Special Report Trademarks in Russia

special report trademarks in Russia GROWING opportunities, MAJOR CHALLENGES

june 2010 Jacqueline verwerft International Business Manager Thomson CompuMark

THOMSON COMPUMARK

contents Introduction....................................................................................................................................................................2 The Russian Federation: an overview of the socioeconomic and political conditions.............................................. 3-5 From individual to state rights (and back again): a historical perspective on Russian IP Law.....................................6 An Inside Perspective on Trademarks in Russia by Eugene A. Arievich and Pavel Gorokhov....................................7-9 Russian Trademark Statistics: trends in applications and registrations, objections and claims............................ 10-11 Conclusion.................................................................................................................................................................... 12 Get ready for Russia with Thomson CompuMark..........................................................................................................13

Special Report: Trademarks in Russia

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Introduction The Russian Federation is a fast-growing “trademarket�. However, registering a mark in Russia requires considerable insight into the specific workings and regulations unique to Russian institutions, as well as expert knowledge of the Cyrillic alphabet.

In this special report, we explore the issues surrounding trademark registration in the Russian Federation.

The first section will bring you up to speed on the Russian Federation’s socio-political climate and a brief history of its economic evolution. How has Russia coped with the collapse of the Soviet Union? What is its role on the international political and economic scene today? And how has Russian intellectual property law developed from the early 19th century to the present day?

In the second section, leading IP experts Eugene A. Arievich of the CIS Intellectual Property Practice Group and Pavel Gorokhov, Counsel at the Moscow office of Baker & McKenzie, shed light on one of the fastest growing domains in Russian intellectual property: the process of registering and searching trademarks in the Russian Federation. Where and how are trademarks registered? How long does the process take?

What are the important aspects of clearing Cyrillic and/ or Latin characters? You will find the answers to these and other questions in this special report.

The concluding section examines the continuing rise in trademark registrations in the Russian Federation with a comprehensive statistical analysis.

Special Report: Trademarks in Russia

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The Russian Federation An overview of the socioeconomic and political conditions The Russian Federation is the largest country in the world. It has endured significant political and economic evolutions throughout its rich, proud and, at times, turbulent history. In this section, we offer a brief introduction-in facts and figures-to a land of growing possibilities.

Geography

The Russian Federation stretches across Eurasia from Eastern Europe to the Pacific Ocean. Until December 1991, it was one of the 15 republics of the Union of Soviet Socialist Republics (USSR). After the collapse of the Soviet Union, Russia became the largest country in the world in terms of territory.

Population

Russia has a population of approximately 143 million people. Roughly 73% of this number lives in urban areas. In fact, there are 13 Russian cities with a population of over one million. The largest city is also the capital, Moscow, with a population of approximately 10,4 million, followed by St. Petersburg, with approximately 4,5 million.

Special Report: Trademarks in Russia

Russia is the largest country in the world in terms of territory.

Economy

The collapse of the USSR has had dramatic consequences for the Russian economy. What follows is an overview of the various stages of its evolution.

Turbulent transition to free market The Russian economy underwent tremendous stress as it moved from a centrally planned economy to a free market system. Fiscal reforms aimed at raising government revenue proved difficult to implement.

The country’s dependence on short-term borrowing to cover its subsequent budget deficits led to a serious financial crisis in 1998. Matters were made worse by a drop in prices for Russia’s major export earners (oil and minerals) and a loss of investor confidence due to the recession in Asia. The result was a rapid decline in the value of the ruble, an exodus of foreign investment, delayed payments on sovereign and private debts, a breakdown of commercial transactions and the threat of runaway inflation.

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Rapid growth to kick off the 21st century The eight years from 2000 to 2008 coincided with a period of rapid economic growth fuelled by sky-high commodity prices and accompanied by a significant increase in the standard of living. The middle class grew from just 8 million in 2000 to 55 million in 2006.

Between 1999 and 2007, gross domestic product (GDP) rose by an average of 6.8% annually. Real fixed capital investments increased by an annual average of 10% between 2000 and 2007, while real personal incomes rose at an average annual rate of 12%. As of April 2008, the International Monetary Fund estimates that Russia’s (nominal) GDP will grow from its 2007 value of $1,289,582 to $3,462,998 by 2013, representing an increase of 168%. Gross domestic product by purchasing power parity (GDP PPP) is expected to grow from $2,087,815 to $3,330,623 over the same period.

