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How Trademark Law Impacts Russian Trade

14 May 2024

Trademarks are an important consideration when running a business. Russian law covers all aspects of trademarks to make business convenient and enforce the business’ rights if needed. The registration requirements are straightforward so that once the path is paved for the inflow and marketing of goods, the protection of the business comes to the fore.

Trademarks protect business from competition, but if a product is in great demand and easily finds consumers, chances are that infringement will loom on the horizon. The trademarked goods may appear on TV, and even more often on the internet. This is good for developing business but is equally attractive for infringers hiding behind trademark owners.

Trademark cases of various natures are examined by the 85 commercial courts in Russia that hear IP disputes, amounting every year to about 15,000 cases. Recently, a law was passed that allows private persons to register trademarks, which means that common courts will now also be involved in the consideration of trademark cases.

As Russia is not a common law country and trademark conflicts often have so many ramifications and overtones, different courts may look differently at particular cases without departing from specific provisions of the law.

Once in a while, the Supreme Court reviews cases examined by different commercial courts, and issues so-called resolutions where many cases are analysed and conclusions are reached to instruct lower courts when examining cases, ensuring more uniform judgments in this or that situation.

One such important decree was issued back in 2019. It explained various situations that may occur during business activities and provided relevant guidelines. For example, it examined several provisions of the Civil Code and explained that a designation filed for registration with the patent office is not yet a trademark therefore, if someone uses that designation before registration, this cannot be regarded as infringement of a trademark.

The date of filing an application serves only to calculate the period of validity of a trademark. This, however, does give a green light to trademark squatters who may wish to intercept a designation used by other people. Such cases are also known in judicial practice, and were discussed in the decree.

There are cases where businesses may seek to cancel trademarks because of non-use. The Supreme Court stated that there may be justifiable reasons for such non-use, so an excusable period of such should not be considered when calculating the non-use period.

A similar situation may take place in the case of assignment of a trademark. If that happens, a non-use action may be initiated against the current owner of the trademark. The period of time before the registration of assignment is not taken into consideration.

The latest review of the Supreme Court was issued in November 2023. It examined new controversial cases and continued its explanation of some of the old cases covered in the previous decree. In order to ensure a unified approach to the examination of cases related to non-use, the court ruled that non-use of a trademark per se does not mean that there is an abuse of right.

In doing so the court proceeded from a particular case (Case No A65-11453/2021), where the trademark owner did not use his trademark but sued the infringer of that trademark. The infringer attempted to argue that the owner was not using his trademark and thus abused his right. The court rightfully dismissed the claim.

In another case, a person obtained a trademark registration with the sole purpose of interfering in the business of goodwill users to claim unfair compensation (Case No 40-59474/2020). The court carefully examined everything that predated filing the suit and concluded that the trademark owner had no intention to use the trademark. In addition, it turned out that the trademark owner had many trademarks but had no evidence of using them. The claim was dismissed.

Abuse of right is not a rare occurrence in the legal landscape. Actions by the same trademark owner may be regarded as abuse of right in one case and be legitimate in other cases. In one case the patent office satisfied an appeal against the registration of a trademark filed by an individual entrepreneur. The owner of the trademark went to court and asked to repeal the decision of the patent office because the entrepreneur allegedly abused his right.

It transpired during the hearings that in a different case the entrepreneur indeed had abused his right, but not in the case at hand. The court concluded the unfair behaviour of the person in one case should not mar their reputation in all other cases.

Licensing is a popular method of disposal of intellectual property. According to data available for 2022, there were about 13,000 trademark licence agreements, so it is natural that many controversial situations come up during the performance of such agreements. The Supreme Court provides guidance as to how to evaluate the behaviour of the trademark owner in specific circumstances.

In one case, an entrepreneur registered a trademark and sued a company for the use of a designation confusingly similar to his trademark. The case seemed simple and entrepreneur’s claim was satisfied.

The court of appeal examined the background and found that the trademark owner had registered his trademark with the sole purpose of claiming compensation from other persons. Having his trademark, the owner did not use it on goods, nor did he make preparation for such use. Hence his behaviour was recognised as unfair and no compensation was awarded to him.

The IP rights courts are not only where controversial situations are resolved – they also have a Science Council that constantly analyses judicial practice. This provides advisory guidance to other courts as to how the enforcement of IP rights should be handled. In the first instance, the infringement of rights is dealt with by commercial courts in the respective regions. If a judgment is appealed, that appeal is examined by an IP court and, if necessary, once more by an IP court in its capacity as a court of cassation. In fact, an IP court examines most complex cases that could not be resolved correctly by lower commercial courts.

For example, trademark owners may be tempted to ask the court to impose a general ban on the use of a trademark in the future. The Science Council has explained that such claims may be satisfied by a court if the claim indicates a specific trademark and specific goods labelled with that trademark in respect of which infringement was confirmed. No ban can be imposed if the claim seeks to ban the use of similar goods because this claim is of an abstract nature.

The same situation may occur in online trade. The owner of the trademark cannot ask the court to forbid sales of counterfeit goods labelled with his trademarks. This is an abstract claim. The respondent, though, may be ordered by the court to remove from sale the goods in respect of which infringement was confirmed.

Claims to forbid the use of a designation without the indication of specific goods and services do occur, and if the court considers such claim as an abstract one, it may ask the plaintiff to amend the scope of claims, and ask the parties to prove other circumstances that may have importance in a particular case.

Judicial practice is a living organism, nurtured by the ongoing judgments of all courts. Appeals against judgments serve to further develop understanding and application of laws. Institutions such as the Supreme Court, an IP court and, in rare instances, the Constitutional Court, carefully follow what is going on in courts, collect information on the application of laws by them, and work out rules to ensure the uniform application of laws.

When regional courts examine trademark infringement cases they rely on the law in the usual way and may, in order to support their conclusions in a particular situation, refer to a decree or ruling of the Supreme Court or an IP court.