Elena Zuykova

A foreign company filed a lawsuit with the Intellectual Property Rights Court (hereinafter the IPR Court) for termination of the legal protection of trademarks No. 574124 CIPRIANI, No. 562922 CIPRIANI, No.554252 HOTEL CIPRIANI in respect of services of class 43 under the Nice Classification because of non-use of the marks.The plaintiff substantiated its interest, in the first place, by arguing that the main activities of the group of companies to which it belongs and whose name resembles the trademarks are restaurant and hotel business, food supply, marketing, and market research services in relation to various types of goods and services, advertising, etc. The plaintiff also pointed to a series of trademarks, united by the CIPRIANI verbal element, the right holder of which it was, and confirmed the intention of the group of companies to do business in Russia.Moreover, Rospatent refused to register three trademarks similar to the disputed ones for the same class of services: GIUSEPPE CIPRIANI PRESENTS DOWNTOWN, GIUSEPPE CIPRIANI, CIPRIANI.The court found the interest confirmed in relation to all services of class 43 under the Nice Classification, for individualization of which the disputed marks were registered. The right holder should have confirmed the use of the marks within 3 years from the date of the plaintiff’s proposal to the interested party, but the court found the use of all marks only in respect of several services and therefore satisfied the claim partially. Sergey Zuykov, the Managing Partner of Zuykov & Partners, Russian Patent Attorney and Eurasian Patent Attorney comments as follows. Based on the legal position of paragraph 166 of the Resolution of the Plenum of the Supreme Court of the Russian Federation of April 23, 2019 No. 10, to maintain the mark, the right holder must prove its actual use for the introduction of each product, for which the mark is registered and for which the plaintiff has proved its interest. Homogeneity, in this case, is not taken into account. However, there is an exception when it is proved that such a mark is notorious (well-known). Not until then, the protection will remain in force and in respect of goods similar to those for individualization of which the trademark is used and is well-known to Russian consumers. The widespread popularity of a trademark may be confirmed by long and intensive use of the marks, extensive geography of use, substantial costs of advertising goods and services, and high market value of the marks. However, in the case at hand, the defendant was unable to convince the court that its designations were well-known.Originally published in World Trademark Review.

The Court for Intellectual Property Rights (IPR Court) resolved cases on the indemnity for infringement of exclusive rights to a trademark and a work, respectively. The plaintiffs chose the double value of the right to use the result of intellectual activity as a method for calculating the amount of compensation. To determine the amount of compensation, the court took into account the sub-franchise agreement in one of the cases, correlating it to the duration of the infringement, and in the other case, the indemnity was based only on the results of the legal expertise.Various right holders filed lawsuits on the indemnity for infringement of exclusive rights to:●      Trademark No. 289416 in the amount of 180 000 rubles, calculated according to subparagraph 2 of paragraph 4, Article 1515 of the Civil Code of the Russian Federation (hereinafter the Civil Code) in the double value of the right to use the trademark;●      Images of cartoon characters in the amount of 300,000 rubles, calculated in accordance with subparagraph 3, Article 1301 of the Civil Code in the double value of the right to use the works.The claims were based on the fact that the infringers sold goods marked with the plaintiffs’ marks.The courts granted the claims in part: they recovered 56000 rubles and 20076 rubles respectively and proceeded from the fact that they should have set the price which on comparable circumstances is usually charged for the fair use, and a specific amount of indemnity, based on that price.In the first case, in confirmation of the value of the right to use the trademark, the plaintiff submitted a franchise agreement, which was signed with a third party, and the defendant submitted the contra-calculation, taking the double value of the right of use the mark and calculating the amount of indemnity attributable to 1 day of infringement as the basis which was defined by the legal expertise (37.7 rubles per day).The plaintiff’s calculation was not accepted, because it was the sum resulting from the agreement of specific market players. However, the court rejected the contra-calculation as well, since indemnity in such an amount would not have met the requirements of reasonableness and fairness.As a result, the amount of indemnity was established on the basis of the results of legal expertise on the market value of the right to use the trademark on a non-exclusive basis. In the second case, the plaintiff justified the amount of indemnity sought by presenting both the franchise agreement for the right to use the works, concluded between it and a third party, and a sub-franchising agreement with a producer of food products. The calculation of the indemnity was made on the basis of the minimum remuneration for the latter for one year. The court found that the defendant had offered to sell the goods for 79 days, and it reduced the amount of the indemnity proportionally.Sergey Zuykov, the Managing Partner of Zuykov and partners, Russian Patent Attorney and Eurasian Patent Attorney, comments as follows. Submitting the franchise agreement does not imply that the indemnity in all cases will be determined in double the amount of the price of the said agreement. The basis for the calculation should be exactly the price which in comparable circumstances is usually charged for fair use, so the court may determine a different amount of compensation compared to the amount claimed by the plaintiff.Originally published on World Trademark Review.