If it does, it would make the Russian Federation the second largest economy in Europe in terms of purchasing power.

The country was vaulted from 72nd to 53rd on the list of the world’s wealthiest nations. The government’s devaluation of the ruble during the 1998 financial crisis gave local producers significant advantages over their foreign competitors. Russian consumption was boosted by the introduction of consumer loans and mortgages.

Among other drivers of economic growth was an increase in the use of industrial capacity generated during the Soviet period.

Expected growth in the GDP PPP would make the Russian Federation Europe’s second largest economy in terms of purchasing power.

Gas and oil export leader Russia is the world’s largest exporter of natural gas and the second largest oil exporter. Oil, natural gas, metals and timber account for more than 80% of Russian exports. Since 2003, however, the economic importance of primary produce began to decrease as the internal market strengthened considerably. Despite higher energy prices, oil and gas only represent 5.7% of Russia’s present-day GDP and the government predicts this will drop even further to 3.7% by 2011. Russia is considered to be well ahead of most other resource-rich countries in terms of economic development with a long tradition of education, science and industry.

The country has more higher education graduates than any other in Europe. Russia is also the world’s top producer of rye, barley, buckwheat, oats and sunflower seeds and is one of the largest producers and exporters of wheat.

Special Report: Trademarks in Russia

Emerging market In March 2008, the country’s gold and foreign currency reserves exceeded $500 billion, giving Russia the third largest reserves in the world after China and India.

These achievements, in conjunction with prudent macroeconomic policies and renewed structural reform, went a long way toward restoring business and investor confidence. New business opportunities soon emerged in sectors such as telecommunications, retail and pharmaceuticals. However, evolutions in global finance were to put a freeze on Russia’s economic resurrection.

Beating the economic crisis Russia was badly hit by the international financial crisis of 2008-2009. A slump in commodity prices, the collapse of the financial markets, restricted access to external financing, rising unemployment, and a consequent drop in internal consumption have all shaken the foundations of the Russian economy.

Among the industries most seriously affected were financial services, B2B, IT, real estate and construction, mining and metals, and the automobile industry.

Since the outbreak of the crisis, the government has taken several measures to safeguard the Russian economy. By April 2009, approximately one third of Russia’s foreign currency reserves had been spent on implementing a step-by-step devaluation of the ruble.

This intervention successfully prevented widespread panic and a resulting run on the banks.

The government has also proposed bailout measures for the country’s largest companies with a view to limiting the negative social impact of massive layoffs.

Current ups and downs The Economist Intelligence Unit associates the strengths of the Russian economy with its comfortable savings levels, very limited exposure to the stock market (less than one million Russians own shares) and low exposure to the mortgage market in comparison with the U.S., the UK and Central and Eastern Europe.

On the downside, there are the significant decreases in real income, real wages, disposable income, and retail sales, coupled with increasing unemployment, which currently stands between 7% and 8%. Consequently, the prospects for an upturn in the Russian economy remain unclear.

facts and figures

• Population: 143 million people • Growth of the middle class from 8 million in 2000 to 55 million in 2006 • Oil, natural gas, metals, and timber account for more than 80% of Russian exports • More higher education graduates than any other country in Europe • The third largest financial reserves in the world after China and India • The government has earmarked some $1 trillion for infrastructural investments leading up to the year 2020 • Major role in safeguarding international peace and security

Future prospects and challenges Nonetheless, the IMF’s World Economic Outlook predicts that the Russian economy will start to grow in 2010. Falling inflation rates are one positive indicator of this: 8% for January 2010 compared with 13.4% for the same time last year. The economic recovery is connected with expected increases in oil prices along with bailout measures implemented throughout the world. That said, the World Bank expects that Russia’s GDP will only return to its pre-crisis levels toward the end of the third quarter of 2012.

The World Bank cites several challenges facing the Russian economy. Chief among them, given its high degree of diversification, is the need to encourage growth in small and medium enterprises, build human capital and generally improve corporate governance.

Matters are complicated by the pressing need to modernize the country’s infrastructure, an aging and inadequate legacy of years of neglect. Indeed, the government has earmarked some $1 trillion for infrastructural investments leading up to the year 2020.

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The government has earmarked some $1 trillion for infrastructure investments leading up to the year 2020.

