The competition of the rights to different means of individualization in the defense of the exclusive rights

Despite the fact that the right to any of the means of individualization is exclusive, and the legal regulation of their statuses seems unambiguous and well-established, the “conflicts” of these subject matters and appropriate legal collisions often occur, which are aggravated by the fact that the protectability conditions are different, and the norms cover not all cases of the correlation of the subject matters.

The majority of the conflicts in this field occur due to the fact that the players of particular markets use similar trademarks and company names, less often - commercial designations. Whatever the reasons for such similarity (intentional use of someone else’s reputation or an accidental coincidence) may be, the result may be confusion in the eyes of the consumer of products, works, services, and the legal entities themselves.

The rules for the correlation of a part of the means of individualization are directly stipulated by the Civil Code of the Russian Federation.

For example, Article 1476 and Paragraph 1 of Article 1541 of the Civil Code of the Russian Federation establish the criteria for the correlation of the rights to a company name, a commercial designation, and a trademark, according to which the company name (its elements) may be used in the commercial designation or the trademark of one and the same right holder being protected independently of each other. 

Similarly, according to Paragraph 2 of Article 1541 of the Civil Code of the Russian Federation, the commercial designation (its elements) may be used by the right holder in the trademark belonging to him. Courts stressed repeatedly that the commercial designation is an independent means of individualization, that is, its legal protection is autonomous and it does not depend on the legal protection of any other means of individualization, including the trademark belonging to one and the same person.

However, it is obvious that the functions of the means of individualization and the fields of their application should not be confused, and this is confirmed by the law enforcement practice.

For example, in case No. A43-8220/2018 on the recovery of damages for the violation of an exclusive right to the trademark “SINTEC,” the defendant tried to substitute the functions of the trademark and the company name: referring to the legality of using the mark due to the fact that the disputed products, when bought, had already been marked with the plaintiff’s trademarks, including a part of the company name of one of the persons, who had introduced the products into circulation (LLC “Scientific and Production Company “Sintek”), and the exclusive right to that name had arisen earlier than the priority date of the plaintiff’s trademark.

But the court pointed out to the fact that the exclusive right to the use of the own company name as a means of individualization in any way that does not contradict the law does not mean that such designation may be used as a means of individualization of the products (the trademark) without the state registration as such.

Furthermore, when the company name is included in other means of individualization, other problematic situations are possible – for example, if the company name is changed, the means of individualization, in which it has been included, will remain unchanged; or if the legal entity ceases its activity under the particular name (as a result of liquidation or reorganization), the right to the company name will also cease to exist, while, for example, the commercial designation that has included it may already belong to another right holder, for example, to a legal successor – thus, the subject matters of one order may belong to different persons.

In addition, the mechanism for preventing a conflict between the rights to different means of individualization is contained in Article 1483 of the Civil Code of the Russian Federation, according to which, under particular conditions, the trademarks competing to the identifiers of alcoholic beverages originating from the territory of the state and having particular properties (Paragraph 5), to the geographical indication, the name of the place of origin of the product (Paragraph 7), the company name or the commercial designation (Paragraph 8) cannot be registered.

The basic norm that regulates the conflicts of the means of individualization is Paragraph 6 of Article 1252 of the Civil Code of the Russian Federation, which establishes a principle of priority of senior subject matters, which is sometimes called a seniority principle.

If the different means of individualization (the article enumerates the company name, the trademark, the commercial designation) turn out to be identical or confusingly similar, and as a result of this, the consumers/counterparts can be misled, the advantage shall belong to the means of individualization, the exclusive right to which has arisen earlier, or, in the cases of establishing a priority under the Convention or an exhibition priority, to the means of individualization, which has a senior priority. A similar rule also acts in the case of the confusing identity/similarity of the means of individualization and the industrial design.

This rule is widely applied in practice - for example, in cases No. A36-13477/2017 and No. A14-19259/2017, where the defendant’s commercial designation competing to the plaintiff’s trademark “Armada” allowed the court to establish the absence of a violation based on the earlier emergence of the exclusive right, although the designations were similar and the activity was homogeneous.

In case No. A63-3960/2019, the court, though recognizing the confusing similarity between the trademark “Continental” and the name of the Commercial Bank “Continental,” as well as the homogeneity of the services, dismissed the claim due to the earlier date of the registration of the bank name.

Sometimes, in practice, one can find a peculiar interpretation of the moment from which the right to the means of individualization emerges, in particular, to the company name. For example, in case No. A31-14529/2019, the plaintiff-right holder of the trademark “Korolevskoye” considered mistakenly that the change in the organizational legal form of the legal entity (without changing an arbitrary part) entailed a new countdown of the validity of the exclusive right, consequently, the defendant acquired the right to the name later.

The main criteria, which existence allows counting upon upholding the claim in the event of a conflict of the means of individualization, are the following:

• the distinctive ability of the designations that is legally inherent in each means of individualization;
• the confusing similarity of the designations;
• the homogeneity of the products and services.

If one of the criteria is not proved, this shall entail dismissing the corresponding claim. 

For example, in case No. A40-236550/2019, there was a conflict of several similar trademarks “СИТАЛ” and “SITAL” - on the part of the plaintiff and on the part of the defendant, but this did not save the latter from the need to pay damages, since the products in the defendant’s trademark certificate were not identical or homogeneous with respect to the products for the individualization of which the defendant had used the designations, thus, referring to the availability of the means of individualization did not lead to dismissing the claim.

The cases on the competition of the trademarks and the company names are very common. For example, in case No. A50-908/2020, the court established the senior priority of the plaintiff’s trademark “Muravey,” and it naturally upheld the claim for damages on the part of the company “Muravey+,” which was engaged in identical activities.

In case No. A40-177805/2019, the company names of the plaintiff and the defendant (“ASHLEY GROUP” and “ASHLEY DECOR”) were confusingly similar, but the companies were engaged in the activities with different core activities; at the same time, their activities coincided in respect of the activities indicated in the Unified State Register of Legal Entities as the additional ones – it is in their respect that the court prohibited to use of the company name.

The cases on the defense of the exclusive right to the commercial designation are less common in practice. For example, case No. A17-545/2019 is notable for simultaneous filing two claims in respect of the designation “ZOZH” – for the protection of the exclusive rights to the commercial designation on the part of the plaintiff and for the protection of the right to the trademark - on the part of the defendant as a counterclaim. The activities of the parties were similar, the designations were confusingly similar, however, the plaintiff proved the emergence of the exclusive right to the commercial designation a few months prior to the defendant’s file of an application for the trademark, this was a conclusion of the first-instance court, which upheld the claim. 

The cassation considered the case and sent it for a new consideration, pointing out to the fact that the start of using the designation did not yet confirm the acquisition of the distinctive features and special popularity, as required by Paragraph 1 of Article 1539 of the Civil Code of the Russian Federation, and that in order to establish the fact, whether the person had the exclusive right to the commercial designation, it was necessary to establish whether the disputed designation existed, whether it was used by the particular person to individualize a particular entity, since which moment such use had started, and whether it continued. The Intellectual Property Court also stressed that, in addition, it should be established separately, whether the commercial designation possessed sufficient distinguishing features and whether there were the appropriate proofs of popularity acquired by it at a particular territory.

Thus, it can be noted that in practice, the conflict of the exclusive rights to the means of individualization occurs quite often, while the seniority principle established by the Civil Code of the Russian Federation prevails; however, there are certain nuances as well, while applying this principle.