The trademark office in Russia is seeing a rise in applications with a distinctly Western feel. In the wake of its deadly attack on Ukraine and considerations from the Russian government about the possibility of “lifting restrictions on the use of intellectual property [for] certain types of goods and services in Russia,” the Federal Service for Intellectual Property in Russia – commonly known as Rospatent – has been on the receiving end of a growing number of trademark applications for the names and logos of famous Western brands – from McDonald’s, Nespresso, and Starbucks to IKEA and Instagram that are being filed by unaffiliated entities in Russia.

The likes of McDonald’s and Instagram are not the only companies being targeted by such unauthorized trademark filings in Russia. On the heels of the Russian government issuing a decree to enable native companies to use the patent-protected products and technologies of those in “unfriendly” countries (i.e., Western nations that have issued sanctions against Russia, including the U.S. and the European Union), and hinting that other intellectual property rights held by companies in Western countries may be soon be free for Russian entities to use without the traditional ramifications of infringement, luxury names, such as Chanel, Christian Dior, and Givenchy, have been forced into the fold, as applications for their world-famous names have been filed with Rospatent for use on the some of the same types of goods/services that they traditionally offer up.

These applications would usually fall neatly within the realm of trademark squatting (i.e., the practice of third parties filing trademark applications for another company’s well-known marks, usually in a market where the trademark owner is not (yet) present, with the aim of either extorting the real brand owner or otherwise piggybacking on the appeal of that brand for its own gain) and/or bad faith trademark filing, and barred from registration by the relevant trademark office, including Rospatent. However, that may not be the outcome here.

According to Maksym Popov, a partner at Mentors Law Firm in Ukraine, it would not be surprising if Rospatent opts not to block the trademarks at the center of these applications from being registered due to efforts by the Russian government to legalize infringement and given the Krelim’s “attitude towards international agreements,” such as the TRIPS Agreement, which Russia is currently running afoul of by allowing for the use of others’ patented inventions in lieu of compensation. Popov also notes that is it significant that Russian entities have started filing “similar but not identical” trademarks for well-known Western brands, such as Instarus and Rosgram (as a substitute for Instagram), Uncle Vanya (with McDonald’s arch), and McDuck’s (the Russian slang name for McDonald’s); these changes could serve to potentially enable the filing parties to avoid pushback from Rospatent should it continue to observe trademark rules against the most obvious instances of bad faith filings.

At the same time, Popov says that Russian lawmakers have proposed “nationalizing companies that leave the Russian market by introducing temporary administration,” or the equivalent of bankruptcy proceedings. In doing so, Popov states that the Russian government would potentially be able to amass “the right to use [the company’s] trademarks under any previously concluded license agreements (franchising), and since trademarks have been registered to local (Russian) companies in some cases, it is possible [for the Russian government] to become the rightful owner of the brand in Russia.” 

In the event that Western companies’ marks are, in fact, registered and/or infringed by Russian entities, or otherwise seized by way of involuntary administration proceedings, Western rights holders may not find relief by way of national courts, as “Russian courts are unlikely to provide assistance,” and “Russia will simply ignore any international legal action,” World Trademark Review reported recently. More broadly, such budding trademark actions could have a “significant impact on the ability of brands to recover their market presence, should they look to re-enter the Russian market in the future,” WTR states. 

Since Western brands “are already losing revenue by suspending their commercial activity in Russia, without robust intellectual property rights,” these same brands “will find it harder to go back into Russia should things change in the future.” (And many brands have not explicitly stated that they will not return to the Russian market if/when it is appropriate to do so. Statements from companies ranging from mass-market retailers to luxury giants have largely emphasized the “temporary” nature of their store closures and have rarely gone beyond generalized statements about closing in light of the “current situation” in explaining their decisions to close their doors in the country. Companies’ overarching refusal to condemn Russia is presumably a bid to save face should they opt to re-enter the Russian market in the future, and in the meantime, an effort to avoid alienating multiple passport-holding oligarchs that have fled Russia and may be shopping in other markets where luxury brands remain open for business.)

As for what brands can/should do in response to the budding number of bad faith trademark filings being lodged with Rospatent, Popov encourages Western companies to closely monitor filings and file objections to any applications for marks that infringe their own, stating that “the absence of an objection will further convince Rospatent that the rights holder has, in fact, left Russia and has no plans to use its trademarks going forward.”

（Source: thefashionlaw.com）