Risks of Early Termination of Ukraine’s Trademark Certificate

It is common practice in Ukraine for applicants to submit trademarks for registration without choosing specific goods/services from the list of classes of the International classification of goods and services applied for the registration of marks (the Nice Classification NCL). This leads to TM protection covering a wide range of goods/services that the TM owner may not use.

At the same time, a trademark cannot be used by others without the permission of the TM certificate owner. To avoid this kind of unjustified “monopoly”, Ukrainian legislation contains a provision that encourages the TM owner to use it for declared goods/services while also containing a legal instrument used by interested parties to terminate someone else’s TM certificate so as to get the opportunity to register the TM and use the disputed mark for its goods/services in the future.

According to Part 4 of Article 18 of the Law of Ukraine On the Protection of Rights to Trademarks for Goods and Services (the TM Law), any person may apply to the court for early termination of the validity of the certificate in whole or in part, if the trademark is not used in Ukraine in full or for part of the goods/services specified in the certificate, continuously within five years from the date of publication of information on the issuance of the certificate. A similar provision can be found in Article 198 of the TRIPS.

In such cases, the plaintiff is the person who applies to the court with a claim for early termination of the validity of the TM certificate. The defendant is the owner of the disputed TM certificate. Accordingly, when the court examines a dispute on the early termination of a TM certificate, the plaintiff must prove non-use, with the defendant proving the proper use of the disputed TM. The side wins the case with evidence deemed most correct, admissible, and reliable.

If you are the TM owner and protect yourself

It is clear that the risk of terminating a TM certificate due to non-use is eliminated if the trademark has been used for the last five years.

Forms of TM usage are given in Part 4 of Article 16 of the TM Law and, namely, used:

  • to any product for which the TM is registered, packaging containing such a product, a sign associated with it, a label, patch, tag or other item attached to the product, storage of such a product with the indicated application of the TM brands for offering for sale, offering it for sale, sale, import and export;
  • in offering and providing any service for which the TM is registered;
  • in business documentation or advertising and on the Internet.

Which of the above, and in what scope, would be sufficient to confirm use? The main manner of TM use is to mark a product. At the same time, Ukrainian judicial practice determines that it is sufficient to provide evidence of “at least some actions” from the TM usage listed in Part 4 of Article 16 of the TM Law. For example, if a mark is used for a certain product exclusively in advertising, this is used.

From this perspective, the Resolution on confirmation of the use of the trademark of the International Association for the Protection of Intellectual Property (Association Internationale pour la Protection de la Propriété Intellectuelle, AIPPI), adopted in Istanbul on 22-25 October 2023, is of theoretical interest because it determines that use of the TM on the Internet, websites, or social networks may be considered to be genuine use. The criteria for evaluating such use shall be the same as for off-Internet use of the TM and shall be applied on a case-by-case basis.

In addition to providing the court with TM marked goods, appropriate evidence of use can include documents featuring the image of the trademark (catalogues, price lists with proposals for the provision of services or delivery of goods, etc.); cashier’s checks, receipts, invoices and other documents containing information about the name of the product and the place of its purchase (Decision of the Supreme Court of 1 January 2019, in case No. 910/1546/19 (https://reyestr.court.gov.ua/Review/79221984); advertising brochures and the corresponding contract for the development of the design and production of the booklet (Decision of the Commercial Court of Kyiv of 1 February 2022, in case No. 910/5815/21 (https://reyestr.court.gov.ua/Review/103851284), the fact of registering a domain name using a trademark (Decision of the Pechersk District Court of the city of Kyiv of 31 October 2022, in case No. 482/1361/21-ts (https://reyestr.court.gov.ua/Review/107307143).

It is important to note that the TM owner must prove (as the defendant) the actual presence on the market of each of the goods/services of each NCL class listed in the TM certificate. The defendant must provide evidence before the court to confirm using the disputed TM for each of such goods/services as listed in Part 4 of Article 16 of the TM Law.

Our recommendation: examine TM certificates for the goods/services of each class of the NCL, determine which are used and which are not used, and also analyse which documents can be used to prove the use of the TM before the court.

If you desire the trademark and claim

Who can be a plaintiff in a dispute on the early termination of a Ukrainian TM certificate?

There is a conflict of material and procedural laws of Ukraine: despite the provisions of Part 4 of Article 18 of the TM Law, which states that “any person may apply to the court for the early termination of the validity of a certificate…”, the procedural legislation determines that the plaintiff must prove the existence of a violation of his rights or legitimate interests. Non-confirmation of the existence of a violated right or legitimate interest, for the protection of which the plaintiff applied, is a reason for refusing to satisfy a claim.

Accordingly, if the plaintiff still needs to apply for registration of the disputed TM, is this a reason to refuse to satisfy a claim?

Unfortunately, there is currently no unanimous court practice on whether the plaintiff’s failure to take actions that would indicate its intention to register the disputed mark is absolute grounds for refusing.

As an example, in the Supreme Court decision of 5 May 2022 in case No. 760/4277/17 (https://reyestr.court.gov.ua/Review/104330112), the court agreed that the claim was duly rejected because the plaintiff “did not take actions that would confirm its intention to register the disputed designation”. In this context, it is worth noting that the law does not require the plaintiff to receive a refusal to register the identical TM in order to file a claim in this case.

