

Quite often, particularly between foreign manufacturers and Russian distributors. Our

firm handled an interesting case that clearly illustrates what can happen when rights are

not adequately protected. The party affected was a major foreign cosmetics manufacturer,

Health & Beauty, a well-known Israeli company operating on the global market. We are

naming the company because we obtained its permission to disclose this information.

The events unfolded as follows. The Russian distributor of the Israeli products registered the

manufacturer’s trade mark in Russia in its own name. Apparently, it wanted to obtain exclusive

rights and dictate its terms to the manufacturer, or at least secure a settlement payment.

The distributor did not manufacture anything itself but may have wanted to obtain complete

control over sales of the well-known brand in Russia. When this became apparent, the foreign

manufacturer was, to put it mildly, extremely surprised.

We began protecting its interests and managed to persuade the distributor to sign an agreement

assigning the trade mark to the Israeli company. However, after the rights holder had fulfilled its

obligations and the agreement had been submitted to Rospatent for registration, the distributor

began engaging in a series of other bad-faith actions. It attempted in every possible way to

prevent registration of the assignment to the Israeli company.

Initially, we believed that the matter would be resolved through the agreement and the transfer of

the trade mark to its legitimate owner. Instead, the dispute developed into four interconnected

court cases.

So, in effect, the rights holder was expected to pay

compensation for the right to use its own brand?

Possibly. One might even admire the scale of such demands. They involved financial

compensation, the right to become the exclusive distributor in Russia and the ability to

dictate terms to the manufacturer.

In practical terms, the Israeli company could have been deprived of the ability to sell its products

on the Russian market. Moreover, while the proceedings were ongoing, we became aware of

several cases in which administrative proceedings for trade mark infringement had been initiated

at the request of the Russian company, and genuine products imported from Israel had simply

been destroyed. Legally, the Russian entity was the owner of the trade mark in Russia.

While the court proceedings were pending, which took approximately two years in total, imports

of the branded products were effectively suspended. The Israeli company was losing market

share and supply-related profits.

Ultimately, however, we succeeded in restoring justice. Following the litigation, the trade mark

was returned to our client.

Did you have the trade mark registration cancelled?

No. We already had a signed agreement assigning the Russian trade mark to the Israeli

company, which was the actual manufacturer of the products.

However, the distributor produced another agreement under which it had allegedly assigned the

same right to another company at an earlier date. There were reasons to suspect that this

agreement was fictitious, but that was not essential. Using exclusively legal mechanisms, we

succeeded in having the parallel agreement declared invalid and obtained a court order requiring

Rospatent to register the assignment of the trade mark to our client under our agreement.

We could have pursued invalidation of the trade mark registration, but that approach had several

disadvantages, including for our client. The trade mark would have lost protection, and it would

have been necessary to register it again, resulting in both time and financial losses.

We therefore chose a different strategy: registration of the agreement assigning the exclusive

right to the trade mark.

How effectively does the current legal framework address

abusive trade mark registrations?

It certainly provides effective remedies. As I mentioned, we could have pursued the

matter through Rospatent, but that would have taken longer.

First, we could have proved that the bad-faith company was merely a distributor and not the

manufacturer of the products, which in itself would have been a serious basis for invalidating the

registration.

Second, there was clear bad faith.

Third, the company did not manufacture any products at all.

Finally, Russian consumers associated the products specifically with the Israeli company. This

constitutes a separate basis under competition law, since the distributor’s actions misled

consumers.

Russian legislation provides a considerable number of mechanisms for restoring justice. The

important point in each particular case is to select the correct strategy. This largely depends on

whether the registration can be cancelled or invalidated and on the available evidence and

documents.

What should parties focus on first when a trade mark

protection dispute arises?



Evidence is the key issue. At the same time, collecting the necessary documents can often

be quite difficult.

Each situation is individual and requires a tailored approach and strategy. In general, however,

Russian law provides sufficient legal instruments to combat bad-faith conduct effectively. There

are many examples of successful enforcement and restoration of justice.

How did the Israeli company react to the Russian

distributor’s actions?



They were simply shocked and, naturally, terminated all relations with their former

dealer.

