Keeping the right side of Rospatent's ban on misleading trademark transfers

6 minute read
30 September 2020

Trademarks are a valuable corporate asset and, as with any asset, one way to make money from it is to sell it. It therefore follows that the transfer of trademark rights is fairly common.

All transfers of registered IP rights must be in writing and recorded at the Russian Patent and Trademark Office (Rospatent).

Those involved in such transfers must be aware that under the Russian Civil Code, the assignment of an exclusive right to a trademark will not be allowed if it risks misleading consumers with regard to the goods or services provided. Rospatent assesses the likelihood of misleading consumers at the state registration stage of the trademark assignment.

Trademarks are proof of quality and source of origin. Their primary purpose is to help consumers obtain a product or service that they know and trust. In this context, the term ‘misleading’ denotes an undesirable situation where giving effect to the assignment of the right might lend a distorted impression about the product or service or its manufacturer that could influence consumer decisions.

When preparing a trademark assignment, applicants should consider whether the proposed assignment might be deemed by Rospatent to be misleading for consumers.

Common situations where there might be a potential to mislead

One common situation is when a mark reproduces the trade name (or individual elements thereof), the right to which is held by the party assigning the mark but retaining the right to the trade name. In this scenario, the competent agency should consider the degree of similarity between the mark and the trade name (in most cases this is the official name of the company, but can also include commercial names, which are the names of specific establishments that do not coincide with the company’s official name).

In order to overcome hurdles when registering an assignment, it is worth submitting clarifying documents. For example, an entity can submit confirmation that open source information extensively covers information on the acquisition of rights. Consumers are therefore informed of the assignment of rights to another party and the registration of the trademark assignment will not be misleading.

In the event that an element of a mark that is non-protectable and does not occupy a dominant position is identical or confusingly similar to a trade name, the trademark owner is entitled to make the necessary alterations to certain elements of the trademark (in particular, by cancelling these elements), without changing the essence of the mark. This approach can also be used for situations with marks that comprise commercial names, the rights to which are retained by the original owner, or non-protectable elements that are solely related to the trademark owner. These elements include the foundation date of manufacture, indication of the place of manufacture and information about awards.

The most common scenario is when the trademark to be assigned can be confused with one or more registered trademarks that continue to be held by the original owner. If the original owner wishes to assign a mark that is confusingly similar to other marks retained in its portfolio, it is unlikely that Rospatent would allow the assignment to proceed.

When designations include non-protectable elements, the trademark can be assigned to another party with the consent of the competent authority or an owner thereof. These elements include:

  • a national emblem or flag;
  • another state symbol, sign or emblem;
  • official state name, emblem or abbreviation;
  • full name of international and intergovernmental organisations;
  • formal control, warranty or assay mark, seal, award, and other insignia; or
  • a designation confusingly similar to these.

The registration of this type of transfer must be authorised by the relevant competent authority and/or agency in the name of a new owner, which is then submitted to Rospatent.

In the event that a trademark includes a designation that is identical or confusingly similar to the official names and images of the most valuable objects of Russian cultural heritage, objects of world cultural or natural heritage or images of cultural property kept in collections and funds, the trademark can be assigned by one party who has the owner’s consent to another party. When filing an application for registration of the trademark assignment, the owner’s consent must be provided.

In the event that a trademark includes a designation that indicates the place of manufacture or sale of goods and this designation is a non-protectable element of the trademark and the trademark is assigned to the party located in another geographic area, a party can submit documents evidencing business operations in this location (indicating that the manufacture of goods continues in the same territory or that raw materials for manufacturing goods labelled with the trademark are supplied from the same territory).

Further, the Civil Code contains a provision that prohibits the registration of an assignment of a trademark that comprises a geographical indication or appellation of origin even as a non-protectable element that enjoys legal protection in Russia, if the assignee holds no rights to such an indication or appellation. The assignment of the trademark comprising these elements may mislead consumers with regard to the product or its manufacturer.

Therefore, the assignee of such a trademark is advised to consider in advance the possibility of acquiring the right to a geographical indication or appellation of origin.

The key takeaway to avoid unforeseen obstacles associated with the acquisition or disposition of a registered trademark is to evaluate whether, at the time of assignment recordal, Rospatent would deem there to be a risk of misleading consumers.

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