The comments of the authors of the January 15 article reveal a certain knowledge of the subject. However, in discussing the problem the authors err in many instances and create a misleading impression, owing to the fact that their viewpoint is that of outside observers. It is useful to let readers know the opinion of the Russian practitioners, too. This is especially important because Gorodissky & Partners were the only trademark attorneys in the Working Group of the Russian Duma, where the bill was prepared.

The authors state that the law was drafted "largely from scratch." This statement probably stems from the fact that the IP legislation is presented as a new Part IV of the Civil Code. In fact, it is not new. Russia currently has several IP laws, which have been included as different chapters in the new Part IV. Aside from this mechanical compilation, the laws were significantly amended. The amendments would have been made in any case, regardless of whether the legislation was included in a single part.

UNIFORM INFRINGEMENT STANDARD

It has long been necessary to regulate the principle of the senior right, because it has to be determined often in courts. The January 15 article expressed the opinion that Part IV provides far too broad a scope of protection for domain names and company names and too narrow a scope for trademarks as a result of different confusion standards and different infringement standards for various IP tides, and that the adopted version of the law made an unsuccessful attempt to remedy the problem by adding a provision imposing a uniform likelihood of confusion standard.

This conclusion can hardly be accepted. The problem is not as simple as it may seem. Article 1252(6) concerns protection against infringement of exclusive rights for the means of individualiza-tion (i.e., the means of distinguishing the owner's goods or services). It sets forth that if different means of individualization are identical or confus-ingly similar, so that the consumer can be misled, the senior right will prevail. Should the same principle (confusing similarity that misleads consumers) be applied during examination of protectabil-ity of a trademark by the Patent Office and it be established that the marks are confusingly similar, a determination of whether the applied-for mark is capable of misleading consumers would also have to be made.

Indeed, capability of misleading consumers may result from similarity, but similarity is not the only cause. Consumers may be misled by many circumstances - for example, the specific conditions of use of the trademark, or advertisements. The Patent Office cannot reveal these circumstances. They can be revealed and presented by the parties in case of infringement. Thus, if it adopted uniform standards for infringement and for protectability, the Patent Office would be faced with the impossible challenge of determining the possibility of misleading confusion during the examination procedure. This is a task inconsistent with the duties of the Patent Office, so what has been provided in the law seems to be acceptable from all points of view.

DOMAIN NAMES

The domain name has been introduced into Russian law for the first time. A domain name has only a protective function, in that it can be used as a basis for cancellation of a trademark if the trademark is identical to a domain registered earlier than the priority date of the trademark. This a reasonable solution, because the domain name has acquired the function of a means of distinguishing the owners goods or services.

In fact, the senior right is exercised here. The owner that first registers the trademark or the domain name will have the senior right. Abuse of right and unfair competition should also be considered in this situation.

COMMERCIAL DESIGNATIONS AND COMPANY NAMES

Commercial designations are also introduced in the law. A commercial designation is subject to the rule of senior right and can hardly harm the rights of goodwill trademark registrants. It is still too early to predict what the negative consequences of this regulation may be.

WELL-KNOWN MARKS

TRIPS provides for a broad scope of protection of well-known trademarks, and a relevant provision has been included in Part IV.

The January 15 article argued that Part IV does not prohibit registration of marks that violate that broader protection, and even described the probable result of this shortcoming as "ridiculous." It is difficult to agree with this view.

The law provides that no trademark can be registered if it is confusingly similar to another, registered trademark. The term "confusingly similar" should be understood broadly and encompass also "association" with different goods. In the past, the Russian Patent Office understood the term "confusingly similar" narrowly. Notwithstanding that fact, a year ago the High Commercial Court did away with the Patent Office's approach and ruled that similar trademarks should not be registered, not only in respect of homogeneous goods but also in respect of the accompanying (associated) goods. A precedential case of this kind concerned the trademark NEVSKOE for beer. A competitor registered a similar trademark, AMRO NEVSKOE, for beer snacks. AMRO NEVSKOE was cancelled and set a precedent that should amend the Patent Office's registration practice. It is worth noting that this decision was handed down in respect of a non-famous mark, which makes the position of the famous marks even more favorable in a similar situation.

