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The Russian IP Court supports Coca-Cola claim to cancel TM registration of its mala fide competitor

The Coca-Cola Company holds and protects rights for its trademarks “FANTA” and “COCA COLA” all over the world since 60-70s. The popular drinks are sold under these trademarks in many jurisdictions and are not only well recognizable but also immiscible for its taste.

Not surprisingly, among the company’s many competitors some are trying to abuse its fame.

AquaLife (Drinks from Chernogolovka; hereinafter – Chernogolovka) is an affluent Russian company producing non-alcoholic beverages since early 2010-s. In 2019 AquaLife (Chernogolovka) registered in Russia a trademark “FANTOLA”. In 2022 “FANTOLA” has been granted protection in Russia another time with a broader list of Nice classes and in both Latin and Cyrillic. It looked like AquaLife (Chernogolovka) was successfully expanding its “FANTOLA” business. But doesn’t the word “FANTOLA” remind us of something?

Concerned by “FANTOLA”’s rapid expansion, The Coca-Cola Co. grew suspicious about the very originality of this brand. As “FANTOLA” clearly sounded like “FANTA” and “COLA” combined, The Coca-Cola Co. decided to oppose the registration referring to its prior rights for “FANTA”. After the application for registration of “FANTOLA” designation with expanded list of goods was filed by AquaLife (Chernogolovka) in 2021, The Coca-Cola Co. filed with the Russian Patent Office (Rospatent) an opposition against the initial registration. In 2022 Rospatent declined the objection stating that “FANTOLA” has more letters and syllables what makes it distinguishable from “FANTA”. Apart from that, Rospatent stated that the results of sociological research in relation to the likeness of “FANTA” and “FANTOLA” are quite controversial.

Unsatisfied by Rospatent’s decision, The Coca-Cola Company appealed the decision at the Russian IP-court. The lawsuit was filed on 15 April 2022 – it is remarkable that a month later Russian government would publish the updated Unfriendly Countries List that would include the USA. Despite the fact that the plaintiff’s origin country was the USA, the case was accepted and considered as per usual (ID: CIP-353/2022). The plaintiff explained to the court that “FANTA” and “FANTOLA” look and sound too similar, so there is a risk of confusion among customers. The Coca-Cola Co. also asked court to take into account that both the Coca Cola Company and its trademark have been widely known in Russia for many years.

The IP Court shared the plaintiff’s opinion and satisfied The Coca-Cola Co.’s claim: on 17 October 2022 Rospatent’s rejection was recognized as illegal. Rospatent was obliged to reconsider the opposition filed by The Coca-Cola Company. Patentica’s lawyers Alexander Timofeev and Yury Bondarev strongly believe this IP court decision is crucial to drive out the “FANTOLA” trademark from the Russian market. The success of the Coca-Cola case is just one bright illustration of many cases involving foreign companies that maintain and protect its intellectual property in Russia.

The above described case developments in the Russian IP-Court clearly demonstrate that the IP legal system in Russia supports the brand owners with no regards of their country of origin contrary to some of the press materials dedicated to the issue of foreign brands in today’s Russia’s legal environment. For example, some journalists claimed that “courts show little sympathy for firms that depart” and that companies face “flip-flopping court rulings”. They also claimed, “Coca-Cola has so far largely failed to have a Russian judge take its side in cases against … competitors with nearly identical names, such as “Fantola”. Well, keeping in mind the results of the case CIP-353/2022, we may definitely say, the legal system in Russia stands firm and fair for international brand owners and their trademarks.

As professional IP attorneys we at Patentica will monitor and keep you posted on the very recent court practice in Russia and the Eurasian region to provide you with a trustable and reliable information.

Parallel import is NOT for counterfeit goods, stated the Head of Rospatent and proved the recent Court decisions in Russia

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 Managing Partner to speak at the Panel during London IP Week in September 2022

Ms. Maria Nilova (Managing Partner; Eurasian and Russian Patent attorney), Ms. Elena Dmitrenko (Partner, Russian and Eurasian Patent attorney) and Ms. Julia Malinina (Russian and Eurasian Patent expert) are excited to join their colleagues during London IP Week – a three-day intellectual property summit.

Ms. Nilova is also delighted to be among speakers in a discussion on how digitizing IP management or IP services can lower costs and increase value. Participate in the conversation that will take place on September, 20 by visiting the Panel “It’s not bragging if it is true”. If you have any other questions, please feel free to schedule a meeting with Ms. Nilova, Ms. Dmitrenko and Ms. Malinina on 19-21 September 2022 by sending an email to info@patentica.com.

IP week is a great opportunity to discuss the most topical IP trends and meet with the IP professionals from all over the world in London.

Maria Nilova, Managing Partner of Patentica, will be attending AIPPI World Congress in San Francisco, September 10-13, 2022

Patentica’s Managing Partner, Maria Nilova (Eurasian and Russian Patent Attorney) will be attending the AIPPI World Congress in San Francisco, September 10-13, 2022 and is looking forward to meet in person colleagues and friends and use the opportunity to discuss the latest IP news in various jurisdictions.

If you have any questions related to IP or if you wish to schedule a meeting with Ms. Nilova on the dates from 9 to 13 September 2022 in San Francisco, please contact us by email at info@patentica.com

Patentica is attending the World Intellectual Property Forum on October 10-12, 2022 in Bangkok, Thailand

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

Patentica’s Delegation to attend APAA Council Meeting, October 15-18, 2022 in Busan

Patentica’s delegates Dr. Vadim Chagin (Partner, Russian and Eurasian Patent Attorney) and Ms. Olga Gribanova (Partner, Head of the Trademark Department, Trademark Attorney) are looking forward to attending the Annual Asian Patent Attorneys Association Council Meeting that will be held on October 15-18, 2022 in Busan, South Korea.

This will be the first in-person APAA meeting since the pandemics and we are delighted to have this opportunity to reconnect with our colleagues and establish new ties.

To schedule a meeting with our delegates during the conference, please contact us at info@patentica.com or send an email directly to Olga (olga.gribanova@patentica.com ) or Vadim (vadim.chagin@patentica.com).

See you in Busan!

We are at Marques, September 20-23, 2022, Madrid

36th Annual Marques Conference to be held on September 20-23, 2022 in Madrid will be attended by Patentica’s Trademark Attorney Ms. Marina Karaldina. Marina will be delighted to celebrate marks with colleagues, discuss the topics from the conference agenda as well as other rising IP related matters.

Please feel free to contact us with any questions or schedule a meeting with our delegate at info@patentica.com. You can also address Marina by email at marina.karaldina@patentica.com.

We will be happy to see you in Madrid!

Online marketplace turns to a safer environment

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”

The intrigue of parallel import in Russia: what’s wrong?

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 Peppa the Pig wins notorious IP case in Russia

“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.