30 Apr
2020

Rights holders’ control of trademark use explained

Co-published

When a trademark is registered in Russia, rights holders assume an obligation to use it. While no documents are drawn up, if a designation is not used it runs the risk of early termination in relation to all or part of the goods and/or services indicated in the certificate.

If an interested party believes that a trademark is not in use, it may send the mark owner a proposal to apply to the Russia Patent and Trademark Office with a request either to waive the trademark rights or to draw up an agreement to assign the mark to it. The earliest that such a proposal can be sent is three years from the date of registration of the trademark.

The rights holder then has two months to act. If two months have passed since the party sent the proposal and the rights holder has not filed a waiver of rights to the trademark or come to an agreement to assign the trademark, the interested party has the right to apply to the court with a claim for early termination of the trademark due to non use.

In the case of early termination, the interested party and the rights holder should provide evidence in court. The former must justify its interest in the early termination while the latter must prove use of the designation.

The current legislation allows that a trademark can be used by various persons, and clarifies the parties in the case as:

  • the trademark holder;
  • any party that has been granted the right to use on the basis of a licence agreement; and
  • any party that uses the trademark under the control of the rights holder.

Courts rarely have questions with regard to the rights holder’s direct use of the mark, although special mention should be made of cases where there have been several rights holders over the three-year period prior to filing a lawsuit. This period is not interrupted if exclusive rights are assigned to a new holder. In this regard, evidence of use can be submitted from one, some or all of the right holders.

The Civil Code allows the proper use of a trademark both under a licence agreement (Article 1235) and under a commercial concession agreement (Article 1027). In this regard, the use of a trademark is recognised not only by the party to the licence agreement (licensee), but also by the party to the commercial concession agreement (user). It also must be considered that when concluding the contract, the licensee undertakes to ensure that the quality of the goods produced or sold by it (on which it places the licensed trademark) meets the quality requirements established by the licensor. The licensor has the right to control compliance with this condition. According to the Decree of the Presidium of the IP Rights Court dated 12 April 2018 in Case SIP-311/2017, licensee and licensor are jointly and severally liable.

Another stakeholder is a party that uses the trademark under the control of the rights holder. At the legislative level, there are no specific requirements to prove this use. Current judicial practice offers clarification on how to prove in court that a party using a trademark – and on whose behalf evidence is presented – is acting under the control of the rights holder in the context of Article 1486(2). Recognition of using a trademark under the control of the rights holder with regard to the abovementioned provisions does not depend on the availability of registration to grant the right to use the trademark or the corresponding agreement.

When establishing another party’s use of a trademark under the control of the rights holder, the court evaluates all the evidence presented as a whole and then determines whether the trademark was used at the will of the rights holder, regardless of the presence or absence of defects in this expression of will.

It is important to consider that the rights holder’s control may:

  • vary in content depending on the methods of use of the mark – with regard to the production of goods, control can be made by checking the quality of the goods, volumes of production and sales, among other things; and
  • differ in cases where a trademark is used by another person in the production of goods (eg, checking the quality of goods) and when importing the original product and its further sale. In the latter case there is no need for additional control of the quality and volume of production of goods.

Corporate relations between the rights holder and another party using the trademark, including within a holding or another group of persons, makes it possible to assume the will of the rights holder to use the trademark. If these relations exist, as a rule, special legal acts are not required within the holding or a group of persons who draw up the consent of the rights holder to use the trademark by another person.

Comment

Despite how the relationship and/or civil law relations between the rights holder of a trademark and the person using it under their leadership is proved, it is crucial that the rights holder provides evidence of control. If the use is carried out under a licence agreement, then there is no need to prove the existence of control by the rights holder.

For further information contact:

Alexandra Pelikh
Zuykov and partners
View website

This is a co-published article whose content has not been commissioned or written by the WTR editorial team, but which has been proofed and edited to run in accordance with the WTR style guide.