Russian Federation: There's Only One "Health Formula"

Last Updated: 16 January 2018
Article by Ekaterina Solonitsyna and Nikolay Roschupkin

Most Read Contributor in Russian Federation, August 2018

Russian law (Clause 6 of Article 1252 of the Civil Code) equally protects all means of individualization (trademarks and service marks, firm names, commercial designations). At the same time priority is given to those means of individualization the right to which emerged earlier. Although the wording is clear, in practice, sometimes one encounters difficulties in defending the rights to a particular means of individualization.

In one of such cases, experts of the Gorodissky branch office in Ekaterinburg represented the company providing medical services.

The company used the designation "Health Formula" (let us name it Health Formula No.1) as a company name in the provision of services: The company used this designation in advertising, in documents and on signboards for 10 years, but did not register a trademark.

In 2016, the company received a claim demanding it to stop illegal use of the trademark. As it turned out, this trademark belonged to another company. It included the verbal element "Health Formula" and was registered with respect to medical services: This company also had a company name "Health Formula" (let us name it Health Formula No.2).

This resulted in a situation where company Health Formula No.1 had a company name being identical to the company name of company Health Formula No.2 and confusingly similar to the trademark of the latter. The review of the claims of company Health Formula No.2 showed that the company name of company Health Formula No.1 had been registered earlier than the company name of company Health Formula No.2 and, consequently, prior to the date of priority of the trademark owned by the latter.

It would seem that the solution was obvious and the truth was supposed to be on the side of Health Formula No.1. However, it wasn't that easy.

It was seem enough to file a claim against company Health Formula No.2 demanding it to cancel its company name. However, aside from proving "similarity" of the activities of two companies there other unexpected difficulties emerged.

1. The relationship of means of individualization

Company Health Formula No.2 referred to the fact that in providing medical services, it did not use a company name, but a trademark with the word element "Health Formula", and, since the right to the trademark had not been questioned it was impossible to prohibit the use of these words.

Hence it is necessary to distinguish between the actions of trademark owner and those of the owner of the company name.

A company name and a trademark are different means of individualization.

A company name individualizes a legal entity and it operates under its corporate name. A trademark individualizes the goods (services).

The arguments of the company Health Formula No.2 that it did not use the company name, but the trademark contradict the law, because it operates under its company name regardless of anyone's opinion.

Thus in order to establish infringement of right for the company name the existence or absence of a trademark of company Health Formula No.2 did not matter.

2. Limitation of action

One of the complicated issues was the limitation period. Health Formula No.2 argued that the limitation of time expired. The company relied on the fact that the plaintiff could have become aware of the violation of his exclusive right to the company name from 2008 (the date of state registration of company Healthy Formula No.2) as well as from the date of entering information about the company in the Trade Register.

Health Formula No.2 actively promoted information about its activities, carried out a large-scale advertising campaign and actively posted information about itself on the Internet. So in the opinion of the company, Health Formula 1 could had learned about the existence of such an economic entity with the same name almost 10 years ago and therefore, the claim of Health Formula No.1 should be rejected for this reason.

It has to be said that the judicial practice is contradictory on this issue. On the one hand, courts sometimes reject the arguments of the parties about the expiry of the limitation period in the disputes on protection of right to any means of individualization because of the continuing nature of the offence.

On the other hand, the courts indicate that there are no exceptions in such cases in calculating the limitation period and general approach should be applied. Therefore, each particular case should be based on actual circumstances confirming or refuting arguments of the parties about the expiry of the limitation period.

In this case, the company Health Formula No.2 invoked expiry of the limitation period but did not take into account that according to Cl. 1 of Article 200 of the Civil Code the commencement of the period of limitation of actions is calculated from the day the person learned or should have learned about the violation of his right. The commencement of the limitation period depends on the circumstances by virtue of which the person applying for the defense had to learn about the violation of his right reliably, and not on when he hypothetically could do it.

It is assumed that the parties in civil relations must act in good faith when protecting their rights. The general rule of Article 10, p. 5 of the Civil Code assumes good faith of participants in civil relations and the rationality of their actions, until proven otherwise.

