info@zuykov.com8 (800) 700-16-37
Free Advice
mon-thu: from 09:30 to 18:15
fri: from 09:30 to 17:00
sat-sun: day off
  • RU
  • EN
  • CN

Change Region :UAE / SA

Sergey Zuykov

Sergey Zuykov

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

Office: Russia, UAE

Sergey has been involved in IP since 1995. He has counseled clients as a patent attorney in the field of inventions, utility models, industrial designs, trademarks, and appellations of origin of goods since 2008.

Sergey has extensive experience in understanding the needs of his clients. He is an experienced and innovative leader who inspires his team to meet the client's expectations. He is an excellent communicator and continues to improve his professional skills.


Sergey is a popular speaker and is a member of several IP associations, including INTA, AIPLA, AIPPI, ECTA, MARQUES, PTMG, and APAA.

In 2010 Sergey Zuykov was chosen a President of the Noncommercial partnership "Guild of patent attorneys and patent experts", with a membership of more than 50 Russian patent attorneys from 2010 to 2014.

Sergey Zuykov graduated from the State University of Management. In 2015 he graduated from the law faculty of RUDN University.


Work experience


Sergey Zuykov has worked in the field of intellectual property since 1995.

  • 1994–2002 — General Director of LLP Akorus
  • 1998–2004 — Executive Director of the Regional common organization “Center of assistance in protection of legal and individual entities rights”
  • From 2004 — General Director of Zuykov and partners
  • 2010–2014 — President of the "Guild of patent attorneys and patent experts”
  • In 2016 Sergey Zuykov was elected as Vice-President of the Association of patent attorneys and specialists with a membership of more than 100 Russian patent attorneys and specialists
  • From 2021 - Deputy Chairman of the Council on Intellectual Property of the Chamber of Commerce and Industry of the Russian Federation and Head of the Working Group on Improving the Legislation on Intellectual Property and Law Enforcement Practice.
  • Sergey Zuykov is a member of the Enforcement Committee (INTA), as well as a member of the Dispute Resolution Team (Marques).


