The ways of the protection of a trademark from an early termination in connection with its non-use

Keywords: intellectual property, means of individualization, exclusive rights, trademark, registration of a trademark, use of a trademark, early termination of the legal protection of a trademark in connection with its non-use, use of a trademark under the control of the right holder.

            The right holder of a trademark, in accordance with the legislation of the Russian Federation, must use it for all products and services that are contained in the list of the registration. This is due, in particular, to the possibility of an early termination of the legal protection of a trademark in connection with its non-use. In accordance with Article 1486 of the Civil Code of the Russian Federation (“The consequences of the non-use of a trademark”), “The legal protection of a trademark may be early terminated with respect to all products or parts of products, for the individualization of which the trademark has been registered, due to the non-use of the trademark continuously within any three years after its state registration. The application for an early termination of the legal protection of a trademark due to its non-use may be filed to the arbitration court by any interested person upon the expiration of the above three years, provided that the trademark has not been used just before the moment of filing such application. The burden of proving the use rests with the right holder of the trademark.

As noted in Resolution of the Presidium of the Intellectual Property Court of July 8, 2016 No. C01-352/2016 in case No. SIP-448/2015, "The norms of Article 1486 of the Civil Code of the Russian Federation correspond with the norms of Subparagraph 1 of Paragraph “C” of Article 5 of the Convention for the Protection of the Industrial Property (concluded in Paris on 20.03.1883), Articles 15 and 19 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (concluded in Marrakech on 15.04.1994), according to which, if the use of a registered mark is mandatory in the country, the registration can be cancelled only at the expiration of a reasonable term (at least three years), and only if the interested person fails to submit proofs justifying the reasons for his inactivity."

            Thus, to avoid the cancellation of the trademark for the products and services for which it has been registered, it is necessary to use it for the respective positions of the list. At the same time, it should be noted that the use of the trademark for each product or service in the form in which this product or service is named in the certificate for a trademark shall be subject to be proved.

The use of the trademark shall be recognized its placement: “... on products, including on labels, packaging of products that are manufactured, offered for sale, sold, demonstrated at exhibitions and fairs or otherwise introduced into the civilian circulation on the territory of the Russian Federation, either stored or transported with this purpose, or imported into the territory of the Russian Federation; at the performance of works, the provision of services; on the documentation related to the introduction of products into the civil circulation; in the offers for sale of products, works, services, as well as in advertisements, on outdoor signs and in advertising; in the Internet, including in a domain name, and using other ways of addressing” (Article 1484 of the Civil Code of the Russian Federation).

Thus, in accordance with Paragraph 2 of Article 1486 of the Civil Code of the Russian Federation  “... the use of a trademark shall be recognized its use by the right holder or the person to whom such right has been granted on the basis of a license agreement in accordance with Article 1489 of this Code, or by another person, who is carrying out the use of 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, except for the cases when the corresponding actions are not directly connected with the introduction of the product into the civil turnover, as well as the use of the trademark with the change of its individual elements, without changing the substance of the trademark and without limiting the protection granted to the trademark.”

It is necessary to dwell upon the above exceptions in more detail.

At first, the use of a trademark may be recognized as the use of a registered designation “...with the change of its individual elements, without changing the substance of the trademark.” This exception undoubtedly creates more favourable conditions for the right holders. In practice, it often happens that for some reasons connected, for example, with the change of the market conditions, market activities and other factors, the right holder is forced to use the trademark in a different way, other than it has been registered. However, if any person files a claim to the court for an early termination of the mark, because it is used by the right holder in a different way, other than it has been registered, the question of whether some or other changes change the mark substantially remains at the discretion of the judge. Therefore, ideally, if the right holder uses the mark in a different way, other than it has been registered, it is recommended to file a new application.

Further, the use of a trademark shall be recognized the use of it not only by the right holder, but also by the person to whom such right has been granted on the basis of a license agreement, or by another person, who is carrying out the use of the trademark under the control of the right holder. At the same time, it should be noted, that the very presence of a license agreement is not a proof of the use of the designation. It is necessary to submit the documents confirming the performance of the agreement by the parties (invoices, payment orders, acts of work performed, etc.)

Within this framework, the contract agreements or franchise agreements, which actually confirm not only the consent of the right holder to use the trademark, but also the quality control of the product are on a par with the license agreements.