Foreign relations

As one of five permanent members of the United Nations Security Council, Russia plays a major role in safeguarding international peace and security.

Russia is a member of the Group of Eight (G8) industrialized nations, the Council of Europe, the Organization for Security and Co-operation in Europe (OSCE) and Asia-Pacific Economic Cooperation (APEC). Russia usually takes a leading role in regional organizations such as the Commonwealth of Independent States (CIS), the Eurasian Economic Community (EurAsEC), the Collective Security Treaty Organization (CSTO), and the Shanghai Cooperation Organization (SCO). Since the collapse of the Soviet Union, Russia has developed a friendlier, albeit volatile, relationship with the North Atlantic Treaty Organization (NATO).

Linguistic diversity

Russian is the official language of the Russian Federation. All official election materials, legislation and other legal acts, must be published in the official state language. Each republic, however, has the right to employ its own language for official use in state and local government institutions, in parallel with Russian.

Thus, regional state bodies and local institutions of self-government within Russia’s 21 republics may conduct official state business in two languages: Russian and the republic’s national language.

Foreign investors should be aware of some of the restrictions governing the use of the Russian language.

For example, the Federal Law On the State Language of the Russian Federation requires that all advertising in the Russian Federation must be either in Russian or in the particular state language of the individual republic in which the advertising appears.

The exceptions to this rule are trademarks, which may be in the original language of the trademark, and mass media designed for teaching foreign languages.

Special Report: Trademarks in Russia

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From Individual to State Rights (and back again) A Historical Perspective on Russian Intellectual Property Law With approximately a quarter of a million trademarks and service marks currently registered, Russia represents a major “trademarket” with its own specific rules and regulations regarding intellectual property.

Indeed, gaining an insight into the mechanisms of registering and protecting trademarks in this vast and linguistically complex country is not an easy task.

In order to fully understand contemporary Russian intellectual property law, it is important to see its development from a historical perspective and, in particular, how it has largely mirrored the country’s “turbulent” political evolution. This section offers an overview of the most relevant milestones from the early 19th century to the present day.

European period

Between 1812 and the turn of the 20th century, Russian intellectual property law developed along much the same lines as in other European states.

The regulations, as they stood in 1896, already contained most of the elements of a modern patent system, such as enablement, novelty and utility requirements and a 15-year period of exclusivity.

Soviet period

In 1917, however, the revolution sparked sweeping changes to Russia’s political and economic systems.

The capitalist monarchy was abolished and replaced by a Soviet Socialist Republic with its regulated economy, subsidized production and complete lack of private enterprise and private property. All but the most basic types of property now belonged to “the people”, a communist euphemism for the state. These changes, however, did not affect Russian intellectual property law immediately. It was not until 1931 that the private ownership of intellectual property was abolished.

Rather than being able to commercially exploit an invention independently, from that date inventors received a nominal remuneration in exchange for transferring their invention and all accompanying intellectual property rights to the state.

The system of intellectual property protection whereby all rights became property of the state remained in place until the late 1980s.

Federation period

The collapse of the Soviet Union in December 1991 put a halt to the ambitious task of reforming Soviet intellectual property law. In fact, over the 12 months that followed, it was in complete disarray. Matters were clarified in Russia in 1992 with the introduction of a new series of intellectual property laws. These laws constitute the primary source of intellectual property law in the Russian Federation and lay out the foundation of the Russian Agency for Patents and Trademarks (Rospatent). Despite a number of amendments over the years, they are still in effect today.

The majority of administrative regulations relating to intellectual property and case law are either translated by non-governmental commercial entities or not translated at all.

Perestroika period

This system of intellectual property protection, whereby all rights became property of the state, remained in place until the late 1980s when the necessity for reform became apparent. Attempts to revise Soviet intellectual property law culminated in 1991 with the circulation of draft legislation designed to completely overhaul the protection of intellectual property rights.

The proposed legislation borrowed many elements from Western intellectual property law, despite the latter’s presupposition of a marketplace economy.

Most notably, the draft legislation replaced “inventor’s Certificates” with patents. It gave inventors an exclusive right to exploit their invention for a set period of time and abolished the older practice of automatically requiring inventors to pass on their inventions to the government.