As far as I know, the Russian company effectively ceased operations in order to avoid paying the

litigation costs. It had been ordered to reimburse the claimant tens of thousands of dollars in

legal expenses. Perhaps it decided that it would be cheaper to abandon the company and

establish a new legal entity.

The main point, however, is that the client succeeded in restoring its rights. It resumed full-scale

supplies to the Russian market and is now very well represented in the cosmetics sector, where

its products enjoy well-deserved success.

How significant is the problem of patent trolling in Russia?



It remains relevant. What does patent trolling involve in practice?

Someone registers, for example, a utility model that contains no genuine invention or know-how,

but the registration gives that person the right to bring claims against manufacturers of similar

products.

For instance, a utility model may be registered for a feature that is effectively within the margin

of error in material processing. Suppose the processing leaves a particular surface, and minor

differences in that surface, such as projections, notches or grooves, are registered as a utility

model even though they are close to ordinary manufacturing tolerances.

On the basis of that registration, the patent troll brings claims alleging use of its utility model. As

a result, a manufacturer or supplier of legitimate products may face confiscation and a ban on

importing its goods into Russia.

Patent trolls are not exclusively a Russian problem. They exist everywhere.

More generally, the use of intellectual property rights to create obstacles for businesses is

regarded as one of the most serious issues in this area.

The situation with patent trolls has improved because the legislation has changed and utility

models are now subject to mandatory substantive examination, which was not previously the

case.

Under the former system, it was theoretically possible to obtain a utility model for almost

anything. Such a decision could subsequently be challenged, but that required time and money.

While the dispute was pending, the rights holder could continue targeting manufacturers.

Unfortunately, such practices were once widespread internationally. Patent trolls are parties that

manufacture nothing but use intellectual property legislation to create obstacles for genuine

manufacturers and demand payments from them.

Some companies prefer to settle with patent trolls, but we believe that this is the wrong approach

because it creates an environment in which further abuse becomes more likely.

Do such situations arise frequently in your firm’s practice?



In Russia, cases involving the unlawful use of trade marks are more common.

For example, unauthorised importers sometimes attempt to cancel the trade marks of legitimate

rights holders so that claims cannot be brought against them, at least while the proceedings,

which they deliberately seek to prolong, remain pending.

They often resort to outright pressure, relying on the fact that proving lawful use of a trade mark

can be difficult and time-consuming. Filing a claim for cancellation of a trade mark on the

ground of non-use is, by comparison, relatively straightforward.

It is fairly common for a trade mark owner to be required to

prove that the mark is being used, is it not?



That is generally correct.

We recently completed a case in which we defended a major automotive manufacturer in Russia

whose trade mark is known to virtually everyone.

A carefully prepared non-use cancellation claim was brought against the rights holder. Although

the allegations were essentially absurd, we collected evidence extremely thoroughly.

We began with vehicle service centres where spare parts were installed under the relevant trade

mark. We contacted the service centres, obtained copies of work orders and traced the supply

chains all the way to customs declarations in which the contested trade mark appeared.

The case materials ultimately comprised more than 30 volumes of evidence.

What do claimants in such cases hope to achieve? What are

their motives?



Their primary objective is to deprive the trade mark owner of the legal basis for bringing

claims against suppliers of counterfeit goods and grey imports.

If non-use of the trade mark is established, its legal protection is terminated.

There are also substantial reputational risks. Imagine the consequences if reports circulated

worldwide that the trade mark of a major global car manufacturer had been cancelled because of

non-use.

Such attacks often arise in response to our anti-counterfeiting enforcement activities.

What strategy is usually adopted by importers that receive

claims from trade mark owners concerning the distribution

of counterfeit goods?



There is nothing particularly sophisticated about it.

Suppose an importer brings in wheel rims bearing the trade mark of a well-known manufacturer.

The trade mark owner wishes to prevent those imports because it objects to that particular

importer handling products associated with its trade mark.

In order to preserve its income, the grey importer receives a claim and then applies to the court to

cancel the manufacturer’s trade mark registration in that territory.

The strategy is simple: the chances of winning may be small, but perhaps the rights holder will

agree to negotiate.

In other words, they hope to be bought off?



Yes.

In our practice, some companies confronted with such actions have preferred to settle rather than

spend time on litigation. Any claim involves legal costs, rumours and potential reputational

harm.

