Key Takeaways
- The Rospatent Chamber held that the initial expert examination's conclusion refusing registration of the trademark under Subparagraph 1 of Paragraph 3 of Article 1483 of the Civil Code of the Russian Federation was unfounded, since the evidentiary record did not properly confirm use of the disputed designation by another person.
- The mere coincidence of the applied-for designation with a designation used in the marketplace does not per se constitute an automatic ground for refusal of registration; the decisive factor is the presence of a risk of misleading the consumer as to the manufacturer of the goods.
- The Chamber critically assessed the internet sources relied upon by the expert examination: some links proved unavailable for verification, while others contained no information regarding the manufacturer, as a result of which such materials were held insufficient to establish the circumstances of the case.
- Material significance for the outcome of the dispute was attached to the amendment of the applicant data in accordance with Paragraph 2 of Article 1500 of the Civil Code of the Russian Federation and the transfer of the right to registration of the designation to the actual user of the disputed designation – Shantou Quanguan Culture Co., Ltd.
- Following the change of applicant, the Chamber concluded that the designation was not of a misleading nature, as a result of which the Rospatent refusal was overturned and registration of the trademark was held admissible.
Legal Analysis
Subject matter and initial refusal
The subject matter of the administrative dispute was the assessment of the protectability of the designation "QUAN GUAN," applied for goods of Class 28 of the Nice Classification, from the perspective of the existence of grounds for refusal of State registration under Subparagraph 1 of Paragraph 3 of Article 1483 of the Civil Code of the Russian Federation.
Initially, Rospatent proceeded from the position that the applied-for designation reproduced a commercially used designation of another economic entity, and was consequently capable of creating in the consumer a false perception as to the manufacturer of the products. The corresponding conclusion was based on information extracted from open internet sources containing references to the designation "QUAN GUAN" in relation to goods in the category of construction sets and toys.
Evidentiary record and misleading character
At the same time, the subsequent administrative review demonstrated a fundamentally important approach to the allocation and assessment of the burden of proof in cases of this category. The Chamber established that not all of the internet materials relied upon by the expert unit possessed the attributes of admissibility and verifiability. Some sources proved inaccessible for reproduction, while other sources contained no information enabling identification of the specific manufacturer of the goods. Accordingly, such information could not be regarded as proper evidence of actual use of the designation by a particular person.
In resolving the dispute, the provisions of Subparagraph 1 of Paragraph 3 of Article 1483 of the Civil Code of the Russian Federation were applied in conjunction with Paragraph 37 of the Rules for the Drafting, Filing and Examination of Documents Serving as a Basis for the Performance of Legally Significant Actions for the State Registration of Trademarks. The said norms are aimed at preventing the grant of legal protection to designations which are capable of giving the consumer an inaccurate perception of the properties of the goods or of the person manufacturing them.
The Chamber specifically emphasized that the criterion of a misleading character is not formal but substantive in nature. The legally significant fact is not the mere existence of a similar designation in circulation, but rather the presence of an objective likelihood of the consumer forming erroneous associations as to the origin of the goods.
Change of applicant and outcome
The key circumstance of the case was the amendment of the application materials in accordance with Paragraph 2 of Article 1500 of the Civil Code of the Russian Federation. In the course of the administrative procedure, the applicant data were amended such that the right to registration came to be sought in favour of the person who had actually used the designation in economic activity and was identified as the manufacturer of the relevant products. Additionally, the consent of the relevant company and confirmation of the corporate nexus between the original applicant and the manufacturer were submitted.
In light of the said amendments, the Chamber formulated the conclusion that the presumed consumer associations no longer conflicted with the actual origin of the goods. Consequently, the obstacle provided for by Subparagraph 1 of Paragraph 3 of Article 1483 of the Civil Code of the Russian Federation was eliminated, and the initial refusal lost its legal basis. The opposition was sustained, the refusal decision was overturned, and registration of the trademark under Application No. 2024709412 was held admissible.
Commentary by Patent Attorney A.V. Leonov
The decision under consideration is of practical interest above all for foreign applicants and groups of companies using a single brand without a formalized structure of ownership of rights to means of individualization.
In practice, Rospatent continues to actively apply the refusal mechanism under Subparagraph 1 of Paragraph 3 of Article 1483 of the Civil Code of the Russian Federation in cases where the applicant does not coincide with the actual participant in commerce known to the consumer as the manufacturer of the goods. However, this case demonstrates that such a refusal is not final and may be overcome with proper procedural management of the application.
We draw attention to the fact that a material risk for business arises not only in the presence of a conflict of exclusive rights, but also in the absence of a duly formalized intra-group structure of brand ownership. If the manufacturer, licensee, export company and applicant are different entities, the absence of documentary evidence of the relationship may lead to a finding that the designation is of a misleading nature.
Recommendations for rights holders
- Conduct in advance of filing an audit of the chain of rights to the designation: identify the actual user of the brand, document corporate links, formalize consents, licensing arrangements or agreements on the transfer of the right to registration;
- In the event that a refusal has already been issued, analyze the feasibility of utilizing the mechanism of changing the applicant under Article 1500 of the Civil Code of the Russian Federation;
- Assemble in advance an evidentiary record of use of the designation — internet references do not enjoy a presumption of reliability and are subject to independent verification as to accessibility, identifiability of the source, and the ability to establish legally significant circumstances.
The prospects for analogous disputes appear favourable in cases where the risk of misleading the consumer may be eliminated by changing the registration holder or by confirming the actual ownership of the brand by the relevant manufacturer. In the absence of such a nexus, the likelihood of the refusal being upheld remains high.
Related Materials
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