Comparison of trademarks and PDO: similarities and differences

Key words: trademark, exclusive rights, protected designation of origin, PDO, intellectual property, intellectual property protection.

Comparison of a trademark (hereinafter – "TM") and protected designation of origin (hereinafter - "PDO") – is one of the "challenging" issues of the intellectual property right that excites considerable interest in specialists who are engaged in this sphere.

Trademarks unlike PDO, are more "customary" and take the leading positions in the market: the institute of trademarks exists from ancient times, and currently a significant aggregation of the national legislation of different governments as well as the international-legal acts is devoted to them. Although in ancient time namely geographical denomination of a locality  was used mainly for denoting goods what made it possible to distinguish between items of the same kind manufactured in different cities and countries, currently PDO  to some extent represents a unique item of intellectual property with a plenty of peculiarities and is regarded to be a rather new conception. It is also confirmed by a unified established term absence in the world practice: beside "protected designation of origin" the terms "geographical denomination" (that is a bit broader in sense than PDO), "stating of origin" and others are used. The legal system has a distinct PDO conception as an independent legal institute not in all countries, and its status as that of belonging to one or another category of items of the intellectual property is also different.

One can enumerate as a number of the reasons for such conception "underdevelopment", a relatively small, as compared to the trademarks, quantity of applications for registration. Protected designation of origin – is very valuable and rather rare experience. And if currently about 90-95% of all the designations applied for marking of goods is attributed to trademarks, then about  5 -10% totally was attributed to a geographical denomination.

As far as a normative definition of the notions under consideration is concerned, then according to article 1477 ("A trademark and service mark")  of the Civil Code of RF ["The Civil Code of the Russian Federation (the fourth part)" dd. 18.12.2006 No. 230-FL (as amended dd. 13.07.2015)], a trademark is a "designation meant for the goods individualization of legal entities or individual entrepreneurs". According to article 1482 of the Civil Code, verbal, figurative, shape and other designations or their combinations  can be registered as trademarks, and a trademark can be registered in any color or color combination.

According to article 1516 of the Civil Code ("Protected designation of origin"), PDO – is "… a designation representing or containing a timely or historical, official or non-official, full or condensed name of a country, city or rural settlement, locality or another geographical object, as well as a designation that is derivative of such name and that has become known as a result of its use in relation to the goods which special properties are exceptionally or mainly determined by the environmental conditions and (or) human factors being peculiar to this geographic area."

So, one can single out the following mandatory characteristics of the protected designation of origin:

– name of a certain locality;

– geographical environment that includes the environmental conditions and/or human factors;

– availability of special properties of the goods;

– functional dependence of special properties of the goods in a geographical environment.

If no PDO is registered, then primarily an application for PDO registration and the right for granting to use this PDO is filed. In case of a positive decision taken as a result of this application consideration, PDO is registered, it is assigned a number, and an applicant is issued a certificate for the right to use this registered PDO. Subsequently, persons manufacturing the identical products with the same  special properties are also entitled to file an application for the right granting to use an already registered PDO.

In Paris Convention of 1979 [The Paris Convention for industrial property protection (revised on 2 October 1979)] they use extensively the term "trademark", but there is just an indirect stating of PDO: for example, in article 10 it is said that "The provisions of the preceding article are applied in case of direct or indirect use of false indications on products origin or personality authenticity of a manufacturer, an industrialist or a tradesman...A party concerned, irrespective of whether it is a natural person or legal entity, is recognized to be any manufacturer, industrialist or tradesman engaging in production, manufacture or sale of this product, based either in a locality misstated as a place of origin of a product or in a region where this locality is situated, or in a misstated country or in a country where deceptive indication of origin is applied."

Having numerous differences that will be dwelt upon later on, a trademark and PDO perform the united functions – distinctive, informative, advertising – and identify a source of products both in the narrow and broad sense of the word. According to the Paris Convention, both TM and PDO are the items of industrial property: clause 2. article 1 states: "...Items of industrial property protection are invention patents, utility models, design inventions, trademarks, service marks, commercial names and indications of origin or names of place of origin as well as unfair competition injunction."

Both trademark and PDO are used for the goals of the lawful rights protection of the respective persons, serve the interests of both manufacturers and consumers of the goods.

The legislation of RF sets forth a uniform requirement of authenticity and genuineness to trademarks and PDO in order to prevent the consumer deception. Otherwise, a mark registration or a right granting to use PDO will be rejected.

Processes of filing and consideration of applications for TM and PDO registration also have adequate uniformity.

Upon these similarities availability, TM and PDO have numerous differences, what is confirmed by their existence as independent items of industrial property.

First and foremost, a trademark, except for certain cases, is not confined to a place of the goods production that can be changed by a right holder. A trademark is arbitrary in many aspects and is, to some extent, a result of "flight of imagination" of its creator. And PDO always attributes to a place of goods production and is inherent in a concrete geographic area, it can't be fantasy.

