About element «№ 1» in a combined trademark

According to Art. 14.4 of the Law “On the Protection of Competition” [1], unfair competition associated with the acquisition and use of the exclusive right to means of individualization of a legal entity and means of individualization of goods, works or services is not permitted.

One type of unfair competition is an incorrect comparison of a business entity (its product) with another competing entity (its product). In particular, forms of incorrect comparison include the use of words or designations that create the impression of the superiority of a product, unless specific and objectively confirmed characteristics or comparison parameters are indicated. For example, superiority can be achieved through the use of words such as “first”, “number one”, etc. (Article 14.3 of the Law on Protection of Competition).

Last year, the Federal Antimonopoly Service recognized the registration and use by the company of a combined trademark, one of the elements of which was the designation «№1», as unfair competition. The Intellectual Rights Court supported the antimonopoly authority [2].

However, in another case [3], where the object of the dispute was a combined trademark with a similar element «№ 1», the IP Court decided that there were no signs of bad faith in the actions of the copyright holder in registering and using such a designation.

What allowed the court to come to opposite conclusions regarding the good faith of the copyright holders of the disputed marks in a seemingly similar situation?

The fact is that despite the perception provisions in a trademark element «№ 1», as indicating the superiority of the product over other goods of a given type, this circumstance in itself does not mean bad faith of its copyright holder.

As the IP Court noted, in order to recognize actions to acquire an exclusive right to a means of individualization as an act of unfair competition, the purpose of performing the relevant actions must be established. Regarding a trademark, it is necessary to establish, among other things, the purpose of acquiring the right to it.

In the case of the trademark Dichlorvos «№ 1», the antimonopoly authority found that the element “Dichlorvos” does not have distinctiveness, since it is a commonly used type of insecticide. Accordingly, combining the designation «№ 1» with it is perceived as an indication of its superiority over other goods of this type and violates paragraph 1 of Art. 14.3 of the Law on Protection of Competition. The court concluded that the copyright holder acquired the mark in order to obtain a formal opportunity to use a form of incorrect comparison in the design of its products.

However, in the case of the trademark Dry Cleaning «№ 1», the antimonopoly authority was unable to prove the illegality of the intentions of the copyright holder when registering the mark. The IP Court indicated that the mere choice of element «№ 1» for inclusion in the trademark does not indicate an unfair purpose - the intention to gain an advantage in business activity through its use. In this case, at the time of registration of the mark, there was no direct indication in the law that the phrase “number one” refers to forms of incorrect comparison. The applicant could assess the meaning of the disputed element differently from the subsequently expressed position of the legislator. His conviction in the possibility of including the element «№ 1» in the trademark was also facilitated by the fact that the authorized body did not see any grounds for refusing to register the mark.

Sources:

1. Federal Law of July 26, 2006 N 135-FZ (as amended on July 10, 2023) “On the Protection of Competition”
2. Decision of the IP Court (SIP) dated November 15, 2023 in case No. SIP-439/2023
3. Decision of the IP Court (SIP) dated September 24, 2021 in case No. SIP-199/2021