Plaintiff hits the jackpot as court awards almost $2 million in compensation

Russian Federation

A CJSC Renna Holding obtained a trademark registration (No 421859) for a figurative trademark containing the word element 'moo cow from Korenovka' (Korenovka is the name of a village).

The owner of the trademark subsequently initiated a court action against Kuban Korovka Ltd ('moo cow from Kuban' - Kuban is the name of a region in Russia). The claim was routine - the plaintiff requested:

  • that the respondent stop the unlawful use of its designation, which was confusingly similar to the registered trademark;
  • the destruction of the counterfeit products; and
  • the award of compensation (compensation is an alternative to damages and does not require evidence of damage).

The commercial court did not satisfy the claims of the plaintiff. The judgment was appealed, but without success. The judgment was further appealed to a higher court, which cancelled the previous judgments and sent the case back to the first instance court for re-examination.

The first instance court re-examined the case and satisfied the plaintiff’s claims. The case was appealed by the respondent to the appeal court, without success. The respondent then appealed to the IP Court, arguing that the owner of the trademark did not produce the products sold under the infringing trademark.

The IP Court stated that the lower courts had correctly inferred that infringement of the registered trademark had taken place. The respondent produced dairy products and marked them with the plaintiff’s trademark. The compensation claimed by the plaintiff was double the cost of the infringing products. The respondent argued that its designation was not confusingly similar; however, the court did not accept this position, especially as the respondent had tried to register the designation as a trademark, but its application had been rejected by the patent office. The IP Court noted that, during previous hearings before the lower courts, those courts had repeatedly asked the respondent to provide information on the quantity of products produced under the infringing trademark, but the respondent had not provided such information.

Following a request by the plaintiff, the court sought a large amount of evidence from the distributors of the respondent, including the companies which manufactured the packaging of the dairy products. The court assessed the quantity of products sold by the respondent and found that the plaintiff had correctly calculated the amount. The court then doubled the amount, as allowed by the law. The court also noted that it could not reduce the amount of compensation claimed because it was the result of an accurate calculation (unlike cases where the plaintiff simply claims compensation without explaining its reasons, where the court can moderate the amount at its discretion).

As a result, the court awarded compensation to the plaintiff in an amount of over Rb114 million, which is equivalent to almost $2 million (after the value of the rouble shrank twofold against the dollar, otherwise the compensation would be approximately $3.5 million). Such amount of compensation is unusually high for the Russian courts, but should certainly provide a lesson for future infringers.

Vladimir Biriulin, Gorodissky & Partners, Moscow

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