Articles

About element «№ 1» in a combined trademark
According to Art. 14.4 of the Law “On the Protection of Competition” [1], unfair competition associated with the acquisition and use of the exclusive right to means of individualization of a legal entity and means of individualization of goods, works or services is not permitted.One type of unfair competition is an incorrect comparison of a business entity (its product) with another competing entity (its product). In particular, forms of incorrect comparison include the use of words or designations that create the impression of the superiority of a product, unless specific and objectively confirmed characteristics or comparison parameters are indicated. For example, superiority can be achieved through the use of words such as “first”, “number one”, etc. (Article 14.3 of the Law on Protection of Competition).Last year, the Federal Antimonopoly Service recognized the registration and use by the company of a combined trademark, one of the elements of which was the designation «№1», as unfair competition. The Intellectual Rights Court supported the antimonopoly authority [2].However, in another case [3], where the object of the dispute was a combined trademark with a similar element «№ 1», the IP Court decided that there were no signs of bad faith in the actions of the copyright holder in registering and using such a designation. What allowed the court to come to opposite conclusions regarding the good faith of the copyright holders of the disputed marks in a seemingly similar situation?The fact is that despite the perception provisions in a trademark element «№ 1», as indicating the superiority of the product over other goods of a given type, this circumstance in itself does not mean bad faith of its copyright holder.As the IP Court noted, in order to recognize actions to acquire an exclusive right to a means of individualization as an act of unfair competition, the purpose of performing the relevant actions must be established. Regarding a trademark, it is necessary to establish, among other things, the purpose of acquiring the right to it.In the case of the trademark Dichlorvos «№ 1», the antimonopoly authority found that the element “Dichlorvos” does not have distinctiveness, since it is a commonly used type of insecticide. Accordingly, combining the designation «№ 1» with it is perceived as an indication of its superiority over other goods of this type and violates paragraph 1 of Art. 14.3 of the Law on Protection of Competition. The court concluded that the copyright holder acquired the mark in order to obtain a formal opportunity to use a form of incorrect comparison in the design of its products.However, in the case of the trademark Dry Cleaning «№ 1», the antimonopoly authority was unable to prove the illegality of the intentions of the copyright holder when registering the mark. The IP Court indicated that the mere choice of element «№ 1» for inclusion in the trademark does not indicate an unfair purpose - the intention to gain an advantage in business activity through its use. In this case, at the time of registration of the mark, there was no direct indication in the law that the phrase “number one” refers to forms of incorrect comparison. The applicant could assess the meaning of the disputed element differently from the subsequently expressed position of the legislator. His conviction in the possibility of including the element «№ 1» in the trademark was also facilitated by the fact that the authorized body did not see any grounds for refusing to register the mark.Sources:Federal Law of July 26, 2006 N 135-FZ (as amended on July 10, 2023) “On the Protection of Competition”Decision of the IP Court (SIP) dated November 15, 2023 in case No. SIP-439/2023Decision of the IP Court (SIP) dated September 24, 2021 in case No. SIP-199/2021
The IP Court clarified that the presence of an identical photograph does not disprove the authorship of the controversial one
According to paragraph 1 of Art. 1259 of the Civil Code of the Russian Federation [1], the objects of copyright are works of science, literature and art, regardless of the merits and purpose of the work, as well as the method of its expression. The list of objects of copyright includes, among other things, photographic works and works obtained by methods similar to photography.The main feature that the law establishes as a criterion for recognizing the result of intellectual activity as an object of copyright is its creation by creative work (Articles 1228, 1257 of the Civil Code of the Russian Federation). As the Supreme Court of the Russian Federation explained [2], the creative nature of an object of intellectual activity is presumed - this means that it is considered created by creative work until proven otherwise. At the same time, the absence of such features as novelty, uniqueness and (or) originality of the result does not in itself mean that it is not creative.Unlike some other objects of intellectual property, the rights to which arise from the moment of their registration in the appropriate register, copyright in a work arises by virtue of the very fact of its creation. This does not require registration or compliance with any other formalities. Authorship is presumed to belong to the person who is indicated as the author on the original or copy of the work or otherwise in accordance with paragraph 1 of Art. 1300 of the Civil Code of the Russian Federation (Article 1257, paragraph 4 of Article 1259 of the Civil Code of the Russian Federation). This state of affairs applies until proven otherwise, i.e. the presumption of authorship has not been rebutted. In this case, the burden of proof rests with the person challenging the authorship.In this regard, case No. A40-31387/2023 on the recovery of compensation for violation of exclusive rights to a photograph, which was considered by the IP Court in November 2023, is interesting [3].According to the plot of the case, the plaintiff discovered that a photograph was posted on the Internet on the defendant’s website, the rights to which belonged to the plaintiff on the basis of an exclusive rights trust agreement. The plaintiff presented evidence that the disputed photograph was first published by its author on his personal blog on the Internet, indicating the date of publication and copyright information that identifies the author.However, the defendant disputed the authorship of the photograph, citing the fact that an identical photograph was posted on the Internet, the file properties of which contained information about the authorship of another person, which was confirmed by a screenshot of the site pages. On this basis, the defendant asked to refuse the plaintiff, citing the lack of a right to sue.However, the IP Court rejected the defendant’s argument, noting that a screenshot of an identical photo does not mean that the latter is the photo in defense of which the lawsuit was filed, because these may be similar objects that were created in parallel, or one work may be the result of processing another.In addition, the court noted that in this case, doubts about authorship presuppose a dispute about the authorship of the disputed photograph directly between the authors. At the same time, the defendant did not prove that the author of an identical photograph claims to be the author of the disputed one, and also granted the defendant the right to use the photograph.Sources: “Civil Code of the Russian Federation (Part Four)” dated December 18, 2006 N 230-FZ (as amended on June 13, 2023, as amended on December 14, 2023)Clause 3 of part I of the Review of judicial practice in cases related to the resolution of disputes on the protection of intellectual rights, approved. By the Presidium of the Supreme Court of the Russian Federation on September 23, 2015, paragraph 80 of the Resolution of the Plenum of the Supreme Court of the Russian Federation dated April 23, 2019 N 10 “On the application of part four of the Civil Code of the Russian Federation”Resolution of the IP of November 3, 2023 N C01-1740/2023 in case N A40-31387/2023
The Supreme Court has determined positions on assessing the actions of trademark rights holders as unfair
By virtue of Art. 1 of the Civil Code of the Russian Federation [1], conscientious behavior of participants in civil legal relations is one of the basic principles of civil legislation and prohibits taking advantage of one’s illegal or dishonest behavior. Otherwise, the court may recognize such behavior as an abuse of rights and refuse to protect the rights of the dishonest participant, oblige him to compensate for losses resulting from unfair actions, etc. (Clause 2 and Clause 4 of Article 10 of the Civil Code of the Russian Federation).In the law, the good faith of participants in civil transactions is presumed (clause 5 of Article 10 of the Civil Code of the Russian Federation), and abuse of rights is defined as the exercise of civil rights solely with the intention of causing harm to another person, actions in circumvention of the law for an unlawful purpose, as well as other deliberately dishonest exercise of civil rights (clause 1 of article 10 of the Civil Code of the Russian Federation). Judicial practice is based on the approach that the main criterion for abuse of rights is the intent of the person, i.e., such behavior, the sole purpose of which is to cause harm to another person (the absence of other bona fide goals), and which leads to an imbalance of interests of the participants in legal relations.The categories of good faith and abuse of right are evaluative, and in each specific case the court can establish them only taking into account the totality of the circumstances of the case. It follows from this that the same fact (action or inaction) in one case may indicate dishonest behavior, but in another it may not mean that the participant is abusing the right. In particular, such situations often occur in cases of protection of trademark rights.In this regard, in November 2023, the Presidium of the Supreme Court of the Russian Federation approved a Review of judicial practice in cases related to the assessment of the actions of trademark rights holders [2], in which, using the example of specific cases, it formed appropriate approaches.We propose to consider some situations from the Review and trace the logic of the courts when assessing the facts that were taken into account by the courts when making opposing decisions. We believe that this may be useful in preparing a defense strategy in the event of such disputes.In particular, consider the following, the most common circumstances in practice:The copyright holder does not use the trademark, but at the same time goes to court to protect the exclusive rights to it (for example, demands compensation for the illegal use of the mark)To begin with, it must be emphasized that the Supreme Court clarified back in 2019 [3] that this fact in itself does not indicate an abuse of law. The Russian Supreme Court repeats this same position in paragraph 1 of the Review, while using the example of a specific case to show why it came to this conclusion.First of all, the court found out the reason why the copyright holder does not use the mark and established the following set of circumstances:previously the copyright holder, as well as his legal predecessor, used the disputed trademark to individualize manufactured goods;at the time of consideration of the dispute, the product is not released due to production problems of the copyright holder;In addition, the court took into account that the copyright holder filed a demand for compensation for the illegal use of the trademark before the defendant filed a claim for early termination of its legal protection. In this case, the court decided that, under such circumstances, the fact that the right holder did not use the trademark did not indicate abuse of the right.However, in another case, which was considered in paragraph 2 of the Review, the court assessed differently the similar fact of non-use by the copyright holder of a trademark. Finding out the reason for non-use, the court found that in fact the copyright holder does not and did not have any economic interest or purpose to use the trademark to individualize goods.The court came to this conclusion as a result of an assessment of the circumstances related to the acquisition by the copyright holder of the exclusive right to a trademark and its subsequent behavior, namely:the defendant proved that he uses his mark, similar to the disputed mark of the copyright holder, for its intended purpose and his mark is famous;the plaintiff (copyright holder) has not proven that he himself or the persons under his control are using the disputed trademark;the plaintiff (copyright holder), in addition to the disputed mark, registered a significant number of other trademarks in his name and filed hundreds of lawsuits demanding compensation for their illegal use.Thus, the court found that the real intention of the copyright holder is not to protect his exclusive right to a trademark, but to simulate its violation in order to collect compensation from bona fide participants in civil circulation - owners of similar trademarks. Under such circumstances, the court decided that the copyright holder knowingly intended to cause harm to another person, and by presenting the corresponding demand to the court he abused his right.Continuing the topic of non-use of a trademark, let us pay attention to clause 5 of the Review: it shows situations in which copyright holders claimed that they had granted the right to use to other persons on the basis of a license agreement, which, by virtue of clause 2 of Art. 1486 of the Civil Code of the Russian Federation [4] is a legal way to use a trademark.However, in reality, such “use” turned out to be formal: in one case, the affiliation of the copyright holder with the licensee and the sham of the license agreement concluded by them was established, in the other, the copyright holder could not prove either the fact of the licensee’s sale of goods protected by the trademark, or preparation for it, or even whether the parties have relevant intentions. Thus, the existence of a license agreement does not in itself mean that the copyright holder is using the trademark.In this regard, the Supreme Court of the Russian Federation indicated that in such cases it is necessary to evaluate the actions of the copyright holder taking into account the circumstances of both the conclusion and execution of such an agreement.The copyright holder initiates many legal disputes with similar demands (for example, demands compensation for illegal use of a trademark)As shown above, a similar argument was taken into account by the court in one of the cases in which the copyright holder was found to be abusing the right. However, it must be taken into account that this fact in itself does not indicate bad faith of the copyright holder. In practice, courts [5] proceed from the fact that the actions of the copyright holder to protect the exclusive right do not indicate the presence of signs of bad faith and cannot be recognized as an abuse of right solely on the basis of a statement from the other party. A different understanding would actually lead to the impossibility of judicial protection of intellectual rights. Moreover, this fact, neither in itself nor even in combination with the fact of non-use of a trademark, does not guarantee that the copyright holder is recognized as dishonest.In this regard, the Supreme Court of the Russian Federation, in paragraph 2 of the Review, determined the legal position according to which such a copyright holder is recognized as abusing the right if it is established that he acquired the right to a trademark not with the intention of using it to individualize goods, but with the intention of bringing claims against bona fide participants civil turnover for the recovery of appropriate compensation.It is important to note that in this paragraph of the Review, the court outlined the totality of circumstances that should be examined in such cases when considering the issue of recognizing the copyright holder as dishonest. Thus, in addition to the fact of non-use of a trademark, it is necessary to establish the purpose of acquiring the exclusive right to a trademark, the real intention of the copyright holder to use it and the reasons for non-use.Hot on the heels of the cases considered, it is interesting to note the position of the Supreme Court of the Russian Federation that the court’s assessment of the rights holder’s actions as an abuse of rights in relation to some persons does not mean that he is considered dishonest in relation to other persons (clause 3 of the Review).At the same time, the Supreme Court of the Russian Federation indicated that the court should take into account the circumstances of the previously considered case related to the qualification of the actions of the same copyright holder to acquire the exclusive right to a trademark as an abuse of right.Thus, despite the fact that abuse of rights in relation to one person does not in itself mean abuse in relation to another person, the court will consider and take into account these circumstances in conjunction with other evidence of bad faith in relation to the party to the dispute.In addition, the Supreme Court indicated that the court must motivate its position, including: in the relevant part, if it comes to conclusions other than those contained in the judicial act in the previously considered case.Thus, when receiving such a claim from the copyright holder, we recommend checking his “legal history” for similar disputes, and if confirmed, declare this in court as one of the evidence of abuse of rights. Sources:Civil Code of the Russian Federation (Part One) dated November 30, 1994 N 51-FZ (as amended on July 24, 2023) // SPS "ConsultantPlus"Review of judicial practice in cases related to the assessment of the actions of trademark rights holders, approved By the Presidium of the Supreme Court of the Russian Federation 11/15/2023 // SPS "ConsultantPlus"Clause 154 of the Resolution of the Plenum of the Supreme Court of the Russian Federation dated April 23, 2019 N 10 “On the application of part four of the Civil Code of the Russian Federation” // SPS "ConsultantPlus"Civil Code of the Russian Federation (Part Four) dated December 18, 2006 N 230-FZ (as amended on June 13, 2023, as amended on December 14, 2023) // SPS “ConsultantPlus”See, for example, Resolution of the Eighteenth Arbitration Court of Appeal dated 05/22/2023 N 18AP-4811/2023 in case N A07-21345/2022, Resolution of the Eleventh Arbitration Court of Appeal dated 02/27/2023 N 11AP-1470/2023 in case N A55-22791 /2021// SPS “ConsultantPlus”
Constitutional Court clarified the amount of remuneration for authors of service objects of patent law
According to paragraph 4 of Art. 1370 of the Civil Code of the Russian Federation [1], an employee who, in the performance of work duties or a specific assignment of the employer, created a service invention, service utility model or service industrial design, has the right to receive remuneration. The amount, conditions and procedure for its payment are determined by an agreement between the employee and the employer, and in case of a dispute - by the court.In the absence of an agreement, the remuneration is paid in accordance with the normatively established Rules [2] for the payment of remuneration for objects of patent law, which determine the rates, procedure and terms of its payment. It should be noted that the courts [3] do not accept the calculation of remuneration if it is based on a local act of the employer. Referring to Art. 1246 of the Civil Code of the Russian Federation, the courts indicate that the effect of a normative legal act establishing the rules for payment of remuneration can be excluded by the parties only if the employer and employee enter into an agreement containing other conditions. Moreover, such conditions must be contained directly in the agreement between the employee and the employer (labor or civil law) or such an agreement must contain a reference to a document defining, for example, the procedure for paying remuneration.This year, the legislator revised some provisions of these Rules and changed them in terms of the size of rates, conditions for determining the amount of remuneration, etc. The reason for the change was the consideration by the Constitutional Court of the Russian Federation of the case [4] on checking the constitutionality of clause 4 of Art. 1370 of the Civil Code of the Russian Federation and clause 3 of the Rules for the payment of remuneration for official inventions, official utility models, official industrial designs [5].In particular, the Constitutional Court of the Russian Federation supported the position that in order to resolve the issue of paying remuneration to an employee, the fact of use or non-use of a service object of patent law has no legal significance, since its use during the validity period of the patent is presumed . In this regard, the employer retains the obligation to pay remuneration regardless of the introduction of such an object into the production or other activities of the employer or its other actual use by the employer.At the same time, the Constitutional Court of the Russian Federation indicated that the court may reduce the amount of remuneration provided for by the Rules if the employer does not use (insufficiently uses) the service object of patent law or, contrary to his reasonable and justified expectations, does not benefit from such use as a result of factors that do not depend on him and which he could not and should not have foreseen, or for other valid reasons.We believe that this approach is fully consistent with the principle of fairness and allows us to maintain a balance of interests of both the employee and the employer.Sources:“Civil Code of the Russian Federation (Part Four)” dated December 18, 2006 N 230-FZ (as amended on June 13, 2023) // SPS “ConsultantPlus”Decree of the Government of the Russian Federation of November 16, 2020 N 1848 (as amended on June 02, 2023) “On approval of the Rules for the payment of remuneration for official inventions, official utility models, official industrial designs” // SPS “ConsultantPlus”See, for example, the Decision of the Dzerzhinsky District Court of the city of Perm dated March 2, 2020 in case No. 2-13/2020 (left unchanged by the Determination of the Seventh Cassation Court of General Jurisdiction dated September 24, 2020 N 88-14345/2020)Resolution of the Constitutional Court of the Russian Federation dated March 24, 2023 N 10-Papproved Decree of the Government of the Russian Federation dated 06/04/2014 N 512. Lost force from 01/01/2021 due to the publication of Decree of the Government of the Russian Federation dated 03/18/2020 N 296 // SPS “ConsultantPlus”
State Duma will consider a bill on the co-ownership of the exclusive right to trademark
As follows from the literal interpretation of paragraph 2 of Article 1229 of the Civil Code of the Russian Federation [1], the exclusive right to the result of intellectual activity or to a means of individualization may belong to either one person or several persons jointly. An exception to this rule is only a brand name, in respect of which the law does not allow the possibility of joint possession of an exclusive right.However, despite the fact that the trademark is not named in the law as an exception, the question of the possibility of co-ownership of the exclusive right to it and allocation of shares in the exclusive right has been and remains debatable. This issue was raised and considered by the working group of the Codification Council back in 2014 as part of the development of the Concept of Improving Civil Legislation, but it remained unresolved.The doctrine has repeatedly expressed the opinion that it is necessary either to explicitly provide in the law the right to jointly own the exclusive right to a trademark, including the allocation of shares in the exclusive right to it, or to explicitly limit such a possibility [2].The case N A40-210165/2016 [3], considered by the Judicial Board for Economic Disputes of the Supreme Court of the Russian Federation and included in the relevant Review of Judicial Practice of the Supreme Court of the Russian Federation N 4 (2018) [4], is noteworthy. In this dispute, the Supreme Court of the Russian Federation pointed out that paragraph 2 of Article 1229 of the Civil Code of the Russian Federation declares only the general rule of ownership of exclusive intellectual property rights, whereas special rules governing legal relations in the field of trademark use are contained in paragraph 2 of Chapter 76 of the Civil Code of the Russian Federation. As a result of the analysis of special rules, the court concluded that it was impossible to register a trademark in the name of several persons (with the exception of a collective trademark) and, accordingly, the impossibility of joint intellectual property of the trademark.At the same time, the approach of the Supreme Court of the Russian Federation has not removed the uncertainty regarding the compliance of the legal regulation of relations with the real needs of society, especially in the field of entrepreneurship. However, it seems that the ice has broken: in November of this year, the Government of the Russian Federation sent for consideration to the State Duma of the Russian Federation Bill No. 479514-8 on amendments to Part four of the Civil Code of the Russian Federation, which, among other things, provides for the possibility of joint ownership of the exclusive right to a trademark and allocation of shares in this right [5].As noted in the explanatory note to the draft federal law on amendments, the new rules will take into account the specifics of a trademark as an object of intellectual property rights. In particular, they will allow the joint possession of the exclusive right to a trademark, the formation of shares in it, as well as the transfer of a share in the exclusive right to a trademark and the use of the trademark by each of the copyright holders at their own discretion. However, all these actions will be limited in such a way as to prevent misleading consumers about the product or its manufacturer.Sources: Civil Code of the Russian Federation (part four) dated 18.12.2006 N 230-FZ // SPS "ConsultantPlus"Article: Annual scientific conference of the Center of Private Law (Bulletin of Civil Law, 2021, N 4) // SPS "ConsultantPlus"Determination of the Judicial Board for Economic Disputes of the Supreme Court of the Russian Federation dated 03.07.2018 N 305-KG 18-2488 in case N A40-210165/2016Review of judicial practice of the Supreme Court of the Russian Federation No. 4 (2018) (approved by the Presidium of the Supreme Court of the Russian Federation on 26.12.2018)http://asozd.duma.gov.ru/bill/479514-8#bh_hron (accessed date: 10.11.2023)
Trademarks in commercial concession agreements: law enforcement problems
Originally published in Trademark Lawyer MagazineIn recent years, relations based on a commercial concession agreement have been widely demanded in the economic sphere of the consumer sector. Experts note that its contractual structure is the best means of expanding business for firms that ensure the implementation of high standards of entrepreneurial activity using this method. In addition, this business model allows you to create and develop a network business model in a much shorter time, including in different countries.At the same time, questions remain regarding the legal regulation of the commercial concession agreement, which leads to disputes about the  effectiveness of the normative provisions of national law and, as a result, litigation, for example, about the abuse of the right in the absence of  registration of exclusive rights.Among others, the issues of the role of a trademark as part of the complex of exclusive rights belonging to the copyright holder and the consequences associated with the lack of rights to the trademark at the time of the conclusion of the contract are topical. According to the legal structure of the commercial concession agreement, established in Paragraph 1 of Art. 1027 of the Civil Code of the Russian Federation [1], under an agreement, one  party (right holder) provides the other party (user) the right to use a set of exclusive rights belonging to the right holder in the user’s business activities, including the right to a trademark, service mark, as well as the rights to other objects of exclusive rights provided for by the agreement, in particular, to a commercial designation, a secret of production (know-how) for an agreed upon period of time in exchange for a fee.From the concept of a commercial concession agreement, it follows that the list of objects, the right to use which can be granted under the agreement, is open, and the parties independently determine its composition. However, an analysis of related norms and law enforcement practice shows that the discretion of the parties in this part is limited, in particular with regard to the means of individualization. So, by virtue of a direct indication of the current law, it is impossible to grant the right to use a company name (Clause 2 of Article 1474 of the Civil Code of the Russian Federation) and a geographical indication (Clause 6 of Article 1519 of the Civil Code of the Russian Federation). At the same time, the defects associated with granting the right to use a trademark entail the following risks and consequences:The fact that there is no right to a trademark in the composition of the set of exclusive rights transferred under an instrumentation agreement gives, in the event of a litigation, grounds for its requalification from a commercial concession agreement into a license agreement [2]. But, if the agreement contains information about the transfer of rights but it is impossible to identify the trademark itself (for example, by indication of registration data or other individualizing features), the contract will be recognized as not concluded due to inconsistency of the essential condition [3].The absence of the right to a trademark as part of the instrumentation to be transferred under a commercial concession agreement entails the refusal of the authorized body to register the provision of the instrumentation, in connection with which the transfer of rights under the agreement will not take  place by virtue of Paragraph 2 of Art. 1028 of the Civil Code of the Russian Federation. Thus, according to the recommendations of Rospatent, under a commercial concession agreement the set of exclusive rights belonging to the right holder must include the right to a trademark without fail. At the same time, the procedure for checking the terms of the agreement for compliance with the terms of registration provides for checking information about registered trademarks (Clauses 3.4.1., 3.4.5 of the Recommendations on verification of agreements on the disposal of the exclusive right to the results of  intellectual activity or means of individualization) [4].In addition, granting the right to use a trademark as an appropriate means of individualizing goods (works, services) is one of the system-forming features of a commercial concession agreement, which is due, in particular, to its entrepreneurial nature. Therefore, unlike the consequences of the termination of the copyright holder’s exclusive rights to other objects, the termination of the rights to a trademark is the basis for the termination of the commercial concession agreement as a whole if there is no replacement of the terminated right with a new similar right (Clause 3 of Article 1037 of the Civil Code of the Russian Federation). In this case, the agreement is also terminated in relation to other objects of exclusive rights without the possibility of automatic re-qualification of the commercial concession into license agreements.It follows from the foregoing that granting the right to use a trademark is a basic (essential) condition of a commercial concession agreement, which must be taken into account when agreeing on its subject matter.With regard to the consequences of the absence of the right holder of the rights to the trademark at the time of the conclusion of the contract, the practice is ambiguous. It follows from the legal structure of a commercial concession agreement that it is not a real, but a consensual agreement, i.e., is considered concluded from the moment the parties reach an agreement on all its essential terms (Clause 1, Article 1027, Clause 1, Article 432 of the Civil Code of the Russian Federation). At the same time, some courts5 hold the position that it is impossible to conclude a commercial concession agreement in the absence of the right holder of the rights to the trademark. Proceed from the fact that by virtue of Paragraph 1 of Art. 1448 of the Civil Code of the Russian Federation, the right to dispose of a trademark, including the right to grant third parties the right to use it, arises from the moment the copyright holder acquires the exclusive right to the trademark.And the exclusive right to a trademark arises from the moment of state registration of a trademark and extends its effect also to the period from the moment of filing an application to registration, according to which, as a rule, the priority of exclusive rights to this trademark is established (Paragraph 1 of Article 1232, Paragraph 1 Article 1484 and Paragraph 1 Article 1491 of the Civil Code of the Russian Federation) [6].Thus, if at the conclusion of a commercial concession agreement, the right holder does not have the exclusive right to the trademark, the right holder does not have a real opportunity to fulfill the obligation under the contract to transfer the right to use as part of the set of exclusive rights, since before the registration of the trademark it is impossible to grant the right to use it.Other courts [7], on the contrary, believe that the law does not connect the moment of concluding a commercial concession agreement with the right holder having the whole complex of exclusive rights, including the right to a trademark. They are motivated by the fact that the commercial concession agreement is consensual, therefore, the presence or absence of the right holder of the right to a trademark at the time of the conclusion of the agreement does not affect the emergence of relevant obligations for the parties, since this relates to the scope of performance, and not to the time of conclusion of such an agreement.In addition, the courts [8] note that when concluding a commercial concession agreement, users, acting with the degree of care and diligence required by the nature of the transaction, are not deprived of the opportunity to require the right holder to present documents of title to the trademark, as well as independently verify information on the registration of the mark (filing an application) using the open registry of trademarks and service marks. On this basis, the courts reject arguments about the bad faith of right holders and misleading users when concluding a commercial concession agreement  regarding the possibility of its execution.It seems that this approach is quite consistent with the nature of the commercial concession agreement and the requirements for business entities when concluding it. Thus, we believe that when concluding a commercial concession agreement, each of the parties must exercise care and discretion. In particular, pay attention to the presence in the contract of a condition on granting the right to use a trademark and its individualizing features as part of the set of exclusive rights, including information on registration or filing a corresponding application, and also check this information for compliance with the state register of trademarks.Sources: 1.“Civil Code of the Russian Federation (Part Two)” dated 01/26/1996 N 14-FZ (as amended on 07/01/2021, as amended on 07/08/2021) (as amended and supplemented, effective from 01/01/2022 ) // SPS “ConsultantPlus”.2.Determination of the Supreme Court of the Russian Federation of March 16, 2017, N 310-ES17-1098 in case N A68-11597 / 2015 // SPS  “ConsultantPlus”.3.Resolution of the IP Court dated 06/07/2021 N С01-754/2021 in case N А40-98878/2020, Decision of the Arbitration Court of the Tomsk Region dated 08/31/2011 in case N А67-4427/2010 // SPS “ConsultantPlus”.4.Recommendations on verification of agreements on the disposal of the exclusive right to the results of intellectual activity or means of individualization, approved. Order of Rospatent dated December 29, 2009, N 186 // SPS “ConsultantPlus”.5.Resolution of the IP Court dated 06.02.2019 N С01-627 / 2016 in the case N А68-9982 / 2015 // SPS “ConsultantPlus”.6.Resolution of the IP Court dated August 15, 2018 N С01-577 / 2018 in case N А71-16755 / 2017 // ConsultantPlus ATP.7.Decision of the Arbitration Court of the Krasnodar Territory dated 11/29/2021 in case N A32-32991/2021 // ATP “ConsultantPlus”.8.Resolution of the IP Court dated 06/03/2022 N C01-703 / 2022 in case N A32-32991 / 2021, Decision of the Arbitration Court of the Udmurt Republic dated 02/09/2021 in case N A71-13539 / 2020 // ConsultantPlus ATP.
The payment of a lump sum does not indicate the conclusion of a commercial concession agreement
By virtue of paragraph 1 of Art. 1028 of the Civil Code of the Russian Federation [1], a commercial concession agreement is concluded in writing, non-compliance with which entails its nullity.As a general rule, paragraph 3 of Art. 434 of the Civil Code of the Russian Federation, the written form of the contract is considered to be complied with even if the written proposal to conclude the contract is accepted in the manner provided for in paragraph 3 of Art. 438 of the Civil Code of the Russian Federation - by accepting the offer by conclusive actions, in particular, by paying the appropriate amount.The Supreme Court of the Russian Federation [2] explained that, within the meaning of paragraph 3 of Art. 438 of the Civil Code of the Russian Federation, for the purposes of qualifying implicit actions as an acceptance, it is sufficient that the person to whom the offer was sent began to execute the proposed contract on the conditions specified in the offer within the time period established for its acceptance.However, in cases provided for by law or by agreement of the parties, an agreement in writing can only be concluded by drawing up one document signed by the parties to the agreement (clause 4, article 434 of the Civil Code of the Russian Federation).The law does not contain a literal indication that a commercial concession agreement must be concluded by drawing up one document. In this regard, disputes arise about the admissibility of its conclusion by accepting an offer by conclusive actions, in particular, by paying a fee for the right to use a complex of exclusive rights.Thus, in case A60-51527/2022 [3], the copyright holder insisted on the conclusion of an agreement, arguing that the user left an application for a consultation on a franchise, requested details for payment and an agreement for review. The copyright holder sent him a draft agreement, under which the user pays the copyright holder a lump-sum fee for the right to use the instrumentation. After receiving the draft contract, the user paid the fee and, in the opinion of the copyright holder, thus accepted the offer.However, the court did not agree with the copyright holder and referring to Art. 160 of the Civil Code of the Russian Federation noted that a transaction in writing must be made by drawing up a document expressing its content and signed by the persons making the transaction, or persons duly authorized by them. The Court of Appeal [4] supported the approach, pointing out that in this case compliance with the written form of the contract means its signing by both parties.In addition, the court pointed out that despite the payment of a lump-sum fee, the copyright holder did not provide the user with a counter performance - a set of services and materials necessary for using the complex of exclusive rights.In a similar dispute in case A63-9524/2021 [5], the court noted that the payment of a lump-sum fee without the actual transfer of the complex of exclusive rights cannot indicate the conclusion of an agreement. At the same time, he indicated that, taking into account the requirements of paragraph 2 of Art. 1028 of the Civil Code of the Russian Federation on state registration of granting the right to use instrumentation under a commercial concession agreement, such an agreement can only be concluded by drawing up one document signed by the parties, which is then subject to submission to the Federal Institute of Industrial Property.Sources:1."Civil Code of the Russian Federation (Part Two)" dated 01/26/1996 N 14-FZ (as amended on 07/01/2021, as amended on 07/08/2021)2.Clause 13 of the Decree of the Plenum of the Supreme Court of the Russian Federation of December 25, 2018 N 49 "On some issues of application of the general provisions of the Civil Code of the Russian Federation on the conclusion and interpretation of the contract"3.Decision of the Arbitration Court of the Sverdlovsk Region dated November 28, 2022 in case No. А60-51527/20224.Resolution of the Seventeenth Arbitration Court of Appeal dated February 1, 2023 N 17AP-16701/2022-GKu5.Decision of the Arbitration Court of the Stavropol Territory dated November 22, 2021 in case No. А63-9524/ 2021
Rejection of arguments about bad faith of the right holder when collecting compensation for use of trademark
By virtue of Art. 1515 of the Civil Code of the Russian Federation [1], in case of illegal use of a trademark, the right holder, at his choice, has the right to demand compensation from the violator in lieu of damages.In disputes about the recovery of compensation, defendants often resort to arguments about the bad faith of the right holder and, on this basis, ask to dismiss the claim or reduce the amount of compensation.The law defines abuse of the right as the exercise of civil rights solely with the intent to harm another person, actions bypassing the law with an unlawful purpose, as well as other obviously unfair exercise of civil rights (Article 10 of the Civil Code of the Russian Federation).According to the clarifications of the Supreme Court [2] the court has the right to refuse the right holder to protect his right to a trademark on the basis of Article 10 of the Civil Code of the Russian Federation, if, based on specific factual circumstances, it qualifies his actions to apply specific protection measures as an abuse of the right.Establishing the fact of bad faith is difficult, given the subjective nature of the category of abuse of the right and the need to refute the presumption of good faith of participants in civil transactions (clause 5, article 10 of the Civil Code of the Russian Federation).So, in practice, the courts do not recognize the following circumstances and actions (inaction) of the right holder as abuse by themselves:non-use of the trademark by the right holder applying for the protection of his right [3];initiation by the copyright holder of a large number of litigations with similar requirements. The defendants substantiate this argument by the illegal purpose of the copyright holder - going to court to enrich themselves by collecting compensation from various participants in economic activity. The courts [4] reject this argument, arguing that the actions to protect the exclusive right do not in themselves indicate the presence of signs of bad faith and cannot be recognized as an abuse of the right solely on the basis of the application of the other party. Any other understanding would actually lead to the impossibility of judicial protection of intellectual rights;the right holder is a resident of a country included in the list of unfriendly states against which restrictive measures have been introduced in Russia [5]. However [6], the courts note that the Russian Federation guarantees equal protection of the intellectual property of foreign organizations, including those registered in unfriendly states, and therefore filing a claim in itself is not recognized as unfair action in relation to Art. 10 of the Civil Code of the Russian Federation. Sources:1."Civil Code of the Russian Federation (Part Four)" of December 18, 2006 N 230-FZ2.Paragraph 154 of the Resolution of the Plenum of the Supreme Court of the Russian Federation of April 23, 2019 N 10 "On the application of part four of the Civil Code of the Russian Federation"3.Par. 4 p. 154 of the Resolution of the Plenum of the Supreme Court of the Russian Federation of April 23, 2019 N 10 "On the application of part four of the Civil Code of the Russian Federation"4.See, for example, Ruling of the Eighteenth Arbitration Court of Appeal dated May 22, 2023 N 18AP-4811/2023 in case N A07-21345/2022, Ruling of the Eleventh Arbitration Court of Appeal dated February 27, 2023 N 11AP-1470/2023 in case N A55-22791 /20215.Decree of the President of the Russian Federation of 05.03.2022 N 95 “On the temporary procedure for fulfilling obligations to certain foreign creditors”, Order of the Government of the Russian Federation of 05.03.2022 N 430-r “On approval of the list of foreign states and territories that commit unfriendly actions against the Russian Federation, Russian legal entities and individuals"6.See, for example, Resolution of the First Arbitration Court of Appeal dated 01/13/2023 N 01AP-8600/2022 in case N A43-22156/2022, SIP Resolution dated 10/19/2022 N C01-1871/2022 in case N A28-11930/2021
Supreme Court recognized the interest of individual participant in LLC in terminating the legal protection of trademark
According to the procedure established in paragraph 1 and paragraph 2 of Art. 1513 of the Civil Code of the Russian Federation [1], the granting of legal protection to a trademark (service mark) may be challenged by an interested person by filing an objection against such granting to Rospatent.The absence of a legal definition of an "interested party" leads to litigation related to the refusal of Rospatent to satisfy the objection on the grounds of the applicant's lack of interest.Thus, Rospatent refused to satisfy the individual founder of the company in satisfying the objection to granting legal protection to a trademark confusingly similar to the key element of the trade name of this company and the identical key element in English. He motivated by the fact that an individual who does not conduct homogeneous activities as an individual entrepreneur cannot have an economic / commercial interest. The fact of participation in the creation of society is not a basis for opposing the rights to a means of individualization belonging to society, because the exclusive right to a company name arises at the time of registration of a legal entity in the Unified State Register of Legal Entities and cannot be granted for use or alienated in favor of another person.However, the court, when considering case N SIP-932/2019 [2], recognized the decision of Rospatent as illegal. Referring to the legal position of the Supreme Arbitration Court of the Russian Federation [3], the court noted that the norm of paragraph 2 of Art. 1513 of the Civil Code of the Russian Federation does not specify the concept of “interested person” and does not contain restrictions on the types of interest, in connection with which any person who proves the existence of an actual interest in terminating the legal protection of a trademark can be recognized as interested.The court found that the trademark owner, also being the founder of the company and at the same time its leader, took a set of actions to transfer all the activities of the company, including the client base, to himself, which indicates an abuse of the right on his part. Under such circumstances, the court agreed with the individual founder of the company that he had an interest in challenging the granting of legal protection to a trademark, Rospatent's decision was canceled on the basis of Art. 10 of the Civil Code of the Russian Federation, recognizing the actions for registering a trademark as unfair.It is noteworthy that the IP Court board [4] did not agree with the conclusion of the court of first instance that there were grounds for applying Art. 10 of the Civil Code of the Russian Federation, referring to the fact that bad faith cannot be assessed administratively. In addition, she noted that the chosen method of protection would not restore the applicant's rights as a member of the company, but he could demand compensation for damages and exclusion of the unscrupulous member from the company.However, the Supreme Court of the Russian Federation canceled the decision of the colleagues, left the decision of the court of first instance in force, arguing as follows: recognition of the actions of a person for registering a trademark as an abuse of the right is impossible within the framework of consideration of a separate claim, but is considered in the case of challenging the decision of Rospatent made as a result of consideration of the relevant objection; the choice of the method of protection of the right belongs to the applicant, whose interest in this case is established.Sources: 1."Civil Code of the Russian Federation (Part Four)" dated December 18, 2006 N 230-FZ (as amended on December 5, 2022) // ConsultantPlus SPS2.Decision of the Court for Intellectual Property Rights dated September 14, 2020 in case No. SIP-932/2019 // SPS "ConsultantPlus"3.Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation of April 3, 2012 N 16133/11 in case N A40-4717 / 11-67-39 // ConsultantPlus ATP4.Resolution of the Presidium of the Court for Intellectual Property Rights dated March 26, 2021 N C01-1651/2020 in case N SIP-932/2019 // ConsultantPlus SPS
Evidence in disputes about the use of product photos on the Internet
Advertising of goods on the Internet is often accompanied by images (photos) of the goods. According to paragraph 1 of Art. 1259 of the Civil Code of the Russian Federation [1], photographs are subject to copyright, and as a general rule, third parties cannot use them without the consent of the copyright holder.So, the company - the owner of trademarks in the process of monitoring on the Internet revealed a site where goods marked with its trademarks were offered for sale. In the opinion of the copyright holder, the photographs depicting the goods posted on the website were copied from its websites.The copyright holder made a test purchase through the site, received a sales receipt and a cash receipt in confirmation of the purchase, from which he established the name, TIN and email address of the seller, the domain of the email address of which matches the name of the seller's website.Considering that the seller was illegally using the company's intellectual property, the latter filed a lawsuit demanding compensation from the seller for the illegal use of photographs and an obligation to stop using them.The court noted [2] that in the case of copyright protection, the plaintiff must prove the right to claim - that he has the exclusive right to the work. At the same time, he can be the author (original copyright holder) or the copyright holder who received the exclusive right on the basis of an agreement.The company pointed out that the disputed photographs are official works, because were created by its employees as part of their work activities in the performance of official duties. In confirmation of the status of the copyright holder, it submitted agreements on service works and protocols on the transfer of exclusive rights.However, the court decided that these documents did not confirm the fact that the plaintiff had exclusive rights to the photographs. In particular, the agreement establishes that employees create works within the framework of their job duties, however, no documents were presented that testify to the job duties of these persons (employment contract, job description, etc.). In addition, there are no documents confirming the existence of orders (service assignments) for the creation of specifically controversial works, just as there are no acts of acceptance and transmission of the results of the execution of orders.Based on the foregoing, the court came to the conclusion that the company did not prove the fact of possessing exclusive rights to the disputed photographs.To confirm the fact of violation of the plaintiff's rights, the company presented a sales receipt and a cash receipt for a control purchase of goods and a printout from the seller's website.The law does not establish a list of admissible evidence on the basis of which the fact of a violation is established, and the court has the right to accept any means of proof provided for by the procedural legislation, including printouts of materials posted on the Internet (screenshots) [3].However, the court noted that the printout presented by the plaintiff only indicates a list of legal entities and individual entrepreneurs who are partners of the company and sell goods. In addition, other legal entities and individual entrepreneurs are listed as sellers of goods on the defendant's website. At the same time, the plaintiff has not proven that the defendant is the administrator and (or) owner of the site on which the disputed photos were used, it has not been proven that it was the defendant who posted them on the site, and it has not been proven that the photos were copied from the plaintiff's network addresses.Upon the purchase, the court noted that the seller does not manufacture the goods, but only sells the original products already put into circulation on the open market, and the image of the goods itself, on which a designation similar to the trademark of the copyright holder is placed, cannot violate its exclusive rights, since it is the implementation of the seller's obligation to ensure the consumer's right to information about the product.Sources:1."Civil Code of the Russian Federation (Part Four)" dated 12/18/2006 N 230-FZ (as amended on 12/05/2022) // SPS "ConsultantPlus"2.Ruling of the Court for Intellectual Property Rights dated December 22, 2022 N C01-2153/2022 in case N A40-237306/2021 // ConsultantPlus SPS3.P.55 of the Resolution of the Plenum of the Supreme Court of the Russian Federation No. 10 dated April 23, 2019 "On the application of part four of the Civil Code of the Russian Federation" // ATP "ConsultantPlus"
IP protection in Russia in 2023: Q&A after the INTA Annual Meeting
After 4 years of not being in-person at INTA, it was a great pleasure to see our colleagues from all over the world in real life.INTA 2023 Annual MeetingThe majority of IP specialists who met their Russian colleagues had a question about the protection of IP rights in Russia after the war started and many sanctions were imposed against Russia.Can IP still be protected in Russia? (After the Peppa Pig court case?)Did the Russian Government impose any counter sanctions against Western countries, which reflected IP?Should companies which stopped selling goods to Russia be afraid of cancelling its trademarks for non-use in a couple of years?  As answers to these questions may be interesting for many companies, I decided to write this article. There are many IP practitioners who have been writing about the Peppa Pig case, informing readers that Russian courts stopped protecting IP rights.  But this case was overturned more than a year ago, the Court of Appeal stopped the defender from illegal use of the Peppa Pig trademark and judged monetary damages in favor of the UK owner.  Within the past year, we have been handling several cases for western owners and successfully protected IP rights of owners from USA, Germany, Spain, etc.  At the end of last year, the Head of Russian Intellectual Property Court Mrs. Ludmila Novoselova gave a comment during her interview to the Russian Agency of Legal and Court Information (RAPSI). She stated that the protection of IP in Russia should not depends on the country where the owner comes from. Russian courts should protect IP equally for the owners from different countries. Regarding the sanctions. Fortunately for all of us, IP was excluded from the sanction list of Western countries. Also, the Russian Government didn’t impose any (almost any) sanctions against IP owners from Western (sanctioned) countries. Now there are 2 sanctions which really may effect owners from Western countries:Parallel import of some goods. The Russian Government made a list of the goods/trademarks which are allowed for import into Russia in spite of trademark owners consent/permission. The list contains cars, smartphones, computers etc. Use of the copyright which is allowed for use without the owners’ permission, but with mandatory payment for use to the owner. The Russian Government allowed the user (generally these are organizations collecting payments for owners for such allowed use) to make payments to the so called Type-“0” accounts opened in names of IP owners in any Russian bank. The owner may collect money from this account whenever he decides.  Cancelling the trademark for non-use. There is a number of companies which stopped selling goods to Russia after the war started in February 2022. And certainly, they feel anxious about what will happen with their trademarks in 2 years’ time as the non-use period to cancel a trademark in Russia is 3 years?There are two options which may be helpful to avoid the possibility of losing a trademark:Filing a new trademark application every 1,5 – 2 years for the variant of the trademark. It should be slightly different to the trademark, which is already protected: different color of all words/letters, adding some image into a trademark, etc.The goods may be sold to Russia via other countries, maybe via parallel import. The original goods sold to Russia and distributed in Russia will be proof of use of the trademark in question. Most of the colleagues I met asked if the Russian IP Court would accept the present situation with sanctions as an excuse to the owner to not be able to use the trademark.  We cannot say for sure how the IP Court would judge such an argument, but most possibly the sanctions of foreign governments which stopped selling some goods to Russia or their own company decision of not selling goods to Russia would not be accepted as an excuse for non-use of a trademark because of circumstances beyond the owners’ control.  The IP Court will count that the Russian Government didn’t make any sanctions which didn’t allow an owner to sell goods to Russia. As an example, I would refer to two court cases for cancelling the trademark for non-use which happened about 6-10 years ago.  In one case (No. А40-85638/2012), the owner of the trademark was a Georgian company which owns a trademark for the alcohol goods of class 33 (wine). The court rejected to cancel the trademarks and stated that the trademark owner could not use its trademarks due to the decree of the Russian Government which forbids to import Georgian wine and other food products from Georgia in 2008 - this sanction was in power for about 6-8 years.  In the second case (No. SIP-601/2017) the court made a similar statement rejecting the claim of Danone Russia to cancel the trademark of Molkerei Alois Muller GmbH & Co. KG for milk products. 
Problems of patent protection of inventions created by AI
Scientific and technical breakthroughs in the field of artificial intelligence already allow to create offline inventions that meet the criteria for patentability. But despite the formal compliance of patent applications with the conditions of patentability, the key question is whether it is possible to issue a patent for an invention that was created not by the creative work of a person, but by an artificial intelligence system.The rule that only a person can be the author of an object of intellectual property will be applied in the legislation of most states. In particular, according to Art. 1347 of the Civil Code of the Russian Federation [1], the author of objects of patent law is a citizen whose creative work created the corresponding result of intellectual activity.The conditions for the patentability of an invention are novelty, inventive step and industrial applicability (Article 1350 of the Civil Code of the Russian Federation). At the same time, scientific and technological breakthroughs in the field of artificial intelligence (AI) already allow the autonomous creation of inventions that meet the criteria for patentability. So, in August 2019, several patent applications were filed, where the DABUS AI system was listed as the author of two inventions. But despite the formal compliance of applications with the criteria for patentability, the key question was authorship, namely, whether it is possible to issue a patent for an invention that was created not by the creative work of a person, but by an artificial intelligence system.The European Patent Office (EPO) rejected the controversial application, arguing that only an individual can be named as the inventor in a patent. The EPO Legal Appeal Board dismissed the applicant's appeal and also rejected his subsidiary request, in which, without identifying the inventor, the applicant justified his right to a patent by being the owner and creator of the DABUS AI system. The council's refusal was motivated by the fact that an intangible object is not capable of transferring any rights, and thus the applicant cannot be the assignee of DABUS [2].The US and UK patent offices also rejected the disputed applications on similar grounds, and the national courts upheld the rejection. It is interesting to note that the Australian Patent Office also rejected the controversial application, but the Federal Court of Australia decided that AI could be named as the inventor in the patent and ordered the application to be reviewed. However, in April 2022, the Federal Court of the Whole did not agree with this conclusion and reversed the decision. To date, the only jurisdiction that has issued a patent in which DABUS AI is named as the inventor is South Africa [3].At the same time, both the European Parliament and the leading world states consider AI as a central element of the digital transformation of society, which cannot be ignored. In this regard, it is emphasized that any regulatory framework should include flexibility that allows for innovation, the freedom to develop new technologies and the use of AI [4]. Obviously, the implementation of these tasks will directly affect the issues of patent protection of the relevant inventions. Sources:1."Civil Code of the Russian Federation (Part Four)" dated 12/18/2006 N 230-FZ (as amended on 12/05/2022) // SPS "ConsultantPlus"2.Ryan Abbott " AIP Worldwide Update July 2022" // https://artificialinventor.com/867-2/ (Accessed: 05/10/2023)3.https://en.wikipedia.org/wiki/DABUS (Accessed: 05/10/2023)4.Resolution of the European Parliament of October 20, 2020 on intellectual property rights for the development of artificial intelligence technologies // https://www.europarl.europa.eu/doceo/document/TA-9-2020-0277_EN.html Resolution of the European Parliament of 12 February 2019 on a comprehensive European industrial policy in the field of artificial intelligence and robotics // https://www.europarl.europa.eu/doceo/document/TA-8-2019-0081_EN.html (accessed: 10.05.2023)
