What Can Be Dangerous Delay in Registration of a Trade Mark
As Jean-Noël Kapferer, Professor of Marketing Strategy at the HEC School of Management, rightly pointed out, a brand is a name that influences consumer behavior in the market. A brand not only allows you to distinguish between products from different manufacturers, but it also serves as a means of building a manufacturer's reputation. When consumers experience positive emotions from using a particular brand, they are more likely to return to that brand, recommend it to others, and leave positive reviews online. In the fashion industry, a well-known brand on a piece of clothing, especially with the new wave of "logomania," can make that item more desirable to millions of customers. It's no surprise that fashion houses invest so much effort and resources in promoting their brand and protecting it, including by registering it as a trade mark and preventing third parties from using it.
However, court cases have shown that not registering a brand as a trade mark in a timely manner is still one of the most common mistakes in intellectual property management. A recent case, which was also considered by the Court of Intellectual Property Rights (CIPR), is a clear example of this and serves as a warning for anyone who believes that registering a brand as a trade mark can wait.
Galina Olegovna Borisenko, a jewelry designer, created designer jewelry under the creative pseudonym GALA GALOLBO. The jewelry was available for sale on the website www.galolbo.com, as well as in the Moscow shopping centers Tsvetnoy and Lotte Plaza.
The GALOLBO designation was not registered as a trade mark, but after learning about the use of this designation by another person, M.A. Kostina, and considering these actions to be illegal, designer Borisenko filed a lawsuit with the Zamoskvoretsky District Court of Moscow.
While the case was still ongoing, the defendant went ahead and registered the designation GALOLBO as a trade mark in her own name, and then filed a countersuit with the Arbitration Court of the Moscow Region against designer Borisenko, making the following claims:
To prohibit the use of the designation GALOLBO, including in the domain name;
To withdraw from circulation and destroy all products marked with this designation;
To recover compensation in the amount of 500,000 rubles.
In the trial court, the case was heard without the participation of the designer Borisenko, and the court partially satisfied the claim, prohibiting the use of the disputed designation GALOLBO and awarding 300,000 rubles in compensation.
In the court of appeal, the case was reviewed, and the lower court's decision was overturned, and the claim was denied. The reason for the change in the decision was the arguments and evidence presented by the designer Borisenko, namely:
Galina Olegovna Borisenko is a well-known designer who has been creating handmade accessories and jewelry since 2005;
The GALOLBO designation is an abbreviation of the designer's full name in Latin (Galina Olegovna Borisenko), has been used since 2005, and is subject to copyright protection.
The domain name galolbo.com was registered in 2008 in the name of the designer Borisenko, long before the priority date of the trade mark on which Kostina M.A. bases her claims.
The Court of Appeal ruled that the designer Borisenko was legally using the GALOLBO designation in the domain name, and therefore the rights to the trade mark, which was registered after the domain name was registered, could not have been infringed. The Court of Appeal also found that Kostina M.A. acted unscrupulously by registering the GALOLBO designation, which became famous thanks to the efforts of designer Borisenko, as a trade mark in her own name.
However, this case was also reviewed by the Court of Intellectual Property Rights (CIPR) as a court of cassation. Despite the evidence of Kostina M.A.'s unscrupulous behavior, the CIPR upheld the decision of the first-instance court. This approach has been criticized in the academic literature. Nevertheless, the fact remains that designer Borisenko was unable to prove the good faith use of her brand in the domain name and lost the opportunity to use her key brand in commercial activities.
According to the data of the Rospatent database, the trade mark owner of GALOLBO is currently the designer Borisenko. In this case, it can be assumed that designer Borisenko had to not only pay the compensation awarded by the court, but also purchase the rights to the trade mark GALOLBO from Kostina M.A. in order to be able to continue using her key brand.
However, it is clear that taking the necessary steps to protect the GALOLBO brand in a timely manner and registering it as a trade mark would have saved the designer from the time and financial costs associated with legal disputes and trademark acquisition.