Special Report: Trademarks in Russia

Language & intellectual property

When it comes to the major intellectual property statutes issued by the Russian Patent Office (Rospatent), there are some official English translations in existence. However, the majority of the administrative regulations relating to intellectual property and case law are either translated by non-governmental commercial entities or not translated at all. Non-native practitioners relying on these unofficial translations should bear in mind that they are not perfect and may not fully represent the spirit of the original Russian text.

Another impact of the language limitation is the relative scarcity of secondary literature, such as treatises and periodicals, available in English.

Source: Julian L. Zegelman from Ropers Majeski Kohn & Bentley PC

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An Inside Perspective on Trademarks in Russia

By Eugene A. Arievich and Pavel Gorokhov “One of the fastest growing domains in Russian intellectual property relates to trademarks and service marks,” says leading IP expert Eugene A. Arievich.

In this section, Mr. Arievich and Pavel Gorokhov, specialists in trademark registration and enforcement, share their views on the current state of affairs, the rules and the challenges associated with protecting trademarks and brands within the Russian Federation.

First registered, first served

“Perhaps the most fundamental aspect of Russian trademark legislation is that trademark rights are acquired through registration with Rospatent or on the strength of international agreements with the Russian Federation,” says Mr. Arievich. “As a general rule, the first person to register a mark has overriding rights.

This first-to-register system means that registration is absolutely essential for the protection of trademarks.

There are a few exceptional cases where claims can be made with respect to well-known trademarks that have not been registered. However, even in such cases, the legal concept of being “well known” is established through a quasi-registration system. Here, a “wellknown” petition is filed with the Russian PTO (Rospatent) which, if accepted, will result in the issue of a well-known trademark certificate by Rospatent.”

Special Report: Trademarks in Russia

Rospatent preliminary searches

“Rospatent fulfills all functions related to the registration of IP rights,” Mr. Gorokhov adds.

“Rospatent investigates both absolute and relative grounds of a trademark registration.”

Applications that are ineligible for registration on absolute grounds include: • applications lacking in distinctive capacity; • applications identical or confusingly similar to state symbols and marks (state arms, flags); • abbreviated or full names of international or intergovernmental organizations and their arms, flags or other symbols; • official control, guarantee or assay marks, seals and awards; • applications which are false or at risk of deceiving consumers with respect to the goods sold or the manufacturer;

Pavel Gorokhov is Counsel in the Moscow office of Baker & McKenzie. He is registered with the Russian PTO as a trademark attorney and is experienced in liaising with CIS Patent and Trademark Offices. Mr. Gorokhov is also a member of the INTA Enforcement Committee.

He specializes in trademark registration and enforcement and regularly represents clients before the administrative authorities in trademark disputes.

• applications that represent the official names or images of valuable items belonging to Russia’s cultural heritage or items of world cultural or environmental value.

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“Even if a trademark lacks inherent distinctiveness, the applicant may still register it if he can demonstrate acquired distinctiveness through the extensive use of the mark prior to the filing date,” says Mr. Gorokhov.

Grounds for rejection with regards to prior rights include: • identity or confusing similarity with previously filed and/or registered marks; • well-known marks; • registered industrial designs; • appellations of origin; • company names and commercial designations; • pre-existing copyrights.

Grounds for rejection in connection with prior rights also include identity with names, pseudonyms, portraits or facsimiles of well-known people.

Clearing cyrillic and latin characters

As Mr. Arievich explains, trademarks should be registered as they are used or are intended to be used in the Russian Federation. “One of the first decisions to make is whether to use Cyrillic and/or Latin characters.

If a company intends to use the Cyrillic equivalent of its mark, it is strongly recommended that it be registered.

Even if the company does not plan to use a Cyrillic version, it may still be a good idea to file an application for the mark’s Cyrillic equivalent. Doing so can expand the scope of protection, as the third-party use of a similar mark in Cyrillic may tip the balance in favor of a lack-of-similarity finding.”

There is, however, more than one way of converting a mark into Russian. “There are, in theory, two options for rendering a mark into Russian: phonetically (transcription) and letter-by-letter (transliteration),” explains Mr. Arievich. “There is no strict rule of thumb as to which method is preferable and in most cases, the decision comes down to marketing considerations.”

Protected “as is”

“Another important aspect to remember is that trademarks are protected in the form in which they are registered, i.e. as they appear on the trademark certificate,” says Mr. Gorokhov. “The law does not allow for the registration of word marks ‘with no claim of script’ or trademarks with ‘no claim of colors’. In other words, a word mark registered in plain, block letters is assigned protection as a trademark in plain, block letters. Similarly, a trademark registered in black and white can count on protection in that particular color combination only.”

