The antimonopoly authority as a tool to defend the rights to a trademark

More recently, we often hear from the clients, who turn to our company that they would like to defend the violated right to a trademark by way of applying to the antimonopoly authority in order to recognize the competitor’s actions as an act of the unfair competition.

Of course, our company renders a full range of the services related to the defense of the intellectual rights, namely: representing before Rospatent and police, conducting the cases in the arbitration courts and the courts of general jurisdiction. Representing the principals’ interests before the antimonopoly authority is not an exception.

In this article, I would like to consider an issue of the effectiveness of the application of the antimonopoly authority as a tool to defend the rights to a trademark, to try to identify strengths and weaknesses, to compare this way of the defense of the violated right with the one that is more common – the legal proceedings.

According to Paragraph 7 of Article 4 of the Federal Law of 26.07.2006 No. 135-FZ “On Defense of Competition” (hereinafter referred to as the Law on Defense of Competition), a competition is a rivalry of economic entities, at which the independent actions of each of them exclude or limit an opportunity of each of them to influence unilaterally on the general conditions of the circulation of the products at a corresponding commodity market.

The unfair competition is any actions of economic entities (groups of persons) aimed at obtaining advantages, while carrying out the entrepreneurial activity, which contradict the legislation of the Russian Federation, the customs of the business practices, the requirements for respectability, rationality and fairness, and which have caused or which are capable of causing losses to other economic entities-competitors, or which have done or capable of doing harm to their business reputation (Paragraph 9 of Article 4 of the Law on Defense of Competition).

As it follows from the title of this article, we consider the antimonopoly authority as a tool to defend the rights to a trademark, and equally, the way how this issue is regulated in the Law on Defense of Competition.

Thus, Paragraph 1 of Article 14.6 of the Law on Defense of Competition indicates the actions referring to the unfair competition, which are related to the illegal use of the means of individualization of an economic entity-competitor, such as the illegal use of the designation that is identical to the trademark, the company name, the commercial designation, the name of the place of origin of the product of the economic entity-competitor or confusingly similar to them, by placing it on the products, labels, packages or otherwise using it in respect of the products that are sold or otherwise introduced into the civil circulation on the territory of the Russian Federation, as well as by using it in the information and telecommunication network Internet, including placing in the domain name and by other ways of addressing.

In fact, this norm, with a small but significant exception, copies Article 1484 of the Civil Code of the Russian Federation (hereinafter referred to as the C.C.R.F.), Paragraph 2 of which states that the exclusive right to a trademark can be implemented for the individualization of the products, works or services, in respect of which the trademark is registered, in particular by placing the trademark: on the products, including on the labels, the packages of the products that are manufactured, offered for sale, sold, demonstrated at exhibitions and fairs or otherwise introduced into the civil circulation on the territory of the Russian Federation, or stored, or transported with this purpose, or imported into the territory of the Russian Federation; at performing works, rendering services; on the documentation related to the introduction of the products into the civil circulation; in the offers for sale of the products, for performing works, for rendering services, as well as in advertisements, on outdoor signs and in advertising; in the network Internet, including in the domain name, and by other ways of addressing.

By virtue of Paragraph 3 of the same Article, no one has the right to use without the right holder’s permission the designations that are similar to his trademark in respect of the products for the individualization of which the trademark has been registered, or the similar products, if as a result of such use the probability of confusion appears.

Thus, as we can see, Paragraph 1 of Article 14.6 of the Law on Defense of Competition differs from Article 1484 of the C.C.R.F. in the presence of a qualifying feature – the economic entity-competitor. That is, in the case if the antimonopoly authority in the course of the consideration of the statement on the presence in the actions of the economic entity establishes that the economic entity is not a competitor of the applicant and it does not carrying out its activity at the same commodity market as the applicant (right holder), the proceedings regarding the case will be terminated.

