Sergey Zuykov

Managing Partner / Patent Attorney of the Russian Federation / Eurasian Patent Attorney

18 August 2022

The Supreme Court approved the position of the lower courts on whether a participant in an LLC can be a plaintiff in defense of a company name

The Supreme Court of the Russian Federation refused to transfer for consideration in a judicial session of the Judicial Collegium for Economic Disputes a cassation complaint in a case on the protection of a company name, a claim in which was filed by a member of the copyright holder company.

Recently, by a ruling of the Supreme Court of the Russian Federation, it was refused to transfer a cassation appeal in case No. A56-35825 / 2020 for consideration in a court session of the Judicial Collegium for Economic Disputes - in a judicial act, the Supreme Court of the Russian Federation did not refute the position of the Court for Intellectual Property Rights (hereinafter referred to as the CIP) and other lower courts, which was as follows.

A member of the company (hereinafter referred to as the "plaintiff's company") with a 40% stake in the authorized capital filed a lawsuit with an arbitration court for the protection of the right to a trade name against a company named confusingly similar to the plaintiff's company. The types of activity of legal entities were characterized as similar.

The plaintiff explained that one of the participants in his company created a new legal entity - the respondent company, which entails the possibility of mixing two legal entities, makes it difficult to individualize them and misleads consumers regarding the identification of companies.

The plaintiff emphasized that, being a member of the company, he is a representative of “his” legal entity by virtue of law, thus suggesting that the plaintiff in the case is not he personally as an individual, but a corporation.

The courts of all instances agreed in unanimous opinion, based on paragraph 4 of Art. 1474 of the Civil Code of the Russian Federation, according to which the condition for the success of a claim for the protection of an exclusive right to a company name is the filing of a corresponding claim by the right holder - a legal entity.

While participants in corporations cannot be plaintiffs in cases of this category, having only the rights listed in the Civil Code of the Russian Federation, special laws (for example, in the federal law of 08.02.1998 N 14-FZ "On Limited Liability Companies") or constituent documents.

The court of appeal additionally pointed out that the presence of a corporate conflict in itself does not indicate the right of a company participant to file a corresponding claim.

The considered case does not seem to be the most typical - far more often lawsuits are filed by participants who have left the company and created a new legal entity with a similar brand name, than vice versa - the "old" company pursues the "new".

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