Burden of proof in disclosure disputes in fine art resales
An accredited organization - an association of copyright holders for the protection and management of copyrights in the field of fine arts - filed a lawsuit against the auction house on the obligation to provide information on sales of original works carried out with the participation of the defendant for a certain period.Motivated by the fact that the auction house did not fulfill her request for information and documents that are needed to ensure the payment of remuneration for the resale of original works of fine art: information about works sold in a certain period, about sellers and the resale price, copies of auction protocols, copies of contracts purchase and sale of all lots sold, etc.The courts of first instance and appeal denied the claim, upholding the arguments of the auction house that the plaintiff could not claim information about all sales for the period, t.to. part of the information is publicly available (published in the public domain on the website of the auction house), and the other part is not transferable, because. contradicts the procedure and limits for the provision of information provided for by the Rules for the payment of remuneration to the author when reselling original works [1].As follows from paragraph 1 of the Rules, they determine the procedure for paying remuneration to the author when reselling original works of fine art, i.e., at each subsequent sale of the original after its initial alienation by the author. According to paragraph 6 (4) of the Rules, an accredited organization has the right to request disputed information only if it has information about a completed transaction for the resale of the originals of the work. Since the details of the seller and documents on the sale price are requested for remuneration purposes, an accredited organization may require the provision of information not about all sellers, but only about those who are payers of the relevant remuneration in favor of recipients of remuneration whose rights it manages.Establishing the fact of resale of the originals of specific works is a circumstance that is important for the correct consideration of the dispute, and the burden of proof lies with the accredited organization by virtue of Part 1 of Art. 65 APC RF [2].Since the association did not provide individualized information about the resale of original works, the courts concluded that the plaintiff's requirements for information on all sold lots and about sellers in relation to sales of original works for the period should not be satisfied.The IP Court Board [3] did not agree with this approach, pointing out the incorrect distribution of the burden of proof: the Civil Code of the Russian Federation [4] and the Rules do not oblige an accredited organization to find out whether an intermediary carries out a primary sale or resale of original works, they do not oblige it to check all auctions conducted by professional participants in the market for the sale of works of art . The procedure for providing information by professional market participants is provided for the purpose of fulfilling the requirements of Art. 1293 of the Civil Code of the Russian Federation in the interests of the authors and their heirs, who are the weak side in the disputed legal relationship. An accredited organization is not obliged to search for information about when and what resales were carried out by the defendant, which excludes the obligation to prove the implementation of such resales. Contrary to the defendant's arguments, it is he who is obliged to provide the requested information.Sources:1.Rules for the payment of remuneration to the author when reselling original works of fine art, copyright manuscripts (autographs) of literary and musical works, approved. Decree of the Government of the Russian Federation of April 19, 2008 N 285 (as amended on August 28, 2018) // SPS "ConsultantPlus"2."Arbitration Procedural Code of the Russian Federation" dated July 24, 2002 N 95-FZ (as amended on March 18, 2023) // SPS "ConsultantPlus"3.Resolution of the SIP dated 19.01.2023 N C01-200/2022 in case N A40-263153/2020 // SPS "ConsultantPlus"4."Civil Code of the Russian Federation (Part Four)" dated December 18, 2006 N 230-FZ (as amended on December 5, 2022) // ATP "ConsultantPlus"
On the ratio of the amount of compensation for the illegal use of a trademark and the price of a license agreement
By virtue of paragraph 4 of Art. 1515 of the Civil Code of the Russian Federation [1], the trademark owner has the right to demand, at his choice, from the infringer of the exclusive right to the trademark, instead of compensation for losses, payment of compensation. In particular, the amount of compensation can be determined at twice the value of the right to use a trademark, determined on the basis of the price that, under comparable circumstances, is usually charged for the legitimate use of a trademark (subclause 2, part 4, article 1515 of the Civil Code of the Russian Federation).Within the meaning of paragraph 3 of Art. 1252 of the Civil Code of the Russian Federation, the court is not entitled, on its own initiative, to reduce the amount of compensation, which is determined in this way [2].As a rule, as a justification for calculating the amount of compensation, right holders submit to the court license agreements that indicate the methods and cost of the right to use the relevant IP object.Thus, in case No. A57-7606/2022, the court of first instance [3] accepted as the basis for calculating the amount of compensation for the illegal use of a trademark the cost of the right to use it, specified in the license agreement submitted by the plaintiff.However, the Court of Appeal [4] changed the decision, indicating that it is necessary to take into account the method that the infringer actually used, and therefore only the cost of the right for a similar method of use should be taken as the basis for calculating the amount of compensation.The court of first instance did not take into account that in the license agreement the price is set per quarter, provides the right to use several classes of the Nice Classification and is not differentiated by headings and classes in respect of which the trademark is protected. At the same time, the trademark was used by the infringer once and belonged to only one class of the Nice Classification, the plaintiff did not provide evidence to the contrary.As a result, the Court of Appeal calculated the amount of compensation based on the ratio of the terms of the contract and the actual circumstances, defining it as the cost of the monthly remuneration divided by the number of classes.At the same time, the court noted that the submission of a license agreement to the court does not imply that compensation in all cases should be determined by the court at twice the price of the agreement. The determination by the court of the amount of compensation in the amount of two times the value of the right in a smaller amount compared to the stated claim, if the court determines the amount of compensation on the basis of the value of the right established by it, which turned out to be less than that declared by the plaintiff, is not a reduction in the amount of compensation.The IP Court [5] supported the algorithm for determining the amount of compensation applied by the appeal, indicating that it does not contradict Art. 1515 of the Civil Code of the Russian Federation and clarifications of the Supreme Court of the Russian Federation [6], from which it follows that when such compensation is required, its amount is determined based on the price that, under comparable circumstances, is usually charged for the legitimate use of the sign in the way that the infringer used.Sources: 1."Civil Code of the Russian Federation (Part Four)" dated December 18, 2006 N 230-FZ (as amended on December 5, 2022)2.Ruling of the Court for Intellectual Property Rights dated 02.12.2022 N C01-1842/2022 in case N A57-7606/20223.Decision of the Arbitration Court of the Saratov Region dated June 17, 2022 in case No. А57-7606/20224.Resolution of the Twelfth Arbitration Court of Appeal dated 08/03/2022 in case N A57-7606 / 20225.Ruling of the Court for Intellectual Property Rights dated 02.12.2022 N C01-1842/2022 in case N A57-7606/20226.Clause 61 of the Resolution of the Plenum of the Supreme Court of the Russian Federation of April 23, 2019 N 10 “On the application of part four of the Civil Code of the Russian Federation”
The number included in the barcode in the database is not in itself an IP protection object
According to the part 1 of Art. 1334 of the Civil Code of the Russian Federation [1] the manufacturer of a database, the creation of which requires significant financial, material, organizational or other costs, has the exclusive right to extract materials from the database and subsequently use them in any form and in any way (the exclusive right of the database manufacturer).At the same time, the database manufacturer cannot prohibit the use of individual materials, although they are contained in the database, but legally obtained by the person using them from sources other than this database (part 4 of article 1335.1 of the Civil Code of the Russian Federation).In case No. A47-19504/2019 [2], at the request of the database manufacturer to recover compensation for infringement of an exclusive right, the object of the dispute was bar codes in the range of the intervals of the first three numbers used to register and account for enterprises, goods and services.According to the plaintiff, the defendant did not have the right to independently produce and use barcodes that match the numerical values of the barcodes included in the plaintiff's registered electronic database. He motivated by the fact that the possession of intellectual property rights to the database gives him the exclusive right to assign bar codes with the corresponding first digits.The court found that the defendant (customer) at one time received certain barcodes from the plaintiff (executor) on the basis of a service agreement and assumed the obligation not to independently produce barcodes inside the digital cipher assigned by the plaintiff. At the same time, after the termination of this agreement, the defendant, in order to speed up the process of obtaining and registering bar codes, turned to the association, which is authorized to assign bar codes to products manufactured by Russian enterprises. Thus, the defendant had the right to independently produce bar codes using software developed by the association. Plaintiff has not shown that the disputed barcodes used by Defendant were retrieved from its database and not from the database of the Automatic Identification Association.At the same time, the court pointed out that the existence of exclusive rights to the database of digital values of bar codes does not indicate that the manufacturer of the database has received rights to the individual bar codes of organizations themselves and does not mean the impossibility of using individual bar codes assigned to organizations. The number of the enterprise included in the barcode in the database is not an independent object of protection, since, as a rule, it denotes the serial number or identification number of the enterprise in the system.The appellate instance [3] and the IP Court collegium [4] agreed with the court's decision to refuse to recover compensation for violation of the exclusive right to use the object of related rights (database).Sources:1."Civil Code of the Russian Federation (Part Four)" dated 12/18/2006 N 230-FZ (as amended on 12/05/2022) // SPS "ConsultantPlus"2.Decision of the Arbitration Court of the Orenburg Region dated 10/06/2020 in case N A47-19504 / 2019 // SPS "ConsultantPlus"3.Resolution of the Eighteenth Arbitration Court of Appeal dated February 1, 2021 N 18AP-14438/2020 in case N A47-19504/2019 // ConsultantPlus ATP4.Ruling of the Court for Intellectual Property Rights dated May 21, 2021 N C01-725/2021 in case N A47-19504/2019 // SPS "ConsultantPlus"
The involvement of commercial organization in an authority does not exempt it from the requirements for brand names
The main purpose of the regulatory rules on the trade names of legal entities is to protect the interests of participants in civil transactions. In particular, a company name should not create unreasonable competitive advantages for a legal entity over other entities of similar economic activity and mislead consumers about the participation of the state in the activities of the organization, or the special significance of its activities in the public interest.To achieve this goal, the legislator has established a number of imperative requirements, including the prohibition to use in the company name the full or abbreviated official names of federal government bodies, government bodies of the constituent entities of the Russian Federation and local governments, the official name of the Russian Federation or Russia, as well as words derived from this name without permission issued in the prescribed manner (clause 4 of article 1473 of the Civil Code of the Russian Federation) [1].In practice, the courts interpret paragraph 4 of Art. 1473 of the Civil Code of the Russian Federation based on the goal pursued by the legislator when establishing the norm, using not only a literal, but also a semantic (associative) method.In particular, the courts [2] recognize the inclusion of the word “state” in the company name as inadmissible, arguing that it is associated with the affiliation of a commercial organization to government bodies, which leads to an unreasonable competitive advantage.At the same time, the direct interaction or involvement of the organization with the authorities does not negate the requirements for obtaining special permission to include the corresponding word in the company name.Thus, the courts [3] recognize as untenable the arguments that organizations participate in targeted programs of a constituent entity of the Russian Federation and (or) are involved by state and municipal customers to perform public procurement services, receive part of their functions, act on behalf of these persons, etc. The rejection of such an argument is justified, in particular, by the fact that the activity of a commercial organization, by virtue of its status, extends to an unlimited circle of potential customers.The following argument is also not accepted: the sole founder (shareholder) of a commercial organization is a constituent entity of the Russian Federation or its authorized body, the authorized capital of the organization is formed at the expense of budget investments, part of the profit is transferred to the regional budget, etc.As noted by the IP Court board [4], these circumstances do not refute the conclusion that the organization does not have the right to use the word “state” in its corporate name without special permission. 1.Civil Code of the Russian Federation (Part Four) dated December 18, 2006 N 230-FZ (as amended on 07.10.2022)2.Ruling of the Court for Intellectual Property Rights dated 06/03/2021 N С01-692/2021 in case N А47-1309/ 2020 on intellectual property rights dated 12.07.2017 N С01-436/2017, this resolution was left unchanged)3.Decision of the Arbitration Court of the Orenburg Region dated October 7, 2020 in case N A47-1309/20204.Resolution of the Court for Intellectual Property Rights dated 06/03/2021 N С01-692/2021 in case N А47-1309/2020
IP Court clarified the likelihood of misleading when alienating a trademark between affiliates
According to a case N A40-149562/2021 [1], foreign companies applied to Rospatent with a set of documents to register the alienation of the exclusive right to trademarks, incl. to the well-known trademark "БИЗНЕС ЛАНЧ" (“Business Lunch”) N 78.In refusing to register a trademark alienation agreement, Rospatent proceeded from the fact that registration could not be carried out on the basis of Art. 1488 of the Civil Code of the Russian Federation [2], since the alienation of an exclusive right may cause the consumer to be misled about the product or its manufacturer.Also, given that the exclusive right to a well-known trademark is being transferred, Rospatent pointed to the absence of documents confirming a stable relationship between the goods and the acquirer of the exclusive right, and refused to register, which was challenged in court.The courts noted that, in relation to paragraph 2 of Art. 1488 of the Civil Code of the Russian Federation, misleading refers to cases where information about a product contained in a trademark, transferred to a new owner, can create a distorted idea about the product or its manufacturer, which can influence the consumer's decision.In this case, trademark rights were transferred to an affiliated company. Noting that in both companies the founder and director are the same person, both companies have confusingly similar names, the courts stated that in the case of registration of the alienation of the right to trademarks and a well-known trademark, the consumer may not even understand that the right holder another person has become, especially considering that another company is engaged in the direct production of goods on the basis of a license (it is also indicated on the label as a manufacturer and remains unchanged, despite the transfer of exclusive rights).Regarding the argument that there is no evidence of the perception of the new right holder as the source of origin of goods marked with a well-known trademark, the CIP noted that the norms do not connect the recognition of a trademark as well-known with the condition that the applicant is known to consumers of the relevant goods/services marked with a trademark. Consumer awareness should be that the goods come from the same source, but the consumer does not have to identify the goods with a particular applicant.The Court stressed that the well-known trademark should not be determined in relation to a specific manufacturer (who may not be the same person as the trademark owner), but in relation to the company that is the source for the origin of the goods under the designation applied for registration.The IP Court concluded that Rospatent is obliged to register the transfer of rights in question, since there are no grounds for possible misleading consumers about the manufacturer.Sources:1.Ruling of the Court for Intellectual Property Rights of October 20, 2022 N C01-1696/2022 in case N A40-149562/20212.Civil Code of the Russian Federation (Part Four) dated December 18, 2006 N 230-FZ
The court recognized tags as protected elements of the database
According to the part 1 of Art. 1334 of the Civil Code of the Russian Federation [1], the manufacturer of a database, the creation of which requires significant financial, material, organizational or other costs, has the exclusive right to extract materials from the database and subsequently use them in any form and in any way (the exclusive right of the database manufacturer).At the same time, this exclusive right does not depend on the uniqueness of the materials that make up the content of the database and on whether the manufacturer himself filled the database or involved third parties for this. The main thing is that the materials that make up independent information elements of the relevant database are systematized in such a way that they can be found and processed using a computer (part 2 of article 1260 of the Civil Code of the Russian Federation).Thus, in case No. A56-5216/2020 [2], at the request of the database manufacturer to recover compensation for its illegal use, identical tags posted on the websites of the plaintiff and the defendant became the object of the dispute.The plaintiff believed that the defendant had extracted and used tags on its website, which are independent information elements of the plaintiff's database. The defendant, in turn, argued that the disputed tags cannot be database objects within the meaning of Art. 1260 of the Civil Code of the Russian Federation, since they are simply elements posted on the site and are not unique.The court found that the tags are used as a search aggregator of goods, since each of them in an alphanumeric element has a specific url page on the site in the alphanumeric element , which is indexed (searched) in search engines. Thus, the court came to the conclusion that the tags are independent materials, systematized in such a way that they could be found and processed using a computer, and, accordingly, recognized them as independent elements of the database.According to the defendant's argument that tags lack such a quality as uniqueness, the court pointed out that the law does not require that the information elements that make up the content of the database be independent objects of intellectual property. Just as there is no requirement that the database manufacturer fill it exclusively himself: the creation of conditions for filling the database, the subsequent processing and arrangement of materials also qualifies as actions that form the legal status of the database manufacturer.It is interesting to note that when recognizing the fact of illegal extraction (copying) of tags from the plaintiff's database, the court, among other things, took into account that the tags appeared on the defendant's website later than on the plaintiff's website, in large numbers and in a short period of time, as well as with multiple typos identical to the typos in the tags posted on the plaintiff's website.Higher courts [3], including the Supreme Court of the Russian Federation [4], supported the conclusions and decision of the court of first instance to recover compensation from the defendant for violation of the exclusive rights to the plaintiff's database in the amount of 5,000,000 rubles.Sources:1."Civil Code of the Russian Federation (Part Four)" dated 12/18/2006 N 230-FZ (as amended on 12/05/2022) // SPS "ConsultantPlus"2.Decision of the Arbitration Court of the city of St. Petersburg and the Leningrad Region dated April 2, 2021 in case N A56-5216 / 2020 // Consultant Plus SPS3.Ruling of the Thirteenth Arbitration Court of Appeal dated September 28, 2021 N 13AP-18778/2021 in case N А56-5216/2020, Ruling of the Intellectual Property Rights Court dated March 10, 2022 N С01-2033/2021 in case N А56-5216/2020 // ATP "Consultant Plus"4.Determination of the Supreme Court of the Russian Federation of 01.07.2022 N 307-ES22-10221 in case N A56-5216 / 2020 // SPS "ConsultantPlus"
IP Court assessed the materiality of contractual violation in case of the transfer of the exclusive right to software
In accordance with paragraph 2 of Art. 450 of the Civil Code of the Russian Federation, one of the two grounds for terminating an agreement by a court decision at the request of a party to such an agreement is a material breach of the agreement by the other party.At the same time, a violation of the contract by one of the parties is recognized as significant, which entails such damage for the other party that it is largely deprived of what it was entitled to count on when concluding the contract.According to a case N А67-9724/2021 between the developer and the customer, an agreement was concluded on the alienation of exclusive rights, according to which the exclusive right to a computer program for a mobile software hardware complex was to be transferred to the customer for a fee.The customer, in accordance with the terms of the contract, paid 70% of the remuneration in advance - the remaining 30% was payable after notifying the developer of the readiness to transfer the right.Upon completion of the development, the contractor sent the customer a link to the developed materials posted on the cloud service and asked to report on the results of acceptance of work under the contract. The customer, in turn, said that he was testing the equipment in different conditions, but in the end he did not inform about the results of testing and the identified comments and did not refuse to accept the developed software.Referring to the developer's failure to fulfill its obligations to transfer the rights to the computer program and to the loss of interest in the subject of the contract, the customer filed a lawsuit against the developer to terminate the contract, collect advance payment and interest for the use of other people's money.The courts of all instances came to the same conclusion that the software that is the subject of the contract was developed by the defendant and transferred to the plaintiff, and the plaintiff announced the termination of the contract after the transfer of the software, therefore there are no grounds for terminating the contract and returning the funds.The courts drew attention to the fact that the fact of a breach of the contract in itself cannot serve as a basis for its termination, the materiality of the breach must be proved - the party referring to a fundamental breach of the contract must provide the court with evidence of such a breach: namely, loss of income, possible incurring additional expenses or the onset of other consequences that significantly affect the interests of the party.In this case, the customer got access to the material carrier of the program, started its operation without remarks, but did not issue acceptance and, citing the loss of interest, demanded termination of the contract executed by the developer - in such circumstances, the developer could not be accused of a material breach of the contract.It should be noted that predominantly contractual violations in practice are rarely recognized as significant. As an opposite example (in which the violation of the party was so serious that it led to the termination of the contract by a court decision), case N A65-13181/2020 can be cited. In the case, the parties agreed in the commercial concession agreement that the right holder grants the user, for a fee, the right to use a set of exclusive rights in their business activities, and also provides services for finding and selecting premises for the plaintiff. It was the failure to make such a selection that served as the basis for terminating the contract due to the materiality of the violation at the user's claim. And, for example, in case N A40-82976/2017, the court terminated the license agreement on the same grounds, since the licensor granted the right to use the software only after receiving a claim to terminate the agreement.
Determining unity of intentions of a person who illegally placed a trademark on several goods
Most often, trademarks are illegally placed not on single goods, but on entire lots, and an offense can be proved by documents confirming several episodes of the purchase of counterfeit goods. In such cases, the key category is the defendant's unity of intent, since if it exists, compensation will be awarded for a single fact of infringement.The issues of determining the amount of compensation for violation of an exclusive right in cases where the same means of individualization is placed not on a single product, but on a batch of goods or simply on several of them, arise in practice regularly, since only in rare cases the violation is limited to a single illegal using the object.The key category in this case is the unity of intentions of the offender - compensation for violation of an exclusive right is a measure of responsibility for the fact of a violation covered by such unity (paragraph 65 of the Decree of the Plenum of the Supreme Court of the Russian Federation dated April 23, 2019 N 10 65). If the unity of intentions is not proven, each sale of material media (whether identical or not) is qualified as an independent violation of the exclusive right.At the same time, this circumstance is not so easy to substantiate and prove. In a recent case N A51-1401 /2021 [1], 3D Sparrow Group Limited filed a lawsuit to recover compensation for infringement of exclusive rights to trademarks N 572790 and N 748258 (БУБА). The plaintiff presented to the court evidence of two episodes of the purchase of several goods, each of which featured trademarks. The court of first instance, considering the unity of intentions of the defendant established, recovered 5,000 rubles for each trademark.The court proceeded from the fact that the entrepreneur sold counterfeit goods with a difference of three weeks, while after the first purchase the defendant was not warned by the plaintiff about the violation of exclusive rights to trademarks, nor did the defendant receive a demand to stop the violation of rights to means of individualization.However, the Intellectual Property Court sent the case back for a new trial, indicating that the courts of first and appellate instances formally applied the approach set out in the ruling of the Supreme Court of the Russian Federation dated December 7, 2015 in case N A03-14243/2014. According to this position, if the purchases of goods were made within a short period of time, for all the facts after the first purchase, the defendant was not warned by the plaintiff about the violation of the exclusive rights to trademarks, the defendant did not receive claims to stop the violation of the rights of the plaintiff, the sale by the defendant of such goods can be be treated as one case of unlawful use of the plaintiff's trademarks.At the same time, in this case, the relevant arguments of the entrepreneur were not voiced and no evidence was presented to justify the unity of intentions on the part of the defendant.It should be noted that in a number of cases [2], on the contrary, the formal application of the specified legal position of the Supreme Court of the Russian Federation made it possible to establish the unity of intentions of the defendant and reduce the amount of compensation claimed.1.Ruling of the Court for Intellectual Property Rights dated March 24, 2022 N C01-57/2022 in case N A51-1401/20212.Rulings of the Court for Intellectual Property Rights dated October 14, 2021 in case N A46-1490 / 2021, dated July 9, 2021 in case N A03-7290 / 2020, dated March 30, 2021 in case N A67-10879 / 2019
IP Court considered cases with claims for large compensations
In one of the cases [1], the trading house, being an authorized representative of the foreign right holder of the trademark N 966078 in the territory of the Russian Federation, applied to protect the exclusive rights of the latter after acquiring counterfeit goods from the company. The declared amount of compensation amounted to the maximum amount - 5,000,000 rubles.It is noteworthy that the court of first instance came to the conclusion that the claim for compensation was stated lawfully and should be satisfied, despite the fact that no justification for reducing the claimed amount of claims was provided. However, the court of appeal radically changed the situation, assessing that the amount of compensation recognized by the court of first instance does not correspond to the nature of the allowable calculation, and deciding to recover from the defendant in favor of the plaintiff only 132,440 rubles. It is interesting to read the argumentation of such contrasting approaches.In the cassation complaint, the plaintiff predictably referred to the fact that the amount of compensation sought was commensurate with the consequences of the infringement, since the company had been profiting for a long time from the illegal use of the trademark in the course of its economic activities. The trading house stressed that the amount of compensation to be satisfied could not be less than twice the value of the goods purchased during the test purchase, namely 264,880 rubles.The Court for Intellectual Property Rights noted an obvious contradiction in the position of the plaintiff - on the one hand, during the consideration of the case on the merits, in support of the claimed amount of compensation, he referred to paragraphs. 1 p. 4 art. 1515 of the Civil Code of the Russian Federation (compensation in a fixed amount), while in the cassation appeal - at paragraphs. 2 p. 4 art. 1515 of the Civil Code of the Russian Federation (double the cost of goods on which a trademark is illegally placed).The IP Court pointed out that since the court is not entitled to change the type of compensation chosen upon presentation of claims on its own initiative, and the claim was not specified in this part, it was necessary to be guided precisely by the rule on a fixed amount of compensation. The court noted that when requesting the maximum amount of compensation allowed by the current legislation, the right holder had to specify such a calculation, but the proportionality of the claimed amount of compensation was not substantiated.At the same time, the sale of counterfeit goods was not an essential part of the economic activity of the defendant, the duration of the illegal use of the disputed trademark was not confirmed, and the violation was not of a gross nature - all these factors were taken into account by the court when the amount of compensation was repeatedly reduced. It is noteworthy that there were no motivated objections of the defendant regarding the need to reduce the requested compensation (which was one of the reasons for the full satisfaction of the claim by the court of first instance). However, the SIP drew attention to the fact that imposing on the defendant the risk of non-commission of a procedural action obviously violated the balance of interests of the parties and deprived the violator of the right to a fair trial, since the defendant did not recognize the requirements.Justifying the specific amount of compensation awarded, the court indicated that the amount to be recovered should be compared with the actual loss of the right holder, confirmed by the invoice and amounting to 132,440 rubles.In the second case [2], the copyright holder became aware that the defendant, without his consent, illegally used in his business activities confusingly similar to trademarks to individualize the services of a public catering enterprise, in connection with which he demanded to recover 4,000,000 rubles from the violator.In this case, the calculation of the amount of compensation claimed for recovery was based on a double amount of the cost of the right to use the disputed trademarks, provided for by commercial concession agreements concluded by the plaintiff with third parties. The court of first instance considered it possible to halve the amount of compensation, that is, to 2,000,000 rubles, taking into account the defendant's petition for a reduction in compensation, the nature of the violation committed, the degree of guilt of the infringer, the absence of violations of the exclusive right of this right holder previously committed by the person, the possible losses of the right holder , as well as proportionality of compensation to the consequences of the violation.However, 2,000,000 rubles was not the final amount - the decision was canceled by the court of appeal, and the amount of compensation was determined as 333,333 rubles 33 kopecks. It is this approach that was supported by the Intellectual Property Court.The IP Court noted that in claims in which compensation is determined at twice the cost of the right to use a trademark, the amount is both the minimum and the maximum [3], but can be challenged by the defendant.The main reason for the significant discrepancy between the claimed amount and the final amount was that the commercial concession agreements submitted by the plaintiff were not recognized as proper evidence of the actual value of the right to use the disputed trademarks for the following reasons:the contracts did not fully cover the period during which the defendant used signs similar to trademarks;the subject of the agreements was the granting of the right to use a set of exclusive rights, including the rights not only to trademarks, but also to the secret of production, therefore, the price agreed by the parties to the agreements could not be the price solely of the cost of the right to use trademarks.Since the cost of the right to use the trademarks for three years was 1,000,000 rubles, the court indicated that the cost of the right to use trademarks for 1 year is 333,333 rubles 33 kopecks, and twice - 666,666 rubles 66 kopecks.The court decided to reduce this amount as much as possible, guided by the fact that the amount of such compensation can be reduced by no more than half - in order to prevent excessive intrusion into the defendant's property, on the one hand, and, on the other, to deprive him of incentives for the uncontractual use of intellectual property.In another case where the maximum compensation was claimed [4], the plaintiff's desire coincided with the final decision in the case. The owner of the trademark "Из Сибири с любовью" N 698703 found out about the violation of his exclusive right by the Tomsk manufacturer and went to court.The courts of all instances agreed with the need to recover compensation for infringement of the exclusive right to a trademark in full in the amount of 5,000,000 rubles, taking into account that the defendant had been a direct manufacturer of a significant amount of counterfeit products for a long time with large income from sales.The courts noted that the defendant did not use his right to present evidence to the contrary, in particular, despite the court's proposal to provide evidence to establish information about the volume of sales of goods marked with the disputed designation, the defendant refused to provide them.1.Ruling of the Court for Intellectual Property Rights dated 10/19/2022 N С01-1585/2022 in case N А41-75506/2021, Tenth Arbitration Court of Appeal dated 05/23/2022 N 10AP-5535/2022, decision of the Arbitration Court of the Moscow Region dated 02/16/20222.Ruling of the Court for Intellectual Property Rights dated 10/13/2022 N С01-1703/2022 in case N А32-44689/2021, Fifteenth Arbitration Court of Appeal dated 06/06/2022 N 15AP-6463/2022, decision of the Arbitration Court of the Krasnodar Territory dated 03/03/20223.At the same time, according to paragraph 31 of the Review of the Judicial Practice of the Armed Forces of the Russian Federation N 2 (2021), approved. By the Presidium of the Supreme Court of the Russian Federation on June 30, 2021, the court, in exceptional cases, with a reasoned statement by the defendant, has the right to reduce the compensation calculated in this way.4.Resolution of the Court for Intellectual Property Rights dated 10/21/2022 N С01-1785/2022 in case N А67-10738/2021, the Seventh Arbitration Court of Appeal dated 08/03/2022 N 07AP-5632/2022, decision of the Arbitration Court of the Tomsk Region dated 05/16/2022
Registration of trademark does not exclude that the company name is in conflict with requirements of Civil Code
According to paragraph 4 of Art. 1473 of the Civil Code of the Russian Federation it is prohibited to include in the company name of a legal entity the official name of the Russian Federation or Russia, as well as words derived from this name, if there is no permission issued in the prescribed manner.Otherwise, the body that carries out the state registration of legal entities has the right to force a change in the company name of the organization on the basis of a court decision (clause 5, article 1473 of the Civil Code of the Russian Federation).Such a risk, in particular, is exposed to organizations whose corporate name contains the letter combination "ros". The court will oblige the organization to exclude the appropriate combination from its trade name if it comes to the conclusion that it evokes in the consumer a strong association about the participation of the state in the activities of the organization or about the special significance of such activities for the public interest.This is due, among other things, to the stable position of the courts that the abbreviation "Ros" is often used in the names of organizations in which the Russian Federation is a member, or in the names of organizations that perform state functions or particularly significant activities for the state interests, for example, Rosreestr, Rospatent, Roskosmos, Rosnano, etc.A similar position was expressed by the IP Court in case N А40-288364/2021 at the request of the authorized body to Rosdent-CHLH LLC to change the company name.The organization (private dental clinic) was unable to convince the IP Court judicial board that the letter combination "Ros" in its company name is an abbreviation of the phrase "Russian General Dentistry".The IP Court canceled the lower court decisions and supported the registration authority, agreeing with its arguments that the decoding of this abbreviation was not brought to the attention of potential consumers, is not indicated either in the Unified State Register of Legal Entities or in the charter of the organization, in connection with which consumers perceive its name as a derivative of the names "Russia" and "Russian Federation".It is noteworthy that the appellate instance took into account that the defendant is the owner of the exclusive right to the trademark (service mark) "ROSDENT". The appeal pointed out that the fact of state registration of the trademark testifies to the position of the authorized body, according to which the trademark "ROSDENT" does not include, does not reproduce, does not imitate any official name, and is not derived from the word "Russia", "Russian Federation", "Russian".However, the IP Court recognized this approach as untenable, noting that a trade name and a trademark (service mark) are independent objects of intellectual property, the purpose of which is to individualize, in the first case, a participant in civil circulation, and in the second, goods and / or services produced by him. A trade name included in a trademark or service mark is protected regardless of the protection of the trademark or service mark (Clause 2, Article 1476 of the Civil Code of the Russian Federation).Thus, the fact of registering a trademark with a combination of letters, which is similar to the corporate name of the organization, does not in itself exclude the conclusion that such a name contradicts the requirements of paragraph 5 of Art. 1473 of the Civil Code of the Russian Federation.
Forms of consent for trademark use according to court evaluation
A license agreement is a basic and indisputable form of the right holder’s consent to use a trademark, while other types of such consent can still be guided mainly by law enforcement practice. Approaches to assessing the form of consent in these cases largely depend on the circumstances in which such consent of the right holder was required. For example, in a 2022 case N A41-13514/2020, the issue of the consent of the trademark owner was raised in order to agree on the placement of a sign on a pharmacy. In a case that reached the Supreme Court of the Russian Federation, the company applied to the administration for the provision of the service “Coordination of the installation of an information placement medium”, attaching to the application the consent of the trademark owner for its use by the company.The administration refused approval due to the fact that the administration considered the consent of the copyright holder to use the trademark in the absence of registration of the right to use it as inadequate evidence. The recognition of the refusal as illegal was denied by all courts, since the consent of the trademark owner submitted by the company was not a proper confirmation of the right to use it - after all, the applicant did not provide evidence of registration of such a right. In the cassation appeal filed with the Supreme Court of the Russian Federation, the company indicated that the written consent of the copyright holder received by it to use the trademark does not contradict the Civil Code of the Russian Federation . The applicant believed that the current legislation does not bind the expression of the consent of the copyright holder to use a trademark with a certain form, and the use of the result of intellectual activity is covered by the exclusive right of the copyright holder and does not require the mandatory conclusion of an agreement. The Supreme Court of the Russian Federation noted that the list of ways to dispose of the exclusive right to a trademark is not exhaustive and is at the discretion of the right holder. Thus, by providing the applicant with his written consent to use the trademark, the right holder has lawfully disposed of his exclusive right.In another case - on the recovery of compensation - the infringer referred to the exhaustion of the exclusive right to a trademark and emphasized that there were no requirements for the form of the consent of the trademark owner to introduce goods into civil circulation, and therefore believed that such consent could be expressed in any writing. He considered business correspondence to be such a form.The court pointed out that the absence of a prohibition of the right holder is not considered consent (permission). Art. 1487 of the Civil Code of the Russian Federation does not really contain an indication of the form in which the consent of the right holder to use the trademark on the goods put into circulation on the territory of the Russian Federation or the country party to the Treaty on the Eurasian Economic Union should be formalized, but this does not mean that the right to use the trademark sign without concluding an agreement can be drawn up in any form. The IP Court emphasized that consent must be expressed in a form that allows one to reliably identify the addressee of the consent, is capable of being perceived by the addressee, and will allow him, in the event of a dispute, to prove the issuance of such consent. With regard to the import of the original product and its further sale, the court noted that the will of the right holder to use the trademark by a specific person may follow, in particular, from documents confirming the right holder’s application to the customs authority to enter the trademark in the customs register with the definition of authorized importers. There were no such documents.In another case on the recovery of compensation4, it turned out that the absence of objections from the right holder was enough for the court - dismissing the claim, the court indicated that, according to the answer of the authorized representative of the company, the trademark right holder did not object to the resumption of the release of the disputed goods - that is, in fact, agreed to enter the disputed batch of goods into civil circulation, which excludes violation of the exclusive right to a trademark. In case N А56-70471/2020 the company was not held liable under Art. 14.10 of the Code of Administrative Offenses of the Russian Federation, since the right holder informed the customs authority of his consent to use the trademark by a corresponding letter on the day when the company filed the corresponding declaration for the goods marked with the trademark. Additionally, the specified consent was confirmed by the right holder during the consideration of the case of an administrative offense. Trademark termination cases traditionally abound in various forms of trademark consent. For example, in case No. SIP-380/2015, the plaintiff emphasized that the only form of consent of the right holder to the use of a trademark by a third party is the conclusion of a license agreement between them. However, having considered the letter of consent and not establishing the vices of the will of the copyright holder, the court concluded that the trademark is still used with the consent of the copyright holder.At the same time, in case No. SIP-110/2013, the court leveled even the importance of defects in the will of the right holder, indicating that when establishing the fact of using a trademark under the control of the right holder, the court should evaluate all the evidence presented in their entirety, regardless of the presence or absence of defects in the expression of this will. Practice allows us to establish that, according to the IP Court, as a general rule, the will of the right holder to use a trademark by a third party can be expressed in an agreement with this third party; such agreements, in addition to the license agreement, may be a commercial concession agreement, a simple partnership agreement, a work contract, an agreement for the provision of services for a fee. At the same time, the will of the copyright holder can be established without any of the above agreements or letters of consent - for example, if there are corporate relations between the copyright holder and the user of the trademark. In case No. SIP-247/2013, the use of a trademark under the control of the right holder was confirmed through the performance by the person using the trademark of the functions of the sole executive body of the right holder. At the same time, no other document formalizing the consent of the trademark owner, except for the agreement on the transfer of powers of the sole executive body, was submitted.Thus, law enforcement practice also offers other forms of consent of the right holder to use a trademark, in addition to the traditional license agreement, and it can be stated that these forms depend on various types of circumstances in which such consent is required.Originally published in Trademark Lawyer, Issue 5/2022
IP Court Practice in Cases of Breeding Achievements
The share of cases involving the rights to such a type of result of intellectual activity as a selection achievement is not very significant in the practice of IP Court, however, 2021-2022 was marked by an increase in the number of cases in this category.In accordance with paragraph 1 of Art. 1412 and Art. 1413 of the Civil Code of the Russian Federation, breeding achievements are plant varieties and animal breeds registered under the condition of relevance to botanical and zoological genera and species, subject to the requirements of novelty, distinctness, uniformity and stability.Violation of the exclusive right to a plant variety is most often expressed in the sowing of the relevant seeds, and losses in such cases in practice were calculated by multiplying the number of seeds sown by the defendant by the amount of the license fee for the use of varieties approved in the region.Also, a violation of the exclusive right to a plant variety can be expressed in the certification of seeds (obtaining a certificate of conformity) with their subsequent sale. It was for such a violation that the plaintiff in case N A72-2222 / 2019 demanded payment of lost profits (unreceived license fee).The consideration of the case dragged on for almost two years and passed two rounds of instances with opposite results, in particular, the courts disagreed about the omission of the limitation period. In the first round of the case, the courts considered that due to the public availability of information from the register of certificates published on the relevant website, the plaintiff could learn about the actions of the defendant almost immediately, but it turned out that the register of certificates for the year in question was created only three years later.However, in the end, the claim was satisfied - the courts determined the lost profits to be compensated by multiplying the volume of seeds subject to certification by the actual sale price of the seeds by the defendant, and highlighting from this amount the percentage of royalties contained in the license agreement between the plaintiff and a third party.2021 and 2022 are also marked by a series of multi-breed recognition cases. This series is characterized by the same plaintiff and similar circumstances, however, none of the cases ended in satisfaction of the claim.In the cases under consideration (Resolutions of the Presidium of the SIP dated 04/11/2022 N С01-233/2022 in case N SIP-994/2020, dated 03/17/2022 N С01-198/2022 in case N SIP-993/2020, dated 01/24/2022 N С01-2061/ 2021 in case N SIP-794/2020, dated 12/27/2021 N C01-2031/2021 in case N SIP-997/2020, dated 08/11/2021 N C01-1143/2021 in case N SIP-995/2020), patents for controversial breeding achievements (rabbit breeds) were issued in the name of the institute in which the development took place. The plaintiff, the head of the institute, claimed co-authorship of the breeds, arguing that the patents are invalid because he was not listed as the author.However, the fact that the breeds were created using research data obtained during the period of the plaintiff's tenure as director of the institute was not enough to establish a creative contribution. The courts acknowledged that the plaintiff had the opportunity to participate in the creation of controversial selection achievements as one of its authors, but only theoretically. Although the plaintiff referred to a number of his scientific publications on the topic of research, he was not the sole author in any of them. Moreover, documents on education and scientific specialization of the plaintiff do not confirm the coincidence of the areas of his scientific activity and scientific activity on the creation of disputed breeds.
Russian IP Court upholds finding of confusion in product mixing case
In a long-running case that has now gone through several rounds, the IP Court has held that the introduction by a plant of products that are capable of causing confusion with the applicant’s products is contrary to Article 14.6(2) of the Competition Law (2006/N 135-FZ).The manufacturer of Reagents KSSB-2M and the owner of trademarks N 499798 and N 687694, brought an infringement claim against a competitor that had introduced into the market identical goods under the same name.Considering the similarity of the marks, and the fact that this infringement took advantage of its mark, the plaintiff applied to the antimonopoly regulator – the Federal Antimonopoly Service for the Republic of Bashkortostan. At first, the service refused to hear the application but the plaintiff challenged this.The court of first instance – the Arbitration Court of the Republic of Bashkortostan – also initially refused to hear the claim on the basis that the abbreviation KSSB means ‘condensed sulfite-alcohol stillage’, a type of product produced by both the plaintiff and the defendant. The 18th Arbitration Court of Appeal upheld this finding. However, the IP Court (court of cassation) considered it premature for these two courts to conclude that the designation KSSB-2M is not distinctive in the minds of consumers of oil and gas products, and ordered a retrial.The court of first instance reconsidered its ruling and satisfied the application, concluding that the defendant’s product was capable of causing confusion, contrary to Article 14.6(2) of the Federal Competition Law. The courts of appeal and cassation recognised these conclusions as lawful.In 1997 (before the founding of the competitor), the applicant developed the technical specifications for Reagent KSSB-2M and began manufacturing and selling it under that name. In 2017, the plant received a safety-data sheet for chemical products for the substance and a certificate of conformity, the catalogue sheets of products were also registered. Thus, in the opinion of the antimonopoly authority, parallel production was made visible.The IP Court noted that for a long time, only the plaintiff was producing KSSB-2M. Further, while the product name KSSB-2 is commonly used, KSSB-2M is not. Thus, copying the name in this case cannot be due solely to functional use.The court unequivocally recognised the high likelihood of confusion between the two parties’ marks due to the identical name of the goods (despite different packaging designs), similar consumer base, and, a wide and long-term recognition of the original product. The court emphasised that the infringement would result in loss of business for the legitimate product at the hands of the infringer.Originally published in World Trademark Review
The IP Court confirmed the abuse of the right when demanding multimillion-dollar compensation
The Intellectual Property Court considered a multimillion-dollar compensation case, in which the courts did not agree on the degree of the plaintiff's good faith, as well as the rationale for the amount of the amount recovered.The foreign company Olympus Corporation filed a lawsuit against the bank demanding to stop the violation of the exclusive right to the trademark "OLIMPUS" and collect compensation in the amount of 581,599,053 rubles.The lawsuit was motivated by the fact that the initially disputed product, marked with the corresponding trademark, was sold by the plaintiff under a distribution agreement, which stipulated that further equipment could be sold only in Mongolia, without the right to import it to Russia, however, the plaintiff found an offer to sell this product to a Russian the respondent company.The court of first instance, satisfying the claim, reduced the amount of compensation to 55,000,000 rubles, but the appellate instance annulled the act, based on two main provisions.Firstly, the court of appeal pointed out that it is impossible to claim compensation in the absence of evidence of damages, since the existence of losses is a prerequisite for the emergence of the right to compensation (in fact, these are losses, the amount of which does not need to be proven). Such a conclusion, according to the court, follows, for example, from the conceptual apparatus of the Decree of the Constitutional Court of the Russian Federation of July 24, 2020 N 40-P, in which the category of compensation is related to the category of losses (“... [the Norm] does not allow the court ... to reduce ... the amount of compensation if this amount is many times greater than the amount of damages caused to the right holder ...”).Secondly, the Court of Appeal also found that the plaintiff's behavior is unfair and is not aimed at protecting his rights as a copyright holder, but at enrichment at the expense of the defendant.The Court of Cassation upheld the second conclusion, disagreeing with the first.With regard to the relationship between proving the existence of losses and payment of compensation, the SIP indicated that, contrary to the position of the court of appeal, the circumstances underlying Resolution No. the right holder has the right to demand payment of compensation for violation of the exclusive right instead of compensation for damages and is released from proving the amount of damages caused to him.With regard to the established abuse of the right, the court noted the following.Constitutional Court of the Russian Federation, in its resolution of February 13, 2018 N 8-P, determined the cases in which the courts may, on the basis of Art. 10 of the Civil Code of the Russian Federation to refuse to apply the consequences of importing into the territory of the Russian Federation without the consent of the trademark owner of a specific batch of goods on which the trademark is placed by the copyright holder or with his consent and which is legally put into circulation outside the Russian Federation. At the same time, such cases are of an extraordinary nature (threat to the life and health of citizens, other publicly significant interests; adherence of the trademark owner to the regime of sanctions against the Russian Federation).The following set of circumstances testified to the abuse of the plaintiff's right:presentation of an unreasonably high amount of compensation, taking into account the fact that the product was original, originally sold by the copyright holder himself (which excluded the danger of introducing such a product into circulation);the claim is made against the bank that acquired the right to the disputed products as a pledgee;the plaintiff refused the bank's proposal to issue him a compensatory consent in relation to the disputed goods without substantiating reasonable motives;a ban on the sale of the disputed goods will entail large losses for the bank and is tantamount to the destruction of the goods.
IP Court considered characteristics of screenshots when proving infringement of exclusive right on the Internet
