Currently, a bill titled “Amendments to Articles 1252 and 1486 of the Russian Civil Code and Articles 4 and 99 of the Russian Arbitrazh Procedure Code” (the “Bill”) is pending in the Russian State Duma. The Bill was drafted in pursuance of a directive given by D.A. Medvedev, Russian Prime Minister, and introduced in the Russian State Duma by the Russian Ministry of Justice. The Bill was cleared by the Federal Service for Intellectual Property and the Court for Intellectual Property Rights.

The goal behind this Bill is to expand out-of-court dispute resolution opportunities in the area of intellectual property rights. According to the Bill’s drafters, it should alleviate conflicts when rights holders defend their infringed intellectual property rights as it would compel them to try and settle their dispute with a potential infringer amicably within a certain period of time before going to court.

Such a mandatory out-of-court procedure is introduced for the following categories of cases: - disputes over violation of exclusive rights where a rights holder files a claim for damages or for compensation if the parties to a dispute are corporate entities and (or) sole proprietors; - disputes over the failure to continuously use trademarks for three years after their official registration.

Amendments to Article 4 of the Russian Arbitrazh Procedure Code have been prompted by the need to remove disputes over early termination of trademarks’ legal protection due to their non-use from the list of disputes which are currently not subject to mandatory out-of-court dispute resolution.

In the first category of disputes a claim for damages or for compensation may be filed in the event of full or partial refusal by a potential infringer to pay a claim or his failure to respond to a claim within thirty days of its receipt.

Furthermore, in order to avoid abuse, the Bill provides that, irrespective of whether or not a rights holder files a claim, a court may grant injunctive relief based on his application. 

As for disputes over early termination of trademarks’ legal protection due to their non-use, the Bill provides for the following claim procedures in respect of this category of claims.

An interested party who believes that a trademark holder has not used his trademark sends a proposal to the trademark holder to either (1) apply to a federal executive authority in charge of intellectual property to waive a particular trademark, or (2) enter into an agreement with the interested party to dispose in his favor of some or all of the goods the registered trademark identifies.

Such a proposal may be submitted by an interested party only upon the expiry of three years after official registration of a trademark.

Furthermore, a trademark holder will have two months from the delivery of such a proposal to waive a trademark or dispose of his exclusive right to the trademark in the interested party’s favor. Upon the expiry of this two-months’ time, an interested party may file a lawsuit seeking early termination of the trademark’s legal protection due to non-use.

On a separate note, it should be noted that if an interested party fails to file suit within the thirty-day deadline, it must send a new proposal to the trademark holder once three months have passed after the delivery of a previous proposal.

Therefore, multiple claims for early termination of legal protection of one and the same trademark may be made.

In conclusion, we note that the trend to make parties to a dispute focus on its potential out-of-court settlement is not new. Courts (in particular, the Russian Supreme Court) have repeatedly drawn attention to the fact that parties to 4/9 disputes should not ignore amicable (out-of-court) settlement of disputes arising, in particular, in the area of intellectual property.

However, legal practitioners have a number of concerns about the Bill, primarily, about how it would be applied in practice and whether it would give rise to more problems than it was designed to solve.

by Helen Avakyan and Irina Kosovskaya

Selected Resources and Publications:

• The State Duma of the Federal Assembly of the Russian Federation (2016), “Amendments to Articles 1252 and
• 1486 of the Russian Civil Code and Articles 4 and 99 of the Russian Arbitrazh Procedure Code”