Category: News

When interviewed by a newspaper Izvestia, Mr. Yury Zubov, the head of Rospatent, has stressed the importance of ensuring legal protection of trademarks belonging to foreign holders. According to Mr. Zubov, protecting trademarks of foreign companies lies within the interests of Russian consumers and Russian market. He emphasized that without such protection counterfeit goods from various sources and of inferior quality would fill in the market and for some categories of goods, such as household appliances or electronics, it could lead to even dangerous consequences (www.iz.ru).

Recent Court decisions in Russia demonstrated the same approach both in civil and administrative proceedings.

The Decision of the Arbitration Court of the Novosibirskaya Oblast dated May 21, 2022 in the case No. А45-1063/2022 has recognized infringement of rights to trademark LOL SURPRISE and works of art representing images of dolls belonging to MGA Entertainment Inc. by a domestic individual entrepreneur and has awarded a compensation to the right holder. In the Decision the court has made the following important conclusion: the Decree of the President of the Russian Federation of February 28, 2022 N 79, as well as the Government Decree N 430-r do not provide for such enforcement measures that would allow the trademark rights violators an exemption from liability in relation to right holders from unfriendly countries. The court has also refused to apply the normative acts regulating parallel import to the case, because the goods under consideration were not original goods (parallel import is the import into the territory of the Russian Federation without the consent of the copyright holders of original foreign goods that have been introduced into civil circulation abroad).

Similar statements have been made in a decision of the Arbitration Court of the Tambov Region dated July 26, 2022 in the case No. А64-9894/2021 on infringement of rights to trademark ROBOCAR POLY and works of art portraying the cartoon characters of ROI VISUAL CO. LTD. The defendant has not provided evidence confirming the legitimacy of using the trademark and works of art belonging to ROI VISUAL CO. LTD., whereas the court has concluded that the registration of the plaintiff in an unfriendly state does not indicate bad faith of the plaintiff and, accordingly, does not give grounds to refuse protection of rights.

Applicability of the parallel import provisions is also determined in the Ruling of the Court for Intellectual Property Rights dated April 27, 2022 N C01-533/2022 in the case N A40-84838/2021 where the defendant has claimed a release from liability on the grounds of the Decree of the Government of the Russian Federation of March 29, 2022 N 506 allowing parallel import of goods labelled with trademarks owned by parties from unfriendly countries. The court has pointed out that the disputed goods have been recognized as counterfeit (not original), since they were not produced and labeled by the trademark owner, which excludes the possibility of applying the legislation regulating parallel import in this case.

The resolution of the Second Arbitration Court of Appeal dated July 26, 2022 N 02AP-5391/2022 in the case N A17-8645/2021 has shown that the court has also disregarded arguments based on parallel import provisions due to the way the disputed trademark has been used by the defendant – in a domain name.

Over the past 6 months courts in various regions of the Russian Federation have completed numerous administrative proceedings launched by executive bodies against parties importing or selling counterfeit goods featuring famous brands such as NIKE, ADIDAS, DIOR, GIVENCHY and many others, which in most cases ended by administrative fines to the infringers and destruction of the counterfeit. Engagement of customs bodies and law enforcement in such administrative actions is an additional evidence of the practical value of IP rights in Russia and possibility of their enforcement despite the instability brought by the political situation.

Patentica’s patent attorney and partner Mr. Eduard Shablin is participating at the World Intellectual Property Forum to be held on October 10-12, 2022 in Bangkok, Thailand.

It would be a great pleasure for Eduard to see Patentica’s old friends and meet new colleagues!

To schedule a meeting with Eduard please send a direct email at eduard.shablin@patentica.com.

We are looking forward to seeing you soon at the forum’s venue!

Sincerely,

Patentica’s Team

A popular online retailer Wildberries plans to introduce a new service that will allow the trademark owners and holders of other intellectual property rights to check authenticity of goods offered on the website. This new service is the company’s way to address concerns for selling counterfeit goods, raised earlier by the Russian Ministry of Industry and Trade.

The new service will be called “Digital arbitration”. According to Wildberries, in this way, the right holders will be protected from unfair competition while consumers can avoid buying knock-off goods.

How will this service work? If the genuine producer suspects that its intellectual property rights have been infringed by another company, a formal inquiry can be made directly to the alleged infringer. The right holder will then be able to check documentation provided in the response. This way, potential infringements may be handled within several days, without long and arduous back-and-forth communication between the parties.

If the check-up reveals that the seller does not have any right to sell the goods, these items will be hidden from the consumers. Wildberries assures that in case of continuous or large scale violations, the seller may be blocked from using the e-commerce website entirely.