“However, the law does allow for the use of registered trademarks in a different form, provided they do not differ substantially from the original registration and only for the purposes of defending against non-use cancellation,” Mr. Gorokhov claims. “In other words, it is highly recommended that trademarks be registered in the way they are intended to be used.”

From the point of view of enforcement, plain, block letter word marks and black and white device marks usually carry stronger enforcement potential. “From that perspective, marks should also be registered in plain block letters and/or in black and white,” suggests Mr. Gorokhov.

10-year protection

Trademark and service mark protection in the Russian Federation applies for a period of 10 years from the filing date and may be renewed during its last year of validity for subsequent 10-year periods. “If it is not renewed, all trademark and service mark registrations are cancelled when this term expires,” says Mr. Arievich.

“Legal protection for trademarks and service marks may be terminated upon request, and with respect to all or part of the relevant goods and services, if the mark is shown to have fallen into disuse for any continuous three-year period. Assignments and licenses of trademarks and service marks must be registered with Rospatent, otherwise they are deemed null and void.”

Eugene A. Arievich heads the Firm’s CIS Intellectual Property Practice Group. He is ranked as a leading lawyer by PLC Which Lawyer? 2009 and has been described by Chambers Global 2009 as a “leading IP specialist with a wealth of experience.”

Mr. Arievich is a member of the INTA Dilution & Well-Known Marks Committee and has previously served on the INTA Board of Directors.

He also represents Russia on the Advisory Board of the World Intellectual Property Report and acts as co-counsel to the Coalition for Intellectual Property Rights. Mr. Arievich’s practice encompasses all areas of IP law throughout the CIS, with a special emphasis on trademark protection.

Respecting international treaties

Russia is a signatory to major international treaties on intellectual property rights. “They include the Universal Copyright Convention, the Berne Convention for the Protection of Literary and Artistic Works, the Paris Convention for the Protection of Industrial Property, the Patent Cooperation Treaty, the Madrid Agreement on the International Registration of Trademarks, the Protocol to the Madrid Agreement, the WIPO Performances and Phonograms Treaty, and the WIPO Copyright Treaty.”

“One of the first decisions to make is whether to use Cyrillic and/or Latin characters.

Even if the company does not plan to use a Cyrillic version, it Russia is a signatory to major may still be a good idea to file an international treaties on application for the mark’s Cyrillic intellectual property rights. equivalent. ”

The opinions of the interviewees are their own and do not necessarily represent an endorsement by Thomson CompuMark.

Special Report: Trademarks in Russia

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Register and take control

“While registering a trademark in Russia gives you the right to use the mark, owners of unregistered marks may still use them,” Mr. Gorokhov says. “However, failure to register a mark exposes the owner to substantial risks. Moreover, there are circumstances where it may be forbidden to use an unregistered trademark. For example, it may be unlawful to use words in non-Cyrillic script in certain types of advertising when those words are not registered as trademarks and are not accompanied by their Cyrillic equivalents.”

“Registration is the only reliable way to stop or prevent trademark infringement,” confirms Mr. Arievich.

“By placing the trademark, for example, onto the Customs Office stop list, Customs may be able to prevent the importation of suspicious products or importation by unauthorized dealers or distributors.

Registration, in other words, also enables trademark owners to maintain control over the way in which their marks are used. Only registered trademarks (and not pending applications) may be licensed for use by third parties in Russia.” saving time with preliminary availability searching

How long does it take to register a mark? “There is no statutory term in which the trademark examination must be completed,” states Mr. Arievich. “At present, a straightforward registration process takes approximately 14 to 16 months. In many cases, companies cannot afford to wait that long to find out whether their trademark is available for use in Russia.

For this reason, a thorough availability search is highly recommended, either before or during the filing procedure.”

As Mr. Gorokhov explains, “If the examiner finds any relative grounds for refusal, he will normally issue an Interim Office Action (a kind of “provisional Refusal” in which the examiner lists possible grounds for refusal).

The applicant is then given six months to file counter arguments against the similarity of the marks/goods in question, to present a letter of consent from the prior owner or to submit proof of revocation of the cited marks, etc. This means that the applicant has a non-extendable statutory term of six months to negotiate with prior owners or to finalize cancellation procedures against the cited trademarks. In many cases, companies are unable to meet this deadline.