With respect to protection of the right to a company name, this means that:

  • Due to the presumption of good faith of participants in civil relations, a legal entity is assumed to carry out its activities without violating the right to means of individualization of other entities. Responsibility for the choice of means of individualization free from the rights of third parties, a company name in particular, rests with the subject of civil relations.
  • The law does oblige a party to continuously monitor any sources of information to search for indications of violation of its rights, because it is assumed that other participants in civil relations will use their civil rights in good faith.
  • Claims for suppressing violation of the right to a company name can be submitted only after the alleged infringer has commenced actual activity similar to the rights holder's (and not from the moment of making an entry on the establishment of a legal entity in the Trade Register.

In this case, the company Health Formula No.1 found out about violation of its right to the company name by the company Health Formula No.2 only after receiving a warning letter. Health Formula No.1 should not have known about the violation of its right to the company name earlier than the specified date. Therefore, it is impossible to talk about the expiry of the limitation period at the time of the claim for protection of the exclusive right to the company name.

3. Chances of misleading consumers

The company Health Formula No.2 stated that the plaintiff did not provide evidence that consumers had been misled about the subject of medical services. Besides, both companies entities carried out their activities in different territories.

The law indicates three aspects of illegal use of the right holder's company name by another person: first, the same designation or a confusingly similar designation; second, carrying out similar activities by legal entities; third, later registration of the company name of another person in the trade register.

Therefore, the right to a company name is subject to protection if all three aspects are evident. The absence of one of them makes it impossible to protect the right (CIP decision of 22 March 2017 in case N A40-71001 / 2016).

4. Similarity of activities in the consideration of disputes

According to provisions of Article 1474 of the Civil Code the performance of similar activities by a third party is one of the indications of unlawful use of a company name.

The Court found violation of Para 3 of Art. 1474 of the Civil Code In the case under consideration the respondent proposed to compare the particular services provided by him and the plaintiff, rather than the types of economic activity, but it was obvious that the concept of "similar activities" was a broader concept than "identical service".

According to the extract of the Trade Register, the company Health Formula No.1, declared "Healthcare Activities" as the main type of economic activity.

Consequently, the company has the right to prohibit any third parties to use their firm name (identical or confusingly similar) with respect to "health activities" if it actually carries out the declared activity; while such a prohibition will apply to any services that constitute this type of economic activity.

This type of activity can be represented by services with varying names and types (for example, a consultation by doctors, diagnostics, taking analysis, etc.), but all of them belong to the same activity – "healthcare activity".

Therefore, the subject of evidence in the case included establishing the fact that the services provided by the plaintiff and the respondent were referred to as "healthcare activities" or "medical activities", but not establishing "the identical nature of the services provided by these entities.

Thus, in this case it was proved that the company Health Formula No.1 and the company Health Formula No.2 carried out medical activities (provide medical services that are part of the medical nature), that is, the activities of these companies were similar.

The defendant did not prove that any services provided by him or by the plaintiff were not perceived by consumers as medical services that constitute medical activity, but as a different kind of activity (that is, the use of the company name cannot be prohibited in relation to the performance of these activities).

It should be noted that in addition to the claim for suppressing violation of the exclusive right to the company name, the company Health Formula No.1 filed an objection to the Russian PTO against granting legal protection to the trademark with the word element "Health Formula" by virtue of discrepancy of the indicated trademark with the requirements provided by cl. 8 of Article 1483 of the Civil Code.

The main issue considered at the Chamber of Patent Dispute of the Russian PTO was the similarity of services in respect of which the disputed trademark and the services provided by the company Health Formula No.1 were registered. Upon reviewing the objection, the Russian PTO concluded "... the services in respect of which the entity who filed the objection and the services of Class 44 of the Nice Classification referred to in the disputed registration relate to one category of services (medical services), have the same function (maintenance and ( or) recovery of health), one range of consumers, i.e. are recognized as similar". Based on this, the Russian PTO accepted the objection of the company Health Formula No.1 and recognized the grant of legal protection to the trademark with the word element "Health Formula" as invalid.

As a result, the company with a prior exclusive right to the company name "Health Formula" was able to use provisions of the law in order to confirm its legal monopoly to use this designation in its activities.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions