Russia contemplates trademark law amendments

Last year the Russian Federation enacted Part IV of the Civil Code. Part IV has raised concerns globally among rights holders and governments that the new law is not in keeping with Russia's international obligations and is inconsistent with international norms on the protection of trademarks. In the US-Russia Bilateral Agreement, the Russian government has committed to ensuring that Part IV is in compliance with Russia's international obligations before the law comes into force on January 1 2008. The following are examples of outstanding trademark protection issues:

• Overprotection of Soviet-era designations: Under the law implementing Part IV, persons who had used a Soviet-era designation before October 17 1992 may continue to use it in Russia by entering into a royalty-free, non-exclusive licence agreement with a subsequent registrant of such a designation. Worse, the licence granted to the user of the trademark has no limit as to term or territory. This provision came into force on January 1 2007.
  
  
• Licensing issues: Part IV maintains the current Russian practice of requiring that all trademark licences be registered. Failure to comply will result in the invalidity of the licence itself and could result in a mark becoming vulnerable to cancellation for non-use. This unnecessarily complicates the licensing environment for trademark owners also because a licence cannot be registered until the trademark itself is registered. Mandatory trademark licence registration has not been adopted, and in fact has been abandoned, by other developed countries and Russia should be no exception.
  
  Part IV adds a further complication by imposing joint and several liability for both licensee and licensor, which increases the exposure of the trademark owner. The practical result could be that trademark owners choose not to license some or all of their marks in Russia.
  
  
• Overprotection of domain names and firm names: In an unusual provision, a trademark may not be registered if it is the same as a domain name, without consideration to the zone (ie, '.ru'), the goods or services associated with the domain name or whether the domain name is actually in use. In effect, Part IV hands to internet trademark pirates an easy and inexpensive means to prey on legitimate brand owners.
  
  In addition, Part IV provides that a trademark may not be registered if it is the same as, or confusingly similar to, a firm name or commercial designation, or even individual elements of such a firm name or commercial designation, without any account of the scope of use of the latter.
  
  
• Inadequate protection for well-known marks: Although Russia has put in place a system of protection of well-known marks recognized as such through an administrative procedure before the local patent and trademark office (Rospatent), providing protection for such marks beyond the goods associated with the mark under certain conditions, this protection does not extend to unauthorized registration or use of confusingly similar marks for dissimilar goods. Part IV thus fails to protect sufficiently against registration of marks that violate the extended protection of well-known marks. As a result, marks can be registered for unrelated goods even if the use of those marks could infringe the rights of an internationally recognized mark that has also received official well-known status granted by Rospatent.
  
  
• Criminalization of all infringement: Part IV provides that goods upon which an infringing trademark is used are counterfeit, effectively criminalizing all infringement and creating the potential for criminal sanctions to be applied against a good-faith trademark owner by a bad-faith trademark registrant. To avoid such a result, Part IV must be amended to differentiate between infringement and counterfeiting so that only counterfeiting may be punishable by operation of the Criminal Code.
  
  
• Lack of pre-registration opposition procedures: Trademark owners have expressed disappointment that the Russian government did not take the opportunity to introduce pre-trademark registration opposition procedures to combat bad-faith registrations and trademark pirates. Instead, owners of registered trademarks that want to challenge a trademark registration must initiate costly cancellation proceedings starting with Rospatent's Chamber of Patent Disputes and, if they lose, an appeal to the civil courts. Moreover, until the mark is cancelled, the infringer has the exclusive right to use the mark.

While the Russian government has agreed to consider amendments to Part IV with a view to ensuring compliance with all treaty obligations, the time line for developing amendments to Part IV is very short. The State Duma has indicated that it will consider proposed amendments in the upcoming spring session. In the meantime, the Russian Federation Expert's Council, which is comprised of State Duma deputies, IP right experts and practitioners and rights holder organizations, will play key roles in developing amendments for consideration by the State Duma. Whether all of these concerns will be addressed remains to be seen.

Robert Macdonald, Gowling Lafleur Henderson LLP, Ottawa