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29 June 2022TrademarksNatalia Gulyaeva

Russia: ‘Waves of applications for confusingly similar TMs’

In the early days of Russia’s invasion of Ukraine, the West imposed more than 10,000 sanctions on Russia, and hundreds of global brands began withdrawing from the country.

Meanwhile, the Kremlin amended its civil code to allow the use of patented inventions from “unfriendly countries” without seeking permission from the owner or paying any compensation.

And, as of today—June 29—Russia has amended its trademark law to open up applications to any individual.

Natalia Gulyaeva is managing partner at Hogan Lovells’ London practice. She is admitted for practice in Russia as well as England and Wales.

Gulyaeva spoke with WIPR about the current situation in the country for IP protection, and professionals working in the field, under recent legislative changes.

What is the IP situation in Russia right now?

The Russian patent and trademark office (Rospatent) and Russian courts continue to act as usual in terms of IP prosecution and enforcement. Still, IP protection does not remain untouched by the recent developments in Russian law.

Among the most important changes are the legalisation of parallel import for certain categories of goods and brands; and the restrictions of IP-related payments to IP owners from so-called ‘non-friendly’ jurisdictions, as well as the so-called ‘free use’ of IP which belongs to owners from ‘non-friendly’ jurisdictions.

This latter rule, though, only refers to compulsory licences that were granted based on governmental decisions and which had an exceptional application. So Russian IP law does not allow by default the free use of IP.

There are draft laws prohibiting the unilateral termination of IP contracts with Russian licensees by foreign IP owners without a cause, but these draft laws are far from being adopted.

Of course, foreign IP owners need to navigate all of the applicable sanctions regimes, which is a challenge. But for now, we see that this task is manageable with the support of experienced sanctions and IP teams.

What are the main issues and challenges for Russian IP lawyers?

We see attempts by parties to refer to the opponent’s residence in a ‘non-friendly’ jurisdiction as a justification for non-authorised use of IP, or failure to pay a licence fee, but the courts generally do not support this approach since it contradicts Russian law.

While we are aware of an unreasonably broad interpretation of recent laws, we see such decisions being overturned in the court of appeal. For example, the first instance court decision for the Peppa Pig case, where the court said that the rights holder claim does not have substance as the rights holder originates from an ‘unfriendly’ jurisdiction. However, this decision was overruled by the appeal court.

The massive exit of foreign brands from Russia poses another risk—the risk of claims for non-use, which must be carefully assessed and managed.

We have seen several waves of trademark applications for registration of designations that are confusingly similar to existing well-known trademarks, probably with the hope that the IP prosecution regime will cease to exist for foreign IP owners.

The latter is not the case, and Rospatent made a public statement that filing a TM application and its acceptance based on compliance with formal requirements does not mean that the protection will be granted.

Simultaneously, the latest amendment to Russian trademark law will allow any person (not only individual entrepreneurs and legal entities as before) to file trademark applications and to obtain trademark registrations.

As such, there is a risk that there will be an increase in the number of inexperienced users of the Russian trademark prosecution system and, therefore, an increase in the number of potential conflicts between existing trademark rightsholders and new applicants.

How do you see the future of the IP landscape, and therefore the scope for innovation, in Russia, given the situation?

We would expect that for those businesses who suspended or terminated their activities in Russia, the core goal will be to ensure that their IP remains properly protected in Russia.

For those who remain in the market, the major challenge will be to adjust their business to cope with parallel imports and make sure that they are properly remunerated by third parties using their IP.

In the current situation, the scope of innovations brought by foreign companies will unlikely increase, and we expect foreign companies to focus merely on the protection and maintenance of their existing rights.

Natalia Gulyaeva is a partner at Hogan Lovells. She can be contacted at: natalia.gulyaeva@hoganlovells.com

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26 May 2022   Russia’s disregard of IP owned by ‘unfriendly’ countries will leave its people unsatisfied, say Anton Koval and Valeriya Sokolova of Doubinsky & Osharova in Ukraine.
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