According to the circumstances of the case No. А18-3502/2021, the defendant entrepreneur posted on the marketplace website advertisements for the sale of goods bearing the trademark "PULOKA", the copyright holder of which filed a lawsuit demanding the termination of the illegal use of the mark and the recovery of compensation in the amount of 290,000 rubles. In support of the claims, the plaintiff submitted screenshots from the marketplace website.In dismissing the claim, the court of first instance found that the claims did not indicate when the right holder became aware of the infringement of the exclusive right to the trademark, while the date directly affects the assessment of the admissibility of evidence. The court also emphasized that screenshots of Internet pages without the presentation of a protocol of notarial examination of these pages are inadmissible evidence.Having re-examined the case file, the court of appeal did not agree with these conclusions, noting that the screenshots are admissible evidence, because their notarial examination is not obligatory. The court accepted the screenshots because they contained a website address, an online retail platform, a seller, and a trademarked product. As a result, the court came to the conclusion about the validity of the stated requirements in full.Thus, the courts differed in assessing two characteristics of a proper screenshot at once - the presence of the date of compilation in it and the need for notarization.Recognizing as appropriate the argument of the cassation complaint about the groundlessness of the conclusion of the court of appeal, the court of cassation recognized the screenshots as improper.The court pointed out that, according to paragraph 55 of the Decree of the Plenum of the Supreme Court of the Russian Federation of April 23, 2019 N 10, the law does not limit the list of admissible evidence on the basis of which the fact of violation of the exclusive right is established, therefore the court has the right to accept any means of proof provided for by procedural legislation, including printouts of materials from the Internet made and certified by the persons participating in the case, indicating the address of the page from which the printout was made, as well as the exact time it was received.At the same time, the submitted screenshots did not contain such information, which hindered the possibility of establishing the exact date of the infringement imputed to the defendant based on the date of granting legal protection to the plaintiff's trademark. Thus, in assessing this aspect, the court of cassation agreed with the opinion of the court of first instance.But with regard to the notarial certificate, the cassation pointed out the opposite.Referring to Article 102, 103 of the Fundamentals of the Legislation of the Russian Federation on Notaries of February 11, 1993 N 4462-I, the court recalled that evidence can be provided by a notary if there is reason to believe that their presentation will subsequently become impossible or difficult. This led to the conclusion that the current legislation does not oblige to provide evidence in a notarial way (this is the right of the party to the process, and not its obligation and does not deprive the evidence of their probative value).
Overview of trademark cases in which the IP Court Presidium supported the annulment of Rospatent decisions
In practice, the decisions of Rospatent are less likely to be recognized as invalid than the applicant receives a refusal to satisfy the corresponding application. In this regard, it is advisable to consider those recent relevant acts of the Presidium of the Court for Intellectual Property Rights, the adoption of which contributed either to the registration of trademarks, which had previously been denied, or to the re-examination of the objection to the refusal to register a mark.In case N SIP-977/2021, the refusal to register the trademark "WISMAR" was motivated by the fact that the designation, which is the name of a German city, indicates the place of origin and production of goods and services, and therefore does not have a distinctive ability. At the same time, according to Rospatent, registration is also capable of misleading the consumer about the place of origin of goods, since the mark is registered in the name of a person located in the city of Orel. Rospatent adhered to this position when considering the objection to refusal.However, the decision was canceled by the court, since both the emergence of associations between Russian consumers between a foreign city and goods (services) and the wide popularity of the city of Wismar to the Russian consumer in connection with the presence in this city of manufacturers of goods for which legal protection is sought were not proven. The court emphasized that the mere fact of the coincidence of a designation with the name of a city cannot serve as a sufficient basis for refusing to register this designation as a trademark, since the legislation does not establish an unconditional ban on the use of geographical names in trademarks, but takes into account existing or probable associative connections arising from consumers in connection with the controversial designation.The court drew attention to the fact that it is required not only to establish the presence or absence of a geographical object whose name is reproduced in a trademark, but also:its popularity for the target group of consumers;the ability to be perceived by the average consumer as a place of production of a specific product, which depends on whether consumers have associative links between a specific product and a specific designation.With regard to the argument about the ability of the designation to mislead, the court noted that Rospatent had to prove that in the mind of the consumer, through associations, an idea about the manufacturer of the goods may arise, which does not correspond to reality.In case N SIP-899/2021, Rospatent refused to register the trademark "MORE! MILK" for dairy products, indicating that the dominant position in the disputed designation is occupied by unprotected elements that do not have a distinctive ability, as they indicate the type, composition, properties, purpose of goods and services.The court, obliging Rospatent to register a trademark, noted that there is no prohibition on the registration of verbal elements characterizing a product (service) made with a certain graphic study that allows distinguishing the claimed designation from similar ones, including due to the complication of additional elements.After analyzing the controversial verbal designation from the standpoint of an ordinary consumer, the court found that the only dominant element "MORE!" can be perceived by Russian consumers who are not native English speakers, including as a transliteration of the Russian word "sea". The word element "MORE!" is a protectable, fantasy (non-descriptive) element, and the word element "Milk" can be included as an unprotected element. At the same time, in general, the elements form an original composition, so there was no need to analyze the confirmation of the acquisition of distinctive ability.Also, the court did not support the position of Rospatent on the unprotectability of both verbal elements (based on the fact that they are perceived as a phrase (“more milk”) that characterizes goods and services). The Court pointed out that writing these words in two lines separated by a punctuation mark and in a different graphic manner precluded the inference of perception as a phrase.In case N SIP-607/2021 Rospatent made a decision to refuse registration of the trademark "KotoMishki", motivated by the identity of the image to the work of a third party.Denying an objection to this decision, Rospatent pointed out that the pictorial elements could well be perceived precisely as images of the characters of a particular animated film, and the very characteristic external outlines of round heads with mouths skewed to the side determine their resemblance in general to the characters of the popular children's animated series, which have exactly the same characteristic memorable features that draw attention to themselves.However, the court ordered Rospatent to register the mark, since in order to conclude that there is a strong associative connection with the opposing works, only “some” similarity due to the use of images of recognizable animals made in a stylized form typical for children's cartoons and illustrations for children's fairy tales is not enough.The court considered that the conclusions of Rospatent were based on a subjective opinion and were not supported by objective information reflecting the opinion of consumers. At the same time, it was noted that, in itself, information about the wide popularity of the animated series does not predetermine the conclusion about the presence of relevant associations, since the fame of the work can "both generate wide associative connections, and, on the contrary, lead to increased consumer awareness, to its attentiveness and selectivity".In case N SIP-455/2021 Rospatent refused to register a trademark "AVIATOR" due to confusing similarity with trademarks previously registered in the name of other persons in relation to similar goods. Filing an appropriate objection did not change the situation.Challenging the refusal to satisfy the objection, the applicant, as in the objection, referred to the agreement reached between him and the right holder of the opposing sign - in the form of an agreement on the alienation of the exclusive right, which was registered with Rospatent.Obliging Rospatent to reconsider the objection, the court pointed out that the acquisition of the exclusive right to the opposing service mark is the result of a conciliation of persons, which indicates that the legal grounds for opposing the corresponding mark have disappeared.
Overview of 2022 IP Court rulings in trademark infringement damages cases
Art. 1252 of the Civil Code of the Russian Federation allows you to present a claim for damages against a person who illegally used the means of individualization and caused damage to the right holder. At the same time, losses recovered in the protection of exclusive rights are determined taking into account the general norms of civil law on compensation for losses.It should be noted that there are relatively few cases in which right holders would choose to claim damages instead of collecting appropriate compensation, which, of course, is due to the complexity of proof.Basically, we are talking about losses in the form of lost profits. Practice shows that in order to bring to civil liability in the form of recovery of lost profits, it is necessary to establish the presence of a corpus delicti, including the occurrence of harm, the wrongfulness of the behavior of the tortfeasor, the causal relationship between these elements, and also, in cases established by law, the guilt of the tortfeasor.In order to recover lost profits, the plaintiff must prove what income he would actually have received if his exclusive right had not been violated under normal conditions of civil circulation (typical conditions for the functioning of the market, which are not affected by unforeseen/force majeure circumstances).A necessary condition for satisfying the claim for the recovery of lost profits is the establishment of the violation committed by the defendant as the only obstacle to the receipt of income by the plaintiff when he takes all the necessary measures to obtain it.It is advisable for the right holder to choose this method of protecting his right if it is economically justified (the lost profit is more than the probable compensation) and / or the plaintiff has a ready evidence base (for example, in connection with the administrative legal prosecution of the defendant). Also, the practical benefit in recovering damages lies in the fact that their size, being established by the court, is not reduced, in contrast to compensation for violation of an exclusive right.In 2022, all successful trademark infringement cases that went to cassation had Chanel SARL and/or Christian as the plaintiffs Dior . All cases are characterized by the presence of prejudicial acts on bringing violators to administrative responsibility, which greatly facilitated the proof. The amount of damages in different cases varied significantly.In case N A63-6499/2021, 125,500 rubles of damages were recovered for infringement of rights to trademarks N 731984, N 951058 'DIOR',  as well as to the well-known trademark N 492476 'CHANEL' (in the amount in favor of both copyright holders). The violation was the sale of counterfeit goods.Despite the defendant's position on the need to calculate the amount of lost profits on the basis of the cost of counterfeit copies sold, the courts of all instances supported the calculation of the amount on the basis of the value of the original products of the plaintiffs at the time the entrepreneur committed the offense, based on the principle that one unit of counterfeit products displaces one unit of original products from the market. Thus, the amount received corresponded to the lost income that the plaintiffs would have received under normal conditions of civil circulation if their exclusive rights had not been violated.The violator referred both to the severity of his financial situation and to the grounds for reducing the amount recovered, however, neither the first nor the second applies to situations in which damages are recovered.At the same time, the defendant managed to convince the Intellectual Property Rights Court not to take into account the reference of the court of first instance to the Resolution of the Plenum of the Supreme Court of the Russian Federation of April 26, 2007 No. patent rights, as well as the illegal use of a trademark". The court of first instance pointed out that, according to this decision, when calculating the amount of damage to the right holder, one should proceed from the retail value of the original copies of works or phonograms at the time of the crime, and this provision should be applied by analogy with the law, since disputed relations are not directly regulated by regulatory legal acts.The IP Court noted that these clarifications relate to the procedure for determining the amount of damage caused as a result of the commission of a crime under Art. 146 of the Criminal Code of the Russian Federation, and for this reason have no legal significance for the purposes of determining the amount of recoverable damages for violation of exclusive rights. It should be noted that the withdrawal of this part of the argument in any case did not bring any changes to the operative part of the judicial act, since the calculation of lost profits based on the cost of the originals corresponds to the concept of lost profits given in Art. 15 of the Civil Code of the Russian Federation.In case N A08-494/2021, the plaintiffs demanded damages in the amount of 170,350 rubles and 263,153 rubles, respectively, for violation of the exclusive right to trademarks N 31339 'CHANEL', N 426432A, N 1205417 when selling counterfeit shoes.The losses were calculated by the plaintiff in the form of lost profits, the amount of which was determined, also based on the prices for original products that were current on the date of seizure of counterfeit goods.At the same time, in the first instance, the basis for refusing to satisfy the claims was the omission of the limitation period, with which the Court of Appeal did not agree, being supported by the SIP. The key issue for this ground was the question of the moment from which the plaintiffs became aware of the trademark infringement.As the beginning of the calculation of the term, the defendant referred to the letters of the Ministry of Internal Affairs of Russia (whose bodies revealed the offense) sent to the plaintiffs, however, there was no evidence of the date of receipt of these letters, so the appellate court proceeded from the date of the answers to them. In case N A32-38394/2021, a claim was made for the recovery of damages in a much larger amount in comparison with the cases described above - 1,625,600 rubles. - in connection with the illegal use of the trademark N 31339 'CHANEL'.The defendant tried to import counterfeit goods, but the customs authority did not allow it to be released.When determining the amount of damages, the courts referred to the fact that it was determined based on the prices for original products that were relevant on the date of seizure of counterfeit products, but the defendant pointed out that the conclusions about the sufficiency of evidence for assessing the market value of the original product are based on a certificate of damage to the company-right holder, which is not relevant evidence.The defendant also believed that, since the sale had not yet begun, and the goods had only just been imported into the Russian Federation, the conclusion about the replacement of one unit of production with a violation of the same unit of production belonging to the plaintiff did not correspond to the case materials, and there were no grounds for recovering lost profits due to lack of evidence of deriving income from the sale of products.The courts took into account that the defendant did not provide other information about a different market value of the original goods to the court of first instance, the company did not make a counter settlement , and the goods were imported for the purpose of sale.In case N A32-15898 / 2021, the plaintiffs received more than 3,500,000 rubles as damages for trademark infringement N 37532 'DIOR', N 37531 'CHRISTIAN DIOR', N 31339 'CHANEL'.The courts, as in other cases, calculated the damages at the price of the originals, and rejected the defendant's arguments about the need to calculate the damages based on the price of counterfeit products.The court also noted that as a result of the defendant's violation of the exclusive rights to other people's trademarks, some consumers of the right holders' goods went to the infringer; the reputation of the right holders was damaged by the use by consumers of low-quality counterfeit goods put into circulation by the infringer, and the right holders incurred expenses for restorative advertising; the violator profited from the illegal use of someone else's trademarks, while the consumer, buying counterfeit goods marked with someone else's trademark, purchased the goods under the brand of the copyright holder.
IP Court obliged Rospatent to restore the legal protection of a utility model due to an error in assessing the materiality of its feature
According to paragraph 2 of Art. 1351 of the Civil Code of the Russian Federation, a utility model is new if the totality of its essential features is not known from the prior art. At the same time, the concept of the “essential feature of a utility model” is not disclosed in the Civil Code of the Russian Federation, but is described in the regulatory document of Rospatent.In accordance with paragraph 35 of the Rules for preparing an application for registration of a utility model, signs are considered essential if they affect the possibility of solving the technical problem indicated by the applicant and obtaining the technical result provided by the utility model, that is, they are in a causal relationship with the specified result.In this regard, the case N SIP-603/2021 considered by the IP Court in 2022 on invalidating the decision of Rospatent, in which the category of essential features turned out to be central for making opposite decisions, seems interesting. In this case, the assessment of the sign as significant influenced the outcome of the case and contributed to the restoration of the legal protection of the utility model.By this decision, the utility model patent was declared invalid due to the inconsistency of the technical solution with novelty - another object was opposed to the utility model. Challenging the arguments of the objection to the registration of the utility model (which is a container), the applicant pointed out that the container according to an independent claim differs from the opposing container in an essential feature - that it has an insert bag with a lid.However, Rospatent did not recognize this distinguishing feature as significant, since, from its point of view, in the application materials, the applicant did not disclose a causal relationship between the implementation of the liner bag with a lid and the technical results.According to Rospatent, it is the description of the utility model that should contain the disclosure of the influence of the features of the utility model on the achieved technical result, and in the absence of such disclosure in the description, the features cannot be considered significant, even if after the grant of a patent it is proved that they really affect the technical result.However, the court confirmed the position that the legislation did not establish the necessary degree of detail in disclosing the effect of the feature on the technical result and, given the simplicity of the device under the disputed patent for a specialist in this field of technology, the claimed causal relationship between the feature and the technical result is obvious.As a result, the decision of Rospatent was canceled, since the court assessed the disputed feature as essential, and the utility model as a “novelty” corresponding to the condition of patentability since the considered feature is contained in an independent claim and distinguishes the controversial technical solution from the opposed one.
IP Court explained the practical features of the qualification of abuse of the right
In most cases, trademark owners do not assume that by filing a claim for the protection of an exclusive right, it would seem that it is completely indisputable, they are legally crossing the line separating a legal claim from an abuse of the right.For example, in case No. A74-12361 / 2020, the entrepreneur-owner of the trademark No. 309546 "Sladkarnitsa" filed a lawsuit against the Sladkarnitsa confectionery house with a demand to recognize the use of the trademark and confusingly similar designations as illegal, as well as the obligation to stop such use and eliminate the results of the offense (remove at their own expense signboards with the appropriate designations, withdraw from circulation and destroy at their own expense counterfeit goods, labels, packaging of goods on which a trademark or a confusingly similar designation is placed).Prior to filing the lawsuit, the legal protection of the trademark of the plaintiff was prematurely terminated in part in relation to some goods and services, in connection with which the court of first instance dismissed the lawsuit, referring to the fact that the plaintiff asks to stop the infringement in respect of those goods and services for which the trademark no longer distributed, i.e. the plaintiff's actions to protect the exclusive right to a trademark constitute an abuse of the right. This conclusion was upheld by the Court of Appeal.Supporting the dismissal of the claim, the Intellectual Property Rights Court noted that the subtlety of the case lies not in whether there is an abuse of the right by the plaintiff or not, but in what exactly to substantiate its presence. In this connection, he emphasized that he agreed with the outcome of the case, but not with the rationale given by the lower courts.The IP Court noted that the operative part of the relevant decision on termination of legal protection was announced on November 25, 2020, and the statement of claim was filed on November 27, 2020, on the same day as the decision on early termination of the legal protection of the mark was dated. This gave grounds for the lower courts to come to the conclusion that at the date of filing a claim against the defendant, the plaintiff not only knew about the existence of legal claims in relation to the trademark, but also had information that the legal protection of the disputed trademark was terminated in part.The IP Court noted that the abuse in this case is confirmed not only by the existence of an appropriate judicial act on the partial early termination of legal protection, but by the real non-use of the trademark by the copyright holder for all, not only “discontinued” goods and services, and the direction of the requirements for future termination of use trademark, including in relation to goods and services for which the legal protection of the trademark has already been terminated.
The court considered rebroadcasting as a way to use a television program
Retransmission of a work is one of the newest ways of its possible use, reflected in the Civil Code of the Russian Federation, so the corresponding few judicial practice is especially valuable. In particular, of practical interest are cases in which the impossibility of using the work in this way is established.In a recent case, following the broadcast of a TV program (and its placement on the website), the plaintiff-exclusive licensee filed a lawsuit against the TV channel for the illegal use of a song as part of an audiovisual work, demanding compensation in the amount of 1,000,000 rubles, calculated for illegal:reproduction of a work - making copies of a work in the form of a sound recording for subsequent inclusion in an audiovisual work;inclusion of a work (combination of a sound recording with a video sequence during the installation of a TV program) as part of a complex object - an audiovisual work;reproduction on the Internet and making available to the public as part of a television program;transmission of the work on the air and its retransmission.The court of first instance recovered 600,000 rubles (100,000 rubles for each use), while the Court of Appeal reduced the amount of compensation by almost ten times. At the same time, the appellate court, as well as later the court of cassation, dwelled separately on the issue of the retransmission of the work, which, in its opinion, could not be carried out in this case.The higher courts noted that the use of a TV program, including a fragment of a video clip, could not be carried out by means of retransmission - retransmission is possible only in relation to a TV program or its essential part, which is initially broadcast by the broadcaster.The IP Court indicated that this conclusion was based on a literal interpretation of the legal concept of "retransmission". According to paragraph 8.1 p. 2 art. 1270 of the Civil Code, retransmission is the reception and simultaneous transmission on the air (including via satellite) or via cable of a complete and unchanged radio or television transmission or its essential part, broadcast on the air or via cable by an on-air or cable broadcasting organization.In this situation, the broadcaster was the defendant (TV channel), which, as the courts noted, “has no need to first broadcast its TV program, and then receive and rebroadcast it” - various cable TV channels and other telecom operators do this.As evidence of the retransmission, the plaintiff also referred to the fact that the contracts with RAS (Russian Authors' Society) provide for the right of retransmission for broadcast TV channels, but the courts pointed out that this did not prove that the defendant had retransmitted the disputed work.
IP Court approved collecting the maximum compensation for the illegal use of the tag database
In case No. C01-2033/2021, the individual entrepreneur-rightsholder filed a lawsuit to stop actions that violate the exclusive right to the database and to recover compensation in the amount of 5,000,000 rubles.The plaintiff was the owner of the registered database "Goods Online", which is a set of unique tags (more than 500,000 pieces). The database was a search aggregate of goods on the plaintiff's website regmarkets.ru (a navigator for advantageous offers for goods throughout Russia).The reason for filing the claim was the following: on the site yavitrina.ru, which was administered by the defendant, numerous elements that made up the content of the plaintiff's database were used.The courts came to the conclusion that both the existence of the database as an object of related rights and the plaintiff's exclusive right to this database were proved. The defendant retorted that the courts did not analyze whether the tags are independent elements of the database, i.e. separate objects of intellectual property, but this argument was rejected with reference to the absence of such a requirement in the law.Assessing the existence of a violation, the courts found that the tags from the plaintiff's database appeared on the defendant's website in a significant amount, while the defendant claimed that he did not extract the tags from the disputed database, but from other sources. However, multiple typos in the tags that make up the content of the disputed base played into the hands of the plaintiff - the courts noted identical typos in the tags used by the defendant. But the main thing is that according to the results of the examination, the coincidence of tags for which the date of indexing in the Yandex search engine was older for regmarkets.ru than for yavitrina.ru was 98.4%.The negative consequence of illegal copying of tags was an increase in the traffic of the defendant's website by borrowing the traffic of the plaintiff's website, which contributed to the "increase" of the defendant's website in the search engine. Consequently, the probability that a potential buyer will go to this site has also increased - and the more "clicks" (transfers) buyers make on the site, the higher the income the owner will receive.Taking into account that as a result of the violation of the exclusive right a significant income was received (more than 80,000,000 rubles) and taking into account the duration of the violation and its purpose, as well as the plurality of illegally borrowed elements of the database (almost half of the database), the courts recovered compensation in the maximum amount - 5 000 000 rubles.
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".
Qualification of designations as false or capable of misleading about the product (its manufacturer) in IP Court practice
In accordance with paragraphs 1, art. 3, Article 1483 of the Civil Code of the Russian Federation, state registration as trademarks of designations that represent or contain elements that are false or capable of misleading the consumer about the product or its manufacturer is prohibited.This prohibition follows from the provision of Article 6-quinquies (B-3) of the Paris Convention for the Protection of Industrial Property, according to which trademarks may be rejected at registration or declared invalid if the marks are contrary to morality or public policy and, in particular, if they may mislead the public.At the same time, judicial practice focuses on the fact that about verification of the designation for compliance with the "registration" requirements is based on the perception of this designation by the addressees of goods/services for the individualization of which legal protection of the designation is requested - by average consumers, but specifically by Russian ones, even if the designation is made in a foreign language.It is also important to note that a designation is considered false or misleading if at least one of its elements is such.When evaluating designations for falsity/ability to mislead, the key category is plausibility-according to the Recommendations on certain issues of examination of the declared designations if an element is found to be false or misleading, it is advisable to evaluate whether the false indications or associative representations are plausible and whether the consumer will believe the false indications and associative representations.If elements of a designation can be classified as false or misleading, but are implausible, it is not appropriate to recognize the designation as false or misleading.For example, Rospatent recognized the designation "CHUDO PIZZA" in relation to goods of the 30th class MCTs that are not pizza (pancakes, noodle-based dishes, etc.) are a false indication of the type of product. But the court in N SIP-543/2021 proceeded from the fact that the word element "pizza" is not able to evoke in the consumer's mind plausible associations in relation to the named products, which obviously do not belong to the dish "pizza" and cannot be perceived by the consumer in this capacity, taking into account the prevalence of this word and a clear understanding of its meaning for the absolute majority of consumers.In case N SIP-1140/2020, the designation was also not recognized as false – the court indicated that the phrase "PROFITABLE CLEANING" in terms of goods of the 3rd class of ICTU related to cosmetics, perfumes, face care cannot be perceived as plausible when marking any cosmetic product from the registration list.In another case, the Agency erroneously refused to register the trademark "Passport Brand", on the grounds that the claimed designation can be misleading consumers on the type and destination of the goods and services, and the applicant insisted that the designation is fictional, not having a definition in the dictionary, therefore will not enter the consumer confusion regarding the type and purpose of the claimed goods and services; two separate entities, "passport" and "brand" do not form a really existing object or applicable anywhere concept.The court supported the arguments of the future copyright holder, pointing out that the verbal designation is a fantasy, invented designation that does not cause the consumer to have plausible associations with any specific goods and services, which follows from the evidence provided by the applicant in the case file.On the contrary, if false and misleading elements are perceived as plausible, reliable indications of the type and nature of the product, information about the manufacturer, etc., they may be considered false or misleading.For example, in the case of N SIP-1066/2020, it was noted that for the product "wine" the designation "FIRE WATER" would be false (but at the same time plausible), and in the case of N SIP-24/2021, such signs were established for the designation wine "Neapol" because the information contained in it may create a distorted view of the place where the relevant services are provided, and through associations, mislead the consumer; thus, “Neapol" can obviously cause the Russian consumer to have plausible associations associated with the place of origin of services, as well as with the location of the person providing them, which do not correspond to reality.In the case of N SIP-864/2020 the court upheld the view of Rospatent on the ability to refer to the "Police" to mislead consumers regarding the service provider as came to the reasonable conclusion about the origin of the consumers is untrue, but the most likely associations between the declared designation and the same name on the rule of law (given the fact that the trademark was planned for legal services, guard services and security).The category of possible delusion is one of the most difficult in practice. Such designations include, in particular, designations that generate in the consumer's mind an idea about a certain quality of the product, its manufacturer or place of origin, which does not correspond to reality, therefore, in order to conclude that the average Russian consumer can be misled by the fact that the designation is used by another manufacturer, it must be established at least that this manufacturer uses a specific designation in the Russian Federation and that the average Russian consumer knows it.The information note prepared based on the results of the analysis and generalization of judicial practice, approved by the decision of the Presidium of the Intellectual Property Rights Court of 05.04.2017 N SP-23/10, specifies the criteria for analysis – paragraph 2.3 emphasizes that consumer confusion regarding the manufacturer of goods can also occur in relation to designations that individualize heterogeneous goods. The help highlights important factors that affect the likelihood of a mistake.: These are the relevance of goods to categories of general consumption or industrial and technical purposes (the probability of mixing in the first case is higher) and the duration of use of goods (the shorter the service life, the higher the probability of mixing).This explanation appears to be situation-specific, and its formal application may lead to incorrect conclusions. So, in case N SIP-212/2018 Rospatent refused to register the trademark "Molodostroy", citing the ability of the designation to mislead consumers in relation to the person providing services – due to possible confusion with the housing and construction cooperative "Molodezhnaya Stroika".With regard to the argument of the failed right holder about the absence of a detailed assessment of the uniformity of goods and services in the contested decision, Rospatent pointed out that in order to refuse registration of a designation as a trademark, it is sufficient to establish the probability of occurrence in the consumer's mind of an idea about a person providing services that does not correspond to reality, and therefore the uniformity of goods and services in such a situation is not taken into account.However, the court recognized that this legal approach should not be applied automatically to any situation and that the true meaning of the explanation is that the absence of the need to take into account the uniformity of goods and services arises in exceptional cases when the designation applied for registration as a trademark had a high degree of popularity and was associated with a certain person among a wide range of consumers before the priority date.Evidence presented in the cases of this category is quite complex; practice emphasizes the that conclusion about the origin of the consumers Association of a particular trademark with a particular manufacturer requires not only the presence of evidence to support the introduction into civil circulation of goods (services) with a similar designation of a different manufacturer, but also a confirmation of the consumers stand associative link between the product (service) and its producer (contractor).As an example of the applicant's success against granting legal protection to a trademark capable of misleading consumers in relation to the manufacturer, we can cite case No. SIP-564/2019.The objector pointed out the existence of an exclusive right to the well-known trademark No. 129 "LEGO" and a series of trademarks LEGO/ LEGO, referring to its long history, the company's popularity among consumers, and the use of the "LEGO City" designations for marking goods (thematic series) in its business activities, presented a report on the results of a sociological survey of consumers conducted by VTsIOM, which, in the company's opinion, confirms the conclusion about the popularity of the "LEGO" trademark and the presence of an associative link between the disputed "LEGOROD" trademark and the person who filed the objection.Rospatent rejected the objection, referring to the results of the VTsIOM report and pointing out that only 20% of respondents assumed that the owner of the designation "LEGOROD "is a company, while 21% of respondents believe that the owner of the designation" LEGOROD "is not related to the company, 30% of respondents believe that the owner of the designation" LEGOROD " is not related to the company, but conducts its activities under the control or under license or with the permission of the company, and the remaining 29% of respondents could not decide on the answer.But the court, on the contrary, considered that the ability of the sign to mislead the consumer about the person who makes goods and provides services was proved, since it was confirmed by the VTsIOM report in conjunction with an average degree of similarity of designations and a high degree of uniformity of goods and services, as well as with information about a series of opposed signs of the company and their popularity.Considering the VTsIOM report, the court noted that Rospatent mistakenly did not take into account that the number of respondents who consider the person using the disputed sign to be the company itself, a person controlled by the company or its licensee is 50% of respondents in aggregate. Thus, the report contained information about consumer associations between the disputed designation and companies as producers of goods and performers of services for registering the disputed mark, and confirmed the wide popularity of the opposed trademarks, including the well-known "LEGO" trademark in the Russian Federation.
The current practice of applying monetary sanctions to protect the exclusive right to a trademark
Most trademark holders are interested in preventing violations of the exclusive right and collecting monetary amounts from persons who illegally use the means of individualization. Therefore, among all the methods of protecting exclusive rights, the most interesting from the point of view of practice are those that apply liability measures, according to the general rule, in the presence of guilt.According to subclauses 3 of clause 1 and clause, 3 of Article 1252 and clause 4 of Article 1515 Civil Code of the Russian Federation, protection of exclusive rights to trademarks is carried out, in particular, by filing a claim for damages or paying compensation for violation of this right. Still, in practice, the first method is used much less often.More strict rules explain this by proving the necessary set of circumstances with which the law connects the possibility of recovery.For example, in the case of N A60-54488/2017 the court, in denying the claim for damages for violation of exclusive trademark rights, stressed that to recover damages, you must prove together the fact of their occurrence, the wrongfulness of conduct, and that the defendant is guilty as a tortfeasor, the causal connection between the wrongful actions (inaction) of the defendant and the ensuing negative consequences to the plaintiff's property and the number of recoverable damages. At the same time, the court pointed out that the causal relationship should have the following characteristics: 1) the cause precedes the effect, 2) the cause is a necessary and sufficient reason for the occurrence of the effect.Examples of a successful recovery of damages include the following cases.In case No. A07-10720/2017, the right holder of the trademark DOBRAYA BURENKA, claimed damages in the amount of 20 million rubles. The Court of the First Instance, rejecting the claim, pointed out the lack of similarity between the designations, but the higher courts partially satisfied the requirement, recognizing the presence of the necessary degree of similarity.To justify the damages, the plaintiff referred to a license agreement concluded with another person on the use of another trademark, according to which the remuneration for use is 300,000 rubles per month. According to the plaintiff's calculations, if the defendant had entered into a license agreement with the plaintiff to use the disputed trademark for 3 years (the period of illegal use of the trademark), the plaintiff would have received a profit of 10.8 million rubles.The court agreed with this method of calculating the damages; however, since the use of the trademark was proven only for 1 month, it decided to recover 300,000 rubles.In the case of N A75-7224/2020, the right holder of a well-known trademark CHANEL N 135, citing losses caused to him, calculated their size (632 100 RUB) based on the price of the original products, current at the date of sale by the defendant of a counterfeit (i.e., loss of income that the company would have received under normal conditions of civil turnover if her right had not been violated); courts have concluded that claims to be satisfied in full.The defendant's argument that the damages should be calculated based on the price of counterfeit goods was rejected since the plaintiff lawfully calculated the cost of damages from the price of the original product displaced from the market.Similarly, in case No. A66-6469/2020, the court granted the same plaintiff's claims in the amount of 500,000 rubles, i.e. in full, determining the amount based on the prices for original products that were valid at the date of seizure of counterfeit goods, guided by the principle that one unit of counterfeit goods displaces one unit of original products from the market.Clause 4 of Article 1515 of the Civil Code of the Russian Federation provides the copyright holder with three options for calculating the required amount of compensation for violation of an exclusive right:1) in the amount of 10,000 to 5 million rubles, determined at the discretion of the court based on the nature of the violation;2) twice the value of the goods on which the trademark is illegally placed;3) twice the value of the right to use the trademark, determined based on the price that, under comparable circumstances, is usually charged for the legitimate use of the trademark. It is noteworthy that the court cannot change the form of payment chosen by the plaintiff-owner (p. 59 resolution of the Plenum of the RF armed forces 23.04.2019 N 10), nor may replace the loss compensation – for example, in the case of N A72 16220/2019 the plaintiff asked the court to recover from the defendant 200 000 damages for violation of exclusive rights to a trademark, but the court of the first instance sought compensation in the same amount. The higher courts noted that the court was not entitled to consider and satisfy the claim for recovery of compensation since such a claim was not made by the plaintiff.The "traditional" method of calculating compensation is to determine the amount of compensation to be paid. This method is used in most cases based on the nature of the violation in any fixed amount in the range of 10,000-5 million rubles.When applying this method of calculating compensation, it should be taken into account that to justify the amount (if it is not minimal), it is necessary to submit to the court documents confirming the proportionality of the amount collected to the nature of the violation (paragraph 61 of the Resolution of the Plenum of the Supreme Court of the Russian Federation No. 10 of 23.04.2019). In practice, this is usually confirmed by the presence of circumstances such as the repetition of and/or duration of offenses.The most notable examples are cases in which the plaintiffs sought the maximum amounts. For example, in case No. A41-39390/2020, the defendants sold clothing using a designation confusingly similar to the trademark BASIK BABY. The plaintiff claimed compensation from the defendants in the amount of 5,000,000 rubles. In granting the claim, the court noted that it considers the nature of the violation committed, particularly that the violation is ongoing (lasted for several years) and took place on several sites and social networks.However, it is not always advisable to calculate compensation based on the nature of the violation. In some cases, it is more practical to use options with double the cost (counterfeit goods/rights of use).When the size is calculated by double the cost of counterfeit goods, for justification, it is necessary to confirm the number of such goods and the price at which they are sold (offered for sale) to third parties (paragraph 61 of the Resolution of the Plenum of the Supreme Court of the Russian Federation No. 10 of 23.04.2019). Such evidence may include, for example, product catalogs that indicate the cost, the defendant's customs declaration for goods imported into the Russian Federation, etc.For example, in case No. A40-249772/2019, when satisfying the claim, the court was guided by information from the cargo customs declaration and an extract from the sales books.When choosing the calculation method, it is necessary to carefully analyze the scope and essence of trademark protection and correlate this information with future evidence.For example, in case No. A45-6211/2018, the plaintiff-the right holder of a sign that applies only to the service of the 42nd class of the ICTU "sale of goods", established the fact of illegal use of the sign as a store name and demanded payment of compensation, calculating the amount by doubling the cost of counterfeit goods. However, the calculation was made based on the cost of goods sold by the respondent and not services for the sale of goods of the 42nd class of the ICTU.The court, rejecting the claim, explained that the plaintiff's trademark was registered not about goods, but about services for the sale of goods, and without specifying specific goods in the name of services, while the sale of goods and the provision of services for the sale of goods are not identical and have a different object and orientation. In the present case, the defendant's activity was not related to the provision of services to third parties; the defendant sold specific goods, which made it impossible to calculate the amount of compensation according to the plaintiff's version.Double the cost of the right to use a trademark is based on the price that, under comparable circumstances, is usually charged for its lawful use in the same way that the infringer used (paragraph 61 of the Resolution of the Plenum of the Supreme Court of the Russian Federation No. 10 of 23.04.2019). This is often confirmed by the plaintiff's contracts with a third party on granting the right to use a trademark license or commercial concession, but the courts also accept expert opinions and reports on the assessment of the value of the right to use the mark.This method of calculating compensation is quite complex since, in some cases, it is problematic to allocate the share that corresponds to the circumstances of the case in the amount of remuneration for a specific contract submitted.Practice emphasizes that when determining the cost of the right to use the corresponding trademark, only the cost of the right to use the same method of use should be taken as the basis for calculating the amount of compensation while submitting a license agreement to the court does not imply that compensation in all cases should be determined by the court in twice the price of the specified contract.For example, in case No. A70-1339/2018, the plaintiff provided a non-exclusive license for all goods of the four classes of ICTU, the remuneration for which was 90,000 rubles, in support of the price that is usually charged for the lawful use of a trademark under comparable circumstances.The court took into account that the factors that influenced the determination of the amount of remuneration under the license agreement differ from the circumstances of the use of the trademark by the defendant, and allocated part of the amount (4,500 rubles) from the specified amount, based on the fact that the defendant used the trademark only in one of the 5 ways specified in the license agreement, and only in relation to goods of only one of the 4 classes of MCTU.Originally published in Trademark Lawyer, issue 2 (2022)
Features of application of the legislation on exhaustion of the exclusive right to a trademark
The mode of the exclusive right exhaustion to a trademark is intended to indicate when the right holder loses the right to make claims regarding the violation of its right to a trademark. The exhaustion principle does not allow the trademark owner to exercise his exclusive right concerning the same goods twice.The smaller the scope of the principle of exhaustion of trademark rights, the more opportunities there are to inflate prices and create a limited offer of original products. Although the international exhaustion principle of the exclusive right to a trademark was in effect in Russia until the end of 2021, the regional is currently in effect.1487 of the Civil Code of the Russian Federation it is not a violation of the exclusive right to a trademark to use it by other persons concerning goods that were put into civil circulation on the territory of the Russian Federation directly by the copyright holder or with his consent. However, due to the membership of the Russian Federation in the Eurasian Economic Union, the goods may also be put into civil circulation on the territory of the EAEU member states.At the same time, in practice, the copyright holder pursues sales of its own goods quite often – for example, in the case of the PASTHER trademark, the plaintiff demanded compensation because the defendant, having purchased a certain amount of labeled products from the plaintiff himself, sold a significantly larger amount of it. However, the courts rejected the claim, finding that the" extra" products were also introduced into civil circulation by the plaintiff but were purchased by the defendant through other sales channels.However, the existence or absence of exhaustion of the exclusive right is not always obvious. For example, one of the controversial situations that have given rise to controversial court practice is the placement of a trademark on the signboard of a store that sells goods that were put into circulation by the trademark owner or with his consent, and the mark is registered for such goods and services for their sale.In some cases, The Intellectual Property Rights Court noted that the use of a trademark on a sign, in this case, is an offense, since it is not proven that the sign on the defendant's store with the trademark of Avtovaz company, where auto parts are sold, belongs to the copyright holder of this trademark, or was made and placed on the facade with his consent. At the same time, there is a reverse practice, according to which use on the signboard is not recognized as a violation, since the exclusive right to goods sold in the store has been exhausted.The key issue in cases involving exhaustion of rights is whether or not the right holder consents to introduce goods into circulation. Most often, this is a license/dealer/distributor agreement, but in rare cases, written approval of the copyright holder is also accepted.For example, in case N C01-305/2016, the trademark owner OREO 1487 of the Civil Code of the Russian Federation found that the suspension of customs release of goods was leveled by a letter from the representative of the copyright holder stating that he did not object to the resumption of the release of these goods in accordance with the established procedure.In a trademark case ARGUS, VARDEX, SHAVIV, the court accepted as evidence of the legality of the use of trademarks a letter issued by the exclusive licensee of the copyright holder to the respondent. The letter established that the respondent "is an authorized organization for the supply of products submitted by [the exclusive licensee of the copyright holder]." Thus, the court found that the plaintiff himself gave the defendant the right to use trademarks.An interesting embodiment was found in the case N C01-1144/2018 - a non-exclusive licensee imported marked goods into the Russian Federation but did not apply for the issue of imported goods. Therefore, the court recognized the goods as ownerless property with subsequent recognition as the property of the port, which then sold it to the defendant. The courts stressed that after the customs authority permitted the release of the declared goods, the person did not apply to the port for the issue of this product does not negate the fact that the disputed goods were put into circulation with the rightsholder's consent.In some acts, courts indicate the legality of the use of a trademark with reference to art. 1487 of the Civil Code of the Russian Federation can be proved by the fact that " the product looks like the original one, the trademark is used in the form in which it is used by the copyright holder himself, and the right holder or his licensee is indicated as the manufacturer on the product (package)." At the same time, the rightsholder has the right to challenge these arguments, for example, pointing out that the disputed goods were not produced by him or his licensee, confirming this by the discrepancy between the disputed goods and the goods produced by him or the lack of production of the disputed goods in general.Among the many issues that arise in the subject of exhaustion of exclusive rights to a trademark, of special note is the question of parallel imports, which refers to "the importation from abroad to the countries of the EAEU by importing the original goods, marked a trademark of the copyright holder, but without his permission, [that] creates a conflict of interests of importers and copyright holders claim to absolute authority to control parallel imports".The complexity of the issue of exhaustion of the exclusive right in general and parallel import, in particular, led to the need for clarification by one of the highest courts of the Russian Federation.The Constitutional Court of the Russian Federation recognized the need to distinguish between liability for parallel import and sale of truly counterfeit products. According to Resolution of the Constitutional Court of the Russian Federation No. 8-P of 13.02.2018 on importation into the territory of the Russian Federation without the consent of the trademark owner of the product on which this mark is placed by the copyright owner or with his consent, it is not assumed to apply the same size (severity of consequences) civil liability measures, such as when importing counterfeit goods (where the trademark is placed not by the copyright holder and not with his consent), if, in the circumstances of a particular case, this does not entail losses for the rightsholder comparable to losses from the introduction of counterfeit goods into circulation.Thus, the Constitutional Court of the Russian Federation pointed out the need to assess the proportionality of the application of liability measures in each case by the criterion of the presence or absence of losses for the right holder. At the same time, the court stressed that goods imported into the Russian Federation in the order of parallel import can be withdrawn from circulation and destroyed only if they are found to be of poor quality and (or) to ensure safety, protect people's lives and health, protect nature and cultural values.So, for example, in the case on the trademarks VOLKSWAGEN, VW, VAG, the court rejected the claim for the seizure and destruction of goods, recognizing as proving the ownership of the exclusive right to the trademark by the plaintiff and the illegality of its use by the defendant, but not establishing the illegality of the origin of the goods. At the same time, the quality of auto parts was confirmed by the certificate of conformity of the Customs Union.In a trademark case PHILIPS the plaintiff also could not prove the poor quality of the products - neither the defendant's replacement of the trademark with another designation nor the lack of regular maintenance of the disputed equipment confirmed this argument since the court established the fact of its production by the plaintiff. On the one hand, the ban on parallel imports aims to protect the trademark owner, but its abuse of rights can lead to restrictions on competition and/or higher prices.It can be assumed that the existence of parallel imports should not entail significant negative consequences. However, it directly affects the interests of foreign rights holders. It favors consumers – while there is no risk of an outflow of foreign investors (since foreign markets are usually more competitive), nor the risk of reducing investment (since the quality of goods produced in the Russian Federation and abroad differs, and investments are not made in all sectors of the economy).The risk of an increase in the number of counterfeit goods is also minimal since obvious counterfeit goods differ from the original and the right holder still has such a legal instrument as entering a trademark in the customs register, which protects the interests of trademark owners.Originally published in World Trademark Review
Competition Protection Practice in the Court Acts of the Intellectual Property
