Russian Trademark Owner’s Claims upheld against Grey Imports of genuine products

The Supreme Court of the Russian Federation has confirmed, in a recently published decision, its ruling of December 2001 concerning the legality of a requirement by the Customs Office, which was disputed by the “Lavash” enterprise.

According to the requirement, a proof of the ownership of a Trade Mark or of the existence of a licensing agreement for a trade mark must be presented before the permission to pay excise duty on importation of the goods designated by the trademark is given to the importer.

The plaintiff alleged that the said requirement contradicted Articles 23, 26 of the Russian Trade Mark Law as well as Article 7 of the Russian Law on Competition violating the right of the owner of the goods to freely dispose of them.

A trademark owner in Russia has an exclusive right to the use and disposal of the trademark as well as the right to prohibit its use by others. Nobody is entitled to use a trademark without permission by the trademark owner. The manufacture, use, importation, offering for sale, sale and any other form of marketing, or the holding for that purpose, of a trademark, of a product designated by a trademark or of a sign confusingly similar to such a trademark constitutes an infringement of the rights of the trademark owner if it is done without authorization and if it relates to goods of the same type.

In its decision of March 14, 2002 the Supreme Court emphasized that the right of ownership to goods bearing a trade mark, which have been acquired abroad, can not be used in violation of the right of the trademark owner, which is deemed to be essentially predominant.

The Supreme Court has also turned down the plaintiff’s assertion that the fact that the goods designated by the trademark have been acquired abroad allegedly testifies to their having been marketed by the trademark owner, in countries including Russia.

The Court underlines in its reasoning that Article 23 of the Russian Trade Mark Law indeed forbids the trademark owner to prohibit the use of the said trade mark by other persons in respect of goods which have been previously marketed by the rightful trademark owner or with his consent. However the decision by the Supreme Court supports the view reflected in the ruling, that the above provision of the Trade Mark Law is only applicable to cases inside the territory of Russia . Goods produced abroad, designated by trade marks registered in Russia are considered to be marketed in Russia only as from the date of their importation into the territory of Russia according to the prescribed procedure keeping to the requirements by the Customs Code.

Thus any marketing of goods by the trademark owner himself or with his consent abroad can not be considered as such in respect of the Russian market (provided there is no provision of an international agreement binding Russia to act otherwise). Consequently, in such cases, the owner of a trademark registered in Russia is not deprived of his right to prohibit its use by others.

The Supreme Court upheld its previous ruling, confirming the requirement by the Customs Office.