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The right to a well-known trademark: how to dispose of it?

May 8, 2019

It should be assumed that the emergence and development of the institution of well-known trademarks is justified and due to the scale of modern trading markets and the expansion of their borders. As a result of competitive relations, some entities achieve greater advantage and increase the production volumes, expand a product range. At the same time, the trademark, with the help of which the product is distinguished, becomes more recognizable, what is beneficial both for the right holder and the potential offenders. The use of the institution of well-known trademarks gives the holders of the well-known designations an opportunity to obtain a number of preferences in the use of the trademark and the suppression of the unfair registration of the similar means of individualization regarding other classes of the ICGS.

The disposal of the exclusive right to a well-known trademark

The norms of the Civil Code of the Russian Federation devoted to well-known trademarks do not contain any restrictions regarding the disposal of the exclusive right to such designation. And, therefore, as in the case with a conventional trademark, the right holder may:

  • Grant the right to the use of the trademark to other persons (under a license agreement);
  • Conclude a concession agreement and transfer the right to the use of the trademark in conjunction with the exclusive rights to other subject matters of intellectual property;
  • Use the exclusive right to the trademark as a subject of the pledge;
  • Transfer in full the exclusive right to the designation belonging to him/it (under an alienation agreement).

In accordance with Article 1490 of the Civil Code of the Russian Federation, any disposal of the exclusive right to a trademark shall be executed in the form of an agreement concluded in writing. Such agreement shall be subject to the registration with Rospatent. Then the information on the disposal of the right shall be published in the Register of Well-Known Trademarks in the Russian Federation (hereinafter referred to as the Register), so that the third parties can verify the legality of the authority to use the designation by other entities.

According to the information presented in the Annual Report on the Activities of Rospatent for 2018, the prevailing ways of the disposal of the exclusive rights to the trademarks are granting the rights to the use as a result of the license and concession agreements.[1] Obviously, such trend is characteristic, among other things, for the agreements in the field of well-known trademarks. This is due to the priority of the lack of the transfer of the exclusive rights to another entity and preserving them by the right holder.

The disposal of the exclusive right to a well-known trademark is one of the ways of gaining profit from the use of intangible assets. By granting a license to the use of the means of individualization to other persons, the right holder gains an additional income and also he contributes to the increase in the potential value and recognizability of the designation used. The transfer of the rights to the combined designation “Rospechat,” registered regarding OJSC Agency “Distribution, Processing, Collection of Press” can serve an example of the active use of the well-known trademark as a subject of the license agreements. According to the information presented in the Register from the moment of obtaining the status of well-known in 2004, the right holder granted the right of the use of the designation on the basis of a non-exclusive license to 12 enterprises.[2] It is important to note that while granting several licenses, the right holder is entitled to establish different effect periods of the license agreements. For example, LLC “Baikal,” having a exclusive right to the well-known trademark “Baikal” regarding the products of the 33d class of the ICGS (vodka), has granted the non-exclusive licenses to different enterprises for a period of 4, 5, 10 years and for the whole effect period of the exclusive right to the trademark on the territory of the Russian Federation.[3]

The right to the well-known mark may also be used to ensure obligations. For example, the well-known trademark “Etalon,” registered regarding LLC “Crystal-Lefortovo” for the 33d class of the ICGS (vodka; vodka with additives) has become a subject of the pledge twice during one year.[4]

Despite the fact that the holder of the well-known trademark is entitled to choose any way of disposing the exclusive right to the means of individualization, there are still a number of optional restrictions due to the nature of the well-known trademark. One of them is the indication in Paragraph 2 of Article 1488 of the Civil Code of the Russian Federation to inadmissibility of the alienation of the exclusive right to the trademark “... if it can become a cause of confusing the consumer regarding the product or its manufacturer.” At the same time, it is not indicated in the legal acts how and according to what criteria the Office determines the probability of confusing the consumers, while registering the agreement. The restriction seems to be justified, because when filing an application for the registration of the designation as well-known, the right holder, among other things, shall be obliged to present evidence that the means of individualization is widely known, the trademark is recognized by the consumers, etc. Thus, the holder of the designation confirms, and Rospatent makes sure that the claims to a priority status are justified, the designation is really well-known among the consumers and an associative link “product-manufacturer” emerges in the buyer’s mind, while perceiving the trademark. It is logical that while alienating the well-known designation there is a high probability of confusing the consumer regarding the manufacturer of the product and the violation of his rights and legitimate interests. It is necessary to assume that granting the right to the use of the well-known trademark under a license agreement can also cause confusing the manufacturers, when the product is perceived by the buyer. However, regarding the agreement of this kind, the legislator does not stipulate such restrictive condition.

If we consider the situation from the point of view of protecting the consumers, the most correct way of transferring the exclusive right under an alienation agreement, to our opinion, is the following: the company “Nidan Soki,” which has been the right holder of the well-known trademark “Moya Semya” since 2010 regarding the 32d class of the ICGS (fruit juices, tomato juice), first granted the right to the use of the designation on the basis of a license to another company, and then, upon the expiration of a certain period, it concluded an alienation agreement with this manufacturer, having transferred the exclusive rights to the means of individualization in full.[5] Such approach to the alienation and transfer of the rights to the well-known designation should be considered priority, since in this case, the original right holder gets an opportunity to check the good faith of the future holder of the well-known trademark.

[1]The Annual Report on the Activities of Rospatent for 2018 / URL: https://rupto.ru/content/uploadfiles/otchet_2018_ru.pdf

[2]See the details: The Register of Well-Known Trademarks in the Russian Federation / URL: http://www1.fips.ru/registers-doc-view/fips_servlet?DB=WKTM&rn=7350&DocNumber=24&TypeFile=html;

[3]See the details: The Register of Well-Known Trademarks in the Russian Federation / URL: http://www1.fips.ru/registers-doc-view/fips_servlet?DB=WKTM&rn=4714&DocNumber=102&TypeFile=html;

[4]See the details: The Register of Well-Known Trademarks in the Russian Federation / URL: http://www1.fips.ru/registers-doc-view/fips_servlet?DB=WKTM&rn=7350&DocNumber=90&TypeFile=html.

[5] See the details: The Register of Well-Known Trademarks in the Russian Federation http://www1.fips.ru/registers-doc-view/fips_servlet?DB=WKTM&rn=4714&DocNumber=100&TypeFile=html

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Author of article

Olga Plyasunova

Olga Plyasunova

Head of Department / Trademark Attorney