Competition is the main factor capable of ensuring economic growth, and its state issues are becoming increasingly important in the context of digital technologies development and the increasing innovation role, as indicated by the Protocol of the Federal Antimonopoly of Russia Presidium in the Development Strategy of Competition and Antimonopoly Regulation in the Russian Federation for the period up to 2030.Since 2016 the Law N 135-FL has a number of “new” compositions (Articles 14.1-14.7) of unfair competition introduced by the so-called "fourth antimonopoly package," and the study of their application peculiarities by the Court of Intellectual Property Rights (hereinafter referred to as CIP) has significant practical importance.  1. Discrediting means disseminating false, inaccurate, or distorted information that can cause losses to an economic entity and (or) damage its business reputation (Article 14.1 of Law No. 135-FL).According to Clause 9.1 of the Federal Antimonopoly Service of Russia letter, N IА =/74666/15 act of unfair competition can only be recognized as such dissemination of this information, which can give the person who disseminated the information advantage over competitors and causing them harm.For example, in case No. С01-1278 / 2020, both the antimonopoly authority and the court found it a violation to send letters to the counterparties of a competitor with a message that the competitor's use of the designation "FROM TURAKOVO" on all food products is illegal. The basis for such a court decision was that the competitor had a valid exclusive right to the corresponding trademark. Although it was canceled, it turned out to be illegal (the Rospatent decision to invalidate the legal protection grant was successfully challenged).In another case, a person disseminated information about the illegality of a competitor's using the Goods’ Origin Place Name, mistakenly believing that only one person could be a Goods’ Origin Place Name user, while both companies were entered In the register.  2. Misleading, including the quality, quantity, consumer properties of the goods offered for sale, and its other characteristics (Article 14.2 of Law No. 135-FL).According to clause 9.2 of the Federal Antimonopoly Service of Russia letter N IА/74666/15, the article applies to cases of misleading any persons (consumers, counterparties, competitors), where misleading is a consequence of the dissemination of not negative information, as in discrediting, but positive (the one not corresponding to reality), and its content concerns the distributor’s activities himself and (or) his product. At the same time, the list of circumstances regarding which the consumer can be misled is open.An example of misleading is the actions of the plant in case No. С01-986 / 2021, in which by producing and selling vodka "100 Let Cheboksarskaya", misleading the consumer regarding the goods’ production place manufactured in Yadrin, forming a false impression about the manufacturer in order to influence the buyer’s decision to purchase the goods.On the contrary, in case no. С01-454 / 2018 the presence of the composition corpus delicti was not established in Art. 14.2, although the applicant assumed the opposite, pointing out that the participant of such a tender misled the tender organizer by referring to the products’ protection offered for delivery by patent rights. In the applicant's opinion, this consisted of the submission of a patent form containing false information.However, the court noted that the patent form determines the state of the object technology concerning the industrial property protection and is intended to be presented to organizations (bodies) deciding questions of the object implementation in the country and abroad. Therefore, it indicates that the product does not contain patent infringement signs. It does not guarantee that this product was manufactured on the patent basis, the exclusive right to which belongs to a third party.Moreover, the patent form itself is an internal document within the relationship framework between the seller and the buyer, which excludes the possibility of misleading both the tender organizer and other persons.  3. Unfair acquisition and use of the exclusive right to individualization means (Art. 14.4 Law N 135-FL).Unfair acquisition of an exclusive right is most often found in the registration of individualization means and much less often in the acquisition under an agreement on the exclusive right alienation.Regarding this composition, it is mandatory to establish the fact of bad faith, the exclusive right acquisition, and the object used as a whole.In accordance with the explanations of the Federal Antimonopoly Service of Russia for recognizing such actions as unfair, the court establishes a set of circumstances: the use of the designation by other persons before the date of filing by the respondent-competing application for registration and the fact that the respondent is aware of this fact; intention to cause harm to the plaintiff, push him out of the product market, or gain unreasonable advantages; infliction (probability of infliction) on the plaintiff of harm by filing requirements for the termination of the designation used.In this case, the unfair acquisition must be established in the period preceding the filing of the application for registration, while subsequent behavior can only confirm or deny this.An example of unfair acquisition registration and use of a trademark is the Tornado case. The invention patentee (the future trademark owner) granted the user the right to use his invention, as a result of which he produced the product in which this invention is embodied under the name "TORNADO" (assigned by mutual agreement). However, the patentee registered this designation as a trademark for himself and began his own Tornado cultivators production, presenting appropriate claims to a competitor.The court recognized that the purpose of the actions was not only to obtain an opportunity, without investing in the production and products’ promotion, to assign all the user's efforts results to develop and popularize the TORNADO brand, but also to oust the former co-production partner from the product market.  4. Sale, exchange, or other introduction of goods, if in doing so the results of intellectual activity were illegally used (Article 14.5 of Law No. 135-FL).Examples of such actions are the sale of goods produced with using know-how, the exclusive right to which belongs to a competitor and which has been withdrawn from its possession, or the goods’ sale in packaging, which is confusingly similar to packaging designed by a competitor.  5 Actions (inaction) that can cause confusion with the activities of a competing economic entity or with goods or services put into the market by it (Article 14.6 of Law No. 135-FL).Among other things, such actions include the illegal use of a designation identical to the individualization means or similar to it to the point of confusion, and copying or imitation of the product appearance, its packaging, label, name, color scheme, corporate identity.For example, in case No. С01-760 / 2021 the use of a color gamut imitating the general applicant's gas stations style, as well as images confusingly similar to the trademarks to which the applicant has the rights - N 391296, N 340214, N 340215 was recognized as such a violation.  According to Clause 9.6 of the letter of the Federal Antimonopoly Service of Russia No. IA /74666/15, copying (imitation) of the product appearance or its parts cannot be recognized as illegal if such copying is due solely to their practical use.For example, in case No. С01-760 / 2021 courts found no violation of Art. 14.6, since the presence of a general similarity between the individual packaging elements of sealants, was due to the goods’ functional characteristics in this category and the prevailing customs of product design in this market. The courts noted that the use of colors for packaging sealants is traditional, as colors are associated with building materials. 6. Unfair competition associated with the illegal receipt, use, or disclosure of information constituting a commercial or another legally protected secret (Article 14.7 of Law No. 135-FL).For example, the use by former employees and management in the work of a new legal entity of information constituting a trade secret of the legal entity-former employer and its production secrets in order to produce and sell products that are confusingly similar to those of a competitor.  7. Other forms of unfair competition (Art. 14.8 N 135-FZ).The Court of Intellectual Rights has repeatedly pointed out that the determining factor for recognizing specific actions as unfair is not their specific mentioning in Law No. 135-FL, but their reach by the unfair competition composition in the context of paragraph 9 of Art. 4 and Art. 10. bis of the Paris Convention for the Protection of Industrial Property of 20.03.1883.The unfair competition forms list is open, which corresponds to the legal position of the Constitutional Court of the Russian Federation, who noted that this expands the scope of judicial discretion in the field of suppression of unfair competition and is associated with a variety of forms and methods of unfair competition, not all of which may directly contradict legislation or business turnover.It is quite rare that actions concerning intellectual property or its use that do not directly fall under the compositions established by Law N 135-FZ are recognized as unfair competition. For example, according to Clause 169 of the Russian Federation Supreme Court Resolution dated 23 April 2019 N 10, unfair competition outside the classification established in Law N 135-FL is unfair competition associated only with the exclusive right acquisition to individualization means (if it does not apply to usage).   Thus, the Court of Intellectual Property practice concerning competition protection is quite extensive; the use of intellectual activity results and individualization means of competitors can provide significant advantages, while the Law provides a whole system of tools to suppress such violations.
The Court found no abuse of registration in the case where the very author of the images in question registered them as trademarks
The Intellectual Property Rights Court (hereinafter, the Court) decided on the case of trademark registration and usage claimed to be unfair. The claim was denied as the entrepreneur who holds the trademark is the very author of the images protected as trademarks in question and uses them in good faith. The company filed a claim to find an abuse of fair competition in the entrepreneur’s actions to acquire exclusive rights for trademarks ## 572840 and 631667 and their usage.  The company referred to the common practice when several participants to the market, as well as the Company itself, used the aforementioned images in their similar activity for a long period of time and claimed that the entrepreneur’s actions to acquire exclusive rights for the trademarks in question were targeted at excluding his competitors from the market by filing numerous claims among other things. The Court dismissed the claim; the court of cassation enforced the Court’s decision. The Court assumed that long before the company was registered as a legal entity, the entrepreneur was the author of the images which he registered later as the trademarks and he had them made in woods for further sale. Moreover, the Court pointed out that neither the entrepreneur's intention to reap benefits from the recognition due to his competitors' activity nor his intention to harm the Company’s business reputation and his intention to limit the Company's activity were substantiated. The Court took into consideration the subsequent right owner's behavior, i.e. the first claim to protect exclusive rights was filed several years after filing the corresponding registration applications. As the result, the Court found no abuse of registration in the entrepreneur's actions in trademarks registration and usage. One of the key aspects of the case was to determine the authorship of the images. The plaintiff mistakenly claimed that the authorship can be evidenced only by the original work with the name of the author clearly indicated. However, the court rightfully scrutinized the whole body of evidence in the case, e.g. the author's creative style was considered. A similar approach is taken in the case between the same parties on the protection of exclusive rights for the aforementioned images. Moreover, while challenging the authorship of the images, the Company provided the court with no evidence that other persons were authors of the images.Originally published on World Trademark Review
IP court examines Rospatent approach to analysing descriptiveness
The Russian IP court has upheld the Russia Patent and Trademark Office’s (Rospatent) decision to reject an application for the trademark ПСИХОСОМАТЕРАПЕВТ (meaning ‘psychosomatherapist’) (Application 2018718299), filed by the Institute for Psychology and Psychosomatic Medicine on the grounds that it went against Article 1483(1) of the Russian Civil Code and did not satisfy the requirements to oppose the decision.Rospatent originally rejected the application due to the fact that the designation was descriptive in relation to all the goods and services indicated – including medical, educational, and laboratory goods and services – and had not acquired distinctiveness through use, since the documents submitted did not indicate its use as a visual identity, but rather a specialty of students at the institute.The IP court disagreed with Rospatent’s conclusion of descriptiveness in relation to all goods and services listed in the application. Instead, it held that ‘psychosomatherapist’ is descriptive in relation to educational and research services only.The court pointed to the lack of analysis of the average consumer’s perception of the applied-for mark in relation to each product and service, and whether it would be perceived as descriptive (ie, characterizing services), false or misleading (ie, causing plausible associations) or unconvincing (ie, non-descriptive of the goods and failing to cause plausible associations).The IP court held that the application may not include goods and services belonging to any of these groups, but that “this situation must be analyzed and conclusions must be made both in relation to the services to which the designation characterizes them and in relation to consumer associations in relation to other services, whether these associations are convincing or not”.Brand owners should bear in mind that when examining whether a designation is descriptive, Rospatent will take into account Paragraph 2.2 of the Recommendations on Separate Issues of Examination of Claimed Designs, according to which non-descriptiveness is determined by the need for additional reasoning, speculation, and associations to formulate a descriptive characteristic of goods.The descriptiveness of a designation can be demonstrated by affirming that the meaning of the mark is clear to the average consumer without additional reasoning and speculation and that consumers perceive the mark as describing the type and characteristics of the goods directly, rather than through association.Originally published on World Trademark Review
Consumer Goods Sold Under Another Brand Name Without Brand Owner Authorization: Counterfeit, Knockoff or Fake?
How shall we correctly call products that have an illegally used trademark and whether there are differences between the concepts of counterfeit, knockoff and fake?It is for a purpose that entrepreneurs and manufacturers of goods register the trademarks they use. Registration and acquiring a certificate of protection is the main way to confirm the legitimacy of the trademark owner’s rights.Modern economic markets are not limited to the territory of one country and offline mode of trade. This leads to the fact that controlling the integrity and legality of the actions of entrepreneurs is becoming increasingly difficult. Therefore, self-control on the part of producers for observance and non-infringement of their rights has particular importance. In this aspect, the registered trademark gives a distinct advantage, as in the case of illegal actions, the right holder has an official confirmation of owning the trademark and exclusive rights, and therefore having every reason to prohibit others from using the registered identity without the right holder’s consent.When the media describe offenses in the field of trademarks, they most often mention counterfeit goods, knockoff and fake. However, for most readers it remains unclear whether these concepts differ from the legal perspective.CounterfeitThe Civil Code of the Russian Federation (hereinafter the Civil Code) defines counterfeit embodiments and counterfeit goods, also listing the unlawful actions that are associated with such objects. Part 4 of Article 1252 of the Civil Code states: “If the manufacture, distribution or other use as well as import, transportation or storage of embodiments in which a result of intellectual activity or visual identity is expressed, leads to a violation of the exclusive right to such result or identity, such embodiments are considered counterfeit”. The counterfeit goods are specified in part 1 of Article 1515 and part 4 of Article 1519 of the Civil Code. Counterfeit should include goods where a registered trademark is used in any way illegally.The mentioned rules of the Civil Code allow to conclude that the production and other use of counterfeit goods is connected with the illegal use of intellectual property or visual identity, and such objects must be expressed in tangible form. That is, for example, disclosure of the secret of production will not be counterfeit, just as the products counterfeited without the use of someone else’s intellectual property will not be counterfeit.KnockoffThe Civil Code does not contain the concept of “knockoff”. However, there is a legal definition of the term. For example, Article 1 of the Federal Law on Quality and Safety of Food describes knockoff food, materials and other products: “...food, materials and other products deliberately altered (counterfeited) and (or) having hidden properties and quality, information about which is knowingly incomplete or untrustworthy”. There is also a definition of a knockoff drug: “... a drug accompanied by false information about the composition and (or) the manufacturer of the drug”. The website of the Federal Service for Health and Consumer Rights states: “When goods are knockoff, one or more characteristics of the goods are usually falsified... Food products are mostly counterfeited...”. Thus, knockoff is associated with a deliberate distortion or alteration of the characteristics and properties of goods. In this case, the transformations have a negative character and can cause harm to the health of consumers.FakeThere is no description of this term in the aspect of the use of trademarks. The Ushakov’s Dictionary gives the following definition: “Something which is counterfeited, an imitation, an object made in the likeness of something real, a fake object, passed off as real”. From the above, we can conclude that a fake is an imitation or falsification of an original product. Thus, faking will be both full copying and distortion of individual qualities or characteristics. Consequently, both counterfeit and knockoff goods can be called fakes.Summarizing the above, we can conclude about the relationship between the terms counterfeit, knockoff and fake which are often used interchangeably although their legal meanings are not identical.Counterfeit goods are goods in which intellectual property is illegally used. The results of illegal actions of the infringer are embodied. In this case, both the distortion of the object of intellectual property, and its unauthorized copying will be considered counterfeit.Knockoff is related to the actions associated with the transformation of qualities or properties of the original product. In this case, offenders manufacture products with a distortion of the characteristics of the original, genuine product and pass off such a product as genuine.Fake is a non-legal term used to refer to the manufacture of goods in violation of the rights of producers, owners of intellectual property and consumers. Counterfeit goods include imitation, when a product or trademark is copied in its entirety, and faking, when goods are produced with transformations or changes.If we consider these concepts with regards to protection of the right holder of the trademark, it can be noted that the Civil Code does not divide the illegal use of trademarks into counterfeiting with distortion and complete copying, and allocates only the concept of counterfeit consumer goods. Thus, regardless of how the offenders illegally used a trademark, the actions will qualify as counterfeit. In this case, if they also distort and change the quality of goods, then we can use “counterfeit goods” as a colloquial term, associated with faking.
Inventions in Russia: Achievement Incentive
In 2021, the remuneration of workers who create service inventions will increase. Moreover, companies that use patented inventions will receive tax benefits from the state.As it is known, not every technical solution becomes the object of patenting. There may be different reasons for this: the invention does not meet the conditions of patentability, the inventor does not have the means to register it, the benefits of patenting are underestimated, and so on.To increase the level of applicant activity in the field of industrial property in Russia, it was decided to stimulate and popularize inventive work. This year, in the framework of the outlined policy, the following positive changes have taken place and will probably take place:The amount of remuneration related to the creation and use of inventions in the course of official activities was increased. As of January 1, 2021, the Order of the Government of the Russian Federation containing the Rules for Remuneration for Service Inventions, Service Utility Models, and Service Industrial Designs (hereinafter the Rules) has come into force1. The adopted bylaw will be valid until January 1, 2027 and provides the following.Payment by the employer of remuneration to the employee in the amount of 30 percent of the average salary of the latter for the creation of a business invention.2Payment of remuneration for the use of the service invention in the enterprise. Paragraph 3 of the Regulations establishes the amount of such payment: “...in the amount of 3 average monthly wages of the employee over the last 12 calendar months, in which such invention was used.”Transfer of a certain amount to the employee, when granting the right to use the service invention under the license agreement or full transfer of rights under the contract of alienation. When granting the right to use an employee’s business invention to another person, the employer shall pay to the employee a remuneration equal to 10 percent of the remuneration due to the employer under the license agreement. In the case of a contract of alienation, the employer shall pay to the employee who created the business invention a remuneration equal to 15 percent of the remuneration provided by the contract of alienation and due to the employer. 3As Grigory Ivliev, the head of Rospatent noted, currently an active work on the development of tax incentives for companies that actively use patented technical solutions in production is underway. There are plans to reduce income tax for organizations that manufacture products on the basis of issued patents. Also, the patent office is promoting the dea: “to exempt intellectual property that has passed the inventory tax for a certain period of time.” 4Grigory Ivliev comments: “...I really like the initiative of the Ulyanovsk regional authorities, where an innovation voucher was introduced; the regional government allocates money for the promotion of an invention, its patenting and implementation in production. It is a very promising form of support for inventors, start-ups, medium and small entrepreneurs. Similar projects are now being launched in other regions of Russia. As a matter of principle, this should be a permanent federal form of grant support in the field of intellectual property.” 5It is worth assuming that the measures taken and the ongoing activities will lead to a progressive increase in the applicant activity and active use of patented inventions by domestic enterprises.1 Order of the Government of the Russian Federation of November 16, 2020 No. 1848 On Approval of the Rules for Payment of Remuneration for Official Inventions, Official Utility Models, Official Industrial Designs2 See more details: paragraph 2 of the Rules3 See more details: paragraphs 4 and 5 of the Rules4 Grigory Ivliev: Rospatent Prepare New Services for Inventors // Rossiyskaya Gazeta URL: https://rg.ru/2021/01/03/grigorij-ivliev-rospatent-gotovit-novye-servisy-dlia-izobretatelej.html (Seen on February, 2021).5 See ibid.
Is a foreign company in Russia obliged to pay any taxes on damages judged by Russian court on the illegal use of a trademark?
The Department of the Tax and Customs Policy of the Ministry of Finance of the Russian Federation has provided an explanation regarding a controversial situation, the essence of which is as follows: a foreign entity with a permanent location in the UK has received damages for the illegal use of a trademark following a number of the legal proceedings. Such payments are considered as income of the foreign legal entity on the territory of the Russian Federation. At the same time, the company had not paid a profit tax in Russia, what became a reason for the appeals filed to the Department. Having analyzed the existing legal norms, the Department of the Tax and Customs Policy of the Ministry of Finance of the Russian Federation published an information letter, where it explained the sequence of actions in such case.[1]According to Subparagraph 4 of Paragraph1 of Article 309 of the Tax Code of the Russian Federation, the following shall be attributed to the foreign company income not related to its business activities: “The income from the use in the Russian Federation of the rights to the intellectual property subject matters.” “Other similar income” is also mentioned in the above norm. The representatives of the Department note that: “Thus, the foreign entity income being paid by the Russian entities according to the court decision regarding the indicated statements of claim shall be subject to be taxed proceeding from their kind classification in accordance with the provisions of Paragraph 1 of Article 309 of the Code…” [2]However, provided there is an international treaty, in the case of a contentious situation, the norms of the international treaty have a priority importance over the provisions of the state law (in this case, the Tax Code). The modern economic relations have lost their territorial character and they are increasingly emerging on the territory of several states. This is usually a reason of the difficulties, while determining the amounts and place of the tax payments. To simplify the system of calculating the amount and procedure for the payments between Russia and other countries, including the UK, the bilateral treaties on avoidance of double taxation are concluded.Thus, in accordance with the Convention between the Government of the Russian Federation and the Government of the United Kingdom of Great Britain and Northern Ireland of February 15, 1994 “On the Avoiding Double Taxation and Preventing Tax Evasion with Respect to the Taxes on Income and Property Value Increase,” a special procedure for determining tax payments is used for the residents of the participating countries.[3] In accordance with the above treaty, if the firm has an actual right to income from the intellectual property subject matters on the territory of one participating state, but the permanent location of the company is on the territory of another participating country, the tax shall be paid only on the territory of the state, where the entity is located.Summing up, the following algorithm of actions can be derived: according to the general rule, while recovering damages in favor of a foreign company for the illegal use of a trademark, this amount is considered as the income from the use of intellectual property and it is taxed according to the legislation of the Russian Federation. However, if the treaty on avoiding double taxation is concluded between Russia and the country, where the foreign company is permanently located, its norms have a priority importance. And then, the amount and procedure for the tax payments should be determined on the basis of the content of the treaty concluded.Despite the fact that the Letter of the Department is of an informational nature, it is should be assumed that now the tax authorities will be vigilant in monitoring the payments that the foreign companies must transfer to the Treasury of the Russian Federation after receiving the damages amounts adjudged by the courts.
The registration of industrial designs: new trends
According to the data represented in the analytical reports of Rospatent, in 2018 the number of the patents granted for industrial designs increased by 18.1% compared with their number in the previous year, and amounted to 6305 patents.[1] The modern state policy is aimed at developing the field of intellectual property in Russia, drawing the public attention to the results of intellectual activity and inventiveness, and increasing the volume of patenting. The general indicators for the registration of industrial designs increase annually, however, compared with inventions or utility models, the number of the claimed and registered subject matters is much less.The recent changes in the field of industrial designs can be divided into two groups: the ones related to the development of the legal norms and optimization of the check process of the claimed results of intellectual activity, and the ones directly related to the requirements to the subject matter of patenting.The development of the legislation and the process of carrying out an examination of the claimed industrial designsThe Federal Law on amendments to Part 4 of the Civil Code of the Russian Federation was signed in December 2018, and it will enter into force in June 2019.[2] The adopted normative provisions provide for the introduction of the temporary legal protection for the industrial designs that have passed the stage of an examination as to form with a positive result. The temporary legal protection will be provided from the moment of publication of the information on the claimed subject matter at the request of the applicant. In fact, the said legislation developments will lead to the fact that, after obtaining a patent, the right holder will get a possibility to recover compensation for the use of the industrial design from the moment of publication of the information on the application in the official bulletin.Regarding the procedure for checking the applications for industrial designs, the examiners of the Patent Office note a positive trend in reducing the terms for considering the applications: in 2018, the process lasted at an average of 5.5 months, which is less by a month compared to the indicators of the last year.[3] Rospatent also supports actively the policy of promoting filing electronic applications. According to statistics, 2,545 electronic applications for industrial designs were filed in the past year.[4]The trends in the field of creation and registration of the industrial designsThere is a tightening of the requirements to the unity of the claimed result of intellectual activity. The lawyers of the company “Zuykov and Partners” encountered a number of difficulties, when filing an application for the registration of an industrial design. A subject matter “A Bottle with a Cork and the Stickers (7 options)” was presented in the application. During carrying out an examination, the employees of the Office came to a conclusion that the bottle with the cork and the stickers belonged to different classes of the ICID (“a bottle with a cork” refers to class 09-01, “stickers” – to class 19-08 of the ICID). And therefore, according to the employees of Rospatent, the claimed industrial design did not meet the requirement of the unity, stipulated by Paragraph 1 of Article 1317 of the Civil Code of the Russian Federation. Due to the above reason, the applicant was sent a notification of non-compliance with the patentability criteria, which stated that it was only possible to file separate independent applications. The representatives of the company “Zuykov and Partners” adhered to a different position and addressed with a request to continue paperwork with respect to the application in accordance with the current legislation. To justify the request, the following reasons were indicated:In accordance with the norms of Paragraph 1 of Article 1377 of the Civil Code of the Russian Federation, an application for the grant of a patent for an industrial design may refer both to one industrial design, and to their group, if they are interconnected so much that they form a unified creative concept (the requirement of the unity of an industrial design).What had been claimed for the registration was a unified article consisting of a bottle with a cork and the stickers. The article described was a unified creative concept. The fact that each of those unified articles belongs to several classes does not constitute a basis for asserting a violation of the requirement for the unity of an industrial design.In the practice of Rospatent there are the cases of the registration of such articles, which are “the bottles with the stickers and a label,” “the bottles with the stickers” with the options. Therefore, such subject matters are capable of complying with the requirement of the unity of an industrial design.Having examined the submitted arguments, the specialists of Rospatent made a decision to resume the process of considering and carrying out further examination.There is also one interesting case in the practice of the lawyers of the company “Zuykov and Partners” related to the registration of an industrial design and its options. According to the Requirements to the Documents of an Application for Granting a Patent for an Industrial Design, it is possible to register two or more industrial designs, which are the options of a solution of the article appearance, belong to the same class of the ICID and differ by non-essential features and (or) the features, which determine the combination of colors.[5] A subject matter “A Gun for Distributing Construction Foam” was claimed for the registration. The application had been filed based on the convention application, originally filed in China, and it contained two options of the article, which were different by the presence of a button at the bottom of the handle. Having considered the application, the employees of the Patent Office indicated that such difference should be considered to be an essential feature of the design, and two independent applications should be filed for each of the indicated subject matters. To continue the registration procedure, the applicant had to exclude one option of the article. As the analysis of the described case and other similar situations shows, usually, only one subject matter in different color solutions is registered as an industrial design option. In the rest cases the specialists of Rospatent indicate that the claimed options have distinctive essential features and notify the applicants on the need for separating the applications.Thus, speaking about the new trends in the field of the industrial designs, it is worth highlighting the emergence of the institution of the temporary legal protection, toughening the requirements to the unity of the claimed subject matter and the registration of the industrial design options. Regarding the examination procedure and the grant of patents, there is a reduction in the terms for considering the applications and an increase in the number of electronic applications, what is due to the possibility of filing the documents via the Internet day and night, as well as to a reduced amount of the state fee.
What to choose for the defense of the products: a trademark or an industrial design
One of the conditions for the successful promotion of the products is distinguishing them with the help of a memorable packaging or a label. At the same time, it is important for the manufacturer to secure the right to the use of the original subject matter, what will allow preventing the unlawful actions of the unscrupulous competitors, as well as defending the violated rights.If to consider the state registration of the actual appearance of the article, its shape or packaging, then there are several ways of the legal protection of the subject matter. Namely: to register a trademark or an industrial design. So, Article 1482 of the Civil Code of the Russian Federation states that word, figurative and combined, as well as three-dimensional or other designations shall be protected as trademarks. Among other things, according to the explanatory provisions of the Guide for the State Registration of Trademarks, it is allowed to register the product appearance (for example, an original bottle, a product design, etc.). As to the industrial designs, in accordance with Paragraph 1 of Article 1352 of the Civil Code of the Russian Federation, these are the solutions of an article appearance or an artisan industry manufacture. On the basis of this legal norm, it becomes obvious that, provided the compliance with the patentability criteria, the protection of the package or the product appearance as an industrial design is permissible.Thus, the following question arises before the owner of the result of intellectual activity: “In what form is it better to register the created packaging or design?” In the cases, when the alternative or simultaneous registration of the subject matter is possible in several fields of intellectual rights, a term “crossing of defense” is used. It means that subject to the appropriate registration of the rights of the holder, the comprehensive (crossing) legal protection is being in force, which guarantees the enhanced defense of the subject matter used, for example, in accordance with the norms regarding industrial property and trademarks. It is important to note that, for the legal action “crossing of defense,” the right holder most often must commit a number of actions. For example, the registration of the subject matter of intellectual property and obtaining subsequently the protection documents issued by the competent public authority.The “crossing of defense” in the subject matters of the rights to trademarks and industrial designs can be visualized as follows.The image clearly shows that the “crossing of defense” is possible only with respect to a specific group of the subject matters, the protection of which is possible both as trademarks and as industrial designs. At the same time, the right holder may register the result of intellectual activity in the same field, but then the “crossing of defense” will not be in force, and there is a possibility of a collision with the rights of another legal subject.Subject to the compliance with the necessary requirements, before deciding in what form to register the result of intellectual activity, it is worth considering the advantages of each option.The main advantages for the trademark registration come down to the following:It is allowed to extend the term of the legal protection an unlimited number of times. The trademark certificate is in force within ten years from the date of filing an application for registration of the designation, at that the further extension every ten years is possible.A variety of the registrable subject matters. The combined designations are registered as trademarks, including those ones that include three-dimensional, holographic, video or sound elements.The simplified requirements to the novelty of the subject matter compared to the novelty of industrial designs. During the examination of the trademark, the examiners take into account the information about the subject matters within the country, while the requirement of the world-wide novelty is imposed upon the industrial designs.The registration of the subject matter as an industrial design has a number of advantages:The patent holder can be a physical person, while only a legal entity or an individual entrepreneur can become the owner of a trademark certificate.There is no obligation to use the registered industrial design. After obtaining the patent, the right holder may, at his own discretion, dispose of the subject matter (including, he may not use it) during the period of protection being in force. As to the trademarks, the early termination of the certificate due to the non-use of the designation is possible at the request of the third parties.The advantages of the comprehensive registration of the subject matter are as follows:Having registered the subject matter in several fields at once, the right holder excludes the possibility of the collision of the rights with another legal subject.If one of the kinds of the protection is terminated early, the registration in another field will continue being in force. For example, if the trademark certificate is cancelled as a result of challenging the registration granted this will in no way affect the validity of the patent for the industrial design.A striking example of the adverse consequences of the registration of the subject matter in the same field of intellectual property was the opposition of the companies “Masan Rus Trading” and “Virosko-N.”[1] On August 27, 2003, “Torgovyi Dom “Virosko,” whose successor the organization “Virosko-N” became, filed an application for the registration of a three-dimensional trademark in the form of a plastic bottle of an original form, for the use in the 29th and 30th classes of the ICGS (tomato paste, mustard, condiments, including sauces, ketchup, and vinegar). Subsequently, Rospatent granted protection certificate No. 264741.Trademark No. 264741On August 28, 2003, the company “Masan Rus Trading” filed an application for the registration of a utility model in the form of the shutter for a vessel, and then, on September 1, sent an application for granting protection to the industrial design, which was a plastic bottle of an original form. As a result, two patents were obtained: No. 34505 and No. 56267.Utility model No. 34505 “The Shutter for a Vessel”Industrial design No. 56267Thus, the companies officially obtained the rights to the use of the visually identical subject matters, while it is worth adding that both organizations manufactured and packaged a homogeneous product (sauce) in them. “Virosko-N” appealed to the court with a claim to stop the violation of the rights to the trademark and to prohibit all actions related to the use of the disputed subject matter. The first-instance court satisfied the claim. However, the Court of Appeal cancelled the decision and justified the position as follows: both companies owned the registered subject matters of intellectual property. The purpose of these subject matters did not coincide, as the trademark was used to distinguish the products, and the industrial design was a new technical and artistic and design solution of the product, which in that case was used to pack the product. The parties to the conflict used the disputed subject matter for the various purposes; therefore there was no violation of the plaintiff’s rights. The court of cassation supported those conclusions and clarified that “Masan Rus Trading” used lawfully the registered results of intellectual activity belonging to it. “Therefore, in the case if the use of an invention, an industrial design or a utility model can not be carried out without violating the exclusive rights of another owner, the latter may apply to the Federal Executive Authority on Intellectual Property with a statement on an early termination of the patent for the invention, the utility model or the industrial design.”[2] The described position of the representatives of the court allows concluding that in the event of the “crossing of protection” with the owner of another subject matter; first of all it is necessary to contact Rospatent with a statement on challenging the legal protection granted.The current legislation contains the norms that do not allow the simultaneous registration of the subject matters with the “crossing of protection” with respect to different applicants. Thus, according to Subparagraph 3 of Paragraph 9 of Article 1483 of the Civil Code of the Russian Federation, “The designations shall not be registered as the trademarks, if they are identical to: ... the industrial design, the correspondence mark, the rights to which have arisen earlier than the priority date of the trademark being registered.” Regarding the industrial designs, the legislator also indicates that the registration of the subject matters that are identical to the ones that have already been registered shall not be granted (Paragraph 5 of Article 1352 of the Civil Code of the Russian Federation). However, even taking into account the existing provisions, the collision of the rights is not excluded; due to this fact, obtaining the comprehensive legal protection in relation to the subject matter being used seems justified.The civil law ways of defending the rights to a trademark and an industrial designSpeaking about the differences and advantages of defending the subject matters as the trademarks and the industrial designs, it is worth noting that in the legal terminology such concepts as the “protection of rights” and the “defense of rights” are distinguished. The first concept is broader in the meaning and it covers all relationships from the moment the particular right has arisen and till to the moment of its termination, while the definition the “defense of rights” is used, when the rights and legitimate interests of the legal subject are violated.According to the general provisions of Part 4 of the Civil Code of the Russian Federation the right holder of any subject matter of intellectual property is entitled to the defense of the exclusive rights by asserting the claims:on the recognition of the right;on the suppression of the illegal actions;on the reimbursement for the losses;on the seizure and the destruction of the tangible media with the illegally used subject matters of intellectual property;on the publication of the court decision on the violation committed with the indication of the actual right holder;on invalidating the grant of the legal protection to the subject matter of intellectual property;on the seizure and the destruction of the equipment, etc., used for committing the offence.The legislator identifies the additional ways to defend the rights to a trademark. According to Article 1515 of the Civil Code of the Russian Federation, in the case of the illegal use, the right holder may appeal to the court and claim:To seize from the circulation and to destruct the subject matters on which the trademark or identical designation is placed illegally;In accordance with Paragraph 4 of Article 1515 of the Civil Code of the Russian Federation: “... instead the reimbursement of the losses – the payment of compensation:in the amount from ten thousand roubles to five million roubles determined at the discretion of the court on the basis of the nature of the violation;or in double the amount of the value of the products on which the trademark is placed illegally,or in double the amount of the value of the right of the use of the trademark determined on the basis of the price, which in the comparable circumstances is usually charged for the lawful use of the trademark.”The norms of Article 1406.1 of the Civil Code of the Russian Federation contain a list of alternative sanctions for the illegal use of industrial designs. The patent holder is entitled to claim: “... instead of the reimbursement of the losses – the payment of compensation:in the amount from ten thousand roubles to five million roubles determined at the discretion of the court on the basis of the nature of the violation;or in double the amount of the value of the right of the industrial design determined on the basis of the price, which in the comparable circumstances is usually charged for the lawful use of the existing subject matter.”What is better to register: an industrial design or a trademark?Subject to the compliance with the requirements for the registration, the right holder chooses independently in what form to register the result of intellectual activity. To make a final decision, it is worth taking into account the cost of the procedure, maintaining the protection document in force and the expediency of one or another kind of protecting depending on the intended way of the use. The analysis of the norms in the field of the trademarks and the industrial designs shows that the main differences come down to the terms and the procedure for the validity of the certificate or the patent and the level of the requirements to the registration subject matter. The stipulated civil law ways of the defense are almost identical. At the same time, it is not prohibited by the law to register the same intellectual property subject matter in several fields with respect to the same right holder. It seems logical and correct to obtain the comprehensive legal protection in the form of the registration of the subject matter as a trademark and an industrial design.
The peculiarities of the registration of the designations comprising geographical names
As a result of an active state policy on promoting and developing the regional brands, the interest in registering the designations comprising geographical names has deepened.The use of geographical names in means of individualizationAccording to the Great Soviet Encyclopedia, geographical names shall mean: “... the proper names of mainlands, oceans, seas, rivers, lakes, islands, mountains, countries, cities, settlements and all other geographical objects on the surface of the Earth.”[1] It is advisable to use geographical names in the designations that individualize a product, thus forming in the consumer’s mind an associative connection between the product and the peculiarities of a particular geographical object.The means of individualization containing geographical names can be divided into two groups:1. The objects in which the geographical name is one of the elements.2. The designations consisting of a geographical name.Considering the possibility of the existence of several manufacturers or distributors of similar products on the territory of one geographical object, the specialists of Rospatent, in order to protect the interests of ordinary consumers, pay special attention to the examination of such designations.The peculiarities of the registration of the designations comprising geographical namesA trademark is the most frequently registered means of individualization. As a general rule, according to Subparagraph 3 of Paragraph 1 of Article 1483 of the Civil Code of the Russian Federation: “No state registration as a trademark shall be granted to the designations, which do not have distinctiveness or which consist only of the elements that: characterize the products, including the ones that indicate to their kind, quality, quantity, property, purpose, value as well as to the time, place and method of their manufacture or sale....” However, it is allowed to include in the trademark the above elements as unprotected, provided that they do not occupy a dominant position in the designation. Consolidating the restrictions of such kind is not incidental: the right holder of the trademark has the exclusive right to the registered object. If Rospatent provides legal protection to the trademark consisting solely of a geographical name, it will be impossible to use such element in other designations.The variety of trademarks comprising geographical names.1. Considering the position that the geographical name occupies, the following shall be distinguished:― The designations partly consisting of geographical names. In this case, the means of individualization shall be granted protection, and the geographical name shall be included as an unprotected element.― The trademarks totally consisting of a geographical name. The registration of such designations is made very rarely. As the specialists of Rospatent point out, the protection of such trademarks is permissible only in the case when the geographical name used is not well known.[2]2. Depending on the purpose for which use the geographical name is used.― The element is included to indicate to the place of the manufacture, sales or location of the manufacturer. The position of the specialists of Rospatent is that granting protection to such designations is unadvisable. According to Paragraph 2.4 of the Rospatent Recommendations on Certain issues of the Examination of the Claimed Designations: “... The approach is explained by the fact that the geographical name indicating to the geographical origin of the product must be free for use by different manufacturers who manufacture the products, which quality, reputation and other characteristics are associated with the peculiarities of the place of manufacture of the product, with the natural conditions of the latter.” The registration of the designation is possible with the indication of a geographical name as an unprotected element.― The geographical names used in the designations as a fantasy element and not perceived as an indication to the place of manufacture or sale of the product. According to Rospatent, the trademarks with such elements constitute the least representative group of designations.The designations with a geographical name as a dominant elementThe name of the place of origin of the product as a means of individualization indicating to a particular geographical objectAccording to the provisions of Article 1516 of the Civil Code of the Russian Federation, the NPOP is a designation that consists of or includes a geographical name (or its derivatives), which has become famous as a result of its use in relation to the product, which special properties are mainly determined by the natural conditions being characteristic of this geographical object and/or the human factors. Thus, the product in relation to which the NPOP is used is necessarily associated with the geographical object and it guarantees the presence of special qualities of the product. The legislator limits a number of the objects that are allowed for the registration – the designation must be known for the reason of the use in relation to the declared product. The applications for the registration of the names of the places of origin of the products are required to include the descriptions of specific properties of the product and an indication of the place of origin of the product, the natural conditions and (or) the human factors that determine the specific properties of the product. According to Paragraph 5 of Article 1522 of the Civil Code of the Russian Federation, if the geographical object is located on the territory of the Russian Federation, it is necessary to enclose a conclusion of the authorized executive authority on the fact that within this geographical object the applicant manufactures the product that meets the requirements of Paragraph 1 of Article 1516 of the Civil Code of the Russian Federation. Both the compliance of the designation with the requirements and also the justification of the indication of the product’s origin are checked during the examination.This year, the Bill containing the proposals for amending certain provisions of Part 4 of the Civil Code of the Russian Federation was submitted to the State Duma.[3] The following condition is proposed to add to the requirements for the use and registration of the NPOP: “All stages of the product manufacture that influence on the formation of its special properties should be carried out on the territory of the given geographical object.” Adding the requirement to describe the specific properties of the product in the application for the NPOP is also considered.A geographical indication is a new means of individualization for promoting the regional brandsIn the middle of 2018, in the first reading, the State Duma adopted Bill No. 509994-7, according to which it is proposed to add a new object of legal protection – a geographical indication. Currently, the document is being finalized for the second reading. The text of the Bill is available for reviewing. According to the provisions of the act under consideration, a geographical indication is defined as: “... a designation that allows identifying a product as originating from the territory of a geographical object, while the product’s certain quality, reputation or its other characteristics are largely determined by its geographical origin.”A number of specific requirements will be brought forward for the registration of such designations. Firstly, at least one of the stages of the product manufacturing that influence on the formation of the quality, reputation or other characteristics should be carried out on the territory of the indicated geographical object. Secondly, the applicant is obliged to submit the data on the place of origin of the product, on the association of the product’s certain quality, reputation or other characteristics with the place of origin. The product’s specific features, the conditions of storage, transportation and the procedure for monitoring the compliance with the conditions of the manufacture and the characteristics of the product should be described in the application.Advantages and disadvantages of using the means of individualization containing geographical objectsThe obvious advantage of such designations is drawing the consumer’s attention to the product by indicating to the product’s unique characteristics associated with the peculiarities of the geographical object. However, when using the means of individualization with geographical names, it is highly probable that the consumer will be confused in relation to the properties of the product or to its manufacturer. Thus, thinking whether it is advisable to use a geographical name in the designation, it should be taken into account that the inclusion of such specific element can both strengthen the position of the right holder at a competitive market and weaken it reducing the consumer’s demand in the result of mixing the similar products.
Securing the claim in the cases on the copyright violation
In case of the copyright violation the holder has every ground to seek protection of the legitimate interestsin the court. At the same time, it is especially important to file a petition for the court to undertake themeasures to secure the claim. The decision made in time and the implementation of the relevant measureswill allow facilitating the check of the objects for the presence of the signs of counterfeitness andavoiding in future the impossibility of executing the court decision, which has entered into force.The general rules and the procedure for applying the interim measures in the civil legal proceedingsThe general rules for securing claims in the civil legal proceedings are set out in Chapter 13 of the CivilProcedural Code of the Russian Federation and in Chapter 8 of the Arbitration Procedural Code of theRussian Federation. The interim measures are the urgent temporary actions undertaken by the court uponthe plaintiff’s application, and in individual cases upon the defendant’s application, aimed at preservingthe possibility of applying the sanctions against the offenders and at protecting the interests of theapplicant. Article 140 of the Civil Procedural Code of the Russian Federation and Article 91 of theArbitration Procedural Code of the Russian Federation contain a list of the interim measures that are usedin the civil legal proceedings. These lists are open; therefore the court can make a decision to appoint themeasures that are not specified in the legal norms. The main condition for determining the interimmeasures is the use of the principle of proportionality of the measures applied and the claims made by theplaintiff.The interim measures are used only when the claim has already been brought, and the judicialproceedings have been initiated. The person is entitled to file a request on the application of the interimmeasures at any stage of the process. The request is made in the form of a petition, which is included inthe claim or it is filed in the form of a separate application. For the measures undertaken to secure theclaim to be effective, it is necessary to make a decision promptly and to ensure confidentiality at the stageof the consideration of the petition in order to prevent the possible unfair actions of the defendant fordestroying or moving the objects in respect of which the corresponding measures are planned to beapplied. For these reasons, the court considers the request without notifying the persons participating inthe case and within the shortest possible time. When making a positive decision, the judicial authoritymakes a decision, this is reported to the body authorized to perform the relevant action. The plaintiff isgiven an enforcement order, and the copy of the court decision is sent to the defendant.The peculiarities of the interim measures applied in the copyrightThe provisions describing the peculiarities of the interim measures applied to the disputes in respect ofthe copyright are contained in Paragraph 2 of Article 1252, Article 1302 of the Civil Code of the RussianFederation, Paragraph 3.1 of Article 140 of the Civil Procedural Code of the Russian Federation andArticle 144.1 of the Civil Procedural Code of the Russian Federation. The actions specified in the norms,which are to secure the claims can be divided into three groups:― the ones aimed at prohibiting particular activities (the manufacture, sale, distribution, etc.);― the ones connected with the arrest of the material media, the copies of the works, the materials and theequipment used or intended for the manufacture or reproduction of the counterfeit objects;― the ones connected with the restraint of the illegal use of the information and telecommunicationnetworks, including the Internet.The legislation contains only a description of the general principles for the functioning of the interimmeasures and their non-exhaustive list. However, in particular cases there is no indication to theapplication of specific measures. It points to the fact that, as in the cases with other branches of the civillaw, the court must determine independently the measures necessary for the use, which may not havebeen specified in the norms, being guided by the principle of proportionality.Among the interim measures used in the copyright disputes there are those that are due to the specifics ofthe field. These include the measures to prohibit the transportation, storage or ownership of thecounterfeit copies, as well as the actions to arrest the materials and the equipment used to manufacture thecounterfeit copies. In respect of the specified measures, there are various discussions in respect of thefault and intent in the defendant’s actions at the transportation, storage or, for example, the use of theequipment. After all, the owners of the property (the vehicles or the apparatuses for the manufacture)could have been unaware of the illegality of the actions being performed. To minimize the cases ofdamage to innocent persons, Paragraph 1 of Article 1302 of the Civil Code of the Russian Federationstates that in order to prohibit the actions the judicial authority must have sufficient ground to assume thatthe actions of the person are illegal.Why we need the measures to secure the claims in the copyrightAssessing the need to file a petition for the interim measures, the person whose rights are violated shouldtake into account the following:― According to Paragraph 1 of Article 50 of the TRIPS Agreement, the use of the interim measures isaimed at:“a) preventing the occurrence of a violation of any intellectual property right;b) preserving the relevant evidence relating to the alleged violations.” 1― The actions performed timely in order to secure the claim will allow reducing the time costs and theywill serve as a guarantee of the execution of the court decision in the case.
