Use of a trademark with "defects" in early termination cases

In view of the limited civil circulation, the legislator established an antimonopoly instrument that deprives the right holder of a legal monopoly (exclusive right) in relation to a trademark registered by him, by means of early termination of his legal protection in relation to all or part of the goods/services due to non-use by the right holder of this trademark continuously for three years (paragraph 1 of article 1486 of the Civil Code of the Russian Federation (hereinafter referred to as the Civil Code of the Russian Federation)).

Having received a claim for early termination of a trademark, the right holder must prove the use of the trademark in relation to each product for which the trademark is registered, and for which the person who applied for early termination proved his interest (paragraph 166 of the Decree of the Supreme Court of the Russian Federation No. ).

Thus, paragraph 2 of Article 1486 of the Civil Code of the Russian Federation establishes that “for the purposes of this article, the use of a trademark is recognized as its use by the right holder or a person to whom such a right is granted on the basis of a license agreement in accordance with Article 1489 of this Code, or by another person using the trademark under the control of the right holder, provided that the use of the trademark is carried out in accordance with paragraph 2 of Article 1484 of this Code <…>.”

At the same time, paragraph 38 of the Review of judicial practice in cases related to the resolution of disputes on the protection of intellectual property, approved by the Presidium of the Supreme Court of the Russian Federation on September 23, 2015, clarifies that for the purposes of applying the provisions of Article 1486 of the Civil Code of the Russian Federation, not any use of a trademark by the right holder is taken into account, but only the performance of actions provided for by paragraph 2 of Article 1484 of the Civil Code of the Russian Federation, directly related to the introduction of goods into civil circulation.

Specifying the methods of using a trademark, paragraph 2 of Article 1484 of the Civil Code of the Russian Federation establishes the possibility of its placement:

1) on goods, including on labels, packages of goods that are produced, offered for sale, sold, demonstrated at exhibitions and fairs, or otherwise introduced into civil circulation on the territory of the Russian Federation, or stored or transported for this purpose, or imported to the territory of the Russian Federation;

2) when performing work, rendering services;

3) on documentation related to the introduction of goods into civil circulation;

4) in proposals for the sale of goods, for the performance of work, for the provision of services, as well as in announcements, signboards, and advertisements;

5) on the Internet, including in a domain name and with other addressing methods.

In the meaning of the above norms, the main task of the right holder in the category of a dispute under consideration is to prove the introduction of products (provision of works/services) marked with a trademark into civil circulation and bring it to the consumer.

However, a situation often arises when the right holder actually carried out actions to individualize his goods (works and services) with a trademark but violated the norms of other legislation when introducing these products into civil circulation.

It would seem that this fact should not have legal significance if paragraph 1 of Article 1484 of the Civil Code of the Russian Federation did not stipulate that “the person in whose name the trademark is registered (right holder) has the exclusive right to use the trademark in accordance with Article 1229 of this Code by any in a manner that does not contradict the law (exclusive right to a trademark), including the methods specified in paragraph 2 of this article.”

Is it possible to state from the above norm that the use by the trademark owner in a manner contrary to the law cannot confirm its proper use, which is required by Article 1486 of the Civil Code of the Russian Federation in the framework of a case on early termination?

Consider specific examples from judicial practice.

The Presidium of the Intellectual Property Rights Court, in its ruling dated April 30, 2015, in case No. SIP-531/2014, where the copyright holder violated the provisions of the legislation on the production and circulation of alcoholic beverages, indicated that “the procedure for the circulation of ethyl alcohol, alcoholic and alcohol-containing products is regulated by the provisions of Law No. 171 -FZ, article 10.2 of which contains a list of accompanying documents certifying the legality of such production and circulation.

Since, by virtue of the provisions of paragraph 2 of Article 1484 and paragraph 2 of Article 1486 of the Civil Code of the Russian Federation, a circumstance of significant importance for the consideration of this case is the fact of the introduction into civil circulation of goods marked with contested trademarks, which, in turn, for alcohol-containing products on the territory of the Russian Federation The Federation is governed by the norms of Law No. 171-FZ, the application of the norms of this Law in the consideration of this dispute was mandatory.

Thus, the court of the first instance correctly concluded that the defendant did not provide evidence confirming the introduction into civil circulation of goods on which the disputed trademarks would be used.

The court concluded that there was no evidence of the proper use of the trademark in the ways specified in paragraph 2 of Article 1484, due to the illegal production and circulation of alcoholic products by the copyright holder.

Later, the judicial practice changed the vector of direction, focusing on the purpose of using a trademark within the meaning of paragraph 1 of Article 1477 of the Civil Code of the Russian Federation.

Thus, the Presidium of the Intellectual Property Rights Court, in its ruling dated January 16, 2017, in case No. SIP-185/2016, where the copyright holder violated the requirements of legislation on certification, as well as on tax and accounting, indicated that “within the meaning of Article 1486 of the Civil Code of the Russian Federation, by itself, the non-compliance of the goods introduced into civil circulation with the requirements of legislation on certification or violation of the legislation on tax and accounting in the course of such circulation cannot be grounds for early termination of the legal protection of a trademark if proper evidence is provided that such goods are actually introduced into civil circulation.

Violations of the requirements of other legislation of the Russian Federation are not the subject of this dispute.».

The Presidium of the Intellectual Property Rights Court came to a similar conclusion in its ruling dated 08/05/2019 in case No. SIP-222/2018, where the right holder violated the requirements of the law for declaring products, indicating that “The reference of the applicant of the cassation complaint to the fact that the defendant did not provide evidence of the declaration of products - drinking water in accordance with the Federal Law “On Technical Regulation” and the Technical Regulations, is subject to rejection since the determination of whether the product is certified from the point of view of state bodies, controlling such proceedings is not included in the subject of the court's investigation in the case of early termination of the legal protection of a trademark due to its non-use and does not affect the resolution of a specific dispute.

A similar approach can also be found in the decision of the Court for Intellectual Property Rights dated June 21, 2017, in case No. SIP-84/2016, the decision of the Presidium of the Court for Intellectual Property Rights dated January 18, 2019, in case No. SIP-125/2018, the decision of the Court for Intellectual Property Rights dated May 15 .2020 in case No. SIP -782/ 2019, the decision of the Court for Intellectual Property Rights dated June 17, 2021, in case No. SIP-373/2021.

Thus, according to the prevailing judicial approach, the circumstances related to compliance with the law when goods (works, services) are introduced into civil circulation are not included in the subject of research in cases of early termination of the legal protection of trademarks due to their non-use and do not affect the resolution of a specific dispute over essence.

The above also follows from the fact that paragraph 2 of Article 1484 of the Civil Code of the Russian Federation specifically draws attention to the need to analyze not the circumstances associated with the placement of a trademark on a product, but the circumstances associated with the introduction of goods into civil circulation - that is, with bringing it to the consumer.

In summary, the current position taken by the courts is more justified than the original one, since cases of early termination of the legal protection of a trademark due to its non-use should be considered through the prism of the main function of a trademark, which is to individualize goods (works, services), in connection with which it is necessary to take into account the actual use of the trademark, even if it is carried out in violation of the provisions of other legislation of the Russian Federation.