A trademark and unfair competition. Examples of the Russian practice

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Nowadays none can be surprised when speaking about intellectual property protection. But what exactly is protected and in what way does the legal mechanism work? And the question asked by many skeptics is whether it works in general?

It does work. And the practice picks up speed.

A “Find 10 distinctions” game.

There are many examples of imitations and counterfeit of trademarks, especially in the sphere of consumer goods. When analyzing the practice one may notice that the most vulnerable are both names and labels (packing) on the whole. Trademarks collisions and brand wars occur in quite different fields and with trademarks different in size and fame nowadays.

But nevertheless, enterprising producers still stick to a stereotype that while playing a “find 10 distinctions” game, adding or changing some inessential elements in the name or design of packing they may create imitations of well-known trademarks without being punished.

Let’s talk about this another time

First of all, inevitability of punishment depends on vulnerability of the very brand. It should be mentioned that a forgery good will be considered as infringing merchandise only when there is breach of grantee of trademark (patent) rights. No trademark rights, no infringement.

The Russian legislation provides a triad of responsibility: administrative, civil and criminal and the one for infringement in the sphere of intellectual property.

Trademarks are protected in different ways nowadays. Let’s discuss one of them. As a rule, either the way of arbitration or criminal prosecution is chosen as the situation requires. In both cases consequences are quite serious for the lawbreaker. However, in a number of cases the most efficient and primary action, especially in case of unfair competition, is applying to administrative practice. In this case applying to the Federal Antimonopoly Service.

We will give the last example from our own practice. The company “Essen production AG”, which interests are represented by Artpatent agency, having discovered an imitation of its product, “Makheev” trademark, in the market efficiently responded to the appearance of such a “twin”.

In August mayonnaise that was obviously similar to the well-known brand “Makheev” appeared on the counters. The producer of the imitation is “Happy times”. A limited liability company.

Such a “marketing” move of the competitors, of course, was not set aside from the direction of the “Makheev” brand owner. A notice of infringement of the Antimonopoly Law was submitted to the Federal Antimonopoly Service Department of the Republic of Tatarstan. It should be mentioned that under Article 14 of the Federal Law “Of competition protection” unfair competition is not allowed, including:

Confusion with respect to the character, means and place of production, consumer characteristics, quality and quantity of goods or with respect to its producers;
Sale, exchange or another introduction of goods if at the same time the results of intellectual activities and equated with it means of legal entity’s individualization, means of production, work, services individualization were used illegally.

Thus, what do we have in the given case?
The activities of “Happy times” were declared to be illegal according to two arguments: confusing consumers and illegal use of the trademark.

The fame and popularity of the trademark and at the same time recognizability of the packing raise no doubts, and it was confirmed by numerous facts. The actual confusing of consumers was confirmed by carried out consumer inquiry of potential customers. According to the conclusion of the mentioned report the overwhelming majority of the questioned consumers took the production of “Happy times” limited liability company for the goods of “Makheev” trademark.

As regards the use of the very trademark, the regulations of the “Law of the Russian Federation on Trademarks, Service Marks and Appellations of Origin of Goods” provide for considering infringement as the use of not only an identical (analogous) but also similar mark (word, figurative). In order to define “confusing similarity” an expert is usually interested in it, generally, a Patent Attorney of the Russian Federation.

On demand of the Federal Antimonopoly Service Department of the Republic of Tatarstan the given labels were examined for the purpose of finding similarity to “Makheev” trademarks. In the expert’s statement it was said that obvious similarity existed, the names and labels had “general contents”, and represented the “common body against contrasting beige background”. Old Russian way and style of writing were also similar. Besides, the label is similar as a whole, the still life coincides in details in the center where a lemon is situated.

Following legal investigation the commission of the Federal Antimonopoly Service Department declared the abovementioned activities of “Happy times” limited liability company to be illegal and have caused material damage and damage of business reputation to the declarant, owing to this they were considered to be an act of unfair competition.

On the grounds of the accepted decision of the Federal Antimonopoly Service Department of the Republic of Tatarstan an order concerning “Happy times” limited liability company and discontinuation of the indicated label use for individualization of the given production was pronounced on September 5, 2007. A fine at the rate of 500 thousand rubles will be imposed as well.

Administrative responsibility certainly does not presuppose recovering losses to the offended party. Such damages can be awarded only when applying to arbitration. It should be mentioned that the Law presupposes payment of compensation up to 5 million rubles within the limits of bringing to civil responsibility.

The measures of administrative responsibility are not so drastic as the one of the criminal responsibility where under Article 180 of the Criminal Code of the Russian Federation maximum punishment of up to 6 years of imprisonment is provided.

But in such cases similar legal investigation carried out by the Federal Antimonopoly Service owing to possible efficiency and effectiveness is a very important and immediate step. First of all, it is an obtained prohibition of use and a fine. When not observing the obtained order the infringer will face the prospect of additional serious fines. Besides, the accepted favourable decision of the Federal Antimonopoly Service will underlie the further writs and applications to both courts and law machinery, considerably improving the further prosecution of the legal rights of the trademark owner.