The ICGS — how it is arranged and why it is necessary to check the list of products and services when filing an application
In order to optimize the activities of the Offices of different states for the registration and check oftrademarks and service marks for their compliance with the patentability criteria, the Nice Agreement onestablishing the International Classification of Goods and Services for the Purposes of the Registration ofMarks (ICGS) was concluded in 1957. For the USSR, the Agreement came into force in 1971. Russia, asthe successor of the USSR, has still been being a party to this Agreement and it uses the ICGS for thedesignation of the products and services with respect to which the means of individualization are beingregistered.The structure of the International Classification of Goods and ServicesThe first edition of the ICGS was adopted in 1963 and it consisted of 34 classes and an alphabetical list ofproducts. The Classification is regularly reviewed by a specially established Committee of Expertsrepresenting the member countries of the Nice Agreement. New products or services are added to theclasses, the subject matters are being redistributed, the changes can possibly be made to the alphabeticallist and the explanatory notes can be adopted. Currently, the 11 th edition (the ICGS-11) adopted in 2017 isin force. It consists of 45 classes: from 1 to 34 ones contain a list of products, and from 35 to 45 onesinclude a description of services.The text of the International Classification of Goods and Services for the Purposes of the Registration ofMarks includes a general part in which it is indicated how to apply the Classification correctly, and a listof classes of products and services grouped according to the same type principle, accompanied with theexplanations. The class names are arranged in an alphabetical order and they indicate the areas, which theproduct or service can be attributed to.The definition of the class of the product or service according to the ICGSIf you file an application for the registration of a trademark to the Federal Executive Authority, accordingto Subparagraph 3 of Paragraph 3 of Article 1492 of the Civil Code of the Russian Federation, the holderof the designation must include the list of the products grouped according to the ICGS classes in the textof the application. If the applicant does not specify the category, the application will be rejected byRospatent. The holder of the means of individualization is entitled to specify any number of the classes. Itis important to bear in mind that the amount of the state fee paid will depend on the number of the classesspecified.For a correct description of the list, it is necessary first to find a general class by the Classification (forexample, class 2 of the ICGS), and then, if possible, to specify the individual products or servicescontained in the list. The explanation notes to each class are of great importance, including thedescription, the list of the subject matters assigned to this group and the list of the products or serviceswhich are not included in the specified class. In case if the class definition becomes difficult, the creatorsof the Classification advise to refer to section “General Remarks,” which is contained in the GeneralProvisions of the ICGS.The expediency of using the ICGSAccording to the WIPO information, the International Classification of Goods and Services is used inmore than 150 Offices worldwide. At the same time, 84 states are the direct members of the NiceAgreement and this list is increasing regularly. 11 URL: http://www.wipo.int/classifications/nice/en/faq.htmlThe expediency and effectiveness of using the universal classification is obvious. Firstly, the correct useof the ICGS allows the applicant to check the uniqueness of the designation in comparison with thealready registered means of individualization with respect to the selected products or services, and also tounderstand how likely obtaining a certificate is. Secondly, the availability of the unified classificationsimplifies the check of the designation at an examination stage, and, therefore, this allows reducing theperiod during which a decision on protectability of the trademark or service mark is made. The ICGSincludes an extensive list of the products and services, regularly added by the new subject mattersappearing at the conditions of a developing economy, which are distinguished with the trademarks. Theuse of the unified list of the products and services facilitates the work of the experts greatly.Why we need checking the list of the products and services, when the application is filedBefore filing an application for the registration of a trademark or a service mark, the holder of thedesignation should examine the ICGS in order to clarify the list of the classes and products with respect towhich the designation is planned to be registered. As the analysis of the Classification shows, someproducts of the same type are in different classes, for example, “Electric Juicers” are assigned to class 7of the ICGS, and “Household Non-Electric Juicers” are included into class 21 of the ICGS. It isappropriate to include in the list even the products that the manufacturer plans to produce if themanufacturing is expanded, since adding new classes after registering the trademark is impossible.Then it is recommended to check for the presence of the confusingly similar or identical designations,among those already registered with respect to the selected classes and products. According to theprovisions of the current legislation, the identical trademarks shall not be registered to distinguish thehomogeneous products. This is due to the possibility of confusing the consumer as a result of using suchdesignations. At the same time, according to the Rospatent's Methodological Recommendations: “Theadopted International Classification of Goods and Services for the Purposes of the Registration of Marksdoes not affect the assessment of the homogeneity of the products and services.” 2 It is necessary toassume that such position of the Office is due to the presence of the homogeneous products in differentclasses.Assessing the justification and necessity of carrying out the check of the list of the products and services,it is possible to make an unambiguous conclusion that this procedure will allow the applicant to reducesignificantly the time and money costs for the registration of a trademark or a service mark.
The Madrid System for the registration of trademarks as an instrument of globalization
The main purpose of the creation and registration of a trademark is its use for the individualization,isolation of а product. If the designation is registered, but at the same time it is not used for its intendedpurpose, then it will not have any value. An active promotion and use of the trademark leads to theformation of the associations “the trademark – the product,” “the trademark – the manufacturer,” “thetrademark – the quality” at a consumer. Thanks to these associations, the buyer makes informed choicesabout the products, and he recommends them to other consumers, what increases consumer demand. Thepositive results of such trend are: a production growth and an expansion of the territory, where theproducts are sold. At this stage, the right holder of the designation has two key questions: “How toprevent the illegal use of the trademark?” and “How to protect the means of individualization acrossseveral countries?”The registration of trademarks in different countriesThe Madrid System for the international registration of trademarks was created in 1891. The fundamentallegal acts ensuring the functioning of the System are: The Madrid Agreement Concerning theInternational Registration of Marks of 1891 and the Protocol Relating to the Madrid AgreementConcerning the International Registration of Marks of 1989. The International Bureau of the WorldIntellectual Property Organization (WIPO) performs the administration of the Madrid System.To file an application for the registration of a trademark using the Madrid System, you need:― To have the designation, which has been registered or filed for the registration with the national Officeof the Madrid Union member country (the Office of Origin), which the applicant is connected with. It isexpressed through a genuine and valid industrial or commercial enterprise, residence or citizenship.― To file an application to the International Bureau through the Office of Origin, where the date ofreceipt of the international application, the identity of the claimed mark to the designation in the basicapplication or registration, as well as the identity of the claimed classes of products and services to theones specified previously are subsequently certified.― To specify in the application an image of the mark and the list of products and services, classified bythe ICGS.― To enumerate the Madrid System member countries, where it is planned to obtain legal protection.― To pay a fee in the fixed amount. The amount of the fee depends on the number of the specifiedcountries, the number of the classes of the products and services enumerated in the application – theamount will increase, if more than three classes, as well as the countries of origin of the applicant, areclaimed – the amount of the fee may be reduced by 10%, provided that the state is recognized by theUnited Nations as the least developed one.After checking the application for compliance with the requirements, as well as the confirmation of thepayment of the fee in the fixed amount, the information about the trademark shall be placed into theInternational Register and be published in the Bulletin. The International Bureau shall notify then theUnion member countries, where the registration is sought. The national Offices of these states shall carryshall out an examination and make a decision on the international application in exactly the same way asif the application is filed directly.The international registration shall be valid during 10 years, further it is allowed to extend protection forthe periods of 10 years subject to the payment of the required fees.The benefits of the registration of trademarks using the Madrid SystemUsing the Madrid System to file an international application, the holder of the trademark gets a number ofadvantages. Firstly, a single application is filed in one of three languages: English, Spanish or French.Secondly, a total fee shall be paid to the International Bureau. Thirdly, the period of examination of theapplication is reduced compared with the period of consideration directly within each Office. And alsothe procedures for changing the data about the right holder and for extending the period of protection ofthe registered designation are simplified.The Madrid System for the registration of trademarks as an instrument of globalizationIn a rapidly developing market relations the use of a trademark is the best way to increase demand and toimprove the company's competitiveness. The distinctive feature of the modern world economy is theabsence of obstacles to the movement of products around the world. Previously, it has been difficult tosell and buy on the territory of different states; also it has been extremely costly. Today, trading on theInternet and the numerous delivery methods make it possible to order and receive the product anywhere.In the circumstances, the simultaneous registration of the trademark in several countries is justified, and itwill allow protecting the designation and products against the illegal actions of the law violators.The Madrid System suggests that the right holders should take advantage of the Union of 102 membersrepresenting the interests of 118 countries. According to the WIPO data: “These members account formore than 80% of the world trade, and it can grow as the number of the Union members increases.” 1About 1.3 million trademarks have been registered by filing an international application.The person registering the trademark under the Madrid System gets a resource to ensure protection of thedesignation in several jurisdictions at once. As the Nestlé representative notes: “It is economicallyadvantageous, it requires minimal bureaucratic costs and it has a minimum of administrative barriers; itdoes not require powers of attorney and agents.” 2 Thanks to the use of the System, the procedure forextending the period of protection of trademarks is simplified. If desired, the right holder is entitled torefuse from the prolongation of the registration in a number of countries or, conversely, to expand the listof the states, in which the designation is registered.In conclusion, it is worth noting that in the process of the global economic integration, the Madrid Systemfor the registration of trademarks is a modern tool that allows the right holder, who has entered the worldmarket, to ensure timely and effective protection of his own means of individualization.
A free use of a work for scientific and educational purposes
According to the norms of the Russian legislation, the author of a work of science shall obtain theexclusive rights to such a result of intellectual activity from the moment of the creation and expression ofthe work in an objective form. The content of these rights is limited to the use and disposal of the subjectmatter by any way not contrary to the law. The exclusive rights of the author are of an absolute nature, theessence of which is that the right arises from a person, regardless of the will of third parties, and all therest must refrain from the actions capable of violating it. However, the legislation contains a number ofcases, where the works can be used without the right holder’s consent. One of them is the right to a freeuse of the work for scientific and educational purposes.The general provisionsAccording to Subparagraphs 1 and 2 of Paragraph 1 of Article 1274 of the Civil Code of the RussianFederation: “The following shall be allowed without the consent of the author or other right holder andwithout the payment of remuneration, but with an obligatory indication of the name of the author, whosework is used, and of the source of borrowing:1) quoting in the original and in translation for scientific, discussion, critical, information and educationalpurposes, for the purpose of disclosing the author's creative design of the legally promulgated workswithin the scope justified by the purpose of quoting, including the reproduction of excerpts fromnewspaper and magazine articles in the form of press reviews;2) using the legally promulgated works and excerpts from them as illustrations in publications, radio andtelevision broadcasts, sound and video recordings of an educational nature within the scope justified bythe set purpose.”The analysis of the above legal norm allows us drawing a number of conclusions:― The quoted subject matter must be legally promulgated.― There is no need to obtain the consent of the author or right holder, or to conclude an agreement, to usethe work in the above cases.― The remuneration for a free use for scientific and educational purposes shall not be paid.― It is permitted to use both the original and the translation of the work.― For the legal inclusion of a work or fragment, a number of conditions must be observed: to specify theauthor's name or pseudonym (if he performs under it), the work used; to make out the work or excerpt insuch a way that it will be clear, where the borrowed subject matter is.The ways of a free use of works for scientific and educational purposesSubparagraphs 1 and 2 of Paragraph 1 of Article 1274 of the Civil Code of the Russian Federationstipulate two ways of a free use of works without the author's consent for scientific and educationalpurposes: in the form of quoting and in the form of press reviews.Quoting means the use of the work or fragment as the inclusion in another subject matter of the copyright.Quoting must occur without distorting the borrowed element and it should be made out with correcttextual or audiovisual distinguishing. For example, distinguishing with quotation marks in case of literaryworks or the indication to the use of the subject matter in the credits of the audiovisual work.In the text of Subparagraphs 1 and 2 of Paragraph 1 of Article 1274 of the Civil Code of the RussianFederation, the legislator states that the press reviews in the form of the reproduction of the excerpts fromnewspaper and magazine articles shall be considered as a type of quoting. At the same time, this type isstill distinguished separately. This is due to the fact that this way of a free use can both lead to theemergence of a new work (with additions, the indication to the author's opinion, etc.), and it can be usedfor a simple reproduction of various excerpts of newspaper or magazine articles.The peculiarities of the use of the legal provisions of Subparagraphs 1 and 2 of Paragraph 1 ofArticle 1274 of the Civil Code of the Russian FederationThe above Article contains a number of terms and concepts that require clarification and specificity.Enumerating the cases of a free use of works without the right holder’s consent, the legislator indicates toa possibility of using for scientific and educational purposes. At a superficial review, these terms seem tobe synonymous. Therefore, it seems necessary to consider them in more detail. The scientific purposesshall be understood as the study and analysis of existing works (textbooks, monographs, scientificarticles, etc.) for the subsequent development of new knowledge about the subject matter or the researchsubject. The educational purposes shall be meant the study of subject matters of the copyright foreducational purposes. Thus, the qualitative difference of the use of works for scientific purposes from theuse for educational purposes is to obtain the new information, conclusions or knowledge about the subjectmatter of the research, which are not contained in the quoted sources.The determination of the volume, in which the work or its excerpt can be used freely, causes difficulty.Article 1274 of the Civil Code of the Russian Federation states that the volume should be justified by thepurpose of quoting. Due to the absence of a more detailed description of this concept, in the event ofdisputable situations, the determination of the permissible size of the quoted subject matter falls withinthe jurisdiction of the judicial authorities. When considering the cases related to the legality of a free useof works without the author’s consent, the court shall take into account the following circumstances:whether the quotations are used for the purposes specified in the Articles of the Civil Code of the RussianFederation; whether the author of the borrowed excerpt or work is indicated; what the volume of theindicated element is, in comparison with the work, in which it is used; as well as the practice of a free useof the quoted subject matter of the copyright.
In what form one should register a trademark – a theory and practice
The trademark is one of the most registered means of individualization in Russia. According to theRospatent’s report for 2017, since 2014 there has been a continuous increase in the number of registeredtrademarks. 1 Over the last year, the volume of applications filed has exceeded the threshold of 73,500applications. With so many designations, it is difficult to create a unique, effective means ofindividualization. To simplify the process of developing the original designation, it is worth examiningthe variety of trademarks and the peculiarities of their registration.Types of trademarksWord, figurative, three-dimensional and other designations or their combinations can be registered astrademarks, in accordance with the provisions of Article 1482 of the Civil Code of the RussianFederation. Indicating to a possibility of protecting “other” designations, the legislator makes a list ofregistered subject matters as a public one. When checking the means of individualization in respect ofwhich the protection is sought, the Rospatent examiners, regardless of the type of the trademark beingunder consideration, establish the compliance of the subject matter being checked with the provisions ofthe current legislation, namely, with the norms of Article 1477 of the Civil Code of the RussianFederation and Paragraphs 1-7, Subparagraph 3 of Paragraph 9, Paragraph 10 of Article 1483 of the CivilCode of the Russian Federation. Thus, the applicant is entitled to file for registration any designation,which complies with the conditions applicable to the protectable trademarks. However, a variation of theclaimed means of individualization may cause making additional requirements to the subject matter or toits description.Word trade marksThe Rules for drafting, filing and considering the documents that are the basis for performing legallysignificant actions for the state registration of trademarks, service marks, collective marks of theregistration of trademarks, service marks, collective marks (hereinafter referred to as the Rules) describein detail the types of trademarks stipulated in Article 1482 of the Civil Code of the Russian Federation. 2In accordance with Paragraph 32 of the Rules, the word trademarks include the combination of letters,which have a word nature, words, sentences, as well as their combinations. The main function of the wordmeans of individualization is quick informing the consumer. The designation may contain the informationabout the distinctive properties or quality of the product, an indication to the manufacturer or a hint to theplace of manufacture. The main advantage of the word trademark is its memorability, due to thepeculiarities of pronunciation, any analogy with the known words or absolute uniqueness. The analysis ofwell known and well used designations shows that the optimal word means of individualization mustinclude one or more words and in some cases – a slogan. The compliance with the above volumefacilitates the perception and memorizing the trademark by the consumer.Figurative trademarksSuch designations include the images on a plane of natural and other objects, living beings, subjects, anyfigures. The figurative means of individualization allow the manufacturer to bring additional attention ofthe buyer to the products. It is worth noting that compared to the word trademarks, the figurativetrademarks are considered to be more perceived by the consumers, who do not always have time tofamiliarize themselves with the designation (for example, with reading it). In the foreign literature, theterm “eye-catching” is applied to such subject matters, what means “attracting an attention.”1 https://rupto.ru/content/uploadfiles/docs/otchet_2017_ru.pdf2 http://new.fips.ru/documents/npa-rf/prikazy-minekonomrazvitiya-rf/prikaz-ministerstva-ekonomicheskogo-razvitiya-rf-ot-20-iyulya-2015-g-482.php#P32Combined trademarksThe combined means of individualization are defined as the designations consisting of a combination ofword, figurative, three-dimensional and other elements. This kind of designations seems to be the mostsuccessful for the registration as a trademark. The combined subject matter, consisting of a complex ofelements, influences the consumer through various “channels” of perception: visual and audio, and,possibly, kinesthetic. Such trademark is universal and multifunctional.Three-dimensional trademarksIn Paragraph 32 of the Rules, such designations include: “three-dimensional subject matters, figures andcombinations of lines and figures in a spatial arrangement, which may be a form of the product or its part,a form of the packaging of the product, a form not related to the product.” In case, when the three-dimensional means of individualization is filed for the registration, the holder of the trademark shallrepresent a general view of this subject matter in the application.Other designationsOther designations include: sound, light, changeable, holographic, tactile, positional, olfactory and tastedesignations. Despite the increase in the number of applications filed for the registration of suchdesignations, the number of the registered trademarks from this group is rather modest compared to word,figurative or combined means of individualization.Sound trademarks are used for radio or television advertising. The applicant of the sound designationshall submit for examination a soundtrack on a digital media.The changeable trademarks consist of a combination of figurative, word, light, sound designations, andthey are used in b-rolls of television companies and film companies.The tactile trademarks are most often intended for the perception of the product by visually impairedconsumers and they are made in a special relief and dot font.The taste and olfactory trademarks usually refer to the characteristics of food products and beverages. Inorder to become protectable, such designations must acquire distinctiveness as a result of the use withrespect to the claimed products. As it has been noted in the Guide for the State Registration of aTrademark, Service Mark, Collective Mark: “the smell should not be a natural property of a product (forexample, the smell of leather for shoes, the smell of fruit for fruit juice).” 3 If the olfactory or tastedesignation is filed for the registration, the applicant should describe clearly and intelligibly in a wordform the characteristics of the smell or taste.In what form one should register a trademarkWhen creating a designation, a potential right holder of a trademark should take into account thefollowing circumstances. According to the materials of the Rospatent reports, word, figurative andcombined trademarks are registered in the majority of cases. Consequently, there are especially manysuch subject matters, what means there is a high risk of establishing identity or similarity to the degree ofconfusion with the already registered means of individualization. Due to this reason additional difficultiesin developing a new and original trademark may appear. Perhaps one should pay attention to more raredesignations, for example, sound, light, olfactory ones, or include them as elements in the combinedmeans of individualization. It is also important to take into account the class of the consumers withrespect to whom the sale of the product is intended, the peculiarities of the types of designations and the3 The Guide for the implementation of administrative procedures and actions within the framework of providing the stateservice for the state registration of a utility model and for the grant of a patent for a utility model, its duplicate – URL:https://rupto.ru/ru/documents/ruc-tz/downloadspecificity of the products being manufactured. When creating and registering the designation, it is worthremembering that the buyer does not spend a lot of time studying the trademark, therefore the trademarkmust be memorable and unique.
The mission and the place of a patent attorney in the intellectual property protection
According to Paragraph 3 of Article 1247 of the Civil Code of the Russian Federation and Paragraph 1 ofArticle 2 of Federal Law of the Russian Federation of 30.12.2008 No. 316-FZ, a patent attorney is acitizen of the Russian Federation, who, in accordance with the established procedure, has received arelevant status and who carries out his activities related to the legal protection and the defence of theintellectual rights, including the acquisition and disposal of these rights. 1According to the Rospatent information, more than 1,900 people have been registered in the Register ofPatent Attorneys of Russian Federation by the beginning of 2018. However, as it is indicated in theinformation report about 1,500 people work actually. 2 According to the statistical reports, the number ofcertified specialists increases annually, but if you compare the number of such specialists, for example,with Germany, where about 3,800 patent attorneys are registered, the figures are very modest. 3 At thesame time, the importance and demand for patent attorneys is obvious.The powers of a patent attorney for the protection of the intellectual rightsDescribing the patent attorney’s powers, it is not by chance that the legislator has highlighted thepossibility of participating in the protection and defence of the rights of the holder of the intellectualproperty subject matters. Thus, the term “protection” means the use and application of the measuresstipulated by law for the suppression of offenses, the recognition and restoration of the rights, as well asthe application of the appropriate sanctions.In accordance with Paragraph 1 of Article 4 of the Law “On Patent Attorneys” the patent attorney shallhave the right to provide the following services for the protection of the rights to the client.· To advise on the protection of the intellectual rights.· To interact with the Federal Executive Authority on Intellectual Property and the Chamber for PatentDisputes, including to correspond, to prepare and submit objections to the examination decisions andother documents, to participate in various meetings and sessions.· To participate as an examiner or a representative in the court in cases involving the rights to theintellectual property subject matters.· To implement other patent attorney activities not prohibited by the legislation of the Russian Federationin the interests of the client.Advising on the protection of the intellectual rightsOne of the requirements to the person claiming the status of a patent attorney is the requirement to haveexperience in the relevant specialization during at least four years. Thus, addressing to a certified patentattorney for an advice, the right holder can be sure that he will receive a qualified advice and the usefulinformation regarding the ways and opportunities for the protection of the rights and the legitimateinterests.The interaction with Rospatent and the Chamber for Patent DisputesThere are often the situations, when the applicant does not agree with the decision of Rospatent withrespect to the application filed, or the owner of the registered subject matter of intellectual property1 The Federal Law of December 30, 2008 No. 316-FZ “On Patent Attorneys”2 The Rospatent report on the number of the patent attorneys in the regions of the Russian Federation for 2017 – URL:https://rupto.ru/ru/activities/pat_pov/sved-pat-pov3 Horoshkeev V. A. Who about what, but the patent attorneys about their law // Patent Attorney – 2018 – No. 3 – URL:http://www.patentinfo.ru/issue/3p_18.htmlconsiders granting legal protection to another subject matter to be illegal. In such cases, the use of apatent attorney as a representative in the Chamber for Patent Disputes will be the most correct decision.The patent attorney, being the person who constantly interacts with the Federal Executive Authority andensures the correct and timely filing the documents required for the registration, will be able to composecorrectly an objection, as well as to assess correctly the expediency of addressing to the Chamber forPatent Disputes.The participation in the court proceedingsThe patent attorney can act as an examiner or he can be a representative in the court in the cases involvingthe intellectual rights.The examination shall be appointed by the court in the cases, where it is necessary to establish the factsrequiring the special knowledge. The patent attorney, depending on his qualification, has the right to holda patent and technical examination, to study the issue of similarity of the designations in the event of adispute with respect to the trademarks or to analyze the products with respect to which the means ofindividualization have been registered as to their homogeneity. The examiner’s conclusion shall berecognized as evidence, along with and on an equal basis with other evidence. But because of the specificknowledge of the person, who has conducted the examination, the court, when making a decision, pays anincreased attention to such conclusions.The right of the patent attorney to participate as a representative on the client's behalf during the courtproceedings shall be certified by the power of attorney that does not require notarization. The advantagesof such representation consist in understanding the essence and the specifics of the dispute arising fromthe peculiarities of the field of the intellectual property. At the same time, it should be noted that thestatus of a patent attorney does not exclude the possibility of a person to have simultaneously a lawyerstatus. 4 For this reason, some subjects are patent attorneys and simultaneously they have a lawyer status.Other activities on the protection of the rights of the holder of the intellectual property subjectmatterUnder the norms of the Federal Law “On Patent Attorneys” the range of actions of the patent attorney inthis case shall be limited to the actions that do not contradict to the legislation. Such activities include, forexample, writing and sending the letters of claim to the person who is offending the rights of the person,who is represented by the patent attorneys.The mission and the place of a patent attorney in the intellectual property protectionThe clear arguments can be given to justify the use of the services of a patent attorney for the protectionof the intellectual property rights. The patent attorney is a professional intermediary between the rightholder of the intellectual property subject matter and the state authorities (the Federal ExecutiveAuthority, the judicial instances, etc.). The status of a patent attorney confirms the existence of therelevant exprience and the qualification knowledge. The legislation reflects the obligation of the patentattorney to represent the interests of the customer in a proper manner and in accordance with theprofessional ethics. In the event of damage, the sanctions can be applied to the patent attorney.Describing the role and the mission of the patent attorneys in protecting the legitimate interests of theright holders of the intellectual property and the means of individualization, it can be said with confidencethat their essence is in a professional representation and qualified assistance to the client in ensuring andrestoring the rights owned by him.
The accession of the Russian Federation to the Hague System – the first results
In 2017, one of the most important events in the field of protection and registration of industrial designstook place in Russia – Federal Law No. 55-FZ of 03.04.2017 “On the Ratification of the Geneva Act ofthe Hague Agreement Concerning the International Registration of Industrial Designs” was signed. TheGeneva Act entered in force on the territory of the Russian Federation on February 28, 2018. Since thatdate, our country has become a full-fledged participant in the Hague System.The harmonization of the Russian legislation with a view to the ratification of the Geneva Act of theHague AgreementIt is worth noting that it has not been possible to ratify the above said international treaty for a long time.Starting since 1999, when following the results of the Geneva Diplomatic Conference Russia signed thefinal act of the Hague Agreement, the process of the harmonization of the Russian legislation forprotection of industrial designs has begun with a view to comply with the legal provisions of the GenevaAct. The changes made include the following:• The increase of the level of requirements for the subject matter for which the protection is sought.• The graphic image of the appearance of an article has taken rank as a priority position in an applicationfor registration of an industrial design, and not the description of substantive features, as before.• The period for filing an application from the date of disclosure of the information has increased from 6to 12 months.• The simplification of requirements for an application for registration of an industrial design: it is notnecessary to indicate the substantive features of a subject matter; the requirements to an image have beenedited.The main advantages of the participation in the Hague System of the international registration ofindustrial designsThe ratification of the Geneva Act of the Hague Agreement has allowed the applicants from Russia toobtain a number of advantages:1. An applicant can claim to obtain a protection document being in force in several member-states byfiling only one international application to the National Office (Rospatent) or to the International Bureauof WIPO.2. There is no need to file an application in different languages, depending on the countries, in which theregistration is sought. In case, when an application is filed directly to the International Bureau of WIPO,the applicant chooses one of three languages ​​for filing the application: English, Spanish or French. If anapplication is filed through Rospatent, it is composed in English.3. Up to 100 industrial designs are allowed to be included in one application, provided they belong to thesame class of the International Classification for Industrial Designs (the Locarno Classification).4. It is possible to file an international application without the mediation of a patent attorney.5. The amount of fees has been reduced in comparison with filing several applications to national officesof different states. The required amount is paid in a single currency (the Swiss Franc).In the 2018 Annual Review of the Hague System, published by WIPO, the attention is focused onincreasing the number of the applications filed by 40.6% in 2015 and by 35.3% in 2016. 1 The WIPOexaminers think that the reason for such progress is the accession to the Hague Agreement of Japan, the1 https://rupto.ru/content/uploadfiles/docs/otchet_2017_ru.pdf;Republic of Korea and the United States of America. The published statistics shows a significant increasein the volume of the applications filed in new member-states. This allows supposing that due to theaccession to the Hague System the applicant's activity will increase in Russia as well.The first results of the accession of Russia to the Hague System of the International Registration ofIndustrial DesignsThe Geneva Act of the Hague Agreement has entered in force on the territory of our state relativelyrecently, but there are already the first positive results in the field of patenting industrial designs:• Firstly, it is important to note that the convergence of the legislation of the Russian Federation with theworld practice and with the legislation of the European Union has occurred.• The changes have been made in the legal norms, which are aimed at reducing the requirements for anapplication for registration of an industrial design; the priority position has been allocated to the image ofthe registered subject matter, what is logical, taken into account the nature and purpose of industrialdesigns.• To stimulate the growth of the number of international applications filed under the Hague System,various reference materials and the information Internet resources have been created. For the purposes ofclarification, the WIPO website has published the Recommendations for filling in an internationalapplication (URL: www.wipo.int/hague/en/how_to/file). On the Rospatent website there is aninternational application form, as well as its translation into Russian, to simplify filling in an applicationby the Russian applicants (the form should be filed in English) (URL:www.rupto.ru/ru/activities/inter/coop/wipo / hague_system / forms_hague). There is also a fee table and acalculator for the automatic calculation of fees (www.wipo.int/hague/ru/fees) in order to facilitate thecalculation of fees.• According to the Annual Report of Rospatent, in 2017, the average duration of consideration of anapplication for granting a patent for an industrial design at the stage of a substantive examination was6.05 months. As the examiners of Rospatent state: “Such period for consideration creates a large marginof safety in case of a sharp increase in the receipt of applications for industrial designs in 2018, includingin accordance with the Geneva Act of the Hague Agreement Concerning the International Registration ofIndustrial Designs.” 2Speaking about the results of the accession to the Hague System, we can make a conclusion aboutpositive dynamics. The improvement and harmonization of the norms of the Russian legislation, thesimplification of the procedure for filing international applications for domestic applicants, the possibilityof filing applications to the Russian Federation by foreign applicants through the Hague System – hereare just some obvious advantages. It should be assumed that the above circumstances, as the examiners ofRospatent suppose, will lead to an increase in the number of applicants and an increase in the number ofregistered industrial designs.
The perspective of the development of the NPOP as a regional brand
The name of the place of origin of the product (hereinafter referred to as the NPOP) is one of the mostrarely registered subject matters of intellectual property. However, thanks to the active state policy on thepromotion and actualization of regional brands, the interest of manufacturers to the registration of theNPOP increases every year, what reveals the positive dynamics of the development of the NPOPinstitution as a regional brand.What a regional brand meansIn the Russian legislation there is not a legal definition of the term “brand.” The analysis of the legalliterature and periodicals shows that the concept “brand” should be understood as a combination ofvarious subject matters, which individualize the product of a certain manufacturer and cause the followingassociative links: “the product – the producer” and “the product – the quality” among the consumers. Theterm “brand” is a broader concept than, for example, a trademark, and it includes a combination of suchsignificant elements for an enterprise as: business reputation, different means of individualization, which“individualize” a product and a manufacturer, a recognizable design of a package or a product, etc. Thatmeans, that the brand includes what in the aggregate causes the association with a particular company or aproduct in the minds of the consumers.The uniqueness of the regional brand is that its constituent elements are aimed at the individualization andpromotion of the peculiarities of the region. Two types of regional brands are differentiated: a regionalbrand of resources and a place brand. In most cases, when the issue is about the regional brand, the brandof resources is implied. Under the resources, the products, the landscapes, the cultural and historicalheritage, which are characteristic of the region, are implied. The place brand is a series of associations,images that symbolize the values ​​of a particular region. 1 As a rule, the regional brand includes both of theabove said kinds.What the regional brands are needed forUnder the conditions of an import substitution and a dynamic development of the regions, the need topromote and popularize the regional brands is obvious. Such brand will draw the consumer’s attention tocertain properties of the product, the place of its origin and it will confirm the quality of the product. Theuse of the regional brand will make it possible for the manufacturer to increase the recognition of theproduct and to increase the sales volume. For the region, a well-known regional brand is an inflow offinancial, human resources and an increase in the level of employment of the population.Geographical indications are a new kind of the regional brandsThe Rospatent’s specialists on the basis of the study of various legislative acts in the field of theprotection of the NPOP and the geographical indications (hereinafter referred to as the GIs) have madethe proposals for the improvement of the Russian legislation. In 2018, in the first reading, the State Dumaadopted draft law No. 509994-7, in which it is proposed to introduce the geographical indications as anew subject matter of the legal protection into Part 4 of the Civil Code of the Russian Federation. Themain advantage of such means of individualization is in the simplified requirements made to theregistered designation, in comparison with the NPOP. It is obvious that the GIs will be actively used andpromoted as the regional brands, since now it will be possible to provide the legal protection to thosedesignations, which could not have been registered as the NPOP.The advantages of the NPOP as a regional brand1 Yshimi Zuike // Regional brand: What is a regional brand? – URL:https://sites.google.com/site/yshimizuike/home/regionalbrand01/regionalbrand02The possibility of obtaining a certificate for the use of the designation by the enterprises that areindependent from each other is one of the advantages of the NPOP as a regional brand. So, if on theterritory of the region there are several manufactures of the similar products, each of them has the right toregister the NPOP.Another advantage is that, using the NPOP, the manufacturer indicates to the name of the geographicalobject, within the limits of which the product is manufactured, thus drawing the consumer's attention tothe place of manufacture of the product.Another positive peculiarity is the permissibility of a permanent change in the scope of the right holdersof the NPOP. Due to this circumstance, the manufacturer can expect obtaining a certificate for thedesignation from the date of the release of the production with the appropriate properties, and obtainingall necessary documents. Thus, the NPOP can be constantly used by various enterprises, what contributesto the recognition of the designation and the popularization of the region.The perspective of the development of the NPOP as a regional brandTo forecast the perspectives of the development of the NPOP as a regional brand, it is worth analyzing theinformation on the number of the applications for the registration and the certificates issued according tothe results of their consideration by Rospatent; on the products in respect of which the certificates for theNPOP are being registered; on the state policy for the development of the institution of the regionalbrands.Speaking about the development of the NPOP institution as a regional brand, it is worth paying attentionto the statistics of Rospatent on the dynamics of filing the applications and issuing the certificates for theNPOP. According to the report for 2017, the share of the applications during the period from 2013 to2017 increased from 39 to 56. During the same period, the volume of the certificates issued increasedfrom 9 to 30. 2 The number of the applications and certificates is increasing, so it is possible to assume thatthe manufacturers are beginning to aware the expediency of the registration of the NPOP. It is also worthnoting that, among 56 applications for 2017, 18 applications were filed for the designations, which havenot been previously registered as the NPOP. This reveals the fact that the manufacturers have begun toshow an interest to the individualization of the products not only through the use of fantasy elements andverbal symbols (as in the case of trademarks), but also by establishing a link between the production andthe certain conditions of its manufacture.A majority of the NPOP in respect of which the legal protection has been sought, are aimed at theindividualization of the food products. Starting since 2013, according to the reports of Rospatent, theapplications for the issuance of the certificates for the NPOP with regard to mineral water have held aleading position. 3 Taking into account the fact that the food products are the main articles ofconsumption, there is a high probability of a further use of the NPOP, which have already been registered.The current state policy is aimed at promoting the development of the regions. During the XXIInternational Conference of Rospatent, Deputy Head of Rospatent, Lyubov Kiriy, has called the name ofthe place of origin of the product as “... the most important means of individualization, which underliesthe formation of a successful regional brand, since it allows establishing a link between the products andthe territory on which they are manufactured.” 4 The regional brands, including the NPOP, in particular,are a kind of tools to improve the demographic and financial status of the subjects of the RussianFederation. In this connection, the arrangements are being carried out to draw the public attention to theNPOP institution. In 2018, the Rospatent’s representatives held a thematic meeting dedicated to the2 https://rupto.ru/content/uploadfiles/docs/otchet_2017_ru.pdf3 http://old.rupto.ru/about/reports/2013_14 https://rupto.ru/ru/news/16-10-2017-itogi-xxi-mezhdunarodnoy-konferencii-rospatenta-na-pervoy-sekcii-obsudili-razvitie-regionalnyh-ekonomik-s-ispolzovaniem-sredstv-individualizaciitopical issues of the legal protection of the NPOP, in which the representatives from 27 regionsparticipated. 5 The comprehensive arrangements on informing the manufactures with respect to theadvantages of the registration of the NPOP are being implemented, as well the work of the state bodieslocated on the territory of the regions, which is aimed at the increase of a number of the applications filedfor the registration of the NPOP is being stimulated.All the above said circumstances reveal the fact that the interest of the manufacturers to such means ofindividualization as the name of the place of origin of products increases every year, and the developmentof the NPOP as a regional brand is one of the significant tasks in the strategic policy of Russia.
The payment of the remuneration for the free reproduction of audiovisual works for the private purposes
Since 2010, in Russia there has been a legal norm obliging the manufacturers and importers of theequipment and material media to pay the remuneration for the free reproduction of audiovisual works forthe private purposes.It is worth noting that such payments are also collected in other states. The remuneration essence is thatthe right holder should receive the remuneration for the private use of an audiovisual work. The amountset shall be paid by direct users indirectly: it is added to the value of the equipment or material media, bywhich the audiovisual works are reproduced. The direct responsibility for the payment of theremuneration shall rest with the manufacturers and importers of the equipment and material media.The world practice of collecting payments for the use of works for the private purposesIn the foreign legislation there is not a unified scheme for paying the remuneration for the reproduction ofaudiovisual objects for the private purposes. For example, in Luxembourg and Australia, the fees for thefree use of a private nature are not collected. In Sweden, Romania and Belgium, in addition to themanufacturers and importers, the wholesalers are among the payers. In a number of countries there arefixed payments, the amount of which is regularly revised (France, Hungary, Germany), while in othercountries the remuneration is set in the amount of the interest rate from the selling price (Japan, Poland,Greece and others). 1The legislative regulation of collecting payments for the free reproduction in the RussianFederationIn Russia, the provisions on the payment of the remuneration for the use for the private purposes for thefirst time were legally enshrined in Article 26 of Law of the Russian Federation of 09.07.1993 No. 5351-1“On Copyright and Related Rights.” This norm has lost its force after the introduction of Part 4 of theCivil Code of the Russian Federation. Article 1245 of the current Civil Code of the Russian Federationduplicates the provisions, which have been in force previously.Having analyzed the legislative norm, the following can be identified:• The subjects who are entitled to receive the remuneration. They are the authors, performers andmanufacturers of phonograms and audiovisual works.• The persons whom the payments are collected from. These are the manufacturers and importers of theequipment and material media used for the reproduction of a private nature.• The exceptions with respect to the objects for the implementation of which the fees are not collected.These include the equipment and material media manufactured for the export purposes and theprofessional equipment.The provisions of Article 1245 of the Civil Code of the Russian Federation have not been applied till2010, when the Government of the Russian Federation issued Resolution No. 829 “On the Remunerationfor the Free Reproduction of Phonograms and Audiovisual Works for the Private Purposes.” Theprovisions of the said legal act contain:• the amount of the remuneration paid;• the list of the equipment and material media, for which the payments shall be paid;• the procedure for collecting the remuneration.The organization authorized to collect the remuneration for the reproduction of audiovisual worksfor the private purposesAccording to Paragraph 2 of Article 1245 of the Civil Code of the Russian Federation: “The collection offunds for the payment of the remuneration for the free reproduction of phonograms and audiovisual worksfor the private purposes shall be implemented by an accredited organization.”The only structure authorized to collect the said payments is the All-Russian Social Organization theRussian Union of Right Holders (hereinafter referred to as the “RURH”). In 2010, according to Order ofthe Federal Service for the Supervision of the Observance of the Legislation in the Field of Protection ofthe Cultural Heritage of September 24, 2010, No. 167, the RURH received the state accreditation forexercising authority for collecting the remuneration for the reproduction for the private purposes. In 2015,by Order of the Ministry of Culture of the Russian Federation No. 2440 of September 18, 2015, theaccreditation of the Union was extended for 10 years.The amount of the payments and the distribution of the funds receivedThere are two ways of calculating the amount of the remuneration payable:• A fixed amount payable shall be set;• The manufacturers and importers shall pay a certain percentage of the selling price or the import price ofthe equipment and material media.In Russia, the percentage method of calculating the necessary payments is used. According to Paragraph 1of Article 1245 of the Civil Code of the Russian Federation, the procedure for collecting the remunerationand its amount shall be set by the Resolution of the Government of the Russian Federation. The currentinterest rate is 1% of the total value of the equipment or the material medium, which can be used for thereproduction of audiovisual works for the private purposes.Paragraph 3 of Article 1245 of the Civil Code of the Russian Federation shall set the following percentagedistribution of the paid remuneration with respect to audiovisual works:• 40% – to the authors of the audiovisual works,• 30% – to the performers, whose performance is recorded in the audiovisual works,• 30% – to the manufacturers of the audiovisual works.The development of the institution of payment of the remuneration for the reproduction ofaudiovisual objects for the private purposesAccording to the annual report of the RUSH, in 2016 the amount of the remuneration collected was2,680,749 roubles. In 2010, when the Union was established, such amount was 38,099 roubles. 2 Theincrease in the payments received is due to the increase in the number of the agreements concludedbetween the RURH and the right holders and the agreements concluded between the RURH and theremuneration payers. The identified trend indicates that each year the number of the right holders whoimplement their right to the remuneration for the reproduction for the private purposes is increasing.It should be noted that simultaneously with the beginning of the collection of the payments the attempts tostrike down the operation of the acts, which provide such a possibility, have also appeared. The lastinitiative found its expression in the draft law submitted for consideration by the State Duma Council onMarch 26, 2018. The Member of the State Duma Committee upon the State Construction and theLegislation Sergei Ivanov came up with a proposal to strike down the compensatory payments for the freereproduction for the private purposes, arguing that the users paid the remuneration to the right holders ofthe audiovisual works, when they acquired them, and there was no need to pay again. Thus, there is apossibility of striking down the payments of the remuneration for the free reproduction for the privatepurposes. 3 Bibliography:1 See the details: Kovtun E.V., Kovalenko E.V. The system for collecting and paying the remuneration to right holders for thefree reproduction of phonograms and audiovisual works for the private purposes: problems and prospects 2 The RUSH Report for 2016 3 “Tax on Blanks” can be struck down // the Parliamentary Newspaper of 26.03.2018
Electronic interaction with Rospatent: new opportunities
It so happened that technical innovations at our place are not implemented so quickly and painlessly, asevery interested party would like. Thus, patent offices abroad have already been interacting withapplicants for a very long time using the World Wide Web.Upon the expiration of the first decade of the new century, the domestic FIIP (the Federal Institute ofIndustrial Property – the body. which carries out the state registration of intellectual property subject-matters), which have admitted only a fax machine as a customer focus electronic means until nowadays,followed by a “paper” confirmation, started to implement, slowly but surely, the long-pending aspects inthe social and economic fields.In 2010, the system of electronic filing of applications for the registration of trademarks and carryingout the correspondence related to it with an authorized body started to work. The interaction with theapplicant through the Network is carried out from the moment of filing the application and up to thesettlement of the substantive issue (a decision on the registration, a decision on the refusal of theregistration, or a decision on the withdrawal of the application).As in any aspect of the human activity, in the system described there are clear advantages anddisadvantages, which can rather be called the developers’ shortcomings.Let us touch them briefly. I would like to start with the advantages, as they are greater in number andthey are much more significant.So, in our opinion, the discount on the state fees in the amount of a significant 30 percent is the mostimportant advantage among them, what is a pleasant surprise in the context of the recent years financialpolicy of the state bodies with respect to the business community. There are reasonable grounds to believethat in this way the registering body stimulates the most rapid electronization of the relations: an applicant– the FIIP. Undoubtedly, a positive product of the electronic interaction with the FIIP is the timereduction, the so called formal examination of the application, what, taking into account the significantterms allowed by the legislator for the overall process, has, if not decisive, but a significant importance inchoosing a method for filing the documents.Electronization, in turn, has opened up much convenience for the companies involved in the trademarkregistration. This may include, for example, the possibility of the day and night filing the documents tothe FIIP during 7 days a week and a super-fast receipt of the correspondence, in comparison with a“conventional” method, what, undoubtedly, helps to observe the period for the filing the documents andfilling in the applications more accurately.Who among the office employees has not complained about a large amount of documentation storedon his workplace, and who has not suffered from confusing and loosing it. With an electronic documentflow, these “joys” are the things of the past. This is actual at least for the registration of trademarks. Alldocuments are now stored in a digital format, in one place. The previous convenience has resulted in sucha small, but nevertheless a joyful thing – saving paper, what in economic stagnation conditions, is perhapsa greater piece of luck for the patent bureaus, than a 30 percent discount on the state fee for their clients.The conveniences have not bypassed the FIIP’s employees. When considering an application, forexample, the examiner does not need to check, whether the applicant has used the ICGS current edition,when filling in the application, or he has confined himself to the old one by a mistake. The programmeuses only current regulatory documents. Naturally, in a positive aspect such convenience also refers to theemployees of the patent firms.Turning to the disadvantages or, as we have called them above, the developer’s shortcomings, which,as must be admitted, are smoothed over in course of time, we can recall such a strange feature of theprogramme, as a request for filling in the field for a Tax Registration Reason Code (KPP), in the cases,when the applicant is an individual entrepreneur, who does not have such a code. Of course, it is notdifficult to add zeros required by the programme, but, in general, this indicates a “raw” software product.Unfortunately, there are also frequent cases of difficulties with logging in the resource after thecomputer’s self-updating, what is already a more serious disadvantage, which, along with the failures onthe FIIP’s server, can cause the delay in filing the documents with all the consequences. The latter ones(failures), much to everyone's delight, are rare and short.Another “curable” but an unpleasant trouble of the FIIP’s software product may include the restrictionson the formats and volumes of the package of the documents being filed.This should also include the programme’s failure to detect the name (heading) of the ICGS class, if itis necessary to insert it into the application. In case of such a need, in contravention of the common sense,the entire class list should be placed in the application. The lack of automatic filling in and the ability ofcopying the applications, does not contribute to a convenient work, that is, each of the applications shouldbe filled in separately, what certainly creates unnecessary difficulties in the work and has an indirectnegative impact on the quality of the services.The necessity for obtaining an enhanced electronic digital signature (EDS) doesn’t seem to besomewhat a frightening thing against the background of the above said and, for example, the offset by theprogramme of the paid, but not confirmed state fee is absolutely comical.Summing up, it should be noted that it is rather difficult to classify the above said advantages anddisadvantages in terms of their relevance and a degree of the advantageousness or inconvenience withrespect to the registering body, customers or patent bureaus exclusively. Since the registration of atrademark is a multi-component process with a complex structure of the participants and a need for theirclear interaction, both advantages and disadvantages are common and interrelated.In general, currently it is possible to see a tendency to the improvement of the quality of the electronicinteraction with Rospatent, which, we are sure, will only gather speed.
