The American Bar Association Section of International Law and ABA Center for Continuing Legal Education Russian IP Laws and Commercialization: The New Part IV of the Civil Code Trademarks, Company Names Trade Names and Domain Names October 1, 2008 Presentation by Vladislav Zabrodin Managing Partner © 2008 Capital Legal Services

ABA-CLE Seminar 2008 Basics of Trademark System in Russia - First-to-file system in Russia; - No declarations or proof of trademark use (or intention to use) are required for filing a trademark application in Russia. © 2008 Capital Legal Services 1

ABA-CLE Seminar 2008 Basics of Trademark System in Russia – Continuation - Mandatory state registration through filing an application; - Multi-class applications; - The International (Nice) Classification of Goods and Services; - Class heading does not guarantee effect of the trademark in relation to all goods or services indicated under that class; - Trademark registration is valid within 10 years from the filing date and can be renewed an infinite number of times, each time for 10 years. © 2008 Capital Legal Services 2

ABA-CLE Seminar 2008 Registration Procedure and Terms - Formal examination and “substantive” examination (please see chart in the papers); - Whole registration procedure takes approximately 18 months, if no official actions occur during the examination. © 2008 Capital Legal Services 3

ABA-CLE Seminar 2008 Types of Trademarks - The trademark may be registered in the name of one applicant (legal entity or entrepreneur) or a group of applicants (collective trademark); - Word, pictorial, three-dimensional, and other designations and their combinations may be registered as trademarks; - Color may be registered as a trademark. Such a trademark may be registered if the color is unusual and is not used in traditional coloration of the product; - Acoustic trademarks (theme melodies as trademarks for radio stations), etc. © 2008 Capital Legal Services 4

ABA-CLE Seminar 2008 Latin or Cyrillic? It is advisable that foreign companies whose trademarks consist of words in Latin letters likewise register their trademarks in Cyrillic: - During its commercial use – in documents, price tags, commercials, etc. – the name of product may and in certain cases must have a Russian equivalent; - Average Russian customer does not necessarily know English and therefore will be unable to read and remember a foreign name of goods or services; - Registration of Cyrillic equivalent will strengthen the legal protection of the brand in Russia and prevent potential registration of confusingly similar Cyrillic trademarks of other manufacturers. © 2008 Capital Legal Services 5

ABA-CLE Seminar 2008 Cancellation of Trademark Validity Due To Non-Use As regards the use of trademark after registration, it is important to remember that legislation stipulates the procedure of early termination of trademark validity upon request of any party if the trademark is not in use for a continuous period of 3 years from the date of registration. Provision of evidence of non ‑ use of the trademark is not required on behalf of the applicant. The burden of proof lies entirely with the right-holder. © 2008 Capital Legal Services 6

ABA-CLE Seminar 2008 Unregistered Famous Brands vs. Unfair Market Actions in Russia - the trademark may already be registered in the name of a different party; - manufacturing goods of poor quality; - damaging the reputation of high quality goods under a famous trademark; - misleading consumers as to the manufacturer; - impede business practices of a foreign company on the Russian market; - proposition to purchase the right to the trademark at a high price; - great material losses in form of lost profit. © 2008 Capital Legal Services 7

ABA-CLE Seminar 2008 Unregistered Famous Brands – Measures against Violation of Rights in Russia - Prevention of registration of similar trademarks already at the stage of their examination in the Russian patent office – initiative of the agency; - Filing an application with the Federal Antitrust Service (FAS) on elimination of unfair competition; - Filing claims with courts; - Filing an opposition with the Chamber of Patent Disputes against the trademark registration; - Registration of a well-known trademark. © 2008 Capital Legal Services 8

ABA-CLE Seminar 2008 Prevention of Registration of Similar Trademarks Already at the Stage of Their Examination at the Russian patent office - The examiners often inform that the applied mark cannot be registered due to the fact that the name is already used by someone else in relation to similar goods in Russia or abroad; - The examiners refer to information found on the Internet; - The examiners are trying to consider all cases that may potentially arise in the future in court. © 2008 Capital Legal Services 9

ABA-CLE Seminar 2008 Filing Applications with the Federal Antitrust Service (FAS) on Unfair Competition - Applications on unfair acquisition of exclusive rights, i.e. unfair registration of another’s brands; - Even when the infringing (or infringed) mark is not registered with Russian patent office; - The applicant and the infringer should be in competition, i.e. trade on the same product market to the same circle of customers in the same region; - Not necessary to prove incurred losses for the actions of either party to be acknowledged as an act of unfair competition – proof of the potential of that is sufficient; - Independent examination of the introduction of a product to a market; - Absence of a fee for submission and consideration of an application. © 2008 Capital Legal Services 10

ABA-CLE Seminar 2008 Filing Claims with Courts The courts have not elaborated a common approach for the cases connected with registration of trademarks for unfair purposes, for example, for further sale of trademarks to their original owners: - Some judges consider this to be abuse of rights and forbid such actions; - Some judges do not see anything illegal in registering rights to trademarks which do not formally belong to anyone, and in their further sale. In this situation it is quite an uneasy task to prove in court the unfair actions and to cancel the registration. © 2008 Capital Legal Services 11

ABA-CLE Seminar 2008 Filing Oppositions with the Chamber of Patent Disputes against Trademark Registration Bases for oppositions: - Registration of marks which are false or misleading in respect to the goods or manufacturer; In this case – necessity to submit extensive materials and information evidencing that the brand was widely known on the territory of Russia prior to the date of priority of the opposed trademark. - Opposed trademark is identical or similar to protected company name or trade name (or to separate parts of the company name of trade name), the rights to which were acquired earlier; - If the actions connected with its registration were considered (by FAS or court) as unfair or abusing rights. © 2008 Capital Legal Services 12