Apart from this, the right holder is still entitled to seek compensation for infringement in court, and will be able to submit a record of communications through the new “Digital arbitration” service as evidence in support of the claim.

According to the new Government Decree* signed on July 29, 2022 and coming in force on March 1, 2023, all e-commerce websites will be required to mark the offered goods within the “Honest mark” system as a means to prevent counterfeit, and can face court charges alongside actual sellers of bootlegs.

In these circumstances, the new service introduced by Wildberries may be a forerunner for turning e-commerce practice into a safer environment for right holders and making it much easier for them to swiftly deal with any infringers.

* Government Decree No.1351 of July 29, 2022 “On amending Government Decree No. 1956 of December 31, 2019 and annulling certain legislative acts of the Russian Federation”

To cut long story short – nothing is wrong. The recent series of decrees have added Russia to the list of free markets including the US, UK, US, Australia, Canada, China and Japan, where parallel import has already been working for many years (with country-specific unique features, but still) .

So, how is Russian parallel import different from other countries?

The recent Federal Law No. 213-FZ[1] of 28 June 2022 set out the new IP rights exhaustion model in Russia. Previously, like in the EU, Russia applied regional model effective in the countries of the Eurasian Economic Union. From now on, the international principle comes on the scene. The Law will be effective by the end of 2022 with a possibility for further extension.

This newly introduced system has several nuances. First of all, it affects only some of goods that will be allowed for parallel import. The list of the “chosen ones”[2] includes digital devices, clothing, industrial and domestic equipment, cosmetics, raw materials etc. – 56 categories in total – and also names exact brands, such as Volvo, Tesla, Xbox, urban Decay, Electrolux, Dyson etc.

Another specific feature is flexibility. It seems that brands can pull out from the list if they guarantee direct import of goods or continuation of manufacture on local factories. For example, Nivea, Rexona, Vanish, Domestos, Cillit, Dosia, Tiret, Nescafe, Nespresso are said to have requested to exclude their brands from the list, while Siemens, BMW and Lego in contrast have joined the “club” after deciding to leave the market.

Several online retailers expressed an idea that parallel import should not be exclusive and that it would benefit the consumers and retailers if all categories of products were available for such import.

It is a good question indeed, whether parallel import is beneficial at all and to whom. On the one hand, it creates a more competitive market landscape, and consumers have access to the products they need. The original manufacturers also have revenue increase from sales in Russia even if no direct distribution takes place, which will compensate to a certain extent the financial losses caused by sanctions and logistic complications.

On the other hand, parallel import makes it more difficult for the manufacturers to control prices and stay competitive, regulate the quality of goods and block counterfeit, while for consumers it might be challenging to get warranty service and distinguish between original and counterfeited goods.

Under the current circumstances, the suggested model of selective and temporary parallel import aims to serve interests of the domestic market, local consumers and manufacturers of original goods. As for the drawbacks mainly consisting in expected flow of forged goods, there are several available and useful tools against infringements, such as constant monitoring of the market, sending CDLs, filing complaints with the marketplaces and entering trademarks into Customs Registries of the countries forming the Eurasian Economic Union.

[1] Federal Law N 213-Fz of June 28, 2022 “On amending Article 18 of the Federal Law “On amending certain legislative acts of the Russian Federation”

[2] The list was determined by the Decree of the Ministry of Industry and Trade No. 1532 of 19 April 2022

“Little pig, little pig, let me come in” – says the Big Bad Wolf; “No, not by the hair of my chinny chin chin” – answers the Little Pig, – “Then I will blow your house”, threatens the Wolf. Indeed, a notorious court decision taken on 2 March 2022 in Arbitration Court of the Kirov region of the Russian Federation, which threatened the interests of Peppa the Pig copyright and trademark owner, Entertainment One, was widely cited by mass media in a wave of speculations about the collapse of intellectual property in Russia.
Fortunately, as in the well-known fairy tale, the most recent appeal decision proves them wrong and the little pig won again. The hearing at the Second Court of Appeal took place in the city of Kirov on 21 June 2022 reversed the earlier first instance decision. The full text of the court decision has yet to be published.
Obviously, the initial decision was based on misreading and misinterpretation of the Presidential Decree “About application of special economic measures in connection with unfriendly actions of the United States of America and affiliated with them foreign states and international organizations” No. 79 of February 28, 2022.
The recent positive decision is one of many lawsuits against trademark and copyright infringement won by Entertainment One. There have been around 300 successful cases in the past years in Russia, which stopped the unauthorized use of popular cartoon characters and brought the company compensation reaching about EUR 500,000 in one case.