In the Rospatent decision[i] on the opposition to the registration of the trademark “Ярославский вернисаж”, Rospatent agreed with the arguments of the claimer, who referred to the sub-paragraph. 2 of paragraph 6 of Art. 1483 of the Civil Code of the Russian Federation[ii] and reasoned the opposition by the fact that it was the owner of several confusingly similar trademarks with an earlier priority date, registered in respect of homogeneous services. As a result, the granting of legal protection to the mark for one of the services was annulled. Having considered the claim of the right holder of the disputed trademark in the first instance[iii], the Court of Intellectual Rights (hereinafter the CIP) considered that there were no grounds for reversing the decision of Rospatent. However, the Presidium of the CIP assessed[iv] the situation differently.Without negating either the similarity of signs or the homogeneity of services in respect of which trademarks are registered, the Presidium of the CIP noted that a few months after the CIP decision in this case, the legal protection of the opposing trademark was prematurely terminated in terms of one of the similar classes of the Nice Classification on the basis of Article 1486 of the Civil Code of the Russian Federation.This circumstance, according to the court, disproves the probability of confusion of the disputed trademark with the opposed trademark, since the early annulment of registration implies the absence of use of the trademark in any class of the Nice Classification.  Sergey Zuykov, Managing Partner of Zuykov & Partners, Russian Patent Attorney and Eurasian Patent Attorneycomments:“In this case, the court judged utterly and considered it possible to cancel the decision of Rospatent without referring the case for a new trial, which means absolute certainty that such a ground as early termination of legal protection of a mark excludes the possibility of confusion of signs. The essential circumstance for this situation appears to be the homogeneity of the services in respect of which the non-use of the opposing trademark was established and those for which the junior mark was challenged.” 

The recent[MOU1]  consideration of case No. СИП-819/2018[1]by the Judicial Panel for Economic Disputes of the Supreme Court of the Russian Federation (hereinafter the Supreme Court) was marked by a new position[MOU2]  as follows. It is not always necessary to prove interest in challenging the registration of trademarks, and there is an exception from paragraph 2 of Article 1513 of the Civil Code of the Russian Federation (hereinafter the Civil Code), which is not mentioned in it.The ”ТРИ КЛЮЧА” wordmark No. 599143 was registered under the name of an individual entrepreneur, in relation to the goods of classes 32, 33 and services of сlass 43.A few months later, Rospatent received an opposition from a limited liability company (hereinafter the Opposer) against the granting of the legal protection for the wordmark. The Opposer argued that the registration of the wordmark was against public interest i.e. non-compliance with the registration requirements of sub-paragraph 2, paragraph 3 of Article 1483 of the Civil Code.According to the opposition, the Opposer already owned[MOU3]  the same wordmark, which was used for the same goods and services with few exceptions, and the contested registration would create a situation of double ownership of the same trademark.The Opposer’s interest in the invalidation of the registration was explained by the earlier refusal of Rospatent to register the same trademark in the name of the Opposer for the same goods and services due to its confusing similarity with the two Company’s [MOU4] trademarks in question.Rospatent decided in favor of the Opposer and the registration was invalidated for the goods and services that were covered by the registration of the earlier identical trademark[MOU5] . The entrepreneur[MOU6] , wanting to keep the registration and believing that the decision of Rospatent violated his rights and legitimate interests, [MOU7] appealed to the Court for Intellectual Property Rights (hereinafter the CIPR) with a request to invalidate the decision and reinstate the registration.The case was heard in two judicial instances, generating opposite judicial acts[MOU8] , until it reached the Judicial Panel for Economic Disputes of the Supreme Court.The first decision of the CIPR denied the application; however, the cassation court overturned the decision and sent the case for a new trial.[MOU9] During the review[MOU10]  of the appeal, the application[MOU11]  was satisfied partially. It[MOU12]  was upheld by the CIPR: The decision of Rospatent was recognized invalid, but only in respect of two classes and the registration was invalidated for the rest of the classes. The Applicant had not been able to confirm his interest in challenging [MOU13] the registration, as required by paragraph 2 of Article 1513 of the Civil Code.The Federal Service for Intellectual Property Rights [MOU14] did not agree with the reversal of its decision and filed a complaint with the Supreme Court.The Supreme Court found a substantial violation of the rules of substantive law in the retrial: The CIPR incorrectly defined the range of circumstances to be proved and as a result, the application erroneously proceeded to registration, albeit partially.The CIPR, formally guided by articles 1512 and 1513 of the Civil Code, considered that by challenging the registration of the trademark on the grounds being against public interest (sub-paragraph 2, paragraph 3 of Article 1483 of the Civil Code), the Opposer must first of all prove its interest.However, according to the Supreme Court, the definition of interest in relation to challenging the granting of legal protection for a trademark on such grounds should be interpreted as broadly as possible, as it is intended to protect the public interest rather than the private interest of a particular person, and prohibit unreasonable monopoly on trademarks.In its decision the Supreme Court said that the scope of recognition of the granting of legal protection of a trademark should not be made dependent on the confirmation of personal (actual) interest in respect of specific goods and services.At the same time, the Supreme Court recognized that there was indeed a collision with the public interest in this situation, since the legislation does not provide for the possibility of recognizing multiple exclusive rights in the same scope of legal protection[MOU15] .As the Supreme Court pointed out, this would contradict the absolute nature of the exclusive right and would lead to the impossibility of separating the trademark as an object of civil rights and the exclusive right to it.In its conclusion, the Supreme Court determined, considering the absence of the need to establish the interest of the Opposer as the applicant of the opposition, that the application for invalidation of Rospatent’s decision could not be granted. Thus, those goods and services that coincided with the relevant list of the opposing trademark were excluded from the scope of legal protection of the Applicant’s trademark.