There are several lessons to be learned from this case.
1. Delaying trade mark registration is dangerous
It is important to register a brand as a trade mark before using it.
In the fashion industry, trade marks are usually registered for the name of a fashion house, logos, original slogans (for example, "Because You Deserve It," "JUST DO IT"), prints, the location of a specific design on a product (position-based trademark), the appearance of the product or its parts, and colors that have become associated with a specific manufacturer due to their extensive use (for example, the well-known turquoise color used by Tiffany and Co. It is protected as a color trade mark under RF Certificate No. 560852).
2. In the absence of a registered trade mark and in the presence of a lawsuit from a third party who has registered your brand as their trade mark, it is worth appealing to (non)good faith.
For example, the criteria for the good faith use of a designation in a domain name are set out in the Resolution of the Presidium of the Court for Intellectual Property Rights dated March 28, 2014, No. SP-21/4 "On Approval of a Reference on Issues Arising in the Consideration of Domain Name Disputes," which refers to the UDRP (Uniform Domain Name Dispute Resolution Policy).
"If the domain name administrator (defendant) proves the existence of one or more of the following circumstances, it may be grounds for denying the claims for the cancellation or transfer of the domain name registration to the plaintiff, for example:
(i) Prior to receiving the notice of the claim, the domain name administrator (defendant) used or was preparing to use the domain name or a name that is similar to the domain name in the claim for the purpose of providing goods and services in good faith;
(ii) the domain name administrator was widely known under the disputed domain name, even if the domain name administrator did not acquire the exclusive right to a trade mark that is identical or similar to the domain name to the extent of confusion;
(iii) the domain name administrator uses the domain name for legitimate non-commercial or other bona fide activities without the intention of misleading consumers or damaging the reputation of the plaintiff's trade mark".
We believe that these criteria can be used by analogy not only in domain disputes.
3. It is necessary to consider the possibility of terminating the legal protection of a third-party trade mark.
In the event that a third party has unscrupulously registered your brand as a trade mark in their own name, there are effective legal mechanisms for the cancellation of such registration.
In such a situation, you can file an objection with the Patent Disputes Chamber against the granting of legal protection to such a trade mark based on Part 3 of Article 1483 of the Civil Code of the Russian Federation, which prohibits the registration of trade marks that are false or misleading to consumers regarding the product or its manufacturer.
In this case, it is necessary to prove that the disputed designation has been intensively used by you for a long time and has gained some level of recognition among consumers in connection with your company, and therefore, its use by a third party would mislead consumers regarding the manufacturer of the goods.
As evidence of the intensity of use of the designation and its recognition among consumers, you can use advertising materials, information about advertising costs, information about sales numbers, sociological surveys, information about participation in exhibitions and fairs, and information about distributors and sales locations. It is also possible, for example, to submit to the court printouts of pages with search results for this designation in the largest search engines, of course, only if the first search results refer to you.
If a logo is registered as a trade mark, it is possible to consider the possibility of applying paragraphs 9 and 10 of Article 1483 of the Civil Code of the Russian Federation, which prohibit the registration of trade marks that are identical or similar to the point of confusion with other objects of copyright.
Another option is to file a complaint with an antitrust authority or a court, claiming that the registration of the disputed trade mark is unfair competition, which is prohibited by Article 14.4 of the Federal Law on Protection of Competition.
"Unfair competition related to the acquisition and use of exclusive rights to individualize a legal entity, goods, works, or services is prohibited".
However, despite the existing mechanisms for countering unfair trade mark registration by third parties, the most effective strategy is to register the brand as a trademark in one's own name in a timely manner. Moreover, the time and financial resources spent on registering a trade mark are significantly lower than the resources that would have to be spent on legal proceedings if the delay in registration led to its unfair registration by third parties.
The opinions expressed in this article are the author's personal views and may not coincide with the official position of Hogan Lovells CIS.