Increase in non-use cancellation actions targets foreign trademarks in Russia

In the last few months, there has been a rise in non-use cancellation actions against trademarks owned by foreign entities in Russia, especially those that exited the Russian market. This trend has emerged due to changing geopolitical dynamics and increased competition in the marketplace. Local parties are now more likely to initiate actions challenging the validity of trademarks that their owners do not actively utilize.

The rise in non-use cancellation actions reflects the growing tension between foreign companies and local businesses in Russia. With numerous former partnerships dissolved local entities are seizing opportunities to assume control of businesses previously held by foreign counterparts.  

Trademarks must be used in Russia

Under Russian law, trademarks must be actively utilized within three years from registration or within the three years preceding the filing of a cancellation action due to non-use to avoid loss of rights. Comprehensive evidence of the actual use in Russia must be presented. For companies that exited the Russian market in 2022, proving use to maintain the validity of their rights will present a significant challenge in the near future.  

Starbucks, Ericsson, and others face challenges

Prominent companies such as Starbucks and Ericsson have already faced challenges to their trademark rights due to non-use. For companies publicly announcing their exit from the market, defending against the non-use actions may prove even more challenging. 

One key issue for foreign companies that exited from Russia in maintaining their trademark rights is the interpretation of trademark use, particularly concerning parallel-imported goods. The law requires trademark use either by its registered holder or by a third party with the holder’s consent. However, proving the consent of use necessitates a registered license agreement, adding complexity to the enforcement of trademark rights.  

Consequently, the use of trademarks through parallel imports may not be considered acceptable for maintaining rights. Similarly, questions have arisen about whether sanctions and the counteractions to the sanctions may be valid reasons for non-use.

As the official state of war has not been declared in Russia, no force majeure rules are applicable. Therefore, referring to the non-use due to sanctions will most probably fail. The outcome of the first pending legal disputes will shape the future guidelines in this regard.

Strategies for mitigation

IP rights holders are urged to adopt proactive measures to navigate these challenges. Enhanced monitoring, strategic portfolio management including re-filing of rights, and transparent licensing practices are essential for mitigating risks associated with non-use cancellation actions and safeguarding trademark assets in Russia. 

As the IP landscape in Russia continues to evolve, trademark holders must remain vigilant and adaptive to protect their interests in this changing environment. Staying informed and proactive is key to effectively navigating the complexities of trademark enforcement and ensuring the maintenance of rights.