Authors

Louise Popple

Senior Professional Support Lawyer

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Ina Kamps, M.A.

Knowledge Management Lawyer

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Alina Krukover

Knowledge Management Lawyer

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Authors

Louise Popple

Senior Professional Support Lawyer

Read More

Ina Kamps, M.A.

Knowledge Management Lawyer

Read More

Alina Krukover

Knowledge Management Lawyer

Read More

3 May 2022

Brands Update - May 2022 – 2 of 5 Insights

Russia and Ukraine: important developments for brand owners

  • Briefing

There have been important developments arising from the conflict in the Ukraine which may impact brand owners.

What has happened?

  • A law has been passed which would allow the Russian government to suspend IP rights (including trade mark rights) in Russia for certain goods/groups of goods. However, no list of goods has yet been published.
  • Nonetheless, the Russian government has issued a regulation under the new law to allow the import into Russia of certain goods without the consent of rights holders (parallel imports). A list of goods affected by this particular regulation was published on 6 May 2022. 
  • The decision of the Russian arbitration court to dismiss a case for unlawful use of various Peppa Pig trade marks because the Claimant was based in the UK appears to be a one-off.
  • A number of applications have been filed in Russia for well-known trade marks that appear to conflict with the rights of their owners. It is not yet clear how the Russian Trade Mark Office will deal with these applications and any oppositions filed. We are monitoring the position. 
  • The EUIPO has granted a further extension of deadlines to parties having their residence or registered office in the Ukraine.
  • The Russian government has determined that compensation for patentees "associated" with "non-friendly states" will be reduced to zero in the case of compulsory licences. This does not extend to trade marks or designs.

Want to know more?

 

Suspension of IP rights in Russia 

On 8 March 2022, Russia adopted Law No. 46-FZ "On Amendments to Certain Legal Acts of the Russian Federation". The new law contains 22 articles and amends numerous existing legal provisions (including provisions relating to construction, financial and company law). The 'stated' aim of the law is to avoid bottlenecks arising from economic sanctions. Under Article 18 No. 13 of the law, the Russian government is entitled to determine a list of goods or groups of goods for which individual provisions of the Civil Code on Industrial Property are suspended. This expressly includes provisions of the Code relating to trade marks.

A list of goods does not appear to have been published yet. Nonetheless, on 29 March 2022, the Russian government issued a regulation under Article 18 No. 13 to allow the import of goods into Russia without the consent of rights holders (parallel imports). According to Prime Minister Mikhail Mishustin, the purpose of this provision is to satisfy the demand for goods containing the results of intellectual activity.

A list of the goods affected by this particular provision was published on 6 May 2022 and entered into force on 7 May 2022. It includes various chemicals, pharmaceutical products, soaps, articles made of paper, textiles, metal products, electrical machinery, vehicles (including car spare parts), furniture, toys and games. Specific brands are cited against each product category. IP owners should carefully review the list. Note that action can still potentially be taken to prevent counterfeit/fake goods being imported into Russia by registering IP rights on the Russian Customs IP Register (which is possible if the applicant has encountered counterfeit/fake goods in Russia previously).

The "Peppa Pig" decision: No trade mark infringement due to "misuse of rights"

The decision of a Russian arbitration court on 2 March 2022 in the "Peppa Pig" case has caused concern, especially among trade mark owners. (See Entertainment One UK Limited v. Ivan Vladimirovich Kozhevnikov, Arbitration Court of Kirov, Case No. A28-11930/2021.)

A claim for compensation for unlawful use of images from the "Peppa Pig" series by the owner of various "Peppa Pig" trade marks was dismissed without further consideration for the sole reason that the claimant is based in the UK. In his judgement, the judge pointed out that Western countries, including the UK, had already taken restrictive measures against Russia (even though a list of "non-friendly states" had not yet been published). In his view, this was of precedential importance for the present case. He based his decision on Article 10.1 of the Russian Civil Code, which prohibits (1) the exercise of rights with the aim of causing harm to another (legal) person, (2) circumvention of the law with an unlawful aim, and (3) other abuse of rights. Since its seat was in the UK (which had directed sanctions against Russia), the Claimant's actions in defending its IP rights were held to be an abuse of rights. The judge therefore dismissed the claim.

The judge also relied upon Presidential Decree No. 79 of 28 February 2022 "On the Application of Special Economic Measures in Connection with Unfriendly Acts by the United States of America and Associated Foreign States and International Organisations". However, this decree regulates the sale of foreign currency and imposes restrictions on share trading with foreigners. It does not mention IP rights.

Although this case has caused concern, it appears to be the only decision by a court to the detriment of trade mark owners from "non-friendly states" so far. We will continue to follow developments closely.

Applications for well-known trade marks by Russian applicants

There are reports that Russian persons and companies are filing applications for well-known trade marks at the Russian Trademark Office (Rospatent). Since mid-March, Rospatent has received more than 50 applications for trade marks that appear to conflict with the rights of well-known Western trade marks. Among those affected are Apple, Coca-Cola, McDonalds, and IKEA. It is not yet clear how the Russian Trademark Office will deal with these applications and any oppositions filed. We will continue closely to monitor the position.

Trade mark offices and extensions of time 

The USPTO has stated that it has ceased cooperation with Rospatent and the Eurasian Patent Organisation (EAPO). Until recently, US sanctions had also meant that US-based IP owners could not undertake certain IP-related transactions in Russia. However, since 5 May 2022, the US has authorized certain transactions, including the filing and prosecution of any application to obtain a patent, trade mark or copyright, the payment of any renewal and maintenance fees, and the filing and prosecution of any opposition or infringement proceeding. 

The EUIPO has also ceased cooperation with Rospatent the EAPO and granted a further automatic extension of all time limits for all parties in proceedings before the Office having their residence or registered office in the Ukraine. The two-month extension extends all time limits expiring between 1 April 2022 and 1 June 2022 (inclusive) to 2 June 2022.

Meanwhile, both the Ukrainian (Ukrpatent) and Russian (Rospatent) trade mark offices continue to operate "normally", except that it is currently not possible to send or receive original documents in paper form to Ukrpatent. The online filing system is still in operation and official fees can still be paid. Rospatent has also stated that work on international/ Madrid applications is proceeding as usual despite the lack of co-operation between it and the USPTO and EUIPO.

Reduction of compensation for patentees in compulsory licences 

By order of 6 March 2022, the Russian government determined that compensation for patentees "associated" with "non-friendly states" will be reduced to zero in the case of compulsory licences. This change was already possible under the Russian Civil Code and will particularly affect patentees who are nationals of or registered in, have significant economic activities in, or predominantly derive their income in non-friendly states. "Non-friendly states" include all EU member states and the UK. This regulation explicitly applies only to patent holders and therefore does not affect trade mark or design rights.

You can find more on the legal implications of the conflict in Ukraine on our dedicated page

In this series

Brands & advertising

Brands Update

Briefing

by Multiple authors

Brands & advertising

Russia and Ukraine: important developments for brand owners

Briefing

by Multiple authors

Brands & advertising

Further changes to unfair competition laws in Germany

In-depth analysis

by Multiple authors

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