When trademarks and company names clash

Vladimir Biriulin of Gorodissky & Partners explains how Russia’s court system effectively deals with trademark disputes

The tug of war between the trademark and the company name is a conflict that occasionally surfaces. It was not until 2002 when the law seemingly introduced clarity in the issue. It stated that credit should be given to the name that emerged earlier. But controversies in this area still crop up once in awhile.

A trademark, ‘Delta-Neft’ (‘Delta-Oil’, No 281426) was registered by Agronefteproduct on 25 January 2005 with priority of 27 March 2003 for fuels and other goods and services. Aside from the above word combination, it also had a simple triangular orange figure with a concave base.

‘Delta LLC’ was registered in 1999 and its namesake is engaged in the construction and operation of gas stations and similar structures. Years later, Delta LLC filed an opposition against the registration of the trademark ‘Delta-Neft’. Russia’s Federal Service for Intellectual Property, better known as Rospatent, did not satisfy the opposition and kept the trademark in force. It proceeded from the fact that even though the word ‘neft’ (oil) per se is not eligible for protection, its presence in the trademark brings some additional distinguishing capability. The compared designations are not similar on the whole because there are additional word and graphic elements. Since registration of the trademark was made before 2008 (the year of adoption of Part IV of the Civil Code), the case was considered according to the Trademark Law of 2002, which included the seniority provision of trademarks and company names.

Delta LLC did not agree with the decision of Rospatent and appealed against it in court. Delta LLC argued that the exclusive right for the company name containing the word element ‘delta’ emerged from 1999 while the priority date of the contested trademark was in 2003. The IP Court compared the designations and came to the conclusion that the word designations ‘Delta’ and ‘Delta-Neft’ are similar and are used on the same territory in respect of the same goods and services (sale of fuels and servicing of gas stations). It sent the case back to Rospatent, asking for a re-examination of the case with consideration for all circumstances, including additional evidence that had not been previously examined by Rospatent.

This time the owner of the trademark appealed against the judgment in the Presidium of the IP Court (cassation instance). The Presidium of the IP Court cancelled the judgement of the first instance IP Court and noted that the compared designations are not identical. They may be regarded as identical only if they coincide in all elements while the contested trademark includes the word element ‘neft’ (oil) and a graphic element absent in the company name. The court emphasised that the first instance court should have examined whether those means of individualisations were identical and not confusingly similar, as was opined by the first instance court.

Delta LLC did not agree with the conclusions of the Presidium of the IP Court and appealed against the judgement to the Division of Economic Disputes of the Supreme Court. Delta LLC relied on the information letter of the former Supreme Commercial Court, which had explained in 2007 that the use of not only an identical designation is unlawful, but so is the use of a confusingly similar designation by a third party. Article 10bis of the Paris Convention also forbids any action capable of misleading in any way.

The Division of Economic Disputes of the Supreme Court confirmed the conclusions of the Presidium of the IP Court in that a trademark may be cancelled if there is combination of three conditions:

(i) If there exist a means of individualisation with earlier priority;

(ii) The means of individualisation should be identical to the contested trademark; and

(iii) The means of individualisation should be registered in respect of the same goods and services. The court confirmed that only identity of means of individualisation should be taken into account.

However, it explained that the Presidium of the IP Court was not correct to conclude that the word designations ‘Delta’ and ‘Delta-Neft’ were not identical because there were additional word elements.

This conclusion was made in serious breach of the provisions of the material law. When comparing a combined trademark and a company name, the figurative part of the trademark should not be taken into account because the name of a company is always a word.

The first instance court correctly inferred that the word element ‘neft’(oil) in the contested trademark is not protected as such, the allegation that its presence in the trademark adds to its distinguishing capability is without base and is purely hypothetical.

The non-protected element ‘Neft’ points to a kind of goods, its use shall be allowed to all persons and this shall not be considered as infringement of anybody’s rights. Hence, the court of first instance correctly judged that the word element ‘delta’ of the contested trademark is identical to part of the ‘Delta’ company name. As a result the Division of Economic Disputes of the Supreme Court cancelled the judgements of the lower courts and held valid the judgement of the first instance court, cancelling the trademark ‘Delta-Neft’.

This case clearly shows that the carefully built court system in Russia allows conflicting parties to obtain an unbiased judgement in the long run.

It may take time and the case may take different turns, but the parties may be sure that all aspects of their case will be carefully considered and an objective decision will be taken.
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