However, in the well-known case about the cancellation of the STARLINK trademark owned by a Ukrainian company, the Supreme Court of Ukraine substantiated the right of the “interested person” to claim (Decision of the Supreme Court dated 30 November 2023 in case No. 910/10906/22 (https://reyestr.court.gov.ua/Review/115409007), in particular, it noted that “it is obvious that only a person who plans to acquire exclusive rights to a trademark or who has an interest (in particular, the use of a similar designation, the use of an identical designation in the territory of another state and the planning of such use on the territory of Ukraine), should be able to apply for early termination of the exclusive rights in case of non-use of the trademark. Therefore, the plaintiff who can file a claim for early termination of the validity of the trademark certificate can be any interested person… […] Therefore, the subject of research in such categories of cases should include not only the circumstances of use/non-use of the trademark but also the circumstances that confirm the interest of the person who applies to early termination of the certificate.”

Moreover, referring to the fact that the defendant did not use the disputed TM in relation to specific goods/services of the NCL class, the plaintiff must prove the absence of such use as listed in Part 4 of Article 16 of the TM Law and must provide proper and admissible evidence supporting such arguments.

How do defendants actually prove non-use in practice?

According to the court practice, there are the following examples: as evidence of the absence of goods marked with a disputed TM, the plaintiff provided a letter from an authorised organisation about the non-assignment of a global number of commodity positions (barcodes) for goods and services; a letter from the Ministry of Economy on non-issuance of the certificates of conformity for products to be marked with disputable TM (Decision of the Supreme Court of 2 February 2020 in case No. 760/12081/17 (https://reyestr.court.gov.ua/Review/87826668).

Regarding the use of a TM for services: a letter from the relevant state authorities on the non-registration of a license by the TM owner to use the TM and the non-issuance of a licence allowing a certain type of business activity. Nevertheless, the specified letters confirming the non-granting of services are not the same as the non-use of the TM and cannot be considered proper, permissible, and reliable evidence.

Our recommendation: prior to initiating a legal dispute regarding the early termination of a Ukrainian TM certificate, you should contact the owner with a proposal to transfer the rights to the TM (in whole or in part) or conclude a licensing agreement. If such actions are unsuccessful, it is worth applying for TM registration and receiving a preliminary refusal. In such case, the court will have no procedural grounds for refusing to satisfy the claim because of the absence of a violated right or legitimate interest. With regard to the evidence of non-use of the TM by the defendant, documents on using the mark for each product/service for the last five years should be requested and carefully analysed for propriety, admissibility, and reliability.

  • Volodymyr Hrunskyi

    Counsel, Sayenko Kharenko

    Volodymyr is a counsel at Sayenko Kharenko IP practice. He advises leading businesses on various intellectual property issues focusing on IP litigation and especially on defending pharmaceutical companies in patent disputes.

    His areas of expertise cover suppression of unfair competition, trademark disputes, patent and utility model disputes, industrial design disputes, mediation, copyright disputes, etc. Volodymyr is also experienced in anti-counterfeit cases and customs seizures.

    Before joining Sayenko Kharenko, Volodymyr worked for a Ukrainian law firm and a Big Four company.

  • Alla Smorodyna

    Associate, Sayenko Kharenko

    Alla Smorodyna is an associate with Sayenko Kharenko’s IP practice who advises clients on all intellectual property issues, focusing on advertising laws and regulations, launching advertising campaigns and drafting agreements associated with marketing and advertising-related programs, including sponsorship.

    She deals with legal clearance of advertising materials from the concept to final materials, supporting promotional events (sweepstakes, gift cards, loyalty programs, etc.).

    Her areas of expertise also cover personal data protection law requirements.

    She participated in many projects for globally known companies regarding the protection and represented their interests in Ukraine, particularly cases connected with copyright and trademark infringement.

Sayenko Kharenko

ADDRESS:

Senator BC 32/2 Kniaziv Ostrozkykh Street Kyiv, 01010, Ukraine

TEL.: +380 44 499 6000, 389 5000

FAX: +380 44 499 6250

E-mail: info@sk.ua

Web-site: www.sk.ua

 

Founded in 2004, Sayenko Kharenko enjoys a global reputation as a leading Ukrainian law firm with an internationally oriented full-service practice. The firm works on the largest and most sophisticated transactions and disputes representing the leading international and local companies. Every client is unique and our services are tailored to fit their business needs and individual profile.

Sayenko Kharenko has provided legal services to over 2,500 clients from more than 60 countries around the globe. We pride ourselves on being the firm of choice for the leading international corporations, including over 70 Fortune 500 companies and the world’s top-tier investment banks. Our work has brought over USD 110 billions of investment in Ukraine.

Our excellent reputation is evidenced by our top position in numerous rankings and league tables. Sayenko Kharenko has received every international professional excellence award, including National Law Firm of the Year by the IFLR Europe Awards, Law firm of the Year by The Lawyer European Awards; Most Innovative Law Firm for Ukraine by IFLR European Awards, Law Firm of the Year by Chambers Europe Awards, Law Firm of the Year: Ukraine by Who’s Who Legal and has been recognised as one of the European most innovative law firms according to FT Innovative Lawyers Report by Financial Times.