How to individualize the products with geographical names at the consumer market

From time immemorial, Russia has been known for its folk crafts. Pavlovsky Posad shawls, Tula honey-cakes, Khokhloma painting — in many regions there are the achievements that make people feeling pride. If we consider the said subject matters from a household point of view, it is difficult to establish their uniqueness, because any thing can be replaced in the modern world. But the traditional products have special, distinctive features due to their unique composition, the presence of the rare climatic conditions in the place of origin, the distinctiveness of the human labour as a result of which they are created. For example, Kolomna pastille is made according to the traditional recipe that has been known since the beginning of the XVIII century. And Khokhloma painting as a kind of the folk art originated in the XVII century and it is still one of the most widely known Russian crafts. Buyers purchase such products consciously, while evaluating and choosing them not based on the species feature (pastille, shawls, dishes, etc.), but because of their special, really unique indicators (the recipe, the method of the manufacture, etc.). These properties are due to exactly the territory of origin of the product, that is, the consumer wishes to buy the product obtained and manufactured in the place of origin, where the traditions of its manufacture have started.

The above circumstance explains the importance of mentioning the geographical place of the product creation: the manufacturer needs the designation indicating to the region of origin, and this information will help the consumer to distinguish the desired product among other homogeneous ones, but, most often, having other quality indicators. Naturally, the question arises: how can the manufacturer indicate the territory of origin on the product without violating the rights of other entrepreneurs and without forcing the buyer to search for this information on the back of the product package? The best solution to above problem can be considered the registration of a means of individualization. The purpose of creating and using such subject matter of intellectual property is just distinguishing the products.

What to choose: a trademark, a name of the place of origin of the product or a geographical indication?

The most popular means of individualization is a trademark, and this is due to a number of reasons:

• The monopoly and absolute rights of the owner of the exclusive rights, who is entitled to grant the designation for the use under a license agreement or to sell it on the basis of an alienation agreement.
• An unlimited period of the use of the means of individualization. A period of the protection of the trademark after the registration is 10 years. However, at the discretion, the designation holder is entitled to extend the protection of the trademark for 10 years any number of times.
• A wide list of the claims that can be lodged to the violators. The Civil Code of the Russian Federation stipulates various ways of restoring the violated rights and defending them, including recovering damages in order to compensate for the losses incurred by the trademark holder.

It should be noted that it is due to the exclusive nature of the rights of the owners that there is a number of the exceptions from the range of the designations that can be registered as the trademarks. So, in accordance with Subparagraph 3 of Paragraph 1 of Article 1483 of the Civil Code of the Russian Federation, among other things, the trademarks consisting only of the elements describing the place or method of the manufacture or sale of the products shall not subject to be registered. And also, according to Paragraph 4 of Article 1483 of the Civil Code of the Russian Federation: “The state registration as the trademarks of the designations that are identical or confusingly similar with the official names and images of the particularly valuable subject matters of the cultural heritage of the peoples of the Russian Federation or the subject matters of the world cultural or natural heritage shall not be allowed... .”

These restrictions are partly due to the fact that there may be several manufacturers at the territory, and as soon as one of them registers the designation consisting solely of the geographical name, it will obtain the right to prohibit other persons to use it. In this case, we can talk about the infringement of the rights of other participants in the trade, what is illegal and dishonest behavior. In addition, the consumers may get a false assumption about the monopoly right of the product manufacturer, what will mislead them.

Nevertheless, the legislator still allows indicating the names of the geographical subject matters, but as an unprotected and non-dominant element in the trademark. And also, in individual cases, which will be considered in the following articles, it is permissible to register the geographical concepts as the trademarks.

Another subject mater of intellectual property that is applied to distinguish the products at the market is the name of the place of origin of the product (hereinafter referred to as the NPOP). If we consider the means of individualization taking into account the specifics of its use, and in our case, the peculiarity is in the properties and the territory of the manufacture of the products, then the NPOP can be considered to be the most successful for designating such products. This means of individualization has been created specifically for the designation of the products of the folk crafts, what determines a special regime for the possession of the rights to the NPOP, and different persons can become its right holders independently of each other. Such situation has both advantageous and negative consequences:

• The advantage point is that all the entrepreneurs, who can manufacture the product with the particular indicators, for example, mineral water, have the right to obtain a certificate for the NPOP and to use it regardless of the will of other designation holders.
• The negative point can be considered the fact that essentially the right holder is only a user of the designation and he cannot transfer the right to the use of the NPOP or transfer the right in full under the alienation agreement.
• Among the important peculiarities in a regime of the NPOP, it should also be noted that the right of the use can be disputed by other manufacturers in the case, if the manufacturer does not have a possibility to manufacture subsequently the product with the specific characteristics. In the case of the trademark, there are no such grounds for disputing the validity of the designation.

And also, this year, on July 27, the amendments to Part 4 of the Civil Code of the Russian Federation enter into force, which stipulate the introduction of a new means of individualization – a geographical indication (hereinafter referred to as the GI). This subject matter of intellectual property is similar in many ways to the NPOP: the purpose of the registration of the designations is distinguishing the products, whose distinctive properties are connected with the territory. The NPOP and the GI are the means of individualization that contain a direct reference to the place of the manufacture or origin of the products. Both names are valid till the moment, when the possibility to manufacture the unique product disappears. The rights of the certificate holders to the said subject matters of intellectual property are valid within 10 years with the possibility of being extended in future.

The most essential differences between the GI and the NPOP are noticeable in the conditions of granting the legal protection to the compared designations: the simplified conditions for patentability of the claimed subject matter are planned to be applied in respect of the geographical indications.