It should be noted that by the implication of Article 1486 of the Civil Code of the Russian Federation, as a general rule, for the purposes of preserving the legal protection of a trademark, the license agreement is still required. However, “... in exceptional cases and in the absence of a license agreement, the fact of using the trademark under the control of the right holder may be recognized; then the actual agreement between the right holder and another person, and coordinated actions aimed at maintaining the quality of the product are required” (see Protocol No. 12 of the proceedings of Scientific Advisory Board of the Intellectual Property Court of June 29, 2015).

Since “the use under the control of the right holder” is a rather vague wording, in determining what is included in this concept, it is possible to be guided by the Certificate on the use of the trademark under the control of the right holder, approved by Resolution of the Presidium of the Intellectual Property Court of August 7, 2015 No. SP-23/21. According to this Certificate, the following approaches have been revealed in the judicial practice of the Presidium of the Intellectual Property Court.

At first, when establishing the fact of the use of the trademark by another person under the control of the right holder, the court assesses whether the use of the trademark has been carried out according to the will of the right holder – even if the concluded license agreement has been declared invalid or due to some reasons it has not been registered at Rospatent. Therefore, for the purpose of proving the use of the trademark, it is of no critical importance to what degree the use of the trademark under a license agreement has been legal or illegal (if the agreement does not comply with the Russian legislation).

Further, the use of the trademark according to the will of the right holder shall be recognized as the use of the designation under a contract agreement or an agreement for the paid rendering of services (Chapters 37, 38 of the Civil Code of the Russian Federation), the subject of which is the manufacture of a product with the placement on it of the customer's trademark and/or the distribution of such product/rendering services with the use of a service mark.

The relevant is the point of the Certificate, according to which the presence of a corporate relationship between the right holder and another person, who is using the trademark, including within the holding or other group of persons, the organizational and legal interaction between them, based on the provisions of the constituent documents or the terms of the agreement shall be an additional confirmation of the “will” and “control” of the right holder.

In the current conditions of the globalization, information and the extremely high significance of the Internet for the promotion of products and services, the important provision is that administering a domain name by any person (not the right holder of the disputed trademark), as well as the use by another person of the right holder’s trademark in the Internet for the distribution of the product can be recognized as the use of the trademark under the control of the right holder, subject to the consent of the latter.            Finally, with respect to the imported products, the right holder's control over the use of the trademark for the purposes of Article 1486 of the Civil Code of the Russian Federation can be confirmed, when the right holder appeals to the customs authority (the Federal Customs Service of Russia) to place the trademark in the Register of intellectual property subject matters.

In accordance with Paragraph 3 of Article 1486 of the Civil Code of the Russian Federation, “When resolving the issue on an early termination of the legal protection of the trademark due to its non-use, the proofs submitted by the right holder that the trademark has not been used due to circumstances beyond his control can be taken into account.” It should be noted that, on the basis of this provision, the cases of maintaining the legal protection for the trademark that is not used are very rare. At the same time, they exist. For the court to establish that the mark has not been used due to the circumstances beyond the right holder’s control, such circumstances should not really depend on his will (for example, it may be import/export restrictions imposed by the state, etc.); the circumstances should be weighty, that is, they should objectively prevent the right holder from using his trademark, as well as they should be lasting.  At the same time, the right holder must have a proof that during the indicated period, he has been taking all the necessary measures to use the trademark.

Thus, as we see, the duty of the right holder to use his trademark is one of the fundamental norms in the field of the intellectual property protection. On the basis of the above norm of the Civil Code of the Russian Federation, the large number of claims for the non-use are filed, since the early termination of the legal protection of a trademark is a very pragmatic and often effective way of resolving the problem of a preliminary refusal of the registration on the basis of the existence of identical/similar marks. This mechanism removes the obstacle for the applicants who are really ready to manufacture and sell the products and services under the identical or similar designations.

And for the right holders, in order to avoid the risks of the cancellation of their marks, the recommendations are as follows: from the very beginning of using the trademarks, it is extremely undesirable to change and modify them arbitrarily. It is necessary to store the proofs of the use of one’s registered trademarks. If it is not possible to use the trademark, it is advisable not to allow the non-use during three consecutive years, since Rospatent has not yet developed a common practice regarding the issue to which extent which the use of the mark is considered to be “sufficient” and preventing its cancellation.

In extreme cases, if for some reasons the mark has not been used, but the applicant is interested in maintaining its legal protection, the new application for the registration can be filed.  In this case, the new application should not “duplicate” the existing registration.