Can Cartoon Characters Be Used?
Is it possible to use images of famous cartoon characters for promotional purposes? This is a matter that has recently become increasingly relevant. The images of the popular animated characters can provide a steady demand for the goods for children and adolescents, and many entrepreneurs use them willingly in their activities, believing that they contribute to their even greater fame in this way and not thinking about such actions as copyright infringements. Nevertheless, it is illegal to use the images of cartoon characters without the proper permission.Any cartoon character is a subject-matter of copyright, like any other work of art. Each character has its own author and right holder, and therefore it can be used only, if there is permission. And this permission should be issued not by the person who has invented the character, but by the person who is the rights holder to it.In order to obtain the appropriate permission, it is necessary to apply to the company-right holder or its regional office. The document confirming your rights to use the image will be a license or sublicense agreement, in which it will be clearly specified where, how, in what volumes and in what manner the right holder allows you to use the image of a particular cartoon character. Entering the contract is the only legal way to use the famous characters in one’s work.Misunderstandings often arise in the event that the company- right holder registers the image of the cartoon character as its trademark. In this case, the character is represented in a certain pose and certain clothing. In addition, the trademark shall be registered only for a certain class of the ICGS. Many people believe that by changing the pose or clothing of the character, and also using the aforesaid designation for the goods of another class, they will no longer infringe the rights of the company- right holder, but this is not true. The fact is that the issues relating to the use of trademarks and the issues regulating the use of the subject-matters of copyright are regulated by two completely different fields of law. And if it is really possible to avoid the infringement of the rights of the company that has registered the trademark by changing something in the image of the character and using the aforesaid designation for the goods of other categories, then the copyright infringement will be in any case. In this case, the issue of the character's recognizability will play a key role. That is, if the image of the character is reprocessed, but the character himself will remain recognizable, this character can not be used without permission. If you can prove that you have drawn your own character and this will be confirmed by an independent artistic examination – there will be no copyright infringement.Thus, the protection of the character of the work of art by the copyright assumes that only the author or other right holder has the exclusive right to use the character in any way, including for advertising purposes, and any third party who wishes to use the aforesaid character also needs entering a license agreement with the right holder. Otherwise, there will be an infringement of the exclusive right of the right holder of the character.
Consequences of judicial consideration on confusing similarity from the point of view of an ordinary consumer
13 December 2007 Presidium of the Supreme Arbitration Court of the Russian Federation approved Information letter No. 122 "Review of the court practice of consideration by arbitrazh court of cases, relating to the application of the legislation on intellectual property"1. In accordance with the legal position stated in clause 13, the question of designations confusing similarity is an issue of fact and the general rule is that it can be settled by court without appointment of an examination.Judicial practice precedent to this information letter on claim seeking the prohibition of illegal use of a trademark came down to the fact that in many cases the courts appointed an examination proceeding on the similarity of the trademark of the plaintiff with the designation of the respondent, this appointment dragged out trials for a year or more, thus the judicial restraint of illegal use of a trademark became an extremely ineffective method of exclusive rights protection.Realizing the complexity and duration of the legal proceeding, until 2008 the rights holders together with the filing of a complaint, also applied regularly to the police to create more problems for the offender.With the approval of the Information letter, the number of such applications has decreased; the number of proceeding has increased.Six years have passed since the approval of the Information letter and a certain judicial practice has been formed, in this article the result of this practice will be discussed.Analysing court adjudication on claim seeking the prohibition of illegal use of a trademark and comparing such decisions with court adjudications on contestation of the decisions of Rospatent that considered objections to granting legal protection to a similar trademark, the following conclusion can be made:on claim seeking the prohibition of illegal use of a trademark courts do not recognize as confusingly similar to trademarks the designations that Rospatent would not have registered as a trademark due to the presence of prior similar trademarks.When approving information letter No. 122 "Review of the court practice of consideration by arbitrazh court of cases, relating to the application of the legislation on intellectual property", the Supreme Arbitration Court of RF stated in clause 13 that "Examination is appointed only for the resolution of the issues arising during the investigation  when special knowledge is required. The question of confusing similarity of the two verbal designations used on the goods of the plaintiff and the respondent can be resolved by court from the point of view of an ordinary consumer and does not require special knowledge".Does this position mean that when comparing trademarks, it is not necessary to be guided by any normative acts establishing the criteria for similarity of compared designations, for example, the Rules for the preparation, application and examination of an application for the registration of a trademark and a service mark (approved by Rospatent Order No. 32 dd. 05.03.2003)?2 - No, it doesn't.In the same clause 13 of information letter the Supreme Arbitration Court of RF states that according to the sixth sub-paragraph of clause 14.4.2 of the Rules for the preparation, application and examination of an application for the registration of a trademark and a service mark  (approved by Rospatent Order No. 32 dd. 05.03.2003) (hereinafter referred to as the Rules), a designation shall be interpreted as confusingly similar to another designation , if it becomes associated with it in general despite their individual differences.Thus, after analysing position of the Supreme Arbitration Court of RF stated in clause 13 of information letter No. 122, it's apparent that the Supreme Arbitration Court of RF pointed at the fact that establishment of the similarity of a trademark with a disputable designation does not require special knowledge; i.e. examination procedure; at the same time, when establishing the similarity, it is necessary to apply the Rules.These Rules are applied by Rospatent in the process of registration of trademarks and of consideration of objections against granting protection to a trademark.These Rules should be applied by courts in the process of comparing a trademark with the designation used by the respondent.However, the analysis of court adjudications shows that the courts, guided by clause 13 of information letter of the Supreme Arbitration Court of RF No. 122, come to a conclusion about the similarity/dissimilarity of the compared designations "from the point of view of an ordinary consumer", i.e. they express in their court adjudication their own subjective point of view as if the point of view of the consumer. Practically in all analyzed judicial acts, reference is made to the comparison of designations in accordance with the three criteria of similarity established by the Rules; however, in all court adjudications and decisions, the above analysis of the similarity of the compared designations is not fully completed, there are no comparisons for one or two criteria of similarity: phonetic, semantic or graphic.In subclauses (a) - (c) of clause 14.4.2.2 of the Rules, the signs of similarity of the compared designations are indicated: sound, graphic and semantic.In subclause (d) of clause 14.4.2.2 of the Rules it is stated that: The characteristics listed in subclauses (a) - (c) of this subclause may be taken into account, either individually or in various combinations.This means that the similarity of the compared designations can be on any of the signs of similarity. The absence of a comparison on any of the marks in a judicial act indicates an incomplete judicial act.Very often for the past 2-3 years court adjudications and decisions where there is no comparison of designations for any of the similarity criteria, or for two of similarity criteria are published.I would like to explain this opinion by example of decree of Ninth Arbitration Appeal Court on case А40-187101/20133  concerning the suit of  Aleksandrovy Pogreba LLC to EL-GRAND LLC, ELITTORG LLC, LeoLit LLC, FudProm LLC and Top-Servis LLC.In this case the plaintiff addressed the respondents with a claim seeking the prohibition of illegal use of a trademark Challenge No. 3806114 and recovery of compensation.Trademark of the Russian Federation №380611 Cigar GURKHA Royal Challenge 5Moscow City Court of Arbitration decision dated Moscow City Court of Arbitration, which was upheld by decree of Ninth Arbitration Appeal Court  dated 25.06.2014 and Intellectual Property Court decision dated 26.09.2014 dismissed the claim.Below the text of the decree of Ninth Arbitration Appeal Court is provided, also comments are given, the text of the judicial act is italicized:Based on these provisions of the Rules, resolving the issue of confusing similarity of the verbal designation GURKHA or GURKHA Royal Challenge with the trademark CHALLENGE according to Certificate No. 380611 the Court of Appeal comes to the conclusion that there is no confusing similarity of the indicated designations and the trademark of the plaintiff according to all the criteria.Such conclusion on "absence or presence of similarity in all criteria" is given in almost all decrees establishing the similarity or dissimilarity of the comparative designations. There is no analysis by all similarity criteria.As can be seen from the case materials the design of cigars GURKHA is a combined designation, the combined designation of cigars GURKHA includes verbal elements "GURKHA" and "royal challenge". The Court of Appeal  believes, that compared designations GURKHA or GURKHA Royal Challenge do not match in all elements and that is why they shall not be interpreted as identical.An analysis of the similarity of the compared designations by the three criteria established by the Rules is not given in the decree.Herewith the verbal element GURKHA Occupies a dominant position with respect to the verbal element of the "royal challenge", since it is located in the centre and is made with a larger font.There may be several trademarks / designations on a product. Pursuant to clause 14.4.2.2 of the Rules "Verbal designations are compared with combined designations whose compositions include verbal elements".The Rules do not provide for similarity absence due to the dominance of one of the elements, which should not even be taken into account when comparing the verbal designations "Royal Challenge" and "Challenge". The court should compare and analyse the similarity of designations "Royal Challenge" and "Challenge". Why should it? Because this would be done by Rospatent in case the combined designation "GURKHA Royal Challenge" would be applied for registration as a trademark. Because courts verify the correctness of Rospatent's decisions, when challenging Rospatent's decisions in which such arguments are given.This approach correctness is reflcted in the decree of the Supreme Arbitration Court of RF on case А40-2569/20116 (Lina LLC to MacDonald’s LLC) "Meanwhile, the courts unreasonably assessed the font size of a designation, a place of its location on a package, the presence on a package of designations and trademarks of other right holders, since the above mentioned has no legal significance in establishing the opposable designations' identity and does not affect the conclusion on law infringement availability in the respondent's actions through using someone else's trademark, but rather is subject to investigation in case of the designations similarity to determine whether they can be confused". So, namely the verbal element of GURKHA performs the primary function of goods individualization (cigars) of a legal entity.What does it have to do with similarity of designations Royal Challenge and Challenge?Verbal element royal challenge is a descriptive characteristic of the goods both as to a position in a combined designation and as to semantic meaning, consequently by virtue of subclause 3 of clause 1 of article 1483 of the Civil Code of the Russian Federation it does not possess of a distinctive ability.Is a court entitled to make conclusions on a distinctive ability absence of a trademark in a suit on prohibition to use such a trademark? The same decree of the Supreme Arbitration Court of RF with regard to case А40-2569/2011 (Lina LLC to MacDonald’s LLC) states:"The courts have unlawfully rejected a suit on the grounds of a distinctive ability absence of a trademark "S PYLU S ZHARU", as well as due to the fact that a designation is composed of the elements characterizing quality and properties of the goods, since a legal protection granting to a trademark is not disputed in accordance with the procedure established by the law. Clause 62 of decree dd. 26.03.2009 No. 5/297 also states that a person in whose name a trademark is registered may not be rejected his/her protection (even if proofs of unlawfulness of a trademark registration are provided to court) prior to declare invalid a legal protection granting to such a trademark in accordance with the procedure established by article 1512 of the Code or legal protections cancellation of a trademark in accordance with the procedure established by article 1514 of the Code".So, a court can't make a conclusion on a distinctive ability absence of a trademark at a suit on unlawful use prohibition of such a trademark.The Court of Appeal also believes it is necessary to specify that thee is a threat of confusion if one trademark is perceived as the other one or if a consumer understands that it is referred not to the same trademark, but believes that both trademarks belong to the same enterprise. Such a threat depends on several circumstances: firstly, on a distinctive ability of a trademark with an earlier priority; secondly, on similarity of opposable trademarks; thirdly, on homogeneity evaluation of goods and services designated by a trademark.Such a position complies with the legal position of the Supreme Arbitration Court of the Russian Federation outlined in Decree of the Presidium dd. 18.07.2006 No. 2979/06 with regard to case No. А40-63533/04-67-642, order dd. 30.05.2011 No. ВАС-5661/11 with regard to case No. А40-39536/10-12-240.However, a plaintiff has not provided an evidence that as a result of use by the respondents of disputable designation Challenge, the consumers believed or could have believed that a disputable designation personalized the plaintiff's activities as a right holder of a trademark CHALLENGE under evidence No. 380611.Materials in the case don't contain a proof providing evidence that the products – cigarillos of CHALLENGE trademark mentioned in a statement of claim, are in actual turnover.Prrof absence of trademark CHALLENGE use by the plaintiff under evidence No. 380611 is estimated by the Court of Appeal as a circumstance preconditioning an actual impossibility of the plaintiff's trademark confusion CHALLENGE" under evidence No. 380611 in the consumer's eyes with the disputable designation "Challenge used by the respondents".In recent time the courts reject a suit very often due to lack of evidence of a trademark confusion with a designation used by a respondent. But, on basis of what rule of law do courts reject a suit due to lack of evidence of use? Article 1515 of the Civil Code of RF sets forth two criteria for establishing the exclusive right breach for a registered trademark and prohibition on a similar designation use:confusing similarity;homogeneity of goods and/or services.When registering trademarks Rospatent rejects a a requested designation registration even having established probability of confusion on basis of similarity of the compared designations. Courts, when considering suits on unlawful use prohibition and claims of proving a fact of confusion, seem to proceed from the requirements of article 65 of the Arbitration Procedure Code of the Russian Federation on a party's duty to prove those circumstances that are referred to by a party, fall beyond the scope of the requirements of article 1515 of the Civil Code of RF. Proving namely of the actual confusion is not required by article 1515 of the Civil Code of RF.Moreover, the exclusive right for a trademark arises out of a trademark state registration, a right holder doesn't have a duty to use its trademark for at least 3 years as from a date of its registration. If a lawsuit is filed by a right holder who has not started using its trademark and who can't provide an evidence of use and, accordingly, of the actual confusion, a court will reject a suit due to lack of evidence of an actual confusion? Or whether a right holder files a lawsuit on prohibition of a trademark use after registration of which 3 years have passed, will court reject a suit due to evidence absence of the actual confusion, having actually taken a decision on premature termination of a trademark due to non-use?On the basis of the foregoing, the courts when considering suits on unlawful use of a designation that is similar to trademark shall carry out an analysis of comparison of a trademark and designation according to the criteria of the Rules. Such disputes are considered at all Arbitration Courts by specialized constitutions of the court and judges possess of special knowledge to carry out such analysis.If a court considering such case does not possess of knowledge for independent carrying out of analysis of the comparable designations according to the Rules, or a statement of claim and/or recalls don't contain a similar analysis carried out by the parties, that can be assessed by a court and taken as basis for a judicial act, - a court shall commission a legal expertise to evaluate similarity because it itself does not have any respective special knowledge. The current judicial practice leads to the fact that courts reject a suit on unlawful use prohibition of a trademark, recognizing the designations that could never have been registered as a trademark, as not similar.Having looked through the court adjudications for the last half year one can provide the following examples -Case А40-55565/20138, a trademark "USPEKH", No. 386090 and designation "Vash uspekh - salon krasoty";Case А41-65696/20139, a trademark "TREL-DETAL", No. 458996 and designation "TREL";Case А41-57871/201310, a trademark "GURMAN", No. 213841 and designation "Rublevskiy gurman";Case А40-135039/201311, a trademark "SAMSON", No. 260887 and designation SAMSONAS;Case А40-77233/201312, a trademark "Avtoexpert", No. No. 326231, 341719 and designations experttyres.ru and "EXPERT SHIN".For all that one should pay a special attention to the fact that in a series of cases the right holders, when dealing with such statements of motivation of court adjudications, dispute court adjudications neither to the Court of Appeal nor to Court of Cassation. Despite the fact that a complaint filing against an adjudication – is a party's right, the parties - right holders don't see an opportunity to change the existing practice, don't want to bear attorney's fees, even despite the fact that they can collect legal costs in case of winning a case. Such statement of motivation of court adjudications compromises respect of right holders to the judicial system.Adoption of such decisions results in the fact that the persons using similar designations don't register the designations used by them as trademarks but just use them. Having received a suit on unlawful use prohibition, the breakers convince the court in proofs absence of the confusion fact and, having gained a suit at law continue using a similar designation without a trademark registration.In this connection it is worth discussing separately one more consequence of application by courts of clause 13 of information letter No. 122 of the Presidium of the Supreme Arbitration Court of RF, according to which an issue on similarity to a degree of the designations confusion is an issue of fact and as a general rule can be permitted by court without an examination commissioning.Analysis of the current judicial practice at the suits on unlawful use prohibition of a trademark shows that courts when prohibiting unlawful use of a trademark or when rejecting such a suit, segregate a trademark similarity with a disputable designation from unfair practices and/or unfair competition on part of a respondent.However, premised on the system analysis of the provisions of the Civil Code of RF as to the trademarks as well as the rich judicial practice, it is clear that the goal of a designation use being similar to a confusion degree is use of somebody else's reputation, a reputation that is created by a right holder, obtaining of unjustified advantages for account of a right holder.Use of somebody else's reputation for promotion of one's goods is an element of unfair competition.Courts probably believing that unfair competition – is a separate breach of article 14 of the Law of RF "Concerning the Protection of Competition" do not examine the confusing similarity from the point of view of unfair practices.Such approach results in the fact that a respondent (breaker) can not infringe the rights for a trademark but will breach the anti-monopoly legislation, when the Federal Anti-Monopoly Service of RF recognizes the  respondent's acts to be unfair competition.When summarizing, the following can be saidIt is more than likely that somebody having read this article, will think that the proposed approach on necessity of availability, in judicial acts at the suits on unlawful use prohibition, of trademarks of an analysis of the comparable designations according to the criteria of the Rules, is needless and not well-reasoned.In this case, the goal of this article is a necessity of a similar approach use both at the suits on unlawful use prohibition of a trademark and when registering designations as trademarks.If confusing similarity is an issue of fact that should be evaluated by court from the perspective of an ordinary consumer and does not need a full analysis according to the Rules, - then in registering of designations that are requested for registration, the same approach should be applied: Rospatent's experts shall compare a designation requested for registration from the point of view of an ordinary consumer. And the court, when considering applications on Rospatent's decisions contestation regarding the trademarks' similarity, shall not claim a full analysis of the similarity criteria regulated by the Rules. The article is published in internet journal of the Court for the intellectual rights.  See information letter No. 122 approved by the Presidium of the of the Supreme Arbitration Court of the Russian Federation dd. 13 December 2007 "Survey of practice of cases consideration by arbitration courts relating to the legislation use on the intellectual property" // LEGAL REFERENCE SYSTEM GARANT.See order of Rospatent dd. 5 March 2003 No. 32 "On the rules of preparation, filing and consideration of an application for a trademark and service mark registration" // LEGAL REFERENCE SYSTEM GARANT.See Decree 9 of the Arbitration Court of Appeal with regard to case А40-187101/2013 // LEGAL REFERENCE SYSTEM GARANT.See: Register of Rospatent's trademarks, a trademark Challenge No. 380611 [Electronic resource] // The internet site of FSBI - Federal Institute of Industrial Property // http://www1.fips.ru (an accessed date – 19 December 2014).Resource of a cigar picture of GURKHA Royal Challenge – the Internet site "http://www.cigarinspector.com".See Decree of the FEDERAL ANTI-MONOPOLY SERVICE OF RF with regard to case А40-2569/2011 (Lina LLC to MacDonald’s LLC) // LEGAL REFERENCE SYSTEM GARANT.See joint decree of the plenary assemblies of the Supreme Court of RF and the SUPREME ARBITRATION COURT OF RF dd. 26 March 2009 No. 5/29 // LEGAL REFERENCE SYSTEM GARANT.Case А40-55565/2013 // LEGAL REFERENCE SYSTEM GARANT.Case А41-65696/2013 // LEGAL REFERENCE SYSTEM GARANT.Case А41-57871/2013 // LEGAL REFERENCE SYSTEM GARANT.Case А40-135039/2013 // LEGAL REFERENCE SYSTEM GARANT.Case А40-77233/2013 // LEGAL REFERENCE SYSTEM GARANT.
Interest in contestation or loss of effect of rights for trademarks
In the last few years they have told and written much enough on the interest criteria of the persons filing applications on early loss of effect of a trademark. After introduction into operation of the 4th part  of the Civil Code of RF, the very notion of a person concerned who is entitled to claim an early loss of effect of a trademark, has gone over from one extremity to the other one. If, within about one year after adoption of the 4th part  of the Civil Code of RF and before the beginning of 2009, any persons who had paid a fee for an application consideration on early termination of legal protection of a trademark were recognized to be persons concerned, then later on a severe restriction for "interest" was imposed. For the time being, having understood that a norm on early termination has almost ceased to function, a criterion of "interest" has again become very broad: the main thing is that a person who has filed an application should not be aimed at abusing the rights and creating problems to a right holder.But the 4th part of the Civil Code of RF contains a specification of a necessity of an interest presence in a person who files not only an application on early loss of effect of a trademark due to the fact it is not used, but also those persons who address to the Federal Service for Intellectual Property (Rospatent) with objections on all the criteria of the trademarks protectability stipulated by article 1483 of the Civil Code of RF.A thought to write this article appeared after attending a judicial sitting devoted to an application considering on the Rospatent's resolution contestation (Case SIP-161/2013), under an objection of METRO Cash and Carry LLC that had cancelled the effect of trademark "BERGLAND" No. 321953 (an applicant specified that a trademark had indicated a place of the goods production). During the sitting a representative of METRO Cash and Carry specified told: "An interest of my appointer appeared after a right holder had filed a statement of claim to my appointer on the unlawful use termination of a trademark". Rospatent recognized such interest, and the other party of the proceedings (a right holder) contested the interest neither at Rospatent nor at court.But is there an interest in a trademark contestation in a person who unlawfully uses it? And whether such person can have an interest in a trademark contestation arising only out of unlawful use of a similar designation?Here one shall distinguish at once between an interest in early loss of a trademark effect in connection with its being unused and an interest in a trademark invalidation on other grounds, for example contestation of a mark as not complying with the criteria of article 1483 of the Civil Code of RF.The early termination principle proceeds from the basis that the government obliges a right holder to use a registered right and protects only that exclusive right against unlawful use or against similar marks registration, that is used. And it is quite evident that a person who is filed a suit against, on prohibition of any trademark/designation use, raises legally a question with a right holder: whether he/she uses his/her trademark? If he/she does then it can be protected and court shall prohibit other persons to use it unlawfully. But to what extent is it right to distribute automatically such interest when contesting rights on the grounds of article 1483 of the Civil Code of RF?After participation, for the last 5 years, in the hundreds of cases it has become quite evident that when contesting the rights for the trademarks on many grounds of a trademark protectability that are stated in article 1483 of the Civil Code of RF, such principle of an interest is not applicable and not acceptable. Moreover, when filing objections on trademarks invalidation an interest is different on each protectability criterion, for which reason each of the interest criteria needs a separate discussion. Clause 1 of article 1483 of the Civil Code of RF1. State registration as trademarks of designations that don't have a distinctive ability or are composed only of elements, is not allowed:1) that have entered into common use for designation of a certain kind of goods;2) that are generally accepted symbols and terms;3) that characterize the goods including those indicating  their kind, quality, quantity, property, appropriation, value, as well as time, place and way of their production or sales;4) that represent a form of goods that is determined exceptionally or mainly by a property or by appropriation of goods.These elements can be included into a trademark as non-protectable elements if they don't take a dominant position in it.The provisions of this clause are not applied in relation to the designations that have acquired a distinctive ability as a result of their use.This clause needs to be divided into two parts:●absolute grounds not incidental to stating of a place of the goods production or location of a manufacturer, and● absolute grounds incidental to stating of a place of the goods production or location of a manufacturer. When contesting a trademark and having filed an objection to Rospatent, an applicant shall prove on almost all the grounds stated in this clause that a designation registered as a trademark did not have a distinctive ability as at a priority date and maybe could not obtain an additional distinctive ability. And to confirm an interest in contestation of rights, a person who has filed an objection shall provide evidence of the actual infringement of rights for a registered mark, having substantiated a necessity of its use in the economic turnover. Of course one can provide an evidence of an intention (preparation) of goods introduction havin a disputable designation, but solely an intention to use a disputable designation will be obviously not enough to prove a distinctive ability absence, that's why one will have to substantiate a distinctive ability absence by proofs of a disputable notation use by other persons before a disputable mark priority, including by an applicant according to a principle "others use and I want to use".In the German legislation concerning the trademarks, the criteria of distinctive ability absence stated in clause 1 article 1483 of the Civil Code of RF are generalized by the following provision: a designation requested for registration can't be registered as a trademark since an unlimited set of persons needs to use such designation in the similar economic activities. Maybe some day we will come to such understanding of the absolute grounds for registration rejection and even article 1483 of the Civil Code of RF will be probably supplemented by such provision.For the time being, without having such a ground, Rospatent for example registers a trademark "S pylu, s zharu" and the court has to protect it, to prohibit the use (Case А40-2569/2011). And when contesting this mark Rospatent establishes that the trademark "S pylu, s zharu" is not descriptive and is not indicative of the direct properties of the goods, without second-guessing , that's why the office considered that this mark registration was legally valid (Decision of Rospatent dd. 24.10.2012 No. 2009714885/50). But is there indeed anybody at Rospatent who believes that "S pylu, s zharu" – is not just cooked (maybe warmed up) bakery product? It turned out there are such people.But let us return to discussion of clause 1 article 1483 of the Civil Code of RF. The text of the document contains the criteria that stand absolutely alone from the rest ones. These are the "designations that are indicative of… a place… of their production or sales".Is confirmation of infringing merchandise sale sufficient for a mark contestation on this criterion? I believe that solely sale of infringing merchandise with a similar designation is insufficient to recognize a breaker of the rights as a person who is interested in loss of effect of such trademark.If we assume that a mark protection lapses at an application of a person "concerned", then any person will be able to use a disputable designation. Does such approach takw into account justice? I believe it does not. Particularly for this reason (or it is one of the reasons) the so called "Soviet" brands are not cancelled. The principle is simple: it is better that a "Soviet" brand should be owned by at least anybody than nobody. Furthermore after such trademark cancellation an applicant of an objection or any other persons will in bad faith make use of that publicity and reputation that was created by a disputable mark over a period of its existence.Having cancelled a trademark allegedly indicative of a place of goods manufacture, upon a person's application who sells infringing merchandise, Rospatent or court affords an opportunity to use a disputable mark to any person, in doing so it actually encourages infringing merchandise. That's why when cancelling a mark that is indicative of a place of production or location of a producer, Rospatent or court shall establish an "interest" of a person filing an objection premised on a real necessity to use a disputable designation in the economic turnover.Our company has filed several times the objections against the trademarks' effect on the grounds that a disputable trademark:●denotes a place of goods manufacture if a right holder is located in a region (city) which name coincides with a trademark;●a consumer is misled by such designation because he/she believes that the goods are manufactured in the same region but the goods are manufactured in another place.We substantiated these several times an interest in a trademark contestation by location of our appointer (applicant) in a region that reproduced a trademark.For example, by order of company Redmond Home Appliances LLC located in city of Redmond, USA, we filed objections against the trademarks effect Redmond No. 349142, 395632. We substantiated an interest with a necessity of an applicant to denote its location – city of Redmond. Rospatent recognized an interest of an applicant but dismissed the objection (Decisions of Rospatent dd. 15.07.2010 No. 2006730177/50, 2007740523/50). Our appointer did not start disputing the decisions of Rospatent and did not enter the Russian market with the goods sale manufactured in city of Redmond.But what might have been if company Redmond Home Appliances LLC located in city of Redmond, USA, would start selling the goods for which a trademark is registered, denoting on the goods a designation Redmond as its address? Would the Russian court prohibit this company to use the designation Redmond as an address?I believe that court was not to have prohibited such use of a similar designation in case when a manufacturer stated it as its address, for which reason two goods that use the similar designations may appear on the market: the first, on which a registered trademark will be used, the second – on which some company will write the same designation as its address only.If we imagine such situation, a question arises whether one needs to preserve such a marks if an objection is filed by a person who has a real necessity to use an identical mark? Are arguments in this case so much important that afford an opportunity to preserve the effect of such registrations: the fact that a self-named  city is small, there are several cities in different countries with such name, the Russian consumer is unaware of these cities, such word is a common name in some country etc.? It is evident that a totality of these arguments on a real necessity to use a disputable mark by another person shall be confirmed by his/her interest.One of the main criteria of interest can and shall be an opportunity of subsequent registration of a disputable designation as a trademark as a protected element or at least unprotected.Clause 2 of article 1483 of the Civil Code of RF.2. According to the international treaty of the Russian Federation, no state registration of the designations as trademarks is allowed that are composed only of the elements representing:1) state emblems, flags and other symbol of states and signs;2) abbreviated or full names of international and intergovernmental organizations, their emblems, flags, other symbols and signs;3) official control, seals of guarantee or plate marks, seals, honors and other honorable distinctions;4) designations confusingly similar to the elements specified in subclauses 1 - 3 of this clause.Such elements can be included into a trademark as non-protectable elements if there is a consent of a respective competent authority thereto.Before introduction of the 4th part of the Civil Code of RF, Rospatent registered the trademarks quite frequently which comprised parts of a flag of different countries (Russia, USA, the Great Britain, West Germany and others) and other altered symbols of a state, because formally there was not a prohibition on the similar designations registration.But afterwards such registered trademark having obtained some publicity became the goal for its imitation, copying and unlawful use. Frequently as soon as a right holder starts struggling with infringing merchandise, an objection is filed against such trademark in which there is a specification of unlawful use of a state flag, emblem etc. Sometimes a permit of a competent authority for a flag/emblem registration as a trademark in the name of an applicant  can be attached to such objection. Inter alia, an applicant substantiates an interest by such consent.But in respect of this criterion as was specified earlier, a mark cancellation will result in origination of imitation, copy, false representation on the market. Will the rights of a person who owns the rights, restore? But such a person represents governments, governmental authorities and institutions. Such persons did not file objections and did not consider their rights as infringed. Even having given a consent for a similar designation registration of any organization, the state did not issue orders to protect an infringed right, filed no objections on its own. And if a person, rights holder for the different state symbols, i.e. a state - allows using its symbols of state, what for does is it need to cancel marks containing a partial reproduction of such symbols, at a person's application who has nothing to do with the state?Rights cancellation brings infringing merchandise to the market, and namely those persons want to extinguish the rights who already either manufacture infringing merchandise or are going to manufacture it in the near future.About 10 years ago a struggle between the former partners started for the rights for a series of trademarks Golden Eagle. In the course of mutual statements, objections and suits, an opportunity of the combined marks cancellation of Golden Eagle was considered. For example, a trademark Golden Eagle No. 216818 includes a picture of a part of the USA flag and body that is an official symbol of the USA. We have managed to convince our customer not to file an objection because we won't be able to substantiate an interest in a mark cancellation on the grounds mentioned.Clause 3 of article 1483 of the Civil Code of RF. No state registration of designations as trademarks is allowed, representing or containing the elements:1) that are false or capable of misleading a consumer in relation to the goods or its manufacturer;2) that are detrimental to the public interests, principles of humanity and morals.This clause for an interest determination is also divided into two parts.Under subclause 1, everything is simple enough concerning an interest, because this ground is usually added to the grounds of clause 1 of article 1483 according to the principle: a trademark is descriptive for a part of the goods/services, for the rest part it misleads the consumer.For example, the word "drops" or a picture of drops for a part of the 5th class goods of MKTU (International Classification of Goods and Services), that includes substantially pharmaceutical preparations and other preparations for medical goals that are directly drops (ear drops, ophthalmic drops or other ones) characterizes the goods, and for the rest part it misleads the consumer because the goods are not drops. That's why everything what is told about an interest under clause 1 of article 1483 of the Civil Code of RF, is also naturally applicable to this subclause.Persons concerned on the ground "passing-off " are the persons who started selling the goods with the disputable mark before a date of a disputable mark priority.But the situation with use and understanding of an interest criterion under subclause 2 of this article is much worse.Premised on the word-for-word understanding of this subclause wording, the members of the public whose rights are infringed by a disputable mark can be persons concerned on this ground. For the benefit of the public, the representatives of the public authorities who have such powers, for example, the public prosecution service, can address to the office.Can a trademark, that in opinion of an objection applicant conflicts with the public interests, principles of humanity and morals, infringe the interests of a legal entity? Can a legal entity be interested in a mark cancellation on this ground? If this person – is a non-commercial or public entity protecting the rights of the natural persons or consumers then it is evident that such organization can be a person concerned. But we have not managed to find a single objection considered by Rospatent on this ground against a trademark operation, that had been filed by a commercial entity.On the other hand, Rospatent has considered too many objections to the expert's decisions rejecting the requested designations registration on the ground "contradiction to public interests". It turns out that Rospatent itself has become a person concerned? Or it protects the public interests…The most interesting among the Rospatent's rejections to register designations as a trademark was an application for mark registration "Volodya i Medvedi".From a court adjudication with regard to case No. А40-65503/2011:Designations detrimental to the public interests, principles of humanity and morals, are also called "scandalous  marks".By virtue of the fact that from 2000 to 2008 the president of RF was Vladimir Vladimirovich Putin who is for the time being the current Prime Minister and the chairman of the political party "United Russia", and since 2008 the president of RF is Medvedev Dmitry Anatolievich, there exits a possibility of this designation perception by the Russian consumer as outplaying of the name and surname of the first persons of the government or name of the current Prime Minister and political party "United Russia" (in the associative reference to its symbol – in the shape of a bear).So, use of a derivative of a name, surname of the persons who personify a country by themselves, and construal of a political party symbol on products of the 32nd, 33rd classes of MKTU (International Classification of Goods and Services) by the the collegium of the Chamber for Patent Disputes was assessed as dismissive attitude to the authorities. Therewith a requested designation causes damage to the image and interests of a government and, as consequence, contradicts to the public interests.The courts didn't agree with Rospatent and obliged to register a trademark.It is seen from a statement of motivation of a court adjudication that the persons interested in this mark cancellation could have been natural persons V.V. Putin and D.A. Medvedev or the state governed by them.For all that I believe that none of the vodka producers for which this trademark was registered won't be interested in this mark cancellation on the ground "contradiction to public interests…".But Rospatent in its belief that registration of "Volodya i Medvedi" designation contradicts to the public interests, registers for example the word "Yo Moyo" No. 505721 as a trademark.From Rospatent's decision dd. 13.11.2013. No. 2012702519So, an analysis of these data suggests that the verbal element "YO-MOYE" is irrelevant to abusive, foul language. Besides that, a requested designation contains a bright pictorial element that reminds of some cartoon character holding the verbal element "YO-MOYE".It should be noted that this designation produces a positive impression and is associated well with such goods as ice-cream consumed both by children and grown-ups.To contest such trademark on the criterion "contradiction to public interests" absolutely any person consuming ice-cream can be a person concerned.But when registering the mark "Yo-moyo", Rospatent rejects a designation registration "Shire Khari" on basis of a contradiction to the public interests.From Rospatent's decision dd. 21.09.2012. No. 2010729485/50So, in its contents the word combination "SHIRE KHARI" relates on the whole to the category of the designations that have indecent (abusive) contents insulting the human dignity. In connection therewith the word combination under examination, should it be used as a trademark, can be perceived as abusive or humiliating the human dignity and, consequently, it contradicts to the public interests and principles of morals.So, any practice of use is absent on this criterion, it will be interesting to keep track of its development.Clause 4 of article 1483 of the Civil Code of RF. No state registration is allowed of designations as trademarks that are identical or confusingly similar to the official names and pictures of most valuable cultural heritage sites of the Russian Federation nations or the world cultural or natural heritage sites as well as to the pictures of the cultural valuables kept in collections, collected writings and funds, if a registration is sought in the name of the persons who are not their owners, without consent of the owners or persons authorized by the owners for such designations registration as trademarks.On this subclause the criteria of interest are very similar to the criteria described in clause 2 of article 1483 of the Civil Code of RF. There can be distinguished the bodies issuing permits instead of governmental organizations – public ones. On the whole the criteria are identical.Let me provide an example from the practice.Mongolian entrepreneur Bat-Ulzii Tsendkhuu registered trademark Ogedei Khaan No. 379409 comprising the picture of a famous Mongolian khan.Russian company Profit-S LLC that desired to use a similar designation and to register it in its name, addressed to the National museum of the imperial palace Gugun (China) where the single picture of Ogedei Khaan is kept. A trademark copies completely the picture kept at the museum and being  an object of the mondial cultural heritage, what is witnessed by the respective publications.Profit-S got the museum's consent for registration of Ogedei Khaan's picture as a trademark in the RF territory and filed an objection against opertion of trademark Ogedei Khaan No. 379409. Rospatent dismissed the objection having suggested the Russian company Profit-S LLC as the person not concerned even despite an availability of a consent for registration.From Rospatent's decision dd. 19.07.2013. No. 2008705135/50It should be also noted that a person who filed an objection had not provided, according to clause 2 of article 1513 of the Code, any rationales of his/her interest in contestation of legal protection granting to this trademark on a ground stipulated by clause 4 of article 1483 of the Code. So, for example, a person who has filed an objection is not an authorized person of the National museum of the imperial palace Gugun in China. In connection therewith PROFIT-S LLC has not proved that it is that person whose rights can be touched upon by the legal protection granting to a disputable mark under evidence No. 379409 on the grounds of clause 4 of article 1483 of the Code.Clause 5 of article 1483 of the Civil Code of RF. According to the international treaty of the Russian Federation, no state registration is allowed of designations as trademarks that represent or contain the elements that are protected in one of the governments – participants of this international treaty, as the designations making it possible to identify wines or alcoholic beverages as those originating from its territory (produced within the boundaries of a geographic area of this government) and having a special quality, reputation or other characteristics that are determined mainly by their origin, if a trademark is meant for designation of wines or alcoholic beverages that don't originate from the territory of this geographic area.Persons interested in the rights termination for a trademark on this criterion can be the persons who produce or sell wines and/or alcoholic beverages in the territory of a geographic area, which name is concordant to a disputable trademark. The criteria of interest on this ground are partially similar to the criteria of interest on clause 1 of article 1483 as to stating of a place of goods manufacture or location of a manufacturer. But unlike clause 1 of article 1483, in this case the known designations, for example Cognac, Champagne and others will have the grounds for contestation.Clause 6 of article 1483 of the Civil Code of RF. Designations that are identical or confusingly similar to the following, can not be registered as trademarks:1) trademarks of other persons requested for registration (article 1492) in relation to the homogeneous goods and having an earlier priority unless an application for state registration of a trademark is withdrawn or recognized withdrawn;2) trademarks of other persons protected in the Russian Federation, including according to the international treaty of the Russian Federation in relation to homogeneous goods and having an earlier priority;3) trademarks of other persons recognized as generally known trademarks in the Russian Federation in the manner established by this Code, in relation to homogeneous goods.Registration of a designation as a trademark in relation to homogeneous goods that is confusingly similar to any of the trademarks stated in this clause, is allowed only with consent of a right holder.The criteria on this clause are probably the simplest ones for assessment. Persons who are interested in the rights termination for a trademark on this criterion are either right holders of the prior trademarks or the persons who filed an application for a trademark registration.Clause 7 of article 1483 of the Civil Code of RF. Designations that are identical or confusingly similar to a name of place of the goods' origin protected according to this Code can not be registered as trademarks in relation to any goods, except for a case when such designation is included as a non-protectable element into a trademark registered in the name of a person having the exclusive right for such name, if a trademark registration is implemented in relation to the same goods, for which individualization a protected designation of origin is registered.The criteria of interest on this ground are partially similar to the criteria of interest on subclauses 1 and 5 of article 1483 of the Civil Code of RF as to stating of a place of goods manufacture or place of a manufacturer location.This article is similar to clause 5 article 1483 of the Civil Code of RF, but unlike foreign geographical denominations, this article states the Russian name of a place of the goods' origin. Persons who are interested in the rights termination for a trademark on this criterion can be the persons who possess of a right to use.From Rospatent's decision dd. 03.09.2011 No. 2007721696/50 "A person who has filed an objection substantiates this conclusion by a confusing similarity of a disputable trademark ("Dagestan gold" No. 418054) with the name of the goods' place of origin "DAGESTAN" under evidence No. 106, which right to use belongs to a person who has filed an objection".Clause 8 of article 1483 of the Civil Code of RF. "In relation to homogeneous goods those designations can't be registered as trademarks that are identical or confusingly similar to a commercial name or commercial designation (separate elements of such name or designation) protected in the Russian Federation or to a name of a selection invention registered in the State register of the protected selection inventions, the rights to which in the Russian Federation arose earlier in other persons than on a priority date of a registrable trademark".Criteria on this clause, the same as in case with clause 6 are the simplest ones for assessment. Persons who are interested in the rights termination for a trademark on this criterion, shall be holders of commercial names, commercial designations, selection inventions.Clause 9 of article 1483 of the Civil Code of RF. "The following designations that are identical to the following, can't be registered as trademarks:1) name of a work of science, literature or piece of art, a character or quotation from such a work, piece of art or its fragment that is known in the Russian Federation as at an application filing date for state registration of a trademark (article 1492), without a right holder's consent, if the rights for a respective work arose earlier than on a priority date of a registrable trademark;2) name (article 19), pseudonym ( clause 1 of article 1265) or a designation derivative of them, portrait or facsimile that is well-known in the Russian Federation as at an application filing date of a person, without consent of this person or his/her successor;3) industrial sample, conformity mark, the rights to which arose earlier than on a priority date of a registrable trademark".To discuss and determine the criteria of interest, it is necessary to divide this clause into two parts. With subclause 1 and 3 everything is again simple enough: an applicant shall be a right holder of the rights for a work specified in this clause (a part of work), character, promo-sample. Ownership of the right of the author's proprietary rights is regulated by several articles of the Civil Code of RF. And even if within the framework of an objection consideration there arises a dispute on a right for a disputable designation, it does not reject an applicant's interest who has filed an objection on this criterion, but rather it confirms it.But an interest assessment on subclause 2 of this norm (as well as use of this norm) has turned out to be rather complex for the Russian practice.Complexities occur due to availability in this norm of the words "… or its successor" and "certain" contradiction (and/or inconsistency) of this norm with the provisions of article 150, 1112, 1228 of the Civil Code of RF.In accordance with article 150 of the Civil Code of RF "a citizen's name, authorship, other intangible benefits owned by a citizen since birth or by virtue of the law are inalienable and non-assignable otherwise.In cases and in the manner that are stipulated by the law, intangible benefits that belonged to the deceased, can be protected by other persons.In accordance with article 1112 of the Civil Code of RF, the inheritance composition comprises things, other property, including the proprietary rights and duties  that belonged to a testator as at a day of inheritance opening.Rights and duties inextricably connected with a testator's personality, in particular … rights and duties which transfer under procedure of inheritance are not allowed by this Code or by other laws are not included into the inheritance composition.Personal non-proprietary rights and other intangible benefits don't form a part of inheritance.In accordance with article 1228 of the Civil Code of RF, the right of authorship, the right for a name and other personal non-proprietary rights of an author are inalienable and non-assignable.Despite these norms of the legislation, both RF Law "Concerning trademarks" and the 4th part of the Civil Code of RF contained and contain this provision to the effect that disposal by the "personal non-proprietary right" is implemented by such person's successors. Maybe either a law-maker will amend this norm of subclause 2 of clause 9 of article 1483 of the Civil Code of RF or anybody will dispute this provision at the Constitutional Court.Meanwhile the practice exists in such a way that it is enough to be a relative of a famous person for an interest of a trademark contestation under subclause 2 of clause 9 of article 1483. However "to be a relative" – does not warranty a disputable mark cancellation.Also, beside a problem of establishment of a successor status under the law that was in force as at a date of inheritance creation, there also exists a problem of a quantity of successors whose consent is needed. If there are, for example, 5 successors, is a consent for a trademark registration required from all five successors or a consent from any one successor is enough? There are not so many disputes on this clause, so each case can be resolved individually.Clause 10 of article 1483 of the Civil Code of RF. "On the grounds stipulated in this article, no legal protection is granted either to the designations recognized as the trademarks according to the international treaties of the Russian Federation".This criterion gives a reference to the international treaties, in particular to the Madrid system, addressing the owners of any international rights to the Russian rights, by virtue whereof everything that has been said above on the previous 9 clauses, extends automatically to the RF obligations for the international treaties.On the whole, an assessment of an applicant's interest in a trademark contestation is rather strongly associated with a result of a trademark contestation. When confirming his/her interest, an applicant simplifies significantly a result adoption needed by him/her in a number of instances.In connection with the requirements of the laws on a necessity of an applicant's interest, the administration of the law will develop and, maybe will observe the above mentioned provisions, and maybe in some cases it will be changed.Original article was published in "Journal of the Intellectual Property Rights Court", No. 5, September of 2014, page 42-50http://ipcjournal.ru/trademark-law/interest-in-disputing-or-termination-of-rights-to-trademarks
Who is a person concerned?
