In what circumstances can a trademark be used under the doctrine of exhaustion of rights? According to the general rule established by Article 1229 of the Civil Code of the Russian Federation, only the owner of the intellectual property or means of individualization has the right to use such property or means at their own discretion in any manner consistent with the law. 

This rule also applies to trademarks. According to Article 1484 of the Civil Code of the Russian Federation, the exclusive right to use a trademark in any manner consistent with the law belongs to its owner – the person in whose name the trademark is registered. Other persons may use the trademark or similar designations in relation to the goods for which the trademark is registered or similar goods only with the permission of the owner, if such use would create a risk of confusion. 

Exceptions to the general rule are cases expressly specified by law as permitting the use of intellectual property without the copyright holder’s consent. With regard to trademarks, Article 1487 of the Civil Code of the Russian Federation provides for only one such situation: the exhaustion of the exclusive right to a trademark. 

The core of the exhaustion doctrine is that a right holder cannot prohibit the use of a trademark in relation to goods that have been placed on the market by the owner or with the owner’s consent. In other words, the holder cannot enforce the same exclusive right twice with respect to the same goods once they have entered commercial circulation. 

In Russia, the national exhaustion regime applies. This means that within the territory of a particular state, the exclusive right to a trademark affixed to a specific product and protected in that state is considered exhausted once the product is first placed on the market within that state by the right holder or with the right holder’s consent. 

Thus, the right to use a trademark without the consent of the copyright holder on the basis of the national principle of exhaustion of rights arises when two conditions are met: 

• The product was introduced into civil circulation specifically on the territory of Russia; and 

• The trademark owner either introduced the product into circulation in the specified territory, or this was done by another person, but with the consent of the trademark owner. 

Because the law does not clearly define what qualifies as placing goods into civil circulation, nor does it establish the criteria for determining when the right holder’s consent has been given, disputes concerning trademark use under the exhaustion doctrine frequently arise in practice. At present, most of these disputes involve the online sale of trademarked goods, including through marketplaces. Let us examine this issue through the lens of case law. 

When is a product considered legally introduced into civil circulation on the territory of the Russian Federation? 

The Supreme Court of the Russian Federation, citing Subparagraph 1 of Paragraph 2 of Article 1484 of the Civil Code, clarified that the introduction of goods marked with a trademark into civil circulation means the placement of a trademark on goods, including on labels and packaging of goods that are manufactured, offered for sale, sold, displayed at exhibitions and fairs, or otherwise introduced into civil circulation on the territory of the Russian Federation, or stored or transported for this purpose, or imported into the territory of the Russian Federation. 

Thus, the list of methods for introducing goods into civil circulation is not exhaustive. These include not only sale, exchange, and other legal means of alienating ownership of goods marked with a trademark, but also offering such goods for sale, displaying them at exhibitions and fairs, etc. 

As practice shows, the legality of introducing goods into civil circulation by another party, i.e., with the consent of the copyright holder, can be confirmed, in particular, by any of the following documents: 

• Directly with the written consent of the copyright holder; 

• An agreement with the copyright holder for the sale of goods (dealer, distributor, etc.), an agreement confirming the purchase of goods from an official dealer or other seller who legally purchased the goods; or 

• The copyright holder’s response to the customs service’s notification of no objections to the resumption of the release of the disputed goods. 

If the sale does not involve the actual sale of trademarked goods, but, for example, the use of the trademark when offering the goods for sale, including by advertising them on an online website (marketplace), then a contract confirming the legal purchase of the goods is not required. In the event of a dispute in this situation, it is sufficient to provide evidence that the person placing the offer to sell the goods has the opportunity to purchase them in the future (e.g., commercial offers from legitimate sellers). 

Exception to the principle of exhaustion of rights 

Currently, the principle of exhaustion of rights does not apply in Russia to imported goods (groups of goods) included in the list approved by the Russian Ministry of Industry and Trade based on Russian Government Resolution No. 506 of March 29, 2022. Such goods may be imported into Russia without the consent of the copyright holder, provided they are placed into circulation outside the Russian Federation by the copyright holders, or with their consent. 

It should also be noted that the principle of exhaustion of rights can only be applied to goods, not services. This position is held by the Intellectual Property Court, based on the legal nature of the concept of “service.” Unlike a trademark, which can be freely placed on a product (as on a tangible object), a service mark cannot be placed on the service itself. Services are individualized indirectly – through the placement of a mark on documentation, price lists, online offers, etc. – and therefore, exhaustion of rights is impossible for services legally introduced into civil circulation in the Russian Federation.