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Features of alienation of the exclusive right to a well-known trademark

29 Nov 2023 (updated at 14 Feb 2024)
#Well-known trademarks

By registering a designation as a trademark, its owner receives the exclusive right to use such an object at his own discretion in any way that does not contradict the law. By virtue of paragraph 1 of Article 1484 of the Civil Code of the Russian Federation, such use implies not only the ability of the right holder to derive property benefit, but also to dispose of his exclusive right on the conditions determined by him. Despite the legal monopoly of the use of the exclusive right to a trademark belonging to the copyright holder, the current legislation still establishes some boundaries on his order, for example, when such an order concerns a trademark recognized as “well-known”. The disposal of the exclusive right to a well-known trademark by concluding a license agreement, a pledge agreement or another type of agreement does not raise any special questions, which cannot be said about the alienation of the exclusive right to such a well-known trademark.

Let's start with the fact that, according to paragraph 1 of Article 1488 of the Civil Code of the Russian Federation, “under an agreement on the alienation of the exclusive right to a trademark, one party (right holder) transfers or undertakes to transfer in full its exclusive right to the corresponding trademark in relation to all goods or in relation to part goods, for the individualization of which it is registered, to the other party - the acquirer of the exclusive right.

By virtue of paragraph 2 of Article 1490 of the Civil Code of the Russian Federation, “alienation and pledge of the exclusive right to a trademark, granting the right to use it under an agreement, transfer of the exclusive right to a trademark without an agreement are subject to state registration in the manner established by Article 1232 of this Code.”.

At the same time, in accordance with paragraph 4 of Article 1234 of the Civil Code of the Russian Federation, “if the transfer of an exclusive right under an agreement on the alienation of an exclusive right is subject to state registration (paragraph 2 of Article 1232), the exclusive right to such a result or to such a means passes from the right holder to the acquirer at the time of state registration."

When concluding an agreement on the alienation of the exclusive right to a well-known trademark, its parties may not suspect that the current legislation contains any restrictions on its disposal, which, as a rule, are clarified during the registration procedure mentioned above with the Federal Service for Intellectual Property (hereinafter- Rospatent). Such restrictions are related to the legal nature of a well-known trademark, which undergoes some changes when it acquires such a “status”, in comparison with the legal nature of a conventional trademark, so to speak.

Thus, by virtue of paragraph 1 of Article 1508 of the Civil Code of the Russian Federation, “on the application of a person who considers the trademark used by him or the designation used as a trademark to be a well-known trademark in the Russian Federation, a trademark protected in the territory of the Russian Federation on the basis of its state registration or in accordance with an international treaty of the Russian Federation, or a designation used as a trademark, but not having legal protection on the territory of the Russian Federation, by decision of the federal executive authority for intellectual property may be recognized as a well-known trademark in the Russian Federation , if this trademark or this the designation as a result of intensive use of steel on the date indicated in the application is widely known in the Russian Federation among the relevant consumers in relation to the goods of the applicant. .

A literal interpretation of the above national norm leads to the idea that the recognition of a trademark as “well-known” implies that consumers know and associate the specific right holder (applicant) with the goods/services for which this trademark is registered.

In this context, case No. A40-149562/2021 is noteworthy, in which an application was considered to declare illegal the actions of Rospatent to refuse state registration of the alienation of an exclusive right, incl. to a well-known trademark under an alienation agreement concluded between Crostalia Trading LTD and Crostalia LTD. In refusing registration, Rospatent pointed out that the right holder did not submit documents confirming a stable relationship between the goods and the acquirer of the exclusive right to a well-known trademark.

Agreeing with the conclusions set out in the judicial acts of the courts of the first and appellate instances, which invalidated the notice of Rospatent on the refusal to state registration of the alienation of the exclusive rights to a well-known trademark, the Intellectual Property Rights Court, in its decision dated October 20, 2022, referred to the provision of Article 6.bis of the Paris conventions and adopted resolutions of the AIPPI (International Association for the Protection of Intellectual Property), according to which a well-known trademark is a sign (designation) known to a large part of those persons who are involved in the production or use of the relevant goods, and in an obvious way associated with such goods as originating from a specific source.

Taking into account the above, the Intellectual Property Court noted that “the above norms of international and national legislation do not connect the recognition of a trademark as well-known with the condition that the applicant (as a specific person) 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.

For the purposes of applying paragraph 1 of Article 1508 of the Civil Code of the Russian Federation, it is the declared designation that is generally known to consumers, and not the applicant who applied to the competent authority for recognition of the indicated fact of validity, is decisive. Therefore, the well-knowingness of a trademark does not mean the well-knowingness of a particular manufacturer.

Thus, the well-knowingness of a trademark should be determined not in relation to a specific manufacturer, which may not be the same person as the right holder of trademarks (designations), but in relation to the company that is the source for the origin of goods under the designation applied for registration.

A similar legal position is set out in the ruling of the Presidium of the Intellectual Property Rights Court dated October 11, 2020 in case No. SIP-961/2019.

The above is important, since when alienating the exclusive right to a well-known trademark, it is also necessary to take into account paragraph 2 of Article 1488 of the Civil Code of the Russian Federation, according to which “alienation of the exclusive right to a trademark under a contract is not allowed if it may cause misleading the consumer regarding the product or its manufacturer."

From the content of the above norms, it follows that registration of an agreement on the alienation of the exclusive right to a (well-known) trademark is not allowed if such alienation of the exclusive right contradicts its essence or may cause the consumer to be misled about the product / service or its manufacturer.

According to the legal position of the Judicial Collegium for Economic Disputes of the Supreme Court of the Russian Federation, set out in Ruling No. 305-ES15-4129 dated February 10, 2017, in relation to paragraph 2 of Article 1488 of the Civil Code of the Russian Federation, misleading means cases where information about a product contained in a product a mark transferred to a new owner may create a distorted view of the product or its manufacturer, which can influence the decision of the consumer.

In this regard, in paragraph 3.3.7.2. Order No. 186 dated December 29, 2009 “On Approval of Recommendations on Verification of Agreements on the Disposal of the Exclusive Right to the Results of Intellectual Activity or Means of Individualization” Rospatent explicitly states that "the alienation of the exclusive right to a trademark may be considered misleading when it is also carried out in relation to: - a trademark recognized in the established manner as well-known.".

Since when alienating the exclusive right to a well-known trademark, due to its legal nature, there is a risk of misleading the consumer about the product / service or its manufacturer, Rospatent takes a more serious approach to checking such alienation agreements and registering the disposal of the right based on them.

Based on the foregoing, we can conclude that in order to avoid being denied registration, according to judicial practice, it is necessary to stock up on documents that would indicate that the acquirer of the exclusive right to a well-known trademark is perceived by consumers as the source of origin of goods marked with such well-known trademark. Of course, such a task is simplified when the right holder and the acquirer are affiliated. At the same time, one of the ways to establish an associative relationship between a well-known trademark and the acquiring company as the source of origin of the goods marked by it, is to first grant such an acquirer the right to use this well-known trademark, for example, under a license agreement. After some time, the right holder will be able to transfer in full the exclusive right to a well-known trademark to such an acquirer.

Summing up, as we can see, the alienation of the exclusive right to a well-known trademark has its own specifics, which requires more thorough preparation for the registration procedure and the implementation of additional actions in order to comply with the provisions of the current civil law.