Moreover, in addition to establishing the competitive relations within the framework of the consideration of the case in the antimonopoly authority, it must be established that such actions of the competitor are aimed at obtaining advantages in the entrepreneurial activity, that they contradict the legislation, the customs of the business practices, the requirements for respectability, rationality and fairness, and they are causing (have a possibility of causing) losses to another economic entity-competitor, or they are doing (have a possibility of doing) harm to its business reputation (are doing harm).

It should be noted that only a totality of these actions is an act of the unfair competition, since if at least one of its elements is not proven, the person’s actions cannot be recognized as an act of the unfair competition.

Moreover, the list of the mandatory conditions, which evidence that the competitor is unfair, is added with the “classic” ones to defend the rights to the trademarks in the courts – the conditions of being confusingly similar and homogeneous, which must be established in the aggregate with the violator's actions regarding the introduction of the product into the civil circulation.

I believe that if we compare the defense of the rights to the trademark pursuant to the legal proceedings, it seems to me the way through the antimonopoly authority is more thorny.

At the same time, unlike the court, by virtue of Part 6 of Article 44 of the Law on Defense of Competition, the right of the antimonopoly authority to direct inquiries to the commercial/nonprofit organizations, the government authorities of the Russian Federation, and also to the state off-budgetary funds, the individuals, including the individual entrepreneurs, on submitting the documents and the information is enshrined at the stage of the consideration of the statement or the materials.

That is, the antimonopoly authority has powers to collect evidence, which, in its opinion, will allow the antimonopoly authority making a conclusion on the presence or absence of the features for the violation of the antimonopoly legislation.

Of course, many people may say that by virtue of Paragraph 2 of Article 66 of the Arbitration Procedural Code of the Russian Federation (hereinafter referred to as the APC RF), the Arbitration Court has the right to suggest that the persons participating in the case should submit the additional evidence necessary to clarify the circumstances relevant to the proper consideration of the case and the adoption of a legal and reasonable judicial act before the beginning of a court session or within the period established by the court.

In addition, by virtue of the same Article 66 of the APC RF, the court may require evidence from the person, who has it.

But in fact, everything is not as good as it seems, because by virtue of Paragraph 1 of Article 65 of the APC RF, each person participating in the case must prove the circumstances, to which he refers as to a basis of his claims and objections.

We hear very often from the judges in the legal proceedings that the court is not an authority for a criminal prosecution and it is not empowered to collect the additional evidence establishing the facts of the illegal use.

And, such state of affairs sometimes plays into the hands of cunning and evasive violators, and sometimes, it is quite difficult to collect evidence in respect of them.

Thus, in terms of proving, the advantages regarding the defense of the rights to the trademarks are on the party of the defense through the antimonopoly authority.

As to the periods of the consideration, I would like to compare, in the form of a table, the periods and the stages of the consideration of the case in the antimonopoly authority and in the court, including the appeal stages.

Thus, we see that the period of the consideration of the case on the defense of the exclusive right to a trademark in the court is about twice as shorter than the consideration of the case in the antimonopoly authority.

Further, I suggest that we should compare, again in the form of a table, the results that can be obtained by the right holder, if he uses a particular way of the defense.

As we can see, the adoption by the antimonopoly authority of the decision on the recognition of the actions as an act of the unfair competition does not entail any payments of damages in favor of the right holder, but it may make the violator think seriously, because the fine being from one hundredth to fifteen hundredths of the amount of the revenue taking into account the volume of the illegal use can be a very large sum.

At the same time, the Law on Defense of Competition also states that the antimonopoly authority exercises control over the fulfillment of the issued orders, what is also an important argument, when choosing such way of the defense.

Summing up, we can conclude that there are different ways to defend the violated right, but each of them should be considered in relation to some particular situation with its peculiarities. There are no bad ways of the defense, there is an ill-considered strategy of the defense, which can lead to the negative results, therefore before starting the fight against the violators, and the most correct thing would be to turn to the professionals, who will pick up a relevant complex of the measures and tools.