Crimean Brands. Who Will Be the Owner

Vitalii Savchuk, Senior associate with Legal Alliance Company

Many products produced by the “Crimean residents” are at risk of becoming further from shop counters especially the Russian ones. Although apparently they should have become closer.

If Grishka Rasputin lived nowadays he would hypothetically be at risk of being left without Madeira only because his favorite drink is produced by the Crimean winery under Massandra trademark and the Crimea has been actually submitted to the Russian jurisdiction. Rasputin surely would use his levers of state power to solve the problem at least for the sake of Madeira. Our contemporary who is much more powerful but has a similar surname is being asked already to do the same. The President of the Russian Federation receives letters requesting to solve perhaps the most interesting problem of the 21st century in the field of intellectual property.

The fact is that intellectual property rights, for example trademark rights, have a territorial characteristic – they can be operated only at the territory of the state where they were registered. The majority of trademarks that belong to the “Crimean residents” (for the sake of simplicity we use this conventional term to define companies and citizens of the peninsula) were registered according to the Ukrainian laws, which means they are protected only by the Ukrainian laws. Amid the new Crimean realities, as we can understand, it is of a little help.

For sure the top Crimean brands (especially producers of alcoholic drinks) do not have such problem – many of them have been represented and protected at the Russian market for a long time. At the same time there are thousands of entities now recognized as the residents of the Russian Federation in the Crimea and they are surprised to discover that in their “own” state their trademarks do not have any legal protection. Just imagine for years you have been promoting the brand in order to find out one day that there is no such brand in “your” country.

Due to admission of another territorial subject to the Russian Federation no one will change the federal regulation system which has been developed for years. Especially since the privileges for trademarks of the “Crimean residents” will inevitably cause restriction of rights of the Russian right holders. In other words centralized solution of all problems “in bulk” should not be expected. And if you are drowning, probably by tradition, you are on your own.
Compromise solution

At best such entities must register their marks for goods and services again, this time by filing their applications to the Russian Agency for Patents and Trademarks (Rospatent). The problem is exacerbated by the fact that in the Russian Federation the same trademarks could have been owned by other persons for a long time already.

This involves a number of complications:

• Failure to register own trademark in the Russian Federation. You will never be able to protect a widely promoted brand; instead you will have to ask for permission to use it.
• Risk of court proceedings with the owner of the same or a similar trademark in the Russian Federation. In other words permission to use own trademark might not be obtained.
• Reduction of a distinctive character of both trademarks. Consumers will confuse producers of products/services and both trademarks will be devalued.

Some producers may decide that rumors about total loss of their brands are too exaggerated. They may think in the following way: so far as expansion on the Russian market could be not within their plans supplies to Ukraine can be continued without any complication. But it was not to be: goods supplies to Ukraine from the Crimea are regarded as export according to the Russian laws and export of branded products (as well as its production) is one of ways of trademark use. If a trademark identical to the Crimean one is already registered in the Russian Federation, the Crimean resident can freely use it only provided that its manufacture is transferred to the Ukrainian mainland.

The Crimean resident may try to appeal to the fact that he was the first who started to use the trademark in dispute – the so called right of prior use arises. However this option also seems doubtful because it is not clear whether it is rightful to recognize the priority of the Crimean trademark in the Russian Federation or not. Because its usage actually began at the territory which was not regarded as the Russian one earlier. But even success of this plan will not allow the right holder to develop its business under the trademark in dispute because the right of prior use significantly restricts the entity’s freedom of actions regarding possibility to use and have control over one or another trademark.

Protection of the Crimean brands at the territory of the Russian Federation shall be started with immediate verification of the corresponding Russian data bases for the entities similar to the entities of the “Crimean residents”. Based on the results obtained such brands shall be either registered in the Russian Federation or the right holder shall be defined and negotiations shall be started.