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Companies themselves rather than business partners should register trademarks

7 September 2020

A Chinese company "Wedo Tools Co" trading in hand tools established dealership relations with a Russian company which became its exclusive distributor in Russia. The parties concluded a distributorship agreement after which the Russian company registered its company name as "Wedo Rus." The parties also concluded another agreement according to which the designation "Wedo" should be registered in Russia as a trademark in the name of the Chinese company.

Contrary to the collaborative agreements, the Russian company registered the trademark 606244_220.jpg for goods in Class 8 (hand tools) in its own name (Reg. No 606244).

The Chinese company filed an appeal against the registration and after careful review of the facts, the patent office cancelled the registration. When examining the case, the patent office studied a large number of documents provided by the Chinese company (information from websites, certificate of registration, contracts, invoices etc.). It also studied the chronology of relevant events. It found that the Chinese company had registered its name in 2011 while the Russian company registered the trademark in 2016. The word element of the trademark reproduces the name of the Chinese company despite insignificant differences. The Russian company argued that the name of the Chinese company is not protected in Russia. However, the patent office rightly observed that company names are protected in Russia from the moment of their registration because according to the Paris Convention, Article 8 the name of a legal person should be protected in all countries of the union without obligatory registration and regardless of whether it forms part of a trademark or not. The patent office also stated that the word part of the trademark refers to the same category of goods, i.e. hand tools for various purposes.

The Russian company appealed against the decision of the patent office at the IP court. The Chinese company Wedo Tools was brought by the court as an outside party.

The Russian company made an attempt to have the decision of the patent office reversed arguing that the name of the Chinese company may be understood as "we do tools" while the trademark is one word and occupies a dominating position in the trademark.

The court dismissed this and stated that what is important is the scope and the period of use of the disputed designation in Russia. The documents submitted by the Chinese company evidently proved that the name of the Chinese company had been used in many circumstances for a long time before the date of registration of the Russian trademark. The court confirmed that a right for the company name of a foreign company should be protected in the same way as that of a Russian company. It confirmed propriety of the company name if it predates registration of the trademark and also pointed out that Russian law (Article 1475 of the Civil Code) does not provide any conditions for protection of a company name, such as how famous it is, presence of any associations among consumers, the period of use of the name etc.

As a result, the appeal of the Russian company was dismissed and the judgment went into force immediately.

This is not the first time that foreign companies have come to the Russian market with the assistance of a Russian counterpart. In many cases collaboration is smooth. However, cases happen where the parties fall out for one reason or another, and the Russian company registers the trademark of a foreign company in its own name. It is true that a trademark registered in such circumstances may be cancelled but it takes time and money. It is clear that the benefits of timely registration of the trademark by the company coming into the Russian market outweigh the costs of retrieving it from the possession of the trademark squatter.