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Thursday, 6 November 2014

Brand Tough?: Ford Denied Well-Known Trademark Protection in Russia

Rospatent
It was reported last week that Russia’s Intellectual Property Court upheld a March decision by the country’s IP Office (Federal Service for Intellectual Property - Rospatent) to deny the Ford Motor Company's (FMC) application for well-known trademark protection for its company name and its iconic blue oval logo (below right). Ranked by Forbes Magazine as the 44th most valuable global brand last year, the Ford name and logo is one of most well-known brands in the automobile industry, and arguably the world. Russia's recent denial of well-known trademark protection to FMC therefore comes as surprise to anyone who knows anything about cars, or frankly pop culture. 
A Rospatent Reject?

At first glance, Rospatent and the IP Court's rejection of FMC's iconic name and logo's well-known trademark status suggests Russia's unwillingness to grant western, and particularly U.S. companies, enhanced IP protections for their brands. Beyond broader geopolitical disputes between the U.S. and Russia, Russia was criticized by the U.S. Trade Representative's Office earlier this year for having "continued, significant challenges to IPR protection and enforcement." FMC's rejection also comes at a time when other major U.S. companies, including Boeing and Apple, have had challenges in protecting their brands in Russia. In this present case, Russia's rejection of FMC's well-known trademark protection denies FMC the ability to assert exclusive rights to its name and logo against any subsequent users in Russia across all goods and services, as otherwise provided to well-known trademarks under Article 1508(3) of Russia's Civil Code and Article 6bis of the Paris Convention for the Protection of Industrial Property

However, a closer look at FMC's failure to obtain well-known trademark protection for its name and logo suggests that FMC's denial is more complex than simply geopolitical issues or Russia's precarious IP protection environment. In fact, FMC's rejection may have been more the result of their failure to comply with Rospatent's procedural requirements than any other issue. Understanding why FMC's rejection of well-known trademark protection in Russia may have been its own doing (at least in part) first requires looking at Rospatent and the IP Court's rationale for rejecting FMC's well-known trademark petition.

English versions of Rospatent and the IP Court's decisions are unavailable, however it was reported that Rospatent had rejected FMC's well-known trademark petition due to FMC's failure to provide evidence of the company's extensive use of the logo in Russia, citing both a lack of FMC's operations in Russia and a failure to establish continued uniform use of the FMC name and logo in the country. FMC's petition included documentation from its joint venture company with Russian car maker Sollers, Ford Sollers Limited (FSL), detailing FSL's operations in Russia including over 100 dealerships, as well as FSL's promotional efforts. Rospatent rejected such evidence, citing that because such evidence was provided by FSL, it did not show FMC's operations in Russia, namely FMC's in-country importation or production of automobiles or automobile parts. Further, Rospatent held that evidence provided by FSL showed that the FMC name and logo had not been used consistently  enough in the same manner throughout FMC's history to qualify for well-known trademark protection.

So were these legitimate grounds Rospatent's refusal? The short answer is that it is unclear. Here is why:

Consistent Use: As was mentioned, Rospatent refused FMC's application due to FMC's inconsistent use of their name and logo. Article 1508 of Russia's Civil Code requires that a trademark owner provide proof of "intensive use [of the trademark] on the date" of application. Although intensive use is undefined, commentators have mentioned that Rospatent has denied well-known trademark protection to a mark if there is a discrepancy between the mark for which the application is made and and the way it has been used in Russian commerce. Again, we do not have evidence of what version of the FMC name and logo FMC provided to Rospatent, or evidence of how it was used in Russian commerce. Yet, FMC has always used Ford as its company name, and viewing the general evolution of the FMC logo over the past century does not appear to show any higher degree of changes to the logo than other logos (e.g. Coca-Cola and Bridgestone) that have obtained well-known trademark protection in Russia. However, without further information about the documentation FMC provided to Rospatent concerning use of its name and logo in Russia, we can not tell whether there was substantial differences between how FMC claimed its name and logo were used in Russia, and actual evidence of FMC's in-country use of the mark. 

Local Operations. Rospatent also rejected FMC's claims based in part that it provided no evidence of FMC's operations in Russia where it could be shown to use the name and logo in commerce. Without further information, we can only assume that there was not sufficient evidence of FMC granting FSL rights to use the FMC name and logo in Russia, or FMC's compliance with Rospatent's licensing agreement registration requirements. Commentators have mentioned that Rospatent has rejected well-known trademark applications when the entity claiming extensive use of a trademark in Russia was not the actual trademark owner, but instead a subsidiary business to the actual owner. As much of FMC's evidence of their use of the FMC name and logo was provided by and through FSL, Rospatent may have rejected FMC's application on similar grounds.

More procedurally, FMC's application may have been doomed from the start if FMC did not provide Rospatent evidence of its licensing of the FMC name and logo to FSL in compliance with Rospatent's licensing registration requirements. Like many countries, Russia requires under Article 1490 of the Civil Code that any specific license of an exclusive trademark right be in writing. However, unlike the U.S. and other countries, Article 1490 also mandates that any such licensing agreement be registered with Rospatent. Again, it remains unclear whether FMC provided Rospatent evidence of their licensing of the FMC name and logo to FSL, or whether such licensing agreement(s) complied with Rospatent's registration requirements. 

Consumer Recognition: Perhaps the most perplexing issue of Rospatent's rejection of FMC's petition concerns consumer recognition polls associated with the petition. Under Article 1508 of the Civil Code, a well-known mark must be "widely known in the Russian Federation among consumers in respect of the goods of that [owner]." In order to show that a trademark is widely known amongst Russian consumers, its owner may submit different forms of evidence including lists of retail outlets selling goods or services utilizing the mark, sale figures, valuations of the mark, and most importantly, consumer polls showing the Russian public's recognition of the mark. Polls showing the public's recognition of a mark have been identified by multiple commentators as not only being the most effective, but also the most essential means to show a mark's recognition amongst Russian consumers. Particularly, Rospatent has reportedly required that such polls be provided in well-known trademark petitions, and that such polls be conducted by specific recognized pollers in more than six major Russian cities. Although it is unclear whether FMC's Russian consumer poll met these requirements, it was reported that FMC did submit a consumer poll, and that such results showed "a high degree of recognition of the trademark in Russia." If such polls are considered by many to be the most essential form of evidence of a mark's well-known status in Russia, it is unclear why such a poll did not have more of a dispositive effect on Rospatent and the IP Court's decisions.

It remains unclear whether Rospatent's rejection of the FMC name and logo's well-known status was based on fundamental deficiencies in their use of the name and logo in Russia, or whether it was refused for purely procedural objections. Although FMC may have provided insufficient evidence of their use of their name and logo in Russia, many of the facts of their use of the mark in country would appear to be in their favor. Time will tell whether FMC will reattempt well-known trademark registration in Russia.

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