Preventing early termination of Russian registered marks

There appears to be a new trend in Russian case law concerning claims for the early termination of registered marks or Nice Classification classes due to non-use. Such claims are increasingly on the rise in Russia.

Pursuant to Article 1486 of the Civil Code, a registered trademark can be terminated upon a court order if the rights holder fails to use it within three years of registration. If an interested party claims that a mark should be terminated for non-use, the rights holder has the burden of proving that it has used the mark directly or that the mark was used by a third party under its supervision.

This trend could well become a serious issue for international companies that have their corporate structures in various jurisdictions, but transfer all of their Russian IP rights to a separate vehicle in a foreign jurisdiction. In particular, companies might find themselves vulnerable where such a vehicle is not involved in the actual shipping of goods to Russia (which could be carried out by other companies in the group) or has no direct contractual arrangements (eg, licence or distribution agreements, along with supporting documentation) with the Russian distributors.

In such cases the process of proving the ‘use’ element might become extremely complicated, time consuming and expensive – in particular when it comes to proving that the trademark is used by the rights holder or by an entity under its control.

The absence of any legal relationship between an entity which uses a trademark in Russia and the rights holder could lead to a significant risk of the latter losing its Russian trademark due to non-use.

In order to avoid this, foreign companies doing business in Russia should check and, if necessary, reconsider their IP rights protection strategy in Russia.

Similar issues may arise with respect to losing protection for particular classes of goods under the Nice Classification, rather than the entire trademark.

Often, companies reserve as many Nice Classification classes as possible for a registered trademark. Subsequently, many of these classes are not used because the rights holder simply does not manufacture such products or has no commercial interest in selling or distributing such products in Russia.

Interested persons may also file claims seeking to terminate protection of a trademark in part (ie, for a particular class of goods under the Nice Classification). In such cases, the burden of proof will again rest with the rights holder. If the rights holder cannot produce evidence that it is using the trademarks at issue for a disputed class of goods under the Nice Classification, the court will terminate the trademark in part with respect to that class of goods.