Conducting a preliminary availability search helps the applicant identify potential obstacles at a very early stage and with a high degree of assurance, allowing them the opportunity to deal with them in due course.”

Similarity in latin and cyrillic

According to Russian trademark law and practice, trademark similarity is established on the basis of a combination of phonetic, visual and semantic criteria.

It is important to remember that Russia uses the Cyrillic alphabet and that Cyrillic equivalents should be searched in addition to Latin marks.

Pronunciation check “There is a fair degree of correspondence between some sounds and letters in both Latin and Cyrillic scripts,” explains Mr. Arievich. “Many letters are written and pronounced the same way, for example, A, O, K, M, T. However, there are also many letters that look different such as Ф [f], Г [g], Ы (a deep sound similar to [y]). What makes things more difficult is that some letters that look identical to those of the Latin alphabet Special Report: Trademarks in Russia

are pronounced completely differently. For example, the Cyrillic character ‘B’ is pronounced as a [v], ‘Х’ as [kh], and ‘P’ as [r]. Foreigners are often confused by the sign “РЕСТОРАН” and find it hard to understand how it can signify a “restaurant”. Some famous trademarks encounter problems when rendered into Russian.

For example, BBC would be pronounced [vvs], which stands for “Voenno-vozdushnye Sily” or the Air Force.”

What makes things more difficult is that some letters that look identical to those of the Latin alphabet are pronounced completely differently.

Another example would be the fictitious trademark “POT” (in Latin script). “Searching only for Latin marks and their phonetic Cyrillic equivalents (in this case “ПОТ”) will overlook potentially prior Cyrillic trademarks such as the visually identical “POT” (Russian for “mouth” pronounced [rot]),” says Mr. Arievich.

Equivalence check “To add to the challenge of trademark registration in the Russian Federation, not all Latin letters and sounds have direct Cyrillic equivalents,” says Mr. Gorokhov.

“Conversely, the Russian language also has two unique features, namely the softening of consonants in terminal positions and the changing of vowel pronunciation in unstressed syllables.” As a consequence, the trademark, “BAILEYS” may be rendered into Russian in any of the following ways: БЕЙЛИЗ

БАЙЛЕЙЗ

БЭЙЛИС

БАЙЛИС

БЭЙЛЕЙС

БЕЙЛЕЙС

БЕЙЛИС

БАЙЛЕЙС

БЭЙЛИЗ

БАЙЛИЗ

БЭЙЛЕЙЗ

БЕЙЛЕЙЗ

It goes without saying that the local equivalents to be adopted should be cleared for availability so that any conflict with existing Russian marks may be identified in advance.

Opposing a trademark

TIPS FROM MR. Arievich and MR. Gorokhov • Trademarks should be registered as they are used or are intended to be used in the Russian Federation.

• Marks should also be registered in plain block letters and/or in black and white.

• Registration is the only reliable way to stop or prevent trademark infringement.

• A thorough availability search is highly recommended, either before or during the filing procedure.

• Russia uses the Cyrillic alphabet.

Cyrillic equivalents should be searched in addition to Latin marks.

• The local equivalents to be adopted should be cleared for availability so that any conflict with existing Russian marks may be identified in advance.

• It is possible to submit a so-called “informal” opposition or “letter of objection” setting out the alleged grounds for the refusal of a pending trademark.

Russian law does not allow for a formal opposition procedure against pending applications. “However, registered trademarks may be challenged by means of a cancellation action filed with the Chamber for Patent Disputes,” says Mr. Arievich. “Nonetheless, it is possible to submit a so-called “informal” opposition or “letter of objection” setting out the alleged grounds for the refusal of a pending trademark. This is also a way of notifying the examiner of the intention to challenge a trademark in the Chamber for Patent Disputes should it mature to registration. While the examiner is not obliged to take such informal opposition into consideration, there are precedents where such interventions have been successful. While pending applications are not published for opposition purposes, they may be identified by means of an availability search. Hence the importance of a thorough trademark search in advance of registration.”

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Russian Trademark Statistics Trends in applications and registrations, objections and claims Despite the geographical, political and linguistic complexity of the market, trademark registrations are rapidly expanding in the Russian Federation.

