Civil Code amendments: risk or benefit for trademark owners?

Russian Federation
A number of amendments to the provisions of the Russian Civil Code dealing with intellectual property entered into force in October 2010 (for further details please see "Parliament adopts amendments to Civil Code's IP provisions").

Before the amendments entered into force, Article 1483 of the code gave domain names the status of IP objects; domain name holders thus had the opportunity to object to the later registration of an identical trademark.

Under the current Article 1483, domain names are not placed on the same level as IP objects. This change has raised concerns about the potential problem of reverse domain name hijacking or 'recapture' of domain names - namely, where a party registers a trademark with the purpose of obtaining an existing domain name from its current owner, who had registered and used it in good faith before the trademark was registered.

A recent decision by the Ninth Arbitration Appeals Court involving Russian electronics company Inter Elektrik was an example of this problem. Bureshkin Sergey, a physical person, registered the domain name 'interelektrik.ru'. Inter Elektrik claimed damages based on the infringement of its exclusive rights in the trademark INTER ELEKTRIK. The court reasoned that, since domain names were not among the IP objects mentioned in the Civil Code, the trademark owner was entitled to prevent unauthorised use of its trademark, including as part of a domain name. The court disregarded the fact that the domain name had been registered before the trademark.

The Court of Cassation overruled this decision, recognising that, in this case, the registrant of the domain name had not infringed the trademark owner’s rights. The judge concluded that the fair use of a domain name registered before a trademark could not be regarded as an infringement.

This decision is consistent with the position adopted by the Supreme Commercial Court in December 2009: a similar case was dismissed on the grounds that the domain name had been registered before the trademark’s priority date.

However, Russia does not have a common law system and, therefore, precedents are not taken into consideration. For this reason, it cannot be excluded that other courts will come to the same conclusion as the Ninth Arbitration Appeals Court in the Inter Elektrik case. Nevertheless, domain name owners can avoid such problems by securing trademark rights in advance.

In addition, to prevent cybersquatting, the Federal Anti-monopoly Service (FAS) will prevent anti-competitive acts relating to the registration of domain names. Any attempt to register a domain consisting of an existing trademark will automatically run afoul of Article 14(1)(4) of the Russian Federation’s Law on the Protection of Competition and be considered as an act of unfair competition.

Additional control will be exercised with respect to applications for the registration of domain names containing unregistered trademarks where:
  • the unregistered mark has been in use long before the domain name application was filed; or
  • the registration of the domain name is contrary to the principles of justice and is made with the intent of obtaining an undue advantage.
Therefore, an investigation may be triggered if:
  • the domain name is offered for sale/lease to the party which owns a trademark contained within the domain name (or to its competitors);
  • the registration of the domain name is made with the intent of preventing competitors from using an unregistered trademark; or
  • the registration of a domain name creating a likelihood of confusion with the owner of an unregistered trademark is made with intent of profiting from the goodwill of the unregistered trademark.
Infringers will be subject to a penalty, which will be determined on a case-by-case basis depending on the circumstances. According to the deputy head of the unfair competition department, the FAS will be allowed to request that the infringer modify the domain name or cease using it.

Despite the fact that, in Russia, only courts may revoke the registration of a domain name, the FAS might help courts to resolve domain names disputes more quickly.

Alissia Shchichka, PETOŠEVIC, Brussels

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