A week ago, State Duma deputies approved in the second reading the amendments made to the Law "On Trademarks". If these amendments are legalized in their current form, trademark owners will be able to count on their rights protection on the Internet, counterfeit products will be destroyed, and it will be possible to demand compensation in court.

Deputy Chief of the Ministry of Internal Security's Intellectual Property Crimes Department Andrey Starostin believes that the most important thing is that "for the first time a strong definition of counterfeit goods was given, and also a possibility of seized counterfeits destruction by court order was provided for." Once this provision comes into force counterfeits will be destroyed at the expense of the violator. However, another variant is also possible: at the request of the right holder the counterfeit goods could be handed over to him. For instance, if the matter concerns counterfeit printed material, the publisher-right holder may get hold of these products, and then sell them at a lower price.

The amendments provide for the following provision: if the Anti-Trust Ministry recognizes a trademark registration as a bad faith registration, instructions are sent to Rospatent. On the basis of these instructions registration of such trademark is annulled. First of all this provision is aimed against pirates, which have been successfully registering the trademarks of sluggish foreign companies for quite some time.

The antitrust agency is ready to use these methods to combat piracy, as starting October 12 this year, it may use the renewed Law "On Competition and Monopolistic Activities Limitation On Goods Markets." In late October, the Anti-Trust Ministry considered one of the first cases, which was based on a claim made by Nestle Food, producer of Mega ice cream. Trademark rights to this trademark belong to Nestle. Early this year, the Novokuznetsk Frozen Foods Company began producing ice cream under the name of Mega. Nestle addressed a claim to the Novokuznetsk Frozen Foods Company. However, the Novokuznetsk Company went on producing this brand. After that Nestle applied for protection of its rights to the Anti-Trust Ministry, which qualified the actions of the Novokuznetsk Frozen Foods Company in terms of its using the Mega trademark as unfair competition and ordered it to remove the verbal designation "Mega" from the ice cream label.

Nonetheless, the Anti-Trust Ministry has not yet referred any instructions regarding the trademark registration to Rospatent. The explanation is easy. Rospatent still does not have an appropriate "letter in the legislation." The amendments made to the Law "On Competition and Monopolistic Activities Limitation On Goods Markets" were approved earlier that the changes made to the Law "On Trademarks." Currently, these two laws simply do not correspond to one another. Only the amendments to the Law "On Trademarks" state clearly that if Rospatent receives an appropriate order from the Anti-Trust Ministry, it is obliged to annul the trademark registration.

"The reforms also include new protections for owners of famous trademarks," said Alexander Shelemekh, a member of the Duma Working Group on IP and CIPR Senior Vice President. If Rospatent recognizes the trademark as well-known, protection of this status will apply to all forty-five classes of goods and services. Currently, the status is protected only within the framework of one class.

Another amendment to the Law clearly specifies that the use of third party's trademarks as domain names is a violation. Definitely, following the effective date of this provision, the problem of cyber-squatters will be solved very quickly. Now we can say that the processes has been dragging on for years.

Prior to the current amendments to the Law "On Trademarks," our legislation did not provide for the possibility of demanding compensation. The holder of exclusive rights to a trademark was entitled to demand compensation for losses. For all that, he was not only to prove their presence and to substantiate their amount but also to show that these losses were caused with certain actions.

However, in practice, it was nearly impossible to secure compensation for losses in the cases of violation of rights to trademarks. For example, the brewery Baltika failed to receive compensation for losses after it discovered Baltika cigarettes produced by Podolsk-based Meta-Tabak. All of three instances of the Arbitration Court non-suited the brewery arguing that Baltika did not bear direct financial losses from the production of cigarette of the same name. Vadim Uskov, Head of the legal company Uskov & Partners, who represented the interests of Baltika, told Russky Fokus that the logic of judges was as follows: "So far as you have never produced cigarettes, it is impossible to speak about your profit. This means that a violator of your rights to the trademark was not able to influence the profit we have never had." After the amendments become effective, the trademark's owner will have the right to demand from a violator the compensation, which will range from 1,000 to 5,000 minimum salaries, instead of compensation of losses.

The current amendments stipulate broader grounding for registration of a trademark. In court practice, this provision may become a very actual attainment of the Law "On Trademarks." For example, the international company ICN Pharmaceuticals defended the registration of its PENTALGIN trademark in Rospatent's Chamber of Appeal last week. Contesting this registration, the Schelkovo Vitamin Factory stood its ground that even if PENTALGIN did not become a designation of a kind, nevertheless, it turned into a simple name like the word 'medicine' or 'pill'. A year ago, the point was a package bearing the designation Pentalgin-N, which was registered as a trademark. Last week, the matter was the words 'Ïåíòàëãèí' and 'Pentalgin'. A year ago, Rospatent excluded the word 'Ïåíòàëãèí' printed on ICN's products from the protection list. The case for this trademark will soon be heard in the cassation instance of the Arbitration Court. Rospatent's recent ruling is different: the name of the medicine - in Latin and Cyrillic - is still protected. According to Eugene Arievich, partner of the legal company Baker&McKenzie, we should use the definition 'common use of a trademark', which is accepted around the world. In other words, if pentalgin is manufactured by ICN alone for a long time, it is logical to reserve the registration of a trademark for this company. According to patent attorneys, the designation is becoming distinctive.

According to the amendments, two Rospatent structures - the Chamber of Appeal and the Supreme Patent Chamber - to which trademark's owners should go before bringing an action to the court, will be united into one unit, the Chamber for Patent Disputes. This will significantly reduce the time for consideration of cases. At present, a case may stay in Rospatent for eighteen months.

There are practically no talks about establishment of a special court to hear intellectual property disputes. "All intellectual property litigations are considered in two courts - an arbitration court and a regular court," Valery Medvedev, managing partner for the legal company Gorodissky & Partners, says. "It would be logical to hear them in one, for example, arbitration court (the more so as the majority of cases is currently considered there). This would allow us to concentrate professional efforts of judges on case hearings." However, the current amendments do not mention this point. There is an open question: when the amendments will become effective since it took about nine months to schedule the second reading.