In practice, we often encounter cases of violation of the rights of legitimate owners of trademarks, which often leads to material and reputational losses. However, in such cases, the violator suffers no less, since he can be held accountable and face multimillion-dollar fines for using someone else’s trademark on his counterfeit products or in the provision of services.
In order not to violate the rights to someone else’s trademark, but to use it effectively and legally, there are several methods, which we will consider in this article.
Since a trademark, as an object of intellectual property, can be disposed of by the copyright holder at his own discretion, he can transfer the rights to use to other persons on mutually beneficial terms.
For example, concluding a Franchise Agreement. The benefit for both parties is that the Copyright Holder (franchisor) increases its income through contributions from the Acquirer (franchisee) and increases the popularity of its brand at its expense. The franchisee gets the opportunity to quickly open a business under a well-known brand (or which is on the way to fame).
Under a franchising agreement, the rights to use a trademark, corporate identity, and production secrets are transferred. That is, the franchisee gets the opportunity to legally conduct business using the franchisor’s technologies and standards, as well as use his trademark. The agreement establishes a one-time payment when purchasing a franchise, the size and frequency of royalties, and also stipulates the rights and obligations of both parties, the duration of the agreement and the grounds for its early termination, determines the procedure for interaction and the territory within which the agreement is valid. In the case of concluding an open-ended contract, its validity period will depend on the period of validity of the exclusive right to the trademark. The agreement, along with the necessary documents and confirmation of payment of the state fee, is sent to Rospatent and after 2-3 months, applicants can receive a conclusion and notification of registration, and the franchisee receives the right to conduct their business legally.
The owner of a trademark can transfer exclusive rights to it under the Alienation Agreement (according to Article 1488 of the Civil Code of the Russian Federation) in relation to all goods/services for which the mark is registered or for part of them. The alienation agreement, which specifies the data of the trademark registration certificate, the cost and procedure for payment by the acquirer of the right, as well as the conditions for the transfer of the trademark, is submitted to Rospatent with confirmation of payment of the fee. The registration period with Rospatent is 3 months.
Alienation of the exclusive right to a trademark under a contract is not allowed if it may cause misleading of the consumer regarding the product or its manufacturer.
In the event of concluding a License Agreement, the Copyright Holder retains the right to the trademark, and the Acquirer does not become the owner of the mark, but only receives the right to use it.
Like an alienation agreement, a license agreement can only be concluded with a legal entity or an individual entrepreneur. The license can be exclusive, allowing only one person to use the trademark, or non-exclusive, if the Copyright Holder (licensor) has issued several licenses for different entrepreneurs. In this case, the contracting parties independently establish and reflect in the document the conditions for using the trademark (the list of services and goods in relation to which the mark will be used, as well as the amount and procedure for transferring the license fee). In some cases, an additional agreement is drawn up, which may reflect changes in conditions. Transfer of a trademark under a license agreement is possible for any period that does not exceed the validity period of the right to the trademark. If the terms of use of the trademark or any clause of the contract are violated, early termination is possible.
The license agreement with a package of documents (payment order for payment of fees and application for registration) is submitted to Rospatent for registration.