Together with a growing number of applications and registrations, statistics reveal a higher amount of objections and claims filed with Rospatent’s Chamber of Patent Disputes.

Increasing applications

On the back of Russia’s continuing economic development and growing interest from foreign producers, some 57,112 applications were filed in 2008, close to the 2007 level (57,262) and this, despite the economic downturn. A slight decrease was observed in Russian applications: 31,502 in 2007 vs. 30,024 in 2008. However, the number of applications filed by foreign applicants in 2008 rose by more than 5% compared with 2007 (27,088 and 25,760 respectively - see figure 1). The economic crisis resulted in a decrease in applications for 2009: 50,107 versus 57,112 in 2008.

Increasing registrations

The total number of trademark and service mark registrations in the Russian Federation rose in 2008 to 36,617, by far the most of any year since 2004.

In 2009 there was a small decrease, which can be connected to the economic crisis. Russian applicants represented a slight majority (19,585) over foreign applicants (16,851; see figure 2).

Registration renewals leveled off in 2009. Once again, Russian companies were the most active with 4,243 renewals versus 2,447 for foreign applicants. By the end of 2009, the total number of valid registrations reached 246,607. domestic investment vs. foreign applicants

Before 1999, more than 60% of all registered and operational trademarks belonged to foreign corporations. Russia’s transition to a new economic framework has shown many Russian companies the importance of trademark protection. In 1999, 63% of all trademark applications and 50% of all registered trademarks belonged to domestic applicants.

In 2008, domestic applicants obtained 53% of all the trademark applications and 54% of all registered trademarks (see figure 2).

Source: These statistics are based on the figures published on the Rospatent website.

Figure 1: Evolution of trademark and service mark applications in the Russian Federation Total Applications for Trademark Registration Filed in the Russian Federation, including: 70000

For Russian Applicants For Foreign Applicants, including:

60000

57262 57112

Under the Madrid Agreement or Protocol 52984

50107

50000

47087 40877

40000 31502

29589

30000

26460 23779

30024 27088

25760

23395

26448 23659

20627 20000

17098

16738

15388

14567

12701

15113

10210

10000

0 2004

2005

2006

2007

2008

2009

Figure 2: Evolution of trademark and service mark registrations in the Russian Federation 40000

Trademarks and Service Marks Registered, including: 36617

For Russian Applicants 35000

For Foreign Applicants, including:

36436

30724

Under the Madrid Agreement or Protocol 29447

30000

29199

27540 25000

19895

20000

15000

15505

15058 14389

15257

13694

19585 16851

16722

15731 14993

12283 10185

10000

10240

9537

8518

7765

8101

5000

0 2004

2005

2006

2007

2008

2009

Figure 3: Evolution of registered renewals in the Russian Federation 9000

Registration renewals, including: 8015

For Russian Applicants

8000

For Foreign Applicants 7000

6690

6431 6000

5000 4419 4000

4243

4160 3855

3630

3475

3550 2881

3000

2000

2078

2243 1930

1552

1545

2004

2005

2447 2176

1000

0

Special Report: Trademarks in Russia

2006

2007

2008

2009

10

top non-domestic filers

In 2008, corporations from the United States, Germany, France, Italy, Switzerland, Japan, and China led non-domestic trademark filings (see table 1).

Compared to 1991, there was a strong increase for the U.S. (from 917 registrations in 1991 to 3,502 in 2008) and Germany (from 1,796 registrations in 1991 to 3,408 in 2008). Figures for 2009 were not available at the time of publication.

Objections and claims

As the data in figure 4 shows, the number of objections and claims filed in 2008 with the Chamber of Patent Disputes (the Rospatent appeal body) has decreased compared with 2007. Nevertheless, their level is still significantly higher than in 2004, 2005 and 2006.

