IP Court clarified the likelihood of misleading when alienating a trademark between affiliates

According to a case N A40-149562/2021 [1], foreign companies applied to Rospatent with a set of documents to register the alienation of the exclusive right to trademarks, incl. to the well-known trademark "БИЗНЕС ЛАНЧ" (“Business Lunch”) N 78.

In refusing to register a trademark alienation agreement, Rospatent proceeded from the fact that registration could not be carried out on the basis of Art. 1488 of the Civil Code of the Russian Federation [2], since the alienation of an exclusive right may cause the consumer to be misled about the product or its manufacturer.

Also, given that the exclusive right to a well-known trademark is being transferred, Rospatent pointed to the absence of documents confirming a stable relationship between the goods and the acquirer of the exclusive right, and refused to register, which was challenged in court.

The courts noted that, in relation to paragraph 2 of Art. 1488 of the Civil Code of the Russian Federation, misleading refers to cases where information about a product contained in a trademark, transferred to a new owner, can create a distorted idea about the product or its manufacturer, which can influence the consumer's decision.

In this case, trademark rights were transferred to an affiliated company. Noting that in both companies the founder and director are the same person, both companies have confusingly similar names, the courts stated that in the case of registration of the alienation of the right to trademarks and a well-known trademark, the consumer may not even understand that the right holder another person has become, especially considering that another company is engaged in the direct production of goods on the basis of a license (it is also indicated on the label as a manufacturer and remains unchanged, despite the transfer of exclusive rights).

Regarding the argument that there is no evidence of the perception of the new right holder as the source of origin of goods marked with a well-known trademark, the CIP noted that the norms do not connect the recognition of a trademark as well-known with the condition that the applicant is known to consumers of the relevant goods/services marked with a trademark. Consumer awareness should be that the goods come from the same source, but the consumer does not have to identify the goods with a particular applicant.

The Court stressed that the well-known trademark should not be determined in relation to a specific manufacturer (who may not be the same person as the trademark owner), but in relation to the company that is the source for the origin of the goods under the designation applied for registration.

The IP Court concluded that Rospatent is obliged to register the transfer of rights in question, since there are no grounds for possible misleading consumers about the manufacturer.

Sources:

1.Ruling of the Court for Intellectual Property Rights of October 20, 2022 N C01-1696/2022 in case N A40-149562/2021

2.Civil Code of the Russian Federation (Part Four) dated December 18, 2006 N 230-FZ