The burden of proof and evidence in disputes about company names in conflict with the requirements of the Russian Civil Code
28 April 2023
Controversial combinations of letters (for example, “ros”, “gos”) in a company name do not in themselves indicate its derivative nature from the words “Russia”, “state”, etc. The outcome of the dispute about the contradiction of the company name with the requirements of the law depends, first of all, on the evidence of the associative perception of the name by the participants in the turnover.
According to Part 1 of Article 65 of the Arbitration Procedure Code of the Russian Federation, each person participating in the case must prove the circumstances to which he refers as the basis for his claims and objections.
In many disputes about forcing an organization to change its company name, as it does not meet the requirements of Paragraph 4 of Article 1473 of the Civil Code of the Russian Federation, the position of the registering authority is based on the fact that the name of the organization causes a strong association about the participation of the state in the activities of the organization or about the special significance of such activities for the state interests.
The burden of proving this circumstance lies with the registering authority, the burden of refutation – with the owner of the trade name. When considering the question of the legality of using the name, it is not the semantics of the controversial designation that was assumed by the organization that matters, but the general impression created by the participants in civil circulation when perceiving the means of individualization.
The courts basically proceed from the fact that the letter elements “ros”, “state”, “fed” (“federal”) are stable well-known letter combinations, abbreviated from the official name “Russia”, “Russian Federation”, “state”, the use of which is prohibited (directly or based on the meaning of Paragraph 4 of Article 1473 of the Civil Code of the Russian Federation). The position is based on the fact that these abbreviations are often used in the names of legal entities to reflect their belonging to the state as a whole, to individual federal executive bodies, etc.
At the same time, the courts note that the use of a disputed letter combination as part of a company name does not in itself indicate a derivative character from the words “Russia”, “Russian”, “state”, etc.
Thus, the IP Court canceled the acts of lower authorities that obliged the Terros-Agro company to change its company name, recognizing the conclusions that the presence of the abbreviation “ros” in the company name causes the consumer to have a strong association with the participation of the state in the activities of the organization or with the special significance of its activities in the public interest.
In a new consideration of the case, the court upheld the organization that provided evidence that the company name corresponds to its registered and actual activities related to agricultural cultivation of land for the purpose of growing grain crops (OKVED information, tax returns for the Unified Agricultural Tax, land lease agreements, agricultural testing protocols ofproducts, information about the harvest, the availability of agricultural equipment, etc.). In addition, the court took into account the results of linguistic expertise and concluded that the company name of the organization reflects its activities and was formed by adding the verbal elements “Terros” (from the root “terr” of the Latin language, the meaning of which is known to the average Russian consumer) and “Agro” (translated meaning the relation of something to agriculture and land use, which is also known to the consumer).
It should be noted that in this case, linguistic expertise was accepted by the court not as the main, but as additional evidence, since, as court practice shows, special knowledge is not required to assess the associative perception of a disputed letter element. On this basis, the court has the right not to take into account the relevant examination, refuse to conduct it and independently resolve the issue.
The fact that an organization has a trademark (service mark) identical to its company name cannot in itself serve as evidence of the legitimacy of including disputed letter designations in the company name by virtue of Clause 2 of Article 1476 of the Civil Code of the Russian Federation. As well as evidence of the organization's involvement in the authority or representation of its interests.
As evidence of how ordinary participants in civil circulation (consumers) perceive certain letter combinations in a company name, courts can take, for example, public opinion polls.
However, the court may recognize the results of the survey as inadequate evidence, unless it is proved that the process of its organization provides for a single participation in the survey of each of the respondents, and also excludes the participation of interested persons in it.