Entering a new market is always challenging. One never knows for sure if a product or a service offered by a company may be sought-after in the target region. The intention to give the product a try on the market first, in order to find out if it meets the consumers’ needs and preferences before spending considerable amounts on publicity, promoting and protection of the brand is justified. However, such a decision may lead to undesirable consequences; in particular, the company may face a situation when a third party gets the company’s brand registered in their name without authorization. 

Notably, registration of the trademark by a third party is not always done in bad faith. In some cases, a registered trademark (at least an existing pending trademark application) is an integral part of business operations, since online market places may request confirmation of trademark rights before offering the goods for sale. Therefore, a company operating on the market as a distributor may consider it worthwhile to apply for a trademark registration in its own name instead of the genuine trademark holder, if the owner of the brand is reluctant to do so. However, such course of action is precarious, since the business relations with the distributor may change drastically and as long as the trademark remains in the distributor’s name, they may create considerable obstacles to use of the mark by the genuine trademark holder and misleading issues as to the commercial origin of goods in the eyes of consumers.

Of course, under Russian legislation, the genuine owner of the trademark may seek protection of his violated rights, especially when it comes to the disputes with the distributors. One of the legal tools to restore justice is a possibility to invalidate the trademark that stands in the name of the distributor as being contradictory to the provisions of Article 6.septies of the Paris Convention for the Protection of Industrial Property. Nevertheless, in order to apply this ground for invalidating the trademark, the following conditions should be established as a whole:

1. The applicant of a disputed trademark must be or should have previously been an agent or a representative of the genuine trademark owner (taking note of possible affiliation of the parties);
2. The genuine trademark owner must have an exclusive right in the conflicting trademark with earlier priority in one of the member states of the Paris Convention;
3. The application must concern designation being identical or confusingly similar to the genuine trademark; and
4. The application must have been filed in the name of an agent or a representative without the consent of the genuine trademark owner, without justifiable reasons.

Point 1 suggests that the genuine trademark holder must prove that on the application filing date or in the past, they had business relations with the applicant of the disputed trademark. To prove this fact not only the contract concluded between the companies should be presented, but also the confirmation that this contract was/is being duly performed and the evidence of performance is available.

Points 2 and 3 seem to be clear, but there is a detail that deserves attention. The overwhelming majority of Russian consumers do not know the Chinese language; thus, designations made in the Chinese script are considered by the Russian PTO as graphical marks, and this point might be crucial when determining similarity of marks. If the genuine trademark holder has a trademark registration in one of the member states of Paris Convention in Chinese script, while the disputed trademark represents its Latin or Cyrillic equivalent, such marks will likely be considered dissimilar.

As to Point 4 it should be noted that the consent to registration of a disputed trademark granted by the genuine trademark holder is irrevocable under the provisions of the Russian Civil Code. Therefore, if such a consent has ever been granted to the distributor and the consent is drawn up in accordance with the formal requirements, there may be no chance to succeed in invalidating the trademark.

There is also an issue concerning similarity of goods and services. Article 6.septies of the Paris Convention does not require to establish similarity between the goods which the disputed trademark is registered for and those which the trademark of the genuine trademark owner has been granted legal protection for. To apply the legal norms of Article 6.septies, it is sufficient to establish that the disputed trademark infringes upon the fiduciary relationship between an agent (the owner of the disputed trademark) and a principal (the genuine trademark holder) or affiliated persons and enables the exploitation of trust, knowledge, and experience gained as a result of the business relations between the parties – thereby allowing the acquisition of an unjustified benefit from the genuine owner's efforts and investments, the creation of an association in the consumers’ minds with the principal, or obtaining of other advantages – in violation of the trust reposed by the principal. 

To summarize, though there are legal tools to combat undesirable third parties’ trademark registrations, these proceedings require a lot of effort and evidence, are time consuming and costly. Therefore, it is prudent to obtain trademark protection timely instead to be able to enforce trademark rights in the most effective way.