Besides that, individualization of goods or services by means of a trademark doesn't confirm their properties and qualities and gives no guarantee of itself. And PDO conception, in the very essence of it, is based on availability of special, stable, known properties in goods, preconditioned by a place of its production. So, a consumer gets the information not only on a place of the goods production, by also on special properties of the very goods that are permanent and preconditioned by the natural and/or human factors. These are, for example, Vologda lace, Orenburg kerchiefs knitted of goat wool, Fedoskino miniature lacquer painting  etc.

Manufacture of goods marked with a trademark can be well-established at any place and, if desired, relocated from one locality to the other one (except for cases when a trademark contains an indication to a place of the goods manufacture). It will be impossible to relocate the goods manufacture marked with PDO from one geographic area to another one.

Trademark registration is possible provided that a mark is protected (a distinctive ability availability) and prior marks are absent that are identical or confusingly similar in relation to homogeneous goods/services. Registration of the protected designation of origin is preconditioned, first and foremost, by the special properties availability that the goods, accompanied by it, shall possess of.

Hereinafter, the lawful use of a trademark is accessible to a right holder. And PDO is accessible to all manufacturers in a respective geographic area. So, an unlimited number of persons  may obtain a right to use  PDO, who produce or manufacture the similar products in the same territory and for all that the products possess of one set of the special properties.

A right holder for a trademark is entitled to use a trademark as well as prohibit its being used by other persons. Without his/her consent nobody is entitled to use his/her trademark for the homogeneous goods marking.  Right for a trademark is alienable. A right holder can also provide a license for a right to use a trademark belonging to him/her. A holder of a right to use a registered name of the goods' place of origin is entitled to use this designation, to prohibit such use to other persons, but is not entitled to dispose of it. That is, the right for PDO is not alienable, an owner does not have an opportunity to provide licenses to anybody. For all that, a number of persons who can be provided a right to use a registered PDO – is not limited.

A trademark can be registered in the majority of countries according to the national procedure and registration availability in a country of origin is not a binding condition. Legal protection of the protected designation of origin abroad is usually implemented only upon its legal protection availability in a country of the goods' origin.

Validity term of a trademark  - is 10 years with a possibility of further extension. Validity term of PDO is not limited and validity term of a right to use PDO, just like in case with trademarks, amounts to 10 years with a possibility of further extension. For all that, to have a validity term of a certificate extended, a repeated provision of a competent authority's report is necessary, confirming that a right holder produces goods which special properties are determined by the environmental conditions and/or human factors peculiar to a concrete geographic area.

In practice, trademarks differ very much from PDO: they can represent words, phrases, advertising "slogans", logotypes and even melodies.

Trademarks are used for a much bigger range of the goods. And PDO, as a rule, serves for individualization of alcoholic products, cheese, mineral water, oil, results of arts and crafts and others and has verbal statements.

Trademarks can be registered  both for the goods and services. Currently PDO is registered in our country for the goods only. While other names such as "Veliki Ustyug niello application on silver" or "Zlatoust steel engraving" can be perceived by the consumer not only as a name of the very goods but also as a respective service – niello or manufacture or engraving performed with use of the respective unique technique. But this issue still remains open.

Use of the protected designation of origin is not an obstacle for denoting products of a concrete manufacturer with a trademark. These two kinds of designation can go with the same goods provding the consumer with full information about it and its manufacturer.

Trademarks and names of places of the goods' origin, in terms of their "independence" fixed in the legislation, "cooperate" between one another in particular, what is preconditioned by their similarity. The Russian legislation provides for an opportunity to include names of place of origin into a trademark.  For all that, PDO can be included only as a non-protectable element and provided that an applicant is granted a right to use a registered PDO. 

Thus, this phenomenon is also simultaneously a source of conflicts and limitations: so, according to clause 7 of article 1483 of the Civil Code of RF "…Those designations in relation to any goods can't be registered as trademarks that are identical or confusingly similar with a name of a place of the goods' origin protected according to this Code, as well as with a designation requested for registration as such, before a date of a trademark priority..."

According to clause 3 of article 1488 of the Civil Code, "… The exclusive right alienation for a trademark that includes as a non-protectable element a protected designation of origin, that is provided with the legal protection in the territory of the Russian Federation, is allowed only upon availability in an acquirer of the exclusive right for such name ". According to clause 4 of article 1499 of the Civil Code, "A decision on a trademark state registration can be revised by a federal executive authority for the intellectual property before a trademark registration due to … the state registration, as the protected designation of origin, of a designation that is identical or confusingly similar with a trademark specified in a decision on registration". In connection thereto it can be assumed that it is not always expedient to register as a trademark a designation containing a protected designation of origin. So,  an exclusive right holder for a trademark being simultaneously a holder of a certificate for the right to use a name of the goods' place of origin, has more opportunities if he/she obtains separately the respective rights for these items, and then uses them simultaneously when marking the respective goods.  

The challenge of a ratio of the trademarks and names of places of the goods' origin is becoming more and more urgent for the intellectual property specialists worldwide. In terms of the market relations and "struggle" for the consumer, an interest to geographical denominations of goods is awakening again. In connection thereto there is nothing surprising  about a tendency of the special protection mechanisms creation of places' names of the goods' origin and regulation of their "conflicts" with the trademarks both at the national and at the international level.