Nevertheless, I repeat that one should not negotiate with fraudsters. Fortunately, most companies

take a principled position in such situations and pursue the matter to the end.

We handled one case in which a good-faith company was confronted by a legal entity that had

registered more than 3,000 trade marks consisting of popular words such as “football”, “little

cow” and “cow”.

Naturally, there was a high probability that some manufacturer would eventually use one of

those words in a trade mark and immediately face an infringement claim.

In our case, the client used the word “football” and did not realise that such a trade mark had

been registered. Of course, it should have conducted a clearance search, but it simply did not

expect that such a situation could arise. It eventually received a claim.

How did you resolve the situation?



We successfully defended the claims on the basis of bad faith.

We proved that the legal entity had registered such a large number of trade marks not for the

purpose of manufacturing products but for bad-faith use against genuine manufacturers.

We won the case and also recovered substantial legal costs from the purported rights holders.

This line of argument is entirely legitimate.

A similar case handled by our colleagues ultimately reached the Supreme Court. The Court

confirmed that a trade mark registered for the purpose of causing harm and bringing claims

against manufacturers should not receive legal protection.

In other words, the fact that someone has registered a right in its own name for the purpose of

profiting from it does not mean that the person will subsequently be permitted to use that

registration to prejudice the rights of a genuine manufacturer or supplier.

Courts increasingly rely on the concept of bad faith when resolving such disputes, particularly

where the circumstances reveal obvious abuse.

At first sight, such companies formally possess trade mark rights. The court may nevertheless

conclude that the conduct falls within the category of bad faith.

The difficulty is that bad faith must be thoroughly proved, which can be challenging.

Why is that so difficult?



Most often, because the manufacturer cannot produce sufficient evidence.

Many manufacturers take this area too lightly and assume that the relevant facts are obvious even

without documentary proof. Documents are essential and should cover the entire chain of

manufacturing and commercial activity.

This can be regarded as an important recommendation for manufacturers.

What is the position regarding another form of trade mark

abuse, namely cybersquatters who register domain names

associated with well-known manufacturers in order to

pressure them?



A domain name can be recovered from a bad-faith registrant where it is identical or

similar to the name or trade mark of an existing company and it is proved that the domain

was registered for an improper purpose.

Domain name disputes are generally easier than trade mark disputes.

Where a trade mark is registered and entered in the official register, a substantial body of specific

legal rules applies. A domain name, by contrast, is not itself an object of exclusive rights.

A domain name may infringe rights in a trade mark and may also infringe rights in a company

name. These constitute two separate grounds on which a good-faith company may bring claims.

So the trade mark and company name take priority?



Exactly.

What is happening with disputes involving the bad-faith

appropriation and use of trade marks?



The number of such disputes in Russia is in fact decreasing.

In the early 2000s, trade mark piracy was much more widespread, and there were many more

disputes concerning the non-use of trade marks.

Over time, Russia began introducing greater legal order in this area and more civilised methods

of conducting business. Today, there are considerably more legal instruments available to protect

the rights and interests of good-faith manufacturers and rights holders.

Does Russian legislation in this area differ from

international practice?



Not fundamentally.

The legal mechanisms are relatively well developed, and Russian courts take international

experience into account and generally understand the substance of such disputes well.

What would you recommend first and foremost to legitimate

trade mark owners that risk facing claims from bad-faith

applicants?



The first and most important recommendation is to register trade mark rights in a timely

manner and properly formalise all relevant documents.

Rights holders should monitor their trade marks and record all necessary changes. They should

use trade marks in the form in which they are registered and promptly secure rights to new brand

lines as they are introduced.

In general, rights holders should take an active approach.

It is also important to ensure that the use and protection of a trade mark comply with the

requirements of the country in which it is used.

The standard of proof in Russia differs from the standard applied in the United States.

Companies operating in different jurisdictions should therefore consult lawyers qualified in the

relevant countries.

This will reduce the risk of unexpected claims.

The position that “we are a well-known company and we have a well-known brand” is not

accepted by courts as an argument, because every fact relied upon by a party must be supported

by proper evidence.

26 September 2017

Updated: 29 July 2026