Rospatent and bad-faith applications

Bad faith is not recognised as grounds for refusal for a trademark application in Russia. Further, the Russia Patent and Trademark Office (Rospatent) does not have jurisdiction over findings of bad faith. In some limited circumstances, this jurisdiction is vested in the courts and the Federal Antimonopoly Service (FAS). However, there are other relevant courses of action that can be used to protest bad-faith applications.

Protest letters against pending applications

Anyone has the right to submit a letter to Rospatent to protest a pending application. A protest can be based on a mark’s failure to conform to the requirements of Article 1483 of the Russian Civil Code on either absolute or relative grounds, which include if the mark:

• is descriptive or generic;
• characterises the goods (ie, indicates type, quality, quantity, properties or purpose);
• is or contains elements that are false or capable of misleading consumers; or
• is identical or confusingly similar to a registered trademark (or to an application with an earlier date of priority).

The examiner must consider all objections made in the protest letter, but the submitting party will not receive a response, nor will the applicant be given a copy. The examiner can issue an official action on some or all of the grounds outlined in the protest letters, on other grounds or not to issue any official action.

In practice, protest letters serve as an effective and relatively low-cost way to block bad-faith behaviour. If a person has no registered trademark in Russia, the protest letters may be based on the following grounds:

• consumers have been misled by the manufacturer of goods/services or its characteristics;
• usage of a company name; and
• similarity to copyright works owned by the client.

However, there are cases where a bad-faith application meets the registration requirements and protest letters do not succeed in blocking it. In Delicato Vineyards, Inc v Aleksandrovy Pogreba LLC (2 March 2016 (SIP-720/2015)), Aleksandrovy Pogreba LLC filed a trademark application for BUCEPHAL for wines, which Rospatent found confusingly similar to the unregistered designation for the famous premium wine BUCEPHALUS. The IP Court said that since BUCEPHALUS-branded wine was so expensive and only a small amount was sold in Russia, only a small group of consumers would know the brand. Thus, there was insufficient evidence to refuse registration on the basis of misleading consumers and Rospatent, having no statutory grounds on which to base refusal, had to grant the registration.

The court noted that the company's actions showed unfair competition and an abuse of rights. The company knew about the manufacturer's reputation and wanted to capitalise on its goodwill when entering the market in another price bracket. However, these are not statutory grounds that can be relied upon for prosecution by Rospatent.

Invalidation procedures against registered trademarks

If a registered trademark was applied for in bad faith, it is possible to seek cancellation on any of the previously mentioned traditional statutory grounds or on the basis of an abuse of rights or unfair competition under Article 1512 of the Civil Code. With regard to an invalidation based on statutory grounds, the first step is to seek cancellation in the Chamber for Patent Disputes (a division of Rospatent).

If there has been an abuse of rights or unfair competition then a two-step procedure is required based on Article 1512(6)2 of the Civil Code. First, the court or the FAS should make a finding of an abuse of rights or unfair competition associated with the registration. Then, based on this decision, the interested party should file a cancellation action with the Chamber for Patent Disputes.

The first and most significant case in this area is Vacheron & Constantin SA v Tessir Partners Ltd (24 March 2012 (16912/11)). Vacheron & Constantin SA owns the luxury watch brand of the same name. The opposing party registered the confusingly similar designation, VACHERON CONSTANTIN for similar goods, namely, clothes. Vacheron & Constantin SA filed a cancellation action with the Chamber for Patent Disputes. The chamber rejected the cancellation action and the designation remained in force as a trademark for clothes. The Supreme Arbitration Court considered the case in 2012 and invalidated the mark, holding that the opposing party “unfairly took economic advantage of, and traded on the goodwill associated with, the famous brand”.

In cases where a trademark is unfairly registered by the right holder’s agents (distributors), it can be more easily cancelled by filing a cancellation request directly with the Chamber for Patent Disputes. The legal basis for cancellation is Article 6septies of the Paris Convention and Article 1512(5)2 of the Civil Code.

Protection against other types of bad-faith applications

Many bad-faith applications involve squatters, which can be problematic in first-to-file countries.

Squatters usually have no intention of using the mark but aim to obstruct a legitimate brand owner from carrying on business, forcing them to settle, in many cases for a large fee. They act in bad faith, often file pending application(s) for confusingly similar marks simultaneously and/or acquire identical or confusingly similar registrations from bona fide third parties. Multi-pronged strategies are necessary to combat such behaviour, including protest letters against pending applications and court actions or complaints to the FAS in order to obtain a finding of unfair competition.

To summarise, Russian law does provide grounds to fight against those who act in bad faith, sometimes involving a multi-stage process that could take time. As Russia has a first-to-file registration system, it is best to register core marks as soon as the country is considered a market of interest.