When and on what grounds can a competitor contest the registration of your company name as a trademark? And how do you retain your trademark when a competitor wants very badly to cancel it? Materials and examination of a case are prepared by experts of the IP practice at Capital Legal Services Elena Berger and Vladislav Scherbatykh.

A recent dispute between Familia and Offprice raised active discussion. The case in brief was that Offprice registered its name as a trademark. Familia, which is engaged in about the same area of business as Offprice (goods sales at a discount), attempted to dispute registration of this trademark first at the Patent Dispute Chamber, then at the Intellectual Property Court. How did Familia justify its claims?

Russian law does not allow just any designation to be registered as a trademark. One of the restrictions is that you cannot register a designation which characterizes goods or services in respect to which the registration is being applied for. Under the general rule, you cannot register as a trademark such words as “natural” or “useful.”

Why such a ban? The idea is that a trademark gives the title holder an exclusive right – only they can permit or disallow the use of that which is registered as a trademark. In other words, the law gives the title holder a “monopoly” on any word, image, logo, etc. (in respect to particular goods and services).

It is obvious that “monopolizing” something that describes particular goods should not be allowed; otherwise, this would lead to ridiculous consequences such as no one being able to use the word “natural” on the packaging of their goods without getting permission from the title holder. This would extremely restrict competition. Moreover, this would be bad not just for businesses, but for consumers as well. How do you relay to them information regarding the essential properties of your goods if the title holder forbids you to use words designating these qualities?

This is among the main causes of the ban on registering properties of goods as trademarks – the properties of goods must be accessible for all to use. It would seem that this ban is absolutely clear and there should be no problems with applying it. But above we examined simple and easy examples, while in practice things can get much more complicated.

The Familia v. Office case is a stark example. Familia clamed that the word OFFPRICE is a specific property of a service. Any consumer who sees it, understands that this is a store selling goods at a discount. That is why a monopoly on this word should not be given to one person; anyone should have the right to use the word OFFPRICE on their store window sign. Offprice refuted these arguments, saying that most Russian consumers do not understand the word OFFPRICE, therefore this word cannot be deemed a property, hence it can indeed be a trademark.

Each party to the dispute provided a vast amount of evidence showing that a Russian consumer understands (or does not understand) the meaning of the word OFFPRICE. Rospatent, and afterwards the Intellectual Property Court, came to the conclusion that the majority of Russian consumers do not understand the specific meaning of this word and do not associate it with the properties of a service. The legal protection of the OFFPRICE trademarks was kept in place.

It is frequently difficult to understand whether a particular word designates a property of a product. This should depend on how consumers perceive the various words and whether they associate them with specific properties. That is why such disputes are resolved primarily based on evidence of the consumer perception of a designation – public surveys, market research, etc. If it is actually proven that a designation is perceived as a property of a product, then you cannot obtain a monopoly on it by registering it as a trademark in your name, which is quite understandable and logical.