ABA-CLE Seminar 2008 Registration of Well-Known Trademark Well-known trademarks enjoy much broader protection. In order to be deemed well-known, a trademark should possess the following features: - Intensive use; - Wide popularity in Russia among the relevant groups; - Wide popularity as a trademark identifying goods of a particular manufacturer. The status of a well-known trademark may be given to marks that are: - Not registered in Russia; - Registered as a trademark under national procedure; - Protected in Russia in accordance with international treaties (Madrid system). At present there are 73 well-known trademarks entered into the List of Well-Known Trademarks in Russia. Among them are COCA-COLA, NESCAFE, PENTIUM, INTEL, NIKE, GALLUP, TIFFANY, etc. © 2008 Capital Legal Services 13

ABA-CLE Seminar 2008 Registration of Well-Known Trademark – Continuation - Absolute innovation in respect to well-known trademarks: legal protection of all types of well-known marks, even if not registered earlier as trademarks in Russia, covers goods and services for which it was not acknowledged as well-known (!). - This rule may only be applied when an applicant for well- known status for the trademark can prove that (1) a consumer associates it exclusively with him and (2) proves the possibility of his interests being harmed (materially and non-materially). © 2008 Capital Legal Services 14

ABA-CLE Seminar 2008 Documentary Evidences of Trademark Popularity Information on the following: - Intensive use of trademark, in particular, on the territory of Russia; - Countries where the trademark was used and gained popularity; - Advertising expenses; - Value of trademark; - Results of marketing research and opinion polls (!). © 2008 Capital Legal Services 15

ABA-CLE Seminar 2008 Use of Trademark Rights The Civil Code provides for two main possibilities to use a trademark: - Assignment agreement, when the exclusive right is transferred in full (similar to a sales and purchase agreement); - License agreement, when the owner keeps the exclusive right and provides to a licensee a right to use the trademark, limited by the provisions of the agreement. Trademark assignment agreements and license agreements are to be concluded in writing and must be registered at the Russian patent office. © 2008 Capital Legal Services 16

ABA-CLE Seminar 2008 Legal Protection of Company Names - A legal entity obtains the exclusive right to use its company name as soon as the company is registered and entered into the Unified State of Register of Legal Entities; - Rights: a company may forbid use of identical or confusingly similar company names and trademarks, which were registered later, for the same goods or services. - Foreign companies: the company names enjoy protection on the territory of Russia without registration due to the provisions of the Paris Convention on the Protection of IP. - A company name shall not contain the words “Russia” or “Russian Federation”. Use of words “Russian” and “Rus” is allowed. © 2008 Capital Legal Services 17

ABA-CLE Seminar 2008 Legal Protection of Trade Names - The right-holder has an exclusive right to use the trade name if it is sufficiently distinctive and its use is widely known within the boundaries of a certain area, i.e. within some administrative territorial division (city, district or neighborhood). - A trade name is a method of identifying the property of a company (premises, etc.) – names of stores, beauty salons, cafes, factories. Primarily, trade names are used in the service sector. - A trade name is neither subject to any state registration, nor to mandatory record in statutory documents or the Unified State Register of Legal Entities. - The exclusive right to a trade name occurs from the time its owner starts to use it, upon creation of the property complex. © 2008 Capital Legal Services 18

ABA-CLE Seminar 2008 Legal Protection of Trade Names – Recommendations - t is not permitted to use a trade name that is confusingly similar to any company name, trademark or trade name owned by a third party whose exclusive right originated earlier. Recommendation: in such event, it is necessary to properly document the fact of creation of the trade name and the moment of commencement of its use, including introducing amendments into statutory documents. - The right to a trade name is easy to acquire, but also easy to lose. If the trade name is not used by the right-holder for a continuous period of one year, the exclusive right to that trade name is terminated. Recommendation: to maintain its reputation at least at a minimal level – periodic public articles and place advertising. In advertisement the trade name must be connected to a property complex, it must be clear to the consumer that the advertised name – is the name of a specific store. © 2008 Capital Legal Services 19

ABA-CLE Seminar 2008 Legal Protection of Trade Names vs. Trademarks Up to the present, in the event of a conflict between an unregistered trade name and a registered trademark, court authorities protected the right-holder of the trademark. Why? - Prior to the approval of the Part 4 of the Civil Code there was no standard in the Russian legislation governing the relations arising out of the trade name use; - Legal regulation of trademarks still remains more clear and detailed; - List of actions that are deemed violation of exclusive rights of a trademark owner are essentially wider than that of trade names; - Established court practice in respect to the protection of rights to trademarks; - Trademarks are subject to registration that allows to secure the priority date to such item and afterwards to prove this priority. © 2008 Capital Legal Services 20

ABA-CLE Seminar 2008 Legal Protection of Domain Names - Domain names were not included in the final text of the Civil Code; - The Russian Arbitration Courts acknowledge that domain names have actually been transformed into a means fulfilling the function of a trademark; - The use of another party’s trademark in a domain name allowing attracting on the Internet potential buyers of goods and services of the trademark owner, without consent of the latter, is illegal; - Registration of a domain name without its use or the use of the domain name in respect to dissimilar goods and services may not be considered as unlawful use of a trademark; - A domain name can be ground for canceling the trademark registration. © 2008 Capital Legal Services 21

ABA-CLE Seminar 2008 Contacts St. Petersburg OfficeMoscow Office Northern Capital HouseChaplygina House 36 Moika Embankment20/7 Chaplygina Street St. Petersburg MoscowRussia Tel: Tel: Fax: Fax: © 2008 Capital Legal Services