AKAI cancelled on unfair competition grounds

In Akai Electric Co Ltd v Akai Universal Industries Ltd (Case A40-61852 106-110-454, July 1 2008), the Presidium of the Higher Arbitration Court of the Russian Federation has ordered the cancellation of the trademark AKAI on the grounds that it infringed the rights of Akai Electric Co Ltd in its company name.

On February 22 2002 Akai Universal Industries Ltd applied for the registration of the trademark AKAI (Registration 242303) for the following goods in Class 7 of the Nice Classification:

"vacuum cleaners, washing machines, electric kitchen appliances, food processors, mixers, dishwashers, meat choppers, wringing machines for laundry, electric fruit juicers for household purposes, drying machines."

Akai Electric, which is established in Japan, filed an opposition against the application with the Chamber of Patent Disputes of the Russian Patent Office (Rospatent), arguing that the registration of the mark would:

infringe Akai Electric's rights in its name; and
deceive consumers as to the origin of the goods due to the fact that Akai Electric is well known in the Russian Federation as a manufacturer of electronic apparatus.

Akai Universal, which was established in Hong Kong in 2002, has no relation with Akai Electric. Rospatent dismissed the opposition and the mark was registered. The decision was upheld by the Moscow Arbitration Court (July 12 2006), the Ninth Arbitration Appeal Court (March 23 2007) and the Moscow Regional Federal Arbitration Court (November 11 2007).

On appeal, the Presidium of the Higher Arbitration Court held that the courts had failed to take into consideration the fact that Akai Electric had obtained rights in the firm name (including the term 'Akai' on its own) on July 15 1929 - that is, long before the incorporation of Akai Universal and the latter's application for the registration of the trademark AKAI.

Akai Universal admitted that Akai Electric is well known thanks to the advertising campaign conducted under the slogan "Akai - return of the legend". The court stated that the choice of the name Akai Universal created the impression that it was a representative of Akai Electric. Moreover, Akai Universal's representatives made no distinction between the two companies in official statements and interviews, and intentionally posed as representatives of the Japanese company.

According to the presidium, registration of the trademark AKAI by Akai Universal would:

deceive consumers as to the origin of the goods; and
contradict Article 10bis of the Paris Convention for the Protection of Industrial Property, which states that "any act of competition contrary to honest practices in industrial or commercial matters constitutes an act of unfair competition".

The presidium held that Akai Universal knew or ought to have known that the name Akai was being used by Akai Electric in the Russian Federation - not only as a firm name, but also as a trademark (which is currently registered in other countries). The presidium concluded that Akai Universal, by applying to register the mark AKAI, sought to obtain a competitive edge at the expense of the well-known Japanese company. Therefore, Akai Universal's registration of the mark constituted an act of unfair competition.

Consequently, the presidium overturned the decisions and ordered that Rospatent cancel the mark.

Tamara Istomina, Gowlings International Inc, Moscow

AKAI cancelled on unfair competition grounds

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