T-254/20: who owns the Soviet brands?

In October 2021, the General Court (GC) issued the ruling in T-254/20, Roshen v EUIPO, which drew the attention of this Ukrainian Kat.

Louis-Michel enjoys researching Soviet brands

The dispute arose when “Krasny Oktyabr”, a Russian confectionary company, registered an EU trade mark (EUTM) in Class 30 for a figurative sign representing a lobster. In the Soviet Union (which included Latvia, Lithuania and Estonia after 1940), “Rakovye Shejki” (“red lobsters necks”) were cheap and popular candies, sold since the late 19th century. Their wrapping prominently featured a lobster, as seen in some archives from Saint-Petersburg, Moscow or Kyiv factories.

“Roshen”, a Ukrainian confectionary, filed an application for a declaration of invalidity of the EUTM. Rather than arguing that the sign had become customary for the goods in question, Roshen based its application for invalidity on the lack of distinctiveness and descriptiveness of the sign. First the EUIPO, then the General Court, refused Roshen’s application. In essence, the General Court stated that Roshen failed to prove that the goods in question were actually sold and known under that mark during the Imperial or Soviet era in the Baltic States or Poland, this because the evidence relied upon by Roshen only related to Soviet Russia, Ukraine and Belarus. The General Court also concluded that Roshen failed to demonstrate that an average consumer in the Baltic States or Poland would perceive the image of a red lobster immediately, without further thought, as descriptive of the type of candy or of one of its characteristics (para. 98). As the result, Krasny Oktyabr’s EUTM was maintained.

Though it is the first case to have reached the General Court, it is certainly not the first time that the EUIPO has been confronted with disputes over Soviet heritage. In R 2536/2018-4, the same parties, Krasnyi Octyabr and Roshen, litigated over the packaging of “Kara-kum” candies, another famous Soviet sweet. Here, the EUIPO’s Board of Appeal refused Roshen protection for a dark-brown wrapping with camels on it. An opposition was filed by Krasnyi Octyabr, who owns earlier trade mark rights for the packaging of the sweets, which were produced throughout the Soviet Union and commonly featured camels, sun and a dessert (as seen at some examples below).

In R 2496/2018-5, Krasnyi Octyabr opposed the registration, by Steinhauer Holding, of a figurative mark used on the packaging for “Little Red Riding Hood” candy. Steinhauer tried to register the wrapping with an inscription in Latvian, while Krasnyi Octyabr already had earlier EUTM rights to a similar packaging, with no inscription on it. Steinhauer Holding argued, unsuccessfully, that the earlier mark had a weak distinctiveness, as it referred to a specific type of Russian confectionary known as ‘Little Red Riding Hood’ produced in the Soviet times and being part of its “national cultural heritage” (para. 29). The BoA dismissed Steinhauer Holding’s appeal and refused registration.

It is precisely this notion of “national [Soviet] heritage” that lies behind all the litigation. For most of Soviet history, local trade marks were closer to what an EU reader would recognize as a “certification mark”. Instead of guaranteeing the origin of goods and services, Soviet trade marks were used as quality control symbols. Trade marks were not product-specific. They included names of state-owned factories, informing the consumer that the goods, branded under the trade mark of said factory, were of a certain quality.

Products, such as “Alenka” chocolate or processed cheese “Druzhba”, produced by many factories across the Soviet Union under the same nomenclature, were not registered as trade marks. They are now commonly referred to as “Soviet brands”. According to estimates by the Russian IP Office, some 4000 “Soviet brands” existed in 1991. After the dissolution of the Soviet Union, many factories in Russia, Ukraine and other ex-Soviet states were quick to register popular Soviet brands as their own, leading to numerous legal disputes.

For instance, in 2018, the Russian IP court heard a dispute over the traditional Soviet wrapping for condensed milk. Designed by a Soviet artist, Iraida Fomina, in the 1930s, the blue-and-white wrapping was used to label cans for condensed milk in various Soviet factories. A similar case also occurred in Romania, where the company Steinhauer, already mentioned above, sued a local Russian shop, based on its EUTM for the blue-and-white wrapping. In Ukraine, Roshen’s litigation against other Kyiv-based factories over the rights to “Kyiv cake” traditionally makes the yearly ratings of the most discussed IP cases.

In the meantime, this Kat wonders whether, after a quick look at the EUIPO register, there may be other trade marks, dear to the Eastern European consumers, with potential for further litigation.

Credit for the image of “Kara-kum” wrappings above: Yulia Novozhilova, “History of our favourite USSR candies”.