IPR Court Resolved Case Over Competition Between Porcelain Factory and Manufacturer of Tea Products

The IPR Court upheld the position of the lower courts that there were no grounds for overturning the

Federal Antimonopoly Service refusal to initiate proceedings for violation of antimonopoly legislation.

Despite the porcelain factory’s claims that there was a competitive relationship with the manufacturer of

tea products, the courts found the production of ceramic gift packages of tea with a similar pattern to be an

insufficient condition for establishing competition.

The Gzhel Porcelain Factory filed a lawsuit to invalidate the decision of the Federal Antimonopoly Service

to refuse to initiate proceedings against the company.

The IPR Court upheld the lower courts’ ruling, citing the absence of competitive relations between the

factory and the company manufacturing tea products, which is a key circumstance in unfair competition

cases.

The Federal Antimonopoly Service and the courts reasoned this conclusion by the fact that the factory’s

code under the Russian National Classifier of Types of Economic Activity referred to folk art and crafts

products, and the company’s code referred to the manufacturer of tea and coffee products.

The factory’s position was based on the fact that under the guise of tea trade, there was illegal trade in

pseudo-art products of folk arts and crafts, illegally marked Gzhel, a protected appellation of origin.

The plaintiff concluded so due to the fact that the manufacturer of tea products offers tea in gift ceramic

packaging, called Gzhel handmade teapots and marked with the words “Gzhel” and, “handmade”. The

packages are covered with a blue-and-white painting characteristic of Gzhel and are similar to the factory’s

products.

At the same time, the factory noted that the consumed product is only tea, but not the ceramic teapots, which

have independent value for the consumer as products of folk art and crafts and can be used by themselves.

However, the courts concluded that because of the differences in the commodity markets, the company’s

actions could not be aimed at obtaining advantages over the applicant. Moreover, it had not been proven that

it was the company that produced the packaging in question.

The courts also emphasized that the disputed products were sold in stores that were not a place of sale of

handicrafts.

Sergey Zuykov, the Managing Partner of Zuykov & Partners, Russian Patent Attorney and Eurasian Patent

Attorney comments as follows. In order to identify an act of unfair competition, all signs of paragraph 9 of

Article 4 of the Law on Protection of Competition 3 should exemplify the actions of a business entity. First of

all, there must be competitive relations.

For their establishment, the commercialization of interchangeable products within the boundaries of one

territory is mandatory.

In this case, the goods cannot be recognized as such: the interchangeability is determined on the basis of

functional purpose, application, quality and technical specifications, price and other parameters, but not on

the appearance, design and labeling features.