Today no large company does without a trademark. For all that a designation is often registered at once for the entire set of goods and services and is used just for their part. Such state of affairs can prevent registration of another similar or identical designation in relation to homogeneous goods. To regulate such situations the Civil Code of RF provides for article 1486, stipulating an opportunity to cancel trademarks due to their being unused. According to this article, an application for a trademark cancellation can be filed by any person concerned, but the criteria of interest are controversial.To understand the essence of a problem let us remind of the issue history. Several years ago the applications for marks cancellation due to being  unused were considered by the Chamber for Patent Disputes that regarded any persons who paid a state fee for an application consideration, to be persons concerned. Company Zuykov & partners was one of many legal firms that when filing applications for the sake of their appointers' interests, drawn them up from their behalf. For all that we have become the first organization that was rejected the filed applications consideration in a year after coming into force of the 4th part of the Civil Code of RF, because Zuykov & partners is not a person concerned.In 2009 (a year later after the 4th part of the Civil Code of RF came into force) Rospatent came to a conclusion that to file an application for a mark cancellation due to its being unused, a company-applicant was necessary first and foremost to prove its interest. In accordance with an information letter released by the office, henceforth only those companies were recognized to be the persons concerned who either filed an international application for the similar or identical designations registration, or who were manufacturers of the goods with similar marks. In essence, Rospatent determined that to prove one's interest in an unused designation cancellation, a company was to provide an evidence that it had manufactured infringing merchandise with a similar mark.Thus, after the case consideration of trademark "Strizament"  the decision of the Office was contested and the Supreme Arbitration Court ruled that the criterion of interest would be the fact of the homogeneous goods manufacture by a company and an application filing for a similar trademark registration. Thus, today it can be said with confidence that a court decree of the Supreme Arbitration Court on a concrete case determines insufficiently precisely the notion of interest and courts have started construing it in a different way. Many courts have decided for themselves that in accordance with the ruling of the Supreme Arbitration Court, only the companies that are manufacturers of the goods may file applications for loss of effect of unused trademarks. For all that our country's (and many other countries') realia are such that many firms – owners of the trademarks don't have productive capacities and are not manufacturers in the true sense of this word. So, for example, cases are not rare when a mark owner is one company and it is used by another organization. Relations of these two legal entities are regulated by a contract as a rule. Besides that, many companies order goods in China or in other countries, and courts reject their application consideration on loss of effect of the trademarks due to their being unused, motivating its decision by the fact that a plaintiff is not a manufacturer and therefore is not a person concerned, and in this case the persons concerned are the Chinese manufacturers.Premised on such approach, to draw up an application that took just 1 sheet earlier, now it is needed to gather a huge number of the documents and proofs, for all that not many companies are ready to provide them.But why actually the judge's attention was paid to a criterion on interest? The matter is the marks cancellation due to non-use became in due time a certain means of racketeering – "greenmail" and it was necessary to stop this activity. In essence, any company had an opportunity to file an application for contestation registration of unused designations and the burden of proof, according to our law, is imposed on a respondent. It means that an owner of the marks had to deflect attention away from the work and expend energy and time to prove the fact of a designation use owned by it. In due time the applications for cancellation of a group of marks were filed against the operation of trademark Lavazza. An applicant contested the legal protection of several tens trademarks, and a right holder, in his/her turn, having proved the use of five marks, abandoned the struggle for the rest ones, because that work took too much time. For all that, a company that filed an application had had nothing to do with production of tea or coffee, but the problems were created for the Italian brand. Precisely because of such cases they started paying attention to the criterion of interest.Today the administrative- judicial system, in essence, has stepped over from one extreme aspect to the other one. If earlier anyone could contest a mark registration, then now it can't be done even by those companies that are truly interested in exemption from an unused designation. So, having made the criteria of interest to be more rigorous, the judicial authorities put applicants into an embarrassing situation, when nobody knows who is a person concerned? The same judges take conflicting decisions in respect of absolutely the same circumstances, as a result the judicial system ceases to be focused on the legitimate interests protection of the business and laws observance. The antimonopoly principle, declared by the government, of mandatory use of a trademark as a criterion of its protection ceases to function.But a legislator who wrote the 4th part of the Civil Code who had wanted to state in the law that only a manufacturer of the goods or services could address with an application on loss of effect of a trademark due to being unused, what for was it needed to specify some person "concerned"? In all appearances, a broader sense was put into this notion, that today is "narrowed" intentionally  by courts. The first dismal results of such approach are already notable: the quantity of considerations of applications on the trademarks non-use has decreased (from 2500 to 700 per year). Those people who are truly interested in cancellation of unused marks can't defend their interests because they are not regarded to be persons concerned according to the criteria adopted by the courts. For example, a founder of a company -manufacturer is not a person concerned, courts reject a suit, advising that the very manufacturer rather than a founder shall file a legal action.The main goal of the criterion of interest change was countermeasure to the trademark piracy. But I'm sure that the very criterion shall be maximally simple  – a company shall prove that its goal – is not abuse of its rights and raising difficulties to business conducting of a right holder of a disputable mark, but upholding of its legitimate interests and a wish to use a not used designation in the economic activity.For me it is evident that a person concerned is a person who will provide n evidence to court that, for example:he/she is ready to organize deliveries of homogeneous goods to the Russian market  and has filed an application for a similar designation;right holder has submitted claims or filed a suit to an applicant on prohibition of an unused mark use;right holder of an unused mark has filed an objection on loss of effect of an applicant's trademark etc.Courts need to soften requirements to an interest, only in this case this criterion will meet the interests of the entrepreneurs and the norms of the Civil Code, that means the antimonopoly instrument for monopoly divestiture for an unused trademark will function. And the most important thing is that the Supreme Arbitration Court of RF or at least the Intellectual Property Rights Court shall adopt the information letter that will determine: who is a person concerned?
Pirate wars
Currently in Europe's markets when buying and selling enterprises, the cost of a trademark amounts up to 50-60 percent from the total company cost. If and when promoted at the market, this cost grows and a trademark becomes an important element of the property complex of an enterprise. That's why it is no wonder that particularly a company brand often comes under attack both on part of the competitors and on part of the third persons. To achieve one's goals – receipt of a pecuniary compensation or removal from the market of a company- competitor – the instigators of attacks for a brand can use different tools.Manufacturers of the goods and services permanently struggle for a right to increase their customer base. And often a brand plays a pivotal role in a struggle for the consumer.As it is known such notion as "brand" is absent in the Russian legislation. It is substituted by a "trademark" or "service mark" - a designation making it possible for the consumers to distinguish between the goods and services of some legal entities or natural persons from homogeneous goods  and services of the other legal entities or natural persons. But "a trademark" in our country - is exceptionally legal notice and rather "dry" one. In essence, its role consists in unambiguous identification of the goods. Usually they put a broader sense into the notion  "brand", meaning a trademark possessing of its individuality and having already got a certain publicity and loyalty among the consumers. A brand does not only comprise the information on a company and its goods making it possible to differentiate  product but also provides a manufacturer with an opportunity to distinguish, personify its goods and services among the similar products of competitors, to put into circulation in a simpler way a new product line under a brand that is already known. This is precisely why a brand can come under attack on part of different "intellectual diversionists" - competitors, so called "trolls" and other persons.As a rule, each of these groups has its interests: "trolls" want to earn profit, competitors - want to lower the company sales and publicity of its products among the consumers, to push a company out of the market. The third persons represented most often by former business partners or former spouses of business owners, are driven by a personal grievance and a wish to revenge, having caused trouble. To achieve the goals each of these three groups of the intellectual diversionists can register similar trademarks or those that are not yet drawn up by the companies, patents for utility models or design inventions and can file lawsuits on prohibition of the real trademarks and patents use of a right holder, as well as can attempt to contest their protection. To impose an arrest for the goods it is possible to initiate criminal or administrative cases, to address with applications to the anti-monopoly authorities. Thus the schemes of actions of each of the above mentioned groups of intellectual diversionists, differ as a rule.Patent trolls"Trolls" (or "patent trolls") are called small companies and private persons who by some means or other get the ownership (buy up as a rule) of a plenty of patents and trademarks. The goal consists not in subsequent independent use of these items of intellectual property for production of goods and services, but in their sale to companies concerned at essentially excessive price or in getting a compensation from these companies for a similar designation use. The trolls' attacks are aimed as a rule at small and medium business, although sometimes larger companies  become their victims.Scheme of the actions that are typical of trolls. Trolls wait until a would-be victim starts developing and releasing the products to the market containing the registered elements (an invention covered by a patent, or trademark, service mark). Then threatening with a suit or applying to court immediately, trolls claim losses compensation for unauthorized use of their intellectual property and severance payments. As a rule, they become active not on an initial stage of the products release that contain registered elements, but when this release gathers pace and winding-down of a project is fraught with enormous losses. Trolls try to play exactly on the fact that in the eyes of a manufacturer on this stage a needed sum payment to them may seem to be the best way out than the risk of necessity to withdraw all the goods and change a trademark.An example from the practice. The best known case that occurred in Russia at the beginning of the 2000-s with mark STARBUCKS. A Russian company cancelled the marks of STARBUCKS registered in the name of an American company due to being unused, and then registered it in its name, registrations No.No. 274659. This trademark restrained the entrance of an American company to the Russian market for about 3 years. These cases (А40-11022/06, А40-70379/06) were the subject matter of the Russian and American negotiations on Russia accession to the WTO. As a result, a mark of the Russian company was cancelled but the American company registered the marks again and opened coffee houses in Russia.CompetitorsThe main goal of the companies-competitors when filing applications to the anti-monopoly authorities and police as well as suits to court – is to bring down a company brand. They try to push a company out of the market, having given it no opportunity to sell at least temporarily the manufacturable goods or services.Unlike patent trolls that don't know well enough a real market and don't understand what is more important for a manufacturer and exactly what kind of goods are best sold, a competitor possesses of the necessary information and does not always limit by just efforts to deprive a company of a trademark, when applying to a court, police and the Federal Anti-Monopoly Service.When competitors take up a struggle, they acquire or register a similar or identical designation by means thereof they initiate subsequently proceedings against a company. The example  – is a struggle for a trademark "GZHELKA" that was owned at one time by Moscow plant "Kristall". Primarily a graphical trademark which used the design elements from popular craftwork items, was registered with a company consent – a manufacturer popular craftwork items of GZHELKA LLC. Thus later on this company was bought by the competitors (JSC Liviz) that filed the objections against the trademarks' operation, having withdrawn a consent issued earlier. As a result, all the trademarks which had used the design elements were cancelled on 22 January 2005 by a decision of the commission for patent disputes of the Federal Service for Intellectual Property. In the course of the long-term judicial proceedings only verbal trademarks "ГЖЕЛКА" and "GZHELKA" continued to be in full force and effect.Whereby as to mark "GZHELKA" No.230001, the mark was restored by a decree of the Moscow District Federal Arbitration Court dd. 12.04.2006 with regard to case No. А40-26356/05-27-93. The decision of the the Chamber for Patent Disputes of Rospatent under application No. 2002727266 is declared invalid, the trademark registration under evidence No. 239001 is fully restored.And as to mark "ГЖЕЛКА" No. 239000, the mark effect was restored only by decree of the Presidium of the Supreme Arbitration Court of RF dd. 09 October 2007 No. 15006/06, that declared invalid the decision of the Chamber for Patent Disputes dd. 25 January 2005 on invalidation of registration No. 239000 of a trademark "Гжелка", the legal protection of a trademark "Гжелка" under evidence No. 239000 is restored.As a result of the war, vodka "ГЖЕЛКА" that took the 1st place on the sales volume in the segment of cheap vodka, ceased to be even a top ten of the best-selling sorts of vodka of the cheap segment. Each of the parties spent over 5 mln. dollars for the war.Currently it is evident that the actions of JSC Liviz for acquisition of Gzhelka LLC and subsequent contestation of the trademarks' effect were not protection of own rights. The company intentionally pushed the competitor out of the market. Nevertheless, a right holder of trademark "ГЖЕЛКА" did not claim to recognize the actions of Liviz as an act of unfair competition.Other personsCompetitors initiating patent confects can be driven by absolutely different motives. Most often, such struggle occurs between the former partners, employees, husbands or wives who have withdrawn from the same business. It makes sense that this category or people having withdrawn from a company, start selling things at what they are good best of all and with which they worked during a long time. War, for all that, can take place both for a well-known brand, for example coffee drink Golden Eagle, and for not well-known, for example jeans Lafei Nier.Much more rare the patent wars' instigators are driven by a personal grievance. But there are such examples: in 2008, the company Russian standard filed a lawsuit to a tower builder Imperia Tower at the complex Moskva-City, trying to prohibit the latter to use a trademark Imperia, which owner was Russian standard for the services in the field of immovable property. The builder registered a trademark Imperia Tower, but on 09.06.2008 Rospatent by the Rospatent's decision No. 2007731256/50 cancelled this mark suggesting its similarity to a confusion degree to trademark No. 120617 "IMPERIA" that had been owned by Russian standard.  Later on the Moscow City Arbitration Court with regard to case А40-52071/08-93-186 declared invalid the decision of Rospatent on the legal protection termination of a trademark. The 9th Arbitration Court of Appeal and the Moscow District Federal Arbitration Court supported the decision of the first instance court.The reason for the war beginning was that the fact that Russian standard failed to agree upon a discount for a penthouse purchase on the 60th floor in Moskva-City.What actions can be undertaken by trolls or competitors?As has been already said above, the trolls and competitors are driven by different goals in principle, thus all the actions undertaken by them can be noted down item-by-item:Registration or purchase of the similar designations. To file a claim, a troll or competitor needs to be an owner of a designation that is confusingly similar to that one which is used by a company against which their actions are aimed. Otherwise, it will be difficult for them to prove their interest and achieve obtaining a compensation or legal protection termination of a used trademark. One can become an owner of a similar designation either having registered it or – having acquired  a trademark registered earlier. Moreover, the second variant is more advantageous for the competitors, especially in those cases when one deals with a  trademark purchase that takes a priority on a registration date over a designation used by a company.  Application filing to Rospatent. Companies address to Rospatent with the applications for designations registration that are similar to competitor's designations, trademarks in relation to the goods that are homogeneous with the company goods in the hope that such applications will be registered or the companies will buy them back from an applicant. At the beginning of this year legal company "Intellectual property — BesProblem" filed applications to Rospatent at the first business day of 2013. In particular, it requests to fix its rights for such brands as Valio, President, "Vesyoliy molochnik", "Domik v derevne", "Savushkin product" and others on the 29th class of the International Classification of Goods and Services (MKTU) in the categories "sweet condensed milk", "sour cream" and "boiled fermented milk". The company explains such filing by the fact that MKTU (International Classification of Goods and Services) of the previous revised editions did not comprise such goods, that's why the company hopes it will be able to register marks and will sell them to everybody who has such a desire. Claim dispatch to the company address. A claim will demand from a company to stop unlawful using of a trademark. Notably, even in those cases when a company is sure in its own rightness, prejudicial claims should not be disregarded – they will provide the competitors with an opportunity to tell before the court about evil intention of actions and intended use of their mark. A response to such claims in different cases is always different, but the first thing that one should started doing – is to file an objection against a "pirate" mark, trying to cancel it. Hereinafter it is important to understand whether a retail shop will be ready to continue sales in case of a claim receipt. It is exactly relied on the fact that shops will more than likely discontinue selling  the goods in order to decrease would-be losses. A possibility to persuade a shop to continue selling the goods is always individual. Patent trolls generally use this method very extensively because their objective – is prejudicial settlement of a situation, profit gaining with the least costs.Application filing to court.  Competitors and trolls can ask the court to render a prohibition for a trademark use and to collect a compensation in the amount from RUB 10,000 to RUB 5,000,000. Courts grant interlocutory injunctions on the goods sale suspension in very rare cases, generally the courts' position is such: interlocutory injunctions shall not coincide with the claims under a lawsuit. It is rather difficult to convince the court to grant interlocutory injunctions in form of assignment prohibition of anything, for example domains or trademarks, such measures are taken in 50% of cases.  Addressing to the Federal Anti-Monopoly Service.  As a rule competitors address to the Federal Anti-Monopoly Service because trolls don't manufacture goods and services, which means this issue is not about the competition protection. If the anti-monopoly service's employees see that a breach takes place, they can call for evidence from a breaker, having relieved, in doing so, a plaintiff from a necessity to gather documents proving the infringing merchandise turnover. If the anti-monopoly service recognizes the actions of a guilty person to be an act of unfair competition, a penalty can be recovered from a company in the amount from 1 to 10% from the turnover of the entire goods of one group being sold by a company. But a penalty enters the government budget. But after a decision of the Federal Anti-Monopoly Service, one can file a statement of claim to court and collect a double amount of the infringing merchandise cost in favor of a right holder, namely for this purpose the documents will be needed that have been provided by breaker to the Federal Anti-Monopoly Service.Appeal to police. The competitors' exclusive right - is that the law enforcement officers can initiate a criminal case or administrative case, seize  the goods marked with a disputable designation or destroy them, having done a considerable financial harm to a manufacturer. The Criminal Code of RF and Administrative Offences Code contain the articles on the criminal liability (article 180 Unlawful use of a trademark, article 147 Unlawful use of a patent) and administrative liability (article 14.10 Unlawful use of a trademark, article 7.12. Infringement of the copyright and associated rights, invention and patent rights).  Police, within the framework of clause 4 of article 111 of the Criminal Procedure Code of RF, can apply a measure of procedural compulsion – seizure of the property. Thus, police works as a rule in full force and effect only when it comes to a well-known brand, and if one deals with a small company and a relatively unknown mark, the law enforcement officers don't make due efforts to protect the right holder's interests.Claim dispatch to the address of shops. Such claims are dispatched as a rule by competitors. Notably, in this case a company-competitor does not just dispatch claims to shops that sell competing goods, but also addresses to police and court. In this case, shops will more than likely take a decision to take the goods away from the shelves until a situation is resolved. What is it fraught with for a manufacturer? Its' products won't be supplied within a long period of time, in this period a company will incur considerable financial losses.Depending on the ultimate goals and a concrete case, trolls or competitors can address to one of the mentioned authorities or to several of them simultaneously. A difference between their actions consists in the fact that if the actions and addresses are initiated by a troll, then his/her threats can have no severe impact upon retail networks, and are always aimed at receiving a compensation, meanwhile the competitors' actions always do an economic harm to a company, preventing its work. Any claims entered in the company address should be treated very attentively, indeed even if a company is sure that its rights for a trademark are pure and the competitor's claims will be unsuccessful, a competitor can do harm to a company by means of interlocutory injunctions. So, a manufacturer will legally win a case, but will be removed from the market for a certain time and nevertheless will suffer losses.Situations that are potentially hazardous for business Naturally those situations can be regarded as potentially hazardous for a company brand when one of the partners abandons business and starts the similar business on his-/her own, when a certain conflict arises with a competitor. However, more frequently a company becomes a victim of patent wars when it starts expanding new markets. As an example, we can consider a case with company Stadler Form Aktiengesellschaft.Stadler Form – is a Swiss company that has existed in the market for over 14 years already. Its founder – is designer and entrepreneur Martin Stadler. After the Swiss company entered the Russian market, it turned out to be within the field of view of BORK company. The machines of these two marks are in the frontier price segment  and are represented in the same chain stores (MediaMarkt, Tekhnosila, Stockmann etc.). In 2010 company Tekhnomag allied with firm BORK (one of its owners is the security department head of a company-manufacturer of electronics), filed an application to Rospatent for the designation registration "STADLER FORM", that is used by self-named Swiss manufacturer. In March another company - Cypriot offshore company Vacasim Properties Limited – filed an application for a mark registration "STADLER". In two months, in May of 2011, the trademark "STAHLER" was bought for offshore company Vacasim Properties, whereafter Vacasim filed objections to Rospatent against validity of mark "STADLER FORM". Rospatent rejected the registration cancellation of the designation, but a plaintiff filed a lawsuit to court on prohibition to use the "STADLER FORM" mark, as well as filed an application to the Agency for financial crimes enforcement on a criminal case initiation and sent the suits to the retail networks claiming to stop selling machines under the brand "STADLER FORM".The Swiss company, in its turn, filed an application on early loss of effect of a trademark "STAHLER", but Rospatent rejected it by virtue of the formal grounds. This decision was appealed against at court. In all the processes the company STADLER FORM referred to the right abuse on part of Vacasim Properties, but the courts didn't apply article 10 of the Civil Code of RF, making it clear that STADLER FORM had not addressed with a respective application to the Federal Anti-Monopoly Service. Just after the cassation appeal that confirmed the cancellation of "STADLER FORM" mark, an application was filed on the actions recognition of Vacasim Properties for the rights acquisition for a trademark "STAHLER" to be an of unfair competition and administrative case No. А40-37701/12-5-343 was initiated. Now, only as soon as the commission of the Federal Anti-Monopoly Service will recognize the actions of Vacasim Properties to be an act of unfair competition, the courts will have an opportunity to apply article 10 of the Civil Code of RF and reject protection to company Vacasim as a person that has abused its rights.On 19 March, the 9th Arbitration Court of Appeal settled the claim of the Swiss company Stadler Form Aktiengesellschaft on the prohibition abolition for the trademark "STADLER FORM" use in the RF territory and revoked the resolution of the Moscow City Arbitration Court and issued decree No. 09АП-1760/2013-ГК.Through the example of STADLER FORM case it is seen what is necessary to do to withstand the competitors' actions.The first thing that is to be done – is to address to the Chamber for Patent Disputes with an objection on legality of a trademark registration. For this goal it is also necessary to prove one's interest and raise arguments confirming that a mark registration is unlawful and the consumer, for example, is misled by such registration. These provisions are reflected in article 1486 of the Civil Code of RF.The next step – is to address to the Moscow City Arbitration Court with an application on early loss of effect of a trademark due to its being unused, thus this rule functions just in relation to the marks registered three and more years ago, because according to article 1486 of the Civil Code of RF the legal protection of a trademark can be terminated early in relation to all the goods or a part of the goods, for which individualization a trademark is registered, as a result of continuous non-use of a trademark within any three years after its state registration.When assessing the situation on the whole it may turn out to be expedient to try to terminate early the effect of a part of your opponent's marks. Having terminated the effect of a prior mark that was used long ago in another form or for other goods, one can supply a reason, to justify the use of a mark, that you have started using a designation earlier than an opponent's later trademark.It will become clear through the following example: Geksa - Non-woven materials LLC filed a lawsuit to JSC Plastic on prohibition of trademark "AGROTEKS" use, No. 170696, registered for the goods of the 17th class and No. 399161, registered for the goods of the 24th class. Case No. А68-9125/2010.The third person, a manufacturer of the material AGROTEKS, company Sibur – Geotextile, the third person with regard to the case, filed an application to Rospatent on early termination of trademark No. 170696 due to its being unused. Decision of Rospatent dd. 07.06.2011 granted the application, the effect of a trademark AGROTEKS was terminated early due to the fact that the goods for which the trademark had been used, referred to the 24th class rather than to the 17th class for which this mark was registered.As a result, the respondent submitted an evidence to the court that it started using the designation AGROTEKS earlier than the priority of trademark "AGROTEKS" No. 399161, a suit was rejected.An application on the competitor's actions recognition as an act of unfair competition for the rights acquisition for a similar trademark or its registration, should be filed to the Federal Anti-Monopoly Service. In case with patent trolls this measure is not effective because trolls, as a rule, manufacture nothing and it is difficult for the Federal Anti-Monopoly Service to establish the competitive relations.Utility model patents"Patent trolling" is developed in our country much less than in Europe or the USA. When a patent raider files a lawsuit in court as a right holder, it has to prove that it has a registered patent to what is used by its victim. And even in case when a company gets a suit from a raider in connection with a patented technology use, it can avoid an attack through the rights establishment for a design invention. And in a series of cases one can do without it because a patent raider will have to find many rationales for his/her suit.The Western "trolls" work primarily at the telecommunications market, at which by virtue of its specific nature, tens of the registered patents of different persons can be used for a certain technology or device. Here it is relatively easy to find a breach, if desired. But patenting in Russia in this field was less intense than abroad, and that's why the main patent wars (for example, between Apple and Samsung) pass our country by. Besides that, RF does not have its technological giants such as IBM and Apple (namely these companies become especially often the objects of patents suits), that's why our trolls act primarily in the field of consumer goods, patenting on the whole the known solutions and blackmailing good faith manufacturers or sellers.The major weapon of the patent trolls – is lack of information or insufficient judicial competence of entrepreneurs. Besides that, today they have an opportunity to get patents for utility models without a substantive examination (that is, actually under a declaration of the very applicant on compliance of a utility model with the conditions of patentability).  This is precisely why in the recent years the growth tempos of patents for utility models have by that surpassed considerably the invention patents growth. Most often the patent trolls' victims in Russia become the manufacturers and suppliers of toys, fast moving consumer goods and electronics. Thus the trolls' attacks are easily defeated if a correct approach is used.This is one of the examples: a suit of the Russian inventors Vitaly Pilkin and Vladimir Miroshnichenko to Sony Electronics. By the way, these two young men are the patent holders for a plenty of inventions in the field of electronics, many of which don't meet such a criterion as industrial applicability.  Citizens of the Russian Federation claimed from the court to prohibit the respondent sales of game console Playstation Vita in the territory of Russia, because they hold the invention patent as early as since 2009, that turned out to be identical to the console of Playstation Vita, under comparison. On the eighth  of September 2012, the collegium of the Chamber for Patent Disputes made a decision under application No. 2009136784/08 and declared fully invalid invention patent No. 2427879 of the Russian Federation.Here there is one more example of the judicial proceedings in respect of the patents: in 2000 six inventors were granted a patent for utility model No. 31946 "Radiographic scanning device". Subsequently, in 2008 the patent was reassigned to Enterprise MEDTEKH LLC.MEDTEKH lodged claims at once to its former partners, companies CJSC Rentgenprom and CJSC AMIKO, to which it had supplied at one time the products under a patent.In 2008 CJSC Rentgenprom and CJSC AMIKO filed an objection to Rospatent against the mentioned patent issue. Their main argument was the fact that the device had not been new because before a priority date of the utility model under patent No. 31946 CJSC AMIKO had manufactured and sold the radiographic scanning device, to which all essential features specified in a formula of a disputable utility model are inherent. Rospatent delivered the decision to declare invalid utility model patent No. 31946 "Radiographic scanning device".In a year company MEDTEKH declared this decision invalid in a judicial procedure, but CJSC Rentgenprom and CJSC AMIKO filed an appeal petition. On 30 July 2010 the ninth Arbitration Court of Appeal delivered the decision with regard to case No. А40-30551/09-5-358 and revoked the resolution of the Moscow City Arbitration Court, having retained in force the decision of Rospatent. Company MEDTEKH filed a cassation appeal, but in November 2010 the Moscow District Federal Arbitration Court issued decree No. КА-А40/14028-10 having retained in force the decision of the  Court of Appeal.Currently our country makes the first steps on the way toward protection strengthening of the intellectual property. So, for example, with the introduction in Russia of the utility models examination, trolling will almost die out in essence , and if the patent court starts functioning in Russia – the arbitration court that will be engaged only in intellectual law, then the disputes resolution in this area will become simpler. The patent court will address all cases under the disputes relating to protection of the infringed or disputable intellectual rights, as the court of the first instance and the court of cassation. Cases will be divided into two categories: on establishment of right holders and on the right infringement.
Are the Soviet film actors entitled to a percentage of the distribution?
The other day they have published the information on Internet that the incomes of Elizabeth Taylor grew even after her death and were measured by millions of US dollars. Subsequently the newsmen of newspaper Tribuna asked a question why the Russian actors, producers and scriptwriters don't get allocations for distribution or streaming of films they had worked on, indeed it should seem they shall have the author's rights. Specialist in the field of the intellectual property protection, the president of "Guild of patent attorneys and patent officials", the Director General of company Zuykov & partners Sergey Zuykov tells why our artists had not perspectives, the same as Belmondo did not have them, and about the fact whether they can struggle for the percent that is due and payable to them.When it comes to pieces of work created as early as before restructuring, it is important to understand that at that time the distribution system was effective in our country and all benefits that were provided to the citizens were given them by the government. Accordingly when people shot films, wrote scenarios and played roles, all the author's rights for their activity result and for the pieces of work created by them belonged to USSR.If, speaking of composers or painters of that time it can be assumed that they all nevertheless were entitled for the result of their intellectual activity, then speaking of the actors it is worth saying that when acting in films they created so called works for hire, the rights to which belong to the employer by virtue of the law – that is to a studio that shoots a film. This is precisely why today our actors don't get any allocations and actually don't have any legal rights for films in which they acted. But the question as to whether it is lawful and if they actually have no rights, remains open. To provide an unambiguous answer to it, one shall raise and study those contracts that were entered into with the executors in the Soviet times.The modern legislation presupposes that the author's rights arise automatically as a piece of work is created and are transferred only in that volume in which it is defined in a contract. That is, if a right to broadcast a film on TV was transferred to a studio, this is not to say that it also possesses of a right to distribute a film on DVD discs or screen it at the movies. Certainly here there is a subject-matter of a dispute and an actor can stand up for his/her rights at court claiming to pay out to him/her a percent from streaming or sales of film copies – particularly the Western stars' heirs become rich namely due to these allocations. But for all that it is necessary to understand that it is always difficult and expensive to go into litigation with Mosfilm, Lenfilm or other large companies. In our country the work of the film studios and television companies with actors, film directors and scriptwriters is most often constructed according to a principle: "we work under those conditions which we are offered or don't work at all". And now the same way as in the Soviet times, many Russian film studios unlike foreign companies, record to themselves all the rights for the created pieces of work. Meanwhile, in the Western countries the practice of royalties receipt by the actors (that is allocations from distribution) is lawful and generally accepted.Naturally, the budgets of the Russian films are much less than the budgets of foreign films as well as  the distribution receipts. But when it comes to a principle, then it is real for a Russian actor to stand up for his/her right for a percent receipt, indeed a clause of any contract depriving a person of his/her lawful right, can be declared invalid in a judicial procedure. But our actors just have a fear to take legal steps because judicial proceedings with the producer centers first and foremost mean that a dispute instigator will more than likely just cease to be invited to act in the films. That's why it is difficult for me to imagine that somebody among the actors, for example Dzhigarkhanyan, will be in litigation with a studio. Besides that, currently our country does not have the practice for such cases consideration, which means there are no precedents, they are needed to be constituted. And it means that one will have to deal with several authorities hoping  that a court will deliver a decision in favor of an executor with the assumption whether it takes place or not, is not wholly clear.
How to buy "half patent"? Partial cession of rights for items of intellectual property
Intellectual property divisibility.Partial cession of rights for items of intellectual property.The problem of the intellectual property divisibility and an opportunity of its partial cession is rather interesting. In the modern business environment a necessity of a right acquisition for duplication of a piece of work arises often, that is a copyrighted item or its reproduction. Many companies are interested in the patents and trademarks acquisition, thus a right holder is not always ready to concede a right to the full extent for an item owned by it. The law presupposes possibility in principle of a partial cession of rights for items of intellectual property, but this opportunity is implemented in a different way in different cases.A trademarkAs a rule, all trademarks registered for one group of the goods and that are similar or identical, are owned by one holder. Notably, this requirement is reflected in the law – according to the Civil Code of RF, the rights for similar or identical designations registered for the homogeneous goods, can't belong to different legal entities. That is, a right holder can transfer the rights only for the entire series of the trademarks.The situation changes if a company has designations registered for different groups of goods. In this case the right can be transferred both for all goods and for the goods of a certain class, what will make it possible for the companies to own the rights for the designations in relation to different goods and services. Among other things, a right holder can concede a mark to his/her partner to be used in marking of a certain group of the goods or for a full class of MKTU (International Classification of Goods and Services). A right holder can transfer such a right having entered into an  assignment contract of a trademark or license contract with a legal successor. The first kind of a contract regulates the exclusive right transfer for a designation fully or partially, the second – a right granting for its uses in highly restricted fames. These kinds of the documents have been already discussed by us with more details in article "How to transfer or sell a trademark in a correct way? Nuances of a license contract and an assignment contract". Everything that has been stated earlier can be supplemented only by the fact that in case when a right holder transfers the rights for a partial use of a designation owned by him/her, a contract shall contain obligatorily the information as to in relation of what goods and services a trademark transfer is made and on what terms and conditions.PatentsAs to a partial cession of rights, a patent is the clumsiest item of the intellectual property. Patents can be transferred partially only in case when there are independent clauses in them, in all the rest cases it is almost impossible. Thus, please note that a patent can belong not only to one author – this document can have several authors or right holders, and the law provides for an opportunity of collective ownership of a patent with allotment or without allotment of stakes.Actually it is impossible to transfer a certain part of a patent to a certain person but a quantity of right holders can be expanded – that is full or partial sale of one's stake in a patent, having made a buyer, in doing so, to be one's joint holder.A new holder will gain all the rights for a patent use, including a right for the goods manufacture or services rendering and protection of one's interests at court. Such relations are regulated by a contract on joint possession of patent rights. For all that there arises a phenomenon reminding to a certain extent of a "common property" (chapter 16 of the Civil Code of RF), in which the joint holders of patent rights have an opportunity to exercise their rights jointly, under the conditions determined by their agreement, and in case it is not available – by the law.Author's rightsAuthor's rights, are no doubt the most interesting object for a partial cession of rights. Article 1270 of the Civil Code of the Russian Federation reflects a huge quantity of the rights that are held by an author of a piece of work and all these rights or any of them can be sold or transferred to some organization or to an individual. What is meant here is an opportunity of reproduction of a piece of work, its distribution through sale, public show, distribution or import of an original and many other things. For all that, relations between an author and acquirer of the rights are regulated by a standard contract that even does not need a state registration. According to the law, the author's rights are transferred only in that volume in which it is stated in a contract. That is, if an author transfers the right of duplication of his/her piece of work on discs, it does not mean that a right acquirer may also distribute a piece of work on cassettes.Rights for a trademark and patent can be transferred, are owned exceptionally in the territory of the entire Russia whilst  the author's rights can be transferred in any territory: in the territory of RF, in the territory of Moscow, region, up to an appropriation of a concrete street or house.Let us specify that despite this, there exists a good deal of nuances in the issue of a partial cession of rights for items of intellectual property that can raise questions in a unprepared person, which can be answered by a specialist having a big work experience in the field of the author's right. For all that, wrong drawing up of a contract or its incompetent registration can cause much trouble to a right holder and to a legal successor and even result in the fact that the rights transfer will be declared invalid! This is precisely why, should a necessity arise to draw up such documents, the best thing is to consult professionals in the field of work with the items of the intellectual property. The original article was published in journal "Na stol rukovoditelu" in 2012, issue No. 45 (http://www.nastol.ru/Go/ViewArticle?id=4239)
How to protect one's rights if infringing merchandise has emerged on the market under your trademark
The European Union's bureaucrats raise alarm: Russia takes the second place in the world as to the volumes of production and infringing merchandise sale, yielding on these indicators only to China. Mass media and bureaucrats keep speaking that clandestine goods cause severe damage to the budget and consumers, but for some reason hardly anybody bears in mind losses suffered by the good faith domestic and foreign manufacturers of goods. It is almost impossible to count how much is lost by the domestic business due to counterfeit products, but it is evident that this sum is very formidable.Counterfeit  products can be different: sometimes infringing merchandise doesn't resemble absolutely, on the outside, the goods of a right holder and are made improperly, but there is also such  infringing merchandise that is difficult to distinguish from an original at first sight. Nevertheless, all infringing merchandises have common feature – poor quality. Indeed the main objective of the underworld manufactures  - is to derive the maximum benefit saving on materials and technologies. And of course there is no question of infringing merchandise to comply with any GOSTs or demands placed on this group of the goods. Quality of the infringing merchandise does much bigger harm to a company-right holder of a trademark it is marked with, than the material losses: an enterprise's prestige drops and therewith confidence level to it on part of the buyers reduces.If you have come across with the fact that infringing merchandise of your products have emerged in the market – start gathering an evidence and try to find a guilty person. As a rule, the main problem of any infringing merchandise case consists in a necessity of proving that namely that company which you have claims against, infringes your rights and uses unlawfully a trademark owned by you. Samples of counterfeit products, any papers confirming the fact of sale, a notarized protocol of a website inspection (in case if the infringing merchandise is sold via Internet) can be an evidence of a respondent's fault.It is not less important to assess competently the opportunities of one's company, in particular, to verify how registration of a mark was carried out, that is used as applied to infringing merchandise. Whether any mistakes were made or legislation was broken? Whether a registration is valid? Only in case you are sure that your rights are valid, one can go on, otherwise prior to start a struggle with infringing merchandise it is necessary to eliminate all inaccuracies and ensure 100% protection to one's trademark.The modern legislation proposes to a right holder several variants of own trademark protection, but in any case one should initiate proceedings with a prejudicial claim dispatch to a respondent. It is often enough to at least start negotiations with a breaker of your rights in case a situation is not settled. In a claim you should demand from a company-respondent to stop using a mark owned by you, having stated that its' actions are unlawful, and you should attach documents to a paper that confirms your rights. If a breaker neglects your address and continues using a trademark, it provides an evidence of malicious intent of its' actions and intended use of an image owned by you. Naturally, a right holder in this case does not have to rely upon an amicable resolution of a situation.The second variant of own rights protection – is  appeal to police with a respective application under which the law enforcement authorities will have to initiate a case on an administrative or criminal offence. In the first case a breaker can be penalized even one deals with a large breach (over RUB 1,5 mln), the sanctions will be also more serious. The police is entitled to seize or destroy the infringing merchandise, but it is unfortunately not entitled just to prohibit a breaker to use it. Only court may pronounce such a judgment.One can appeal to a court  both after carrying out an investigation by the law enforcement authorities and in parallel to a police investigation. In the first case, if the fact of breaches is confirmed by police, a right holder won't even need to prove anything to court: it will be enough to file an application on prohibition rendering to use a trademark and on a compensation collection in the amount up to RUB 5 mln or a double cost of the counterfeit products. In the second case it is necessary to submit to court every proof of a respondent's fault.There is one more variant – an application filing to the Federal Anti-Monopoly Service (FAMS) with a claim to recognize the breaker's actions to be an act of unfair competition. One can address both to the federal department of the service and to its regional offices. The main advantage of addressing to the employees of the anti-monopoly service over addressing to court consists in the fact that the FAMS representatives can themselves claim documents from a respondent, confirming the fact of a breach while when addressing to court an evidentiary burden is fully borne by a right holder.If the Federal Anti-Monopoly Service recognizes that a company-breaker is guilty of unfair competition, it can be collected a penalty from which amount ranges from 1 to 10% of the turnover of the entire goods of one group being sold by the company. For example, if counterfeit product is alcohol and, in particular, vodka, and a company-breaker sells 15 different marks of it, then a penalty sum will be calculated from the turnover of all the goods of this group.The fact where to address primarily and how to plan one's actions so that to stand up for one's own rights quickly and with minimal losses, depends on a concrete case. In certain situations it can be advantageous to address just to one of the above mentioned authorities, in other situations – to file applications to several authorities at once. An expert will advise how to act best of all in your concrete  case.
Information on Necessity to Register License Agreements
Russia, by Federal Law of 23.05.2009 No. 98-FZ, ratified the Singapore Treaty on the Law of Trademarks, signed on behalf of the Russian Federation in Geneva on March 26, 2007.According to Article 19 of this treaty, Russia agrees that the lack of registration of a license:does not affect the validity of registration of the mark, which is the subject of the license or protection of this mark.can not be the reason to require the participation of the licensee in a court proceeding initiated by the right holder in connection with the infringement of the rights to the mark or to receive through such procedures the compensation for losses incurred as a result of the infringement of the rights to the mark that is the subject of this license.can not be the reason to require the registration of a license as a condition to consider the licensee’s use of a mark as the use on behalf of the right holder in the course of the procedures related to the acquisition, maintenance and protection of marks.The enumerated provisions should be considered as an indication to the circumstances, when the registration of a license agreement becomes not mandatory.Such circumstances may include:the use of marks by a group of companies, when the right holder is one person and the user is a different person; the agreement between them shall be concluded in a simple written form;the use of the mark under the control of the right holder with a license agreement, concluded in a simple written form, what provides an opportunity to confirm the use of the mark in case of attacking it,It should be noted that the law does not allow an extensive interpretation of the rules of the law, which include the provisions of the Singapore Treaty on the Law of Trademarks. In this connection, the registration of license agreements with the purpose of extracting income for granting the right to use the mark should be recognized as compulsory.
WTO as medicine for grey import
Russia will have to change its principles of struggle with infringing merchandise after accession to the World Trade OrganizationAccession of Russia to the World Trade Organization is irreversible in essence. The Constitutional Court has already verified the legislative purity of the Protocol of Accession, on Tuesday the document was ratified by the State Duma. Some experts, including the head of Rospotrebnadzor Gennady Onischenko have a fear that Accession to the WTO will open the Russian market for the infringing merchandise. Thus the ideology observance of the World Trade Organization shall, on the contrary, finally result in the territorial principle cancellation of the grey import struggle that is currently effective in our country and it will be advantageous for the Russian consumers of the branded foreign goods.Talking of the fact that the world manufacturers of the goods and right holders suffer from grey schemes of the products import to Russia, take place for many years. But the main victim of the Russian politics in relation to the foreign goods are the consumers. When acquiring the goods from an official dealer in RF they have to pay for them several times more or support the grey import (import of the goods through unofficial channels what is unauthorized by the right holders). One can reverse the situation only having changed the struggle principle with the grey import, enshrined in the 4th part of the Civil Code of RF.In Russia the extensive struggle with the grey import started in the 00s through amending the law "Concerning trademarks". This document was effective from 1992 and contained article 23 on exhaustion of the rights of a right holder, based on a trademark registration. Up to December 2002 this article did not contain the principle of the territorial use limitation of a mark. The document text stated: "Registration of a trademark does not entitle its holder to prohibit this trademark use to other persons in relation to the goods that were introduced into the economic turnover directly by a trademark holder or with its consent". But in December of 2002, the article was supplemented by just several words – "in the territory of the Russian Federation", – and the document essence changed. Actually Russia changed the principle from the international to territorial one.It is difficult to answer what goal it was done with. More than likely that the RF authorities, in doing so, wanted to support the Western manufacturers who kept criticizing and continue criticizing Russia that their intellectual rights are not observed in the country…According to the territorial principle it is assumed that any person, whether it is a legal entity or natural person, when entering the RF territory, shall have a document about oneself confirming that a right holder permitted it/he/she to import these goods to Russia. But the extensive struggle of the right holders supported by the government, with the grey import, concerned for an unknown reason only the legal entities that declared and imported the goods for sale to the territory of the country. It was evident that individually taken tourists just can't get permits for purchases import on a one-off basis. Thus such selectability called into doubt a thesis  stating that we have the law that is equal for everybody...In 2009, the Supreme Arbitration Court considered a very interesting case. A certain legal firm imported a Porshe car to the RF territory, and there had been attempts to stop and destroy this car as grey import. But the court adjudged that since the company had imported the car for its needs, therefore there were no grounds to stop and destroy the car. Subsequently the courts governed by the created precedent, rejected the rights protection to the right holders for some time.Some time ago certain entrepreneurs from Kaliningrad tried to take an appeal at the Constitutional Court from a norm that had entitled a right holder to prohibit the unlawful use of a trademark. But the legal monopoly principle for a trademark as such was taken an appeal from (clause 2 article 4 of the law "Concerning trademarks"), for which reason the court took a decision to let everything be as it is. For the time being the court in Russia acts as the grey import regulator: despite the norm absence in the law that differentiates the rights of the legal entities and natural persons, exhaustion of an entitlement is applied in a different way.Today the Federal Anti-Monopoly Service also states that it is necessary for Russia to transfer to the international principle and WTO – is an optimal cause to do it. After Russia's accession to the organization, the new principle will start having effect as from the time it is adopted. Moreover, there is an opportunity to contest at court the rules that have been effective since 2002, and in theoretical terms the cost of all the goods that were destroyed will have to be compensated to their carriers and a compensation collected from them - shall be returned to the "breakers"..In the meanwhile many goods in our country cost by 2–3 times more expensive than in other countries, because the government in RF permits a right holder to establish such prices, in terms of struggling with grey import. Only when a principle of struggle with grey import becomes international, the prices will be normal. In the meanwhile certain branded things are simpler to buy abroad — at the same money which will be spent in Russia, one can not only purchase goods but also pay flight and accommodation at a place of purchase.Sergey Anatolievich Zuykov — the president of Guild of patent attorneys and patent officials.See more details: http://www.ng.ru/economics/2012-07-12/3_kartblansh.html
How to file an international application for a patent?
Proprietary designs - are not rarity for the Russian industrial enterprises. Today many companies concerned with the issue how to register in a correct way one's invention and to obtain a patent thereto, that is effective not only in Russia but also outside it. It is not so difficult to do as it may seem at first sight.There is a good deal of ways of foreign patenting, but the creators of these or those utility models and technical solutions, try, as a rule, to get an international patent. For all that the main mistake consists in wrong construal of this notion. No common international patent that would be effective in the territory of all the world countries exists merely as of today as such, – any documents obtained by the right holders are effective just in the territory of those countries where they are obtained, except for the Eurasian and European patent. Nevertheless, there exists the way making it possible to be the first person in patenting one' invention or solution in many countries at once.What is meant here is an international application for a patent. Such application is filed according to a Patent Cooperation Treaty (PCT). Is is not a patent as many peple think but a document certifying an authorship, providing a right holder with a priority for patents getting in different countries.Two ways of an international application filing are possible: first of all either a Russian application for a patent granting in RF is filed that subsequently is transferred to the international registration or an international application is filed that subsequently is transferred in a mandatory manner to patenting in RF. In theoretical terms everything seems to be rather simple, but in practice an applicant comes across difficulties as early as before an application filing for a patent. So, according to clause 1 of article 1395 of the Civil Code of RF, applications for inventions and utility models created in Russia can be filed to a foreign patent office only after verification for data availability that represent a state secret. And only as soon as an applicant makes sure that his/her invention or utility model does not contain data representing a state secret, he/she may file an international application to the World Intellectual Property Organization (WIPO) through the Russian patent office (Rospatent). Also worth noting is that an applicant will need