IP Court clarifies what constitutes token use for trademarks vulnerable to non-use
Russian law stipulates that if an owner does not use a trademark within three years, it can be cancelled. To avoid this happening, some owners try to keep their marks alive by producing evidence of use, though in very small volumes. However, token use is generally insufficient to establish that a trademark is, in fact, being used. The IP Court of the Russian Federation often issues rulings to this effect, and has published some criteria for what it defines as ‘token use’.
Token use with regard to goods
Whether a claimed use is a token use or not can usually be determined based on the quantity of goods placed on the market, taking into consideration what would be typical in the normal course of trade. Often, a strangely small volume will signal that a trademark is not genuinely being used.
In one case, for example, the IP Court concluded that the claimed use of a trademark in relation to only 300 0.25 litre bottles of vodka was insufficient to maintain the trademark registration.
In a similar case, the IP Court compared the evidence of use provided by the trademark owner with the total volume of the local vodka market. In 2018, this amounted to 78.61 million decalitres, while the trademark in question was only said to have been used on 150 vodka bottles. The court held that such a small volume of trademarked products, in view of the market size, was insufficient to maintain the trademark.
Other cases in which the IP Court determined that there was mere token use include the following:
- 245 links of cooked sausage;
- 58 bottles of mineral water;
- 100 boxes of inexpensive chocolates; and
- five bottles of discount vodka.
Clearly, if goods are sold at low or medium prices and are readily available to ordinary consumers, a trademark owner must confirm that a significant volume of goods have been placed on the market, in order to demonstrate genuine use of a trademark.
An insignificant volume of trademarked goods alone, however, does not automatically amount to token use. For example, a small amount of trademarked goods in certain Russian regions may be sufficient, if it corresponds to specific local market needs.
Some cases have shown that it may be enough to prove a sufficient (though not significant) volume of goods, as well as systematic sales. The court ruled, for example, that the sale of only 14,880 bottles of wine and 45 pallets of garments constituted qualifying uses and not mere token uses.
A suspicion of mere token use can also be put to rest if the trademark owner proves that this is part of a larger business plan. The introduction of exclusive, high-end goods into a market in small volumes, for instance, can be sufficient for the IP Court to acknowledge actual use of a trademark.
Token use with regard to services
The issue of the token use of service marks rarely comes before the IP Court, and so the criteria for these are less clear. Where it has arisen, the court has applied a common-sense test as to whether the use of the disputed service mark corresponds to ordinary business practices.
In one case, the IP Court decided that it was clear that there had been mere token use based on the following facts:
- A banner bearing the service mark was placed on the side of a building, though not over the store’s entrance;
- the store’s signboard itself did not contain the disputed service mark;
- purchase documents and cash receipts did not refer to the disputed service mark;
- the lease agreement was concluded for only one square metre; and
- a video recording of the purchase of a trademark-bearing good in the store was made only for the purpose of fixing the placed banner. The purchase itself was a one-time sale for a small amount and no cash receipt was issued.
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