Court Declares No Trademark Infringement Using Doctrine of Exhaustion of Exclusive Right to the Trademark

The owner of the “Экономпанель” /econompanel/ trademark No. 177030 applied to the

arbitration court with a claim for compensation for infringement of the exclusive right due to the

fact that the infringer’s website offered for sale goods containing the word “econompanel”,

which is the English for the Russian “экономпанель”. The relevant offers for sale were also

placed on the aggregator site with a link to the infringer’s website.

Justifying the legitimacy of the use of the designation, the infringer referred to its use in relation

to the goods commercialized by the trademark owneritself.

The court of first instance did not find the defendant’s argument convincing and found the

evidence of the use of the designation on the website sufficient to grant a judgement to plaintiff,

but all the courts of superior jurisdiction did not uphold the decision (the case went through two

circles of instances, ending with a dismissal of the lawsuit).

At the same time, the defendant has properly proved the compliance of circumstances in question

with Article 1487 of the Civil Code of the Russian Federation, as the disputed goods were

produced by the plaintiff and delivered to the defendant by a third-party intermediary. Thus,

there was no violation of the exclusive rights to the trademark in this case.

The Doctrine of Exhaustion of the Exclusive Right means that the trademark owner

cannot prevent its use in relation to the goods commercialized by it or with its consent.

Otherwise, the trademark owner would exercise the exclusive right twice in relation to

the same goods that are in the market. Notably, the Civil Code of the Russian Federation

supports exactly the national variant of the Doctrine of Exhaustion of the Exclusive

Rightmeaning the goods must be commercialized in Russia, including those imported

with the statement of the customs-approvedtreatment or use of goods, assuming the use

in the civiltransactions on the territory of the Russian Federation).

Sometimes, in practice the Doctrine of Exhaustion of the Exclusive Right is not obvious.

Forexample, incaseNo.A51-30569/2017, the court found that exhaustion took place, despite the

fact that the imported goods were unclaimed after. The goods were considered Res Nullius, but

this did not prevent the application of Article 1487 of the Civil Code of the Russian Federation.