Defensive trademarks as a proactive anti-counterfeiting strategy in Russia
Fighting against sophisticated counterfeiters in 21th century is about a healthy balance between the sufficient level of protection and the downsides of maintaining an expanded trademark portfolio. The article provides an overview of the defensive trademarks concept from the anti-counterfeiting perspective with a focus on the Russian legislation and practice.
Definition of “defensive trademarks” in Russia and their main functions
Unlike some jurisdictions having defensive trademarks as a formal law concept, the Russian legislation does not contain the term “defensive trademarks”. In practice, the concept of defensive trademarks usually refers to the following designations:
- registrations for goods and services in non-core classes;
- registrations of trademark variations.
The first type normally includes brands registered in respect to a broad range of goods and services, including positions that are not actually produced by the brand owner. For example, Chanel SARL has an international registration for CHANEL covering almost the whole range of goods and services. Spartak football club from Moscow owns a very extensive national registration for its name. The Coca-Cola Company obtained multiple trademark registrations for both Coca-Cola and Coke in various classes.
The second type relates to the famous brands having variations of pronunciation, localized or even informal versions of the brand. For instance, H & M Hennes & Mauritz AB has a registration for 
covering its local variations. The Procter & Gamble Company along with the commonly used in Russia designation 
also maintains another version of its popular household chemistry brand 
. The same strategy is used by PepsiCo, Inc. having both options of pronunciation of its key brand ПЭПСИ and ПЕПСИ covered by trademark protection in Russia. Normally, the brand owner actually uses one “official” version of the brand name reserving the others as defensive trademarks.
Major brand owners tend to use defensive trademarks as part of their strategy of intellectual property protection. Such trademarks serve as a shield against the following risks:
- bad-faith trademark applications by third parties;
- dilution of the brand;
- counterfeiting and related brand protection threats.
Counterfeits and the Russian market
Counteferfeiting continues triggering brand owners worldwide. This issue is especially important in Russia due to its large consumer market and recent supply challenges affecting some product categories and brands.
Counterfeiting leads to financial losses declining the interest of consumers in authentic goods. The brand owner’s local licensees feel significant pressure when cheaper counterfeits capture the market. Counterfeiting may also cause significant reputational damage when it comes to fakes being inconsistent with the brand owner’s quality standards.
As an enforcement mechanism combating counterfeits is usually a straightforward procedure. Fake Nike sneakers, Tom Ford perfumes or Mercedes replacement parts can be easily confiscated and destroyed under a brand owner’s complaint.
Challenges in combating counterfeits
However, counterfeiters may stick popular brand labels on goods that are far from what the brand owner produces. These are just several examples that the authors faced in their practice:
- cigarette lighters with emblems of widely known automotive manufacturers;
- tableware containing designation owned by a famous apparel and accessories brand;
- beer marked with designation confusingly similar to a popular social media brand;
- cakes and biscuits bearing characters of a famous TV series.
Enforcement in situations similar to the above maybe complicated if a brand owner has no trademark protection covering respective non-core goods. If such goods are identified in the internal market, the brand owner would not be in position to take an immediate court action against their sellers. If the counterfeit goods are identified during customs control, they would be simply released.
Advantages and disadvantages of “defensive” trademarks
Indeed, defensive trademarks are certainly able to facilitate enforcement providing a ground for an action against counterfeiters. Fortunately for brand owners, the Russian legislation does not contain an explicit restriction on registering such trademarks.
It is important to note that a well-known trademark does not usually serve as an alternative when it comes to fighting counterfeits. While it is helpful for opposing third party applications, Russian courts often do not accept a well-known trademark as a ground for seizure of counterfeits in respect of non-core complimentary goods.
However, the advantages have a reverse side. The most obvious drawback of defensive trademarks is the cost for obtaining additional trademark registration and its maintenance within a huge brand portfolio. In Russia, state fees are imposed for registration of the trademark, its renewal, recordal of information about assignment or license agreements as well as recordal of any changes related to the trademark or its owner. Foreign brand owners also bear the costs of professional legal services associated with the above.
The second (but even more important) issue is vulnerability of defensive trademarks for non-use cancellation attacks. In accordance with the Article 1486 of the Russian Civil Code, a trademark may be terminated in relation to all goods or part of them due to non-use of the trademark continuously for three years.
The non-use cancellation proceedings are a full-scale litigation process in Russia. The action starts with a mandatory letter addressed to the trademark owner asking to withdraw or assign the trademark. The pre-trial stage is followed by filing of the non-use cancellation claim with the Russian Intellectual Property court.
The non-use cancellation cases usually have several hearings. The court often requires filing additional comments, explanations, legal positions, briefs of defense. Totally, the non-use cancellation process can take from 5 months to 1.5 years depending on the number of hearings. There could be a postponement for 6 months on serving the official court documents according to the Hague Convention.
To preserve the rights to the trademark brand owners must prove its actual use on their goods, including packaging and labels, while performing work or rendering services, on supporting documentation, in marketing activities and advertising materials, on the Internet. Russian courts are rather formal in accepting the evidence. It would be required to provide supply contracts, shipping documents, samples of goods, confirmation of payment transactions confirming sale of goods, certificates of conformity, evidence of marketing expenses. If the trademark is registered for solely defensive purposes, the brand owner would not be in position to provide the required use evidence.
A lack of the use evidence does not automatically mean that the court will decide in favor of trademark cancellation. The claimant under non-use proceedings, in its turn, should provide reasonable evidence of its interest in trademark cancellation. That may be an application for an identical or similar trademark, documents and materials proving the actual or projected use of the similar designation in commerce.
Such burden of proof allows the brand owner to avoid its defensive trademark cancelled accidentally by a random claimant. But, nevertheless, the non-use litigation appears to be an expensive and long process with an unclear outcome.
Conclusion
Defensive trademarks in Russia appear to be an important part of the brand protection strategy providing broader protection and preventing counterfeiting threats. However, the brand owners should stick to a balanced approach between the “all-inclusive” protection and the risks of non-use vulnerability along with the increased budget for trademark portfolio maintenance.
Given the above, it is important for the brand owner to conduct permanent monitoring of the counterfeiting activities with its brand on the particular market. Defensive trademarks may be needed once such monitoring reveals an actual counterfeiting activity concerning goods of non-core classes. Defensive trademarks become essential if the identified counterfeits have substandard quality and may affect the consumers health.
Maria Aronikova
Karina Skomorokhova
Semenov&Pevzner Law Firm
