Fighting against unauthorised trademark use in Russia

While the protection, maintenance, and enforcement of IP are unaffected by sanctions, Russia's invasion of Ukraine has had an impact on exclusive IP rights for foreign owners, says Riikka Palmos of Papula-Nevinpat.

Despite rumours of the possible nationalisation or expropriation of IP rights, no significant restrictions have been implemented. The protection, maintenance, and enforcement of IP rights continue as normal.

Both the Patent Office and the courts issue legal decisions, and, at least for now, no discrimination based on the nationality of the right holders has occurred before the authorities.

Outside the scope of the law, local operators and former dealers/contract partners are frustrated with the situation where foreign companies that exited Russia have left behind unemployment and business losses. This has led to questionable measures to preserve businesses.

Use without permission

Following the exit of many foreign companies from Russia, retailers and former partners have continued using trademarks despite ending their cooperation and despite the prohibition of such use. For example, former distributors have continued marketing and selling their products under the trademark of their former partners. Additionally, other local operators are attempting to take advantage of the situation by using trademarks of foreign companies without permission.

There are also other means of misusing foreign trademarks. Some local operators attempt to capitalise on the strong brands of foreign rights holders by creating associations between their own brands and those of foreign companies. These operators often use similar advertising, product placement, and misleading references to the international nature of their brand.

However, the trademarks they use are usually different from those of the foreign companies. Consequently, in such circumstances, local operators are not directly infringing on any prior trademark rights. Instead, this misleading marketing and unfair conduct fall under the competence of the Anti-Monopoly Committee, which is the competition authority in Russia.

"Other local operators are attempting to take advantage of the situation by using trademarks of foreign companies without permission."

To bring such cases under consideration by the Anti-Monopoly Committee, the actions should be regarded as competitive, meaning that both parties must be present in the market in a competitive situation. For companies that have exited Russia, this significantly limits the measures and possibilities for intervention against such actions.

In clear trademark infringement cases, all legal remedies, such as sending a warning letter and filing an infringement action, are still available. In many instances, sending the warning letter has led to peaceful negotiations and ultimately to an amicable resolution of the dispute. However, not everyone is fortunate, and some infringement claims end up being evaluated by the court.

Case Bosch

While numerous foreign companies have withdrawn from Russia, there remain those who are dedicated to safeguarding and defending their intellectual property. A noteworthy contender in this endeavour is Robert Bosch (Bosch). Despite having closed its Russian factories and ceased deliveries to the country, Bosch’s products continue to circulate within the Russian market. Among these goods, some are original parallel imports, which Bosch is unable to contest based on current legislation, while others are straightforward counterfeits.

The exit of Bosch from the Russian market has triggered an uptick in the import of both authentic and counterfeit Bosch products. As a response to sanctions, Russia has permitted the parallel import of specific original goods, aiming to ensure the availability of products from companies that have exited the Russian market. Bosch is one of the companies whose products can currently be imported into Russia without the right holder’s permission. However, this fact does not deter Bosch from fighting against counterfeit goods.

As a response to the situation, Bosch has filed nearly 100 infringement claims against various defendants this year, including individuals and companies such as car dealerships and spare parts sellers. These claims centre around trademark infringement, involving the unauthorised use of Bosch’s trademarked branding on products. The objective is not only to recover compensation in these cases but also to eliminate counterfeit goods from the market.

Many of Bosch’s cases involving obvious counterfeit goods are resolved through summary judgment, indicating settlements in favour of Bosch without a full trial, with many still pending. It’s evident that Bosch’s legal actions aim to maintain control over its trademarked brand and prevent unauthorised sales of counterfeit products bearing its name, even after it has left
the country.

The situation described above effectively portrays the present IP landscape in Russia—while there has been a rise in unauthorised use of trademarks, the defence of rights and efforts to combat counterfeiting remain effective.

Riikka Palmos is senior partner at Papula-Nevinpat. She can be contacted at: riikka.palmos@papula-nevinpat.com