GEOGRAPHICAL INDICATIONS

There is no absolute priority of the geographical indication over trademarks. Article 1535(2) provides that a geographical indication can be contested and invalidated if it can mislead the consumer in connection with the existence of an earlier trademark. For the sake of justice, it should be acknowledged that not all of the TRIPS provisions regulating correlation between geographical denominations and the trademarks have been respected.

LACK OF TRANSPARENCY AT THE RUSSIAN PATENT OFFICE (ROSPATENT)

Indeed, the databases at the Russian Patent Office sometimes do not provide sufficient information. The situation is improving; however, the problem is not traceable to Part IV.

LACK OF OPPOSITION PROCEDURE

The lack of the opposition procedure is not a problem at the Russian Patent Office, contrary to the representations of the authors of the January 15 article. The arrangement adopted by Part IV simply shows the Patent Office's different approach to the examination procedure. Unlike patent offices that do not conduct searches among registered trademarks and instead wait until interested persons file oppositions, the Russian Patent Office, aside from examination for absolute grounds for refusal, conducts a meticulous search among the registered trademarks. It could be even said that this is an advantage of the Russian legal system. An interested person can file a protest against a registered trademark and have it cancelled. Hence, there is a two-tier protection system against unjustified registrations.

TRADEMARK LICENSING AND FRANCHISING

Here the authors represent an advantage as a defect. It would seem that taking the concept of quality control beyond international norms would only benefit the consumer of the goods. The Russian law provides that the quality of the licensee's goods and services should not be inferior to that of the licensor's goods and services. What is the intrinsic harm in this restriction? Would a consumer protest against it?

The allegedly "burdensome" requirements do not complicate much the registration of licenses, and these requirements are set not by law but by the Russian Patent Office. Indeed, some of those requirements could be waived.

As for the recordal requirements, they are indispensable for creating a database of licenses and for letting the public know that a trademark may be burdened with obligations. One may agree that the Patent Office is too slow in registering licenses; however, this problem should not be attributed to the Civil Code.

The Russian Patent Office does not register licenses involving pending trademark applications. Is this a disadvantage? Imagine a license for a proposed trademark that is rejected - what about paid and future royalties? The same applies to the franchise agreements. There is no change from the old law: pending trademarks were never allowed to be licensed or franchised. After all, a license or a franchise is a disposal of a right. There is no right before the mark is registered!

FAIR USE

Indeed, Part IV does not contain provisions on fair use covering a situation where a person advertising the goods mentions trademarks. It would be a good thing if the law included a relevant provision.

TRANSITIONAL PROVISIONS FOR SOVIET-ERA MARKS

These are correctly included in Part IV. What the law can be reproached for is only that those provisions were not included until now!

COUNTERFEITING AND PIRACY

The existing law is quite adequate to protect the infringed rights and is up to the standards existing in other developed countries. During the last few years, much progress has been made in this area as the law enforcement bodies and the courts have gained experience and right holders have begun to initiate more infringement cases.

What is more troubling is that the right owners are not always ready to protect their rights. There have been instances where even the criminal cases initiated by prosecutors had to be closed because the right owners did not want to press their claims. In many cases, information concerning the infringement that is sent to the right owner does not result in a response.

There was a Working Group created to review and make recommendations regarding the amendments. It was never dissolved. There was a short time schedule for passing the Bill into law, and specifically because of that the Working Group did not have the full opportunity to propose and discuss the required corrections to the draft. After the law was passed, the Russian president instructed the lawmakers to prepare further amendments to Part IV. It is expected that these amendments may be examined and accepted before Part IV becomes operative on January 1, 2008.

There is never a "last chance" to work on Part IV, and January 1, 2008, will not be a cutoff date. To end on a positive note, it is also worth mentioning that Part IV of the Civil Code introduced many provisions that undoubtedly improve the IP situation.