Table 1: Evolution of trademark and service mark filings by foreign applicants from countries with the greatest number of applications (top 15) Country

2004

2005

2006

2007

2008

USA

1878

2585

2999

2794

3502

Germany

2926

3129

3071

3078

3408

France

1403

1530

1708

1653

1838

Italy

1275

1515

1774

1770

1801

Switzerland

1056

1148

1355

1367

1757

OHIM

(not in top 15)

592

913

1313

1711

Japan

548

669

872

756

1135

China

500

811

842

987

1078

Great Britain

661

724

881

860

1003

Bureau of

660

775

892

795

981

Spain

368

395

423

(not in top 15)

515

Austria

282

341

395

(not in top 15)

445

Ukraine

841

682

835

838

686

Turkey

404

558

605

545

611

Poland

353

(not in top 15)

390

439

(not in top 15)

Belarus

(not in top 15)

(not in top 15)

(not in top 15)

460

(not in top 15)

Finland

(not in top 15)

(not in top 15)

(not in top 15)

376

412

Republic of

(not in top 15)

343

(not in top 15)

(not in top 15)

(not in top 15)

376

(not in top 15)

(not in top 15)

(not in top 15)

(not in top 15)

Others

3567

3830

5440

5600

6205

Total

17098

20627

23395

23631

27088

(sorted by the number of filings in 2008)

Source: These statistics are based on the figures published on the Rospatent website.

Benelux

Korea Czech Republic

Figure 4: Trademark objections and claims filed with Rospatent’s “Chamber of Patent Disputes�

3500 3000 2876

2500 2000 1500

2392

2097 1634

1736

1000 500 0 2004

Special Report: Trademarks in Russia

2005

2006

2007

2008

11

conclusion

46% 40%

40%

30% 26% 20%

23% 17%

10%

6%

9% 3%

2%

0%

5%

5%

-4%

RUSSIA

GERMANY

USA (Federal)

ITALY

INTERNATIONAL TRADEMARKS (Madrid Protocol)

UNITED KINGDOM

FRANCE

CHINA

CANADA

-10% COMMUNITY TRADEMARKS

According to the April 2010 World Economic Outlook from the International Monetary Fund (IMF), the emerging Russian economy is expected to grow by 4% this year, which is higher than the expected growth in the U.S., Germany and Japan2. Such growth underscores the need for IP professionals and business strategists to pay close attention to Russia as a jurisdiction in which to conduct business and protect rights.

50%

BRAZIL

Russian trademark registrations increased by 46% from 2004 to 2009, the largest increase of any major trademark-protecting country, including Brazil, China, France, Germany, Great Britain, and the United States, which increased by 40%, 3%, 23%, 5%, 5%, and 6%, respectively (see figure 5)1 . These numbers are testament to the growing awareness of Russia as a viable market and the country’s emergence as a capital-focused, industrialized nation.

Figure 5: Evolution of the number of published registrations in Russia and other countries from 2004 till 2009

BENELUX

As Russia recovers from recent economic turbulence and its marketplace begins to expand, the country is fast becoming a desired destination for manufacturers and service providers seeking to protect their intellectual property rights. Despite the unique criteria and challenging considerations when filing for trademark protection, brand protection in Russia will prove to be worth the effort given its market potential in the long-term.

1 Source: SAEGIS® on SERION™, using global Thomson CompuMark trademark data 2 http://www.imf.org/external/pubs/ft/weo/2010/01/pdf/text.pdf

Special Report: Trademarks in Russia

12

get ready for russia with thomson compumark Are you looking to increase your business in Russia?

Thomson CompuMark provides a full array of research services for every phase of your trademark life cycle. rapid online screening

SAEGIS® on SERION™ offers you direct access to our unique Russia database with relevant information of millions of trademarks.

• Covers all active or recently inactive marks.

• Includes goods and services subclass descriptions in English.

Extend your reach by combining: • More than 40 trademark registers worldwide.

• Trademarks, domain names, industrial names, and pharmaceutical names in one search.

In-depth clearance

When clearing your trademark, we take you as far as possible through our extensive network of carefully selected local partners. Make sure your trademark is successfully launched with our Availability Search for Russia or BRIC. Watch to protect

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Want to know more about trademark protection in Russia? Ready for your free password for online screening? Please contact our Customer Services.

Special Report: Trademarks in Russia

13

Author: Jacqueline Verwerft International Business Manager Thomson CompuMark

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THOMSON COMPUMARK

About Thomson CompuMark Thomson CompuMark develops and delivers intelligent trademark information and trademark research services.

We provide trademark and brand professionals with the information needed to protect the value of their brands while reducing the time, cost, complexity, and risk of managing trademark portfolios.

Thomson CompuMark is part of Thomson Reuters and employs more than 600 people worldwide, with operational and sales offices in Belgium, Canada, France, Italy, Japan, the United Kingdom and the United States.

For more information, visit compumark.thomson.com.

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