Gowling WLG (International) Inc - Russia
Trademarks are vital to all businesses. Used effectively, a mark will help potential customers and clients to distinguish the goods or services of one brand from those of its competitors. Further, a customer will also see as inseparable the association between a specific product that is labelled with a mark and the image of the product’s manufacturer.
The Russian Civil Code defines a ‘trademark’ as a designation that serves to differentiate the goods of legal entities or individual entrepreneurs. This exclusive right is confirmed by a certificate.
In Russia, the principal rule for registering a mark is that it should bear no resemblance to one already on the trademark register. A trademark owner has the right to demand the removal and destruction (at the expense of the infringer) of counterfeit goods, labels and packaging that is labelled with an unlawful mark, or a designation confusingly similar to a registered mark. Administrative, civil and criminal liability measures may be applied to an infringer for the unlawful use of a third-party mark or a confusingly similar designation. The penalties are as follows:
- Administrative liability – a fine of up to Rb200,000 (about $2,800) with the confiscation of goods labelled with the corresponding trademark, as well as materials and equipment used for their manufacture.
- Civil liability – compensation of Rb10,000 to Rb5 million ($135 to $70,000), which is determined at the discretion of the court and based on the nature of the infringement.
- Civil liability – compensation of twice the value of the infringing goods unlawfully labelled with the trademark, or of twice the value of the right to use the mark, which is decided on the basis of the price that, under comparable circumstances, is usually charged for the mark’s lawful use.
- Criminal liability – imprisonment for up to two years with a fine of up to Rb80,000.
Further, in Russia, the meaning of unlawful unfair competition was expanded in 2016 under Article 14.6(2) of the Competition Protection Law. Unfair competition now includes copying or imitating the appearance of trademarked goods and their packaging, labeling, names, colour schemes and general brand styles.
When a company uses a mark that is similar to that of a competitor, it negatively affects both businesses. The first mark is already known to a wide range of consumers, who may become conscious of both marks. This may lead to the dilution of the senior mark.
Trademark dilution ultimately weakens the power of the senior brand since the emergence of another product associating itself with this brand may alter attitudes towards it.
In Russia there is no specific cause of action for dilution but the general concept can form part of an unfair completion claim.
The Civil Code allows for the use of a trademark without registration. However, this if the unregistered mark is identical or confusingly similar to an already registered mark, this may be found to be infringing. Therefore, before starting to use a mark, it is advisable to conduct a search to identify any similarity with a registered designation in the Russia Patent and Trademark Office database.
Other general recommendations when choosing a trademark include:
- avoiding widespread common words whenever possible;
- using memorable and original words and phrases;
- avoiding symbols, words and terms specific to the applicant's scope of business; and
- if possible, avoiding colours that are common in the applicant’s industry (eg, green for the packaging of cosmetic products), since that will not make a product distinctive on the market.