03 December, 2019 Company news

Risks of buying a "finished" brand

When buying a registered trademark from the owner of the mark, the risks associated with its possible non-use are borne by the buyer.

What does it mean? Let's look at an example of a real case.

In 2005, when the trademarks were not the mainstream in Ukraine, the Arcadia Trade House registered the right to TM, let it be "Chamomile". After some time, or more precisely, in 2013, Arkadia TD was transferred ownership of the mark for goods and services under the contract of a citizen of Romashkin.

Let's move on to 2015, where the American company Wolverine Audors Inc. (e Michigan Corporation), failing to routinely register the TM "Chamomile" (refusal due to the fact that the sign is very similar to the registered "Chamomile") has filed a lawsuit with the State Intellectual Property Service of Ukraine (hereinafter - the State Intellectual Property Office of Ukraine) owner gr. Romashkin, with the participation of a third party Arcadia Trading House. I requested the early termination of the certificate of Ukraine on the sign for the goods and services "Chamomile" in connection with its long non-use (more than three years).

After numerous court turmoil, the Supreme Court concluded that the long term non-use of the TM is calculated from the date of publication of the certificate of issue (ie, the initial publication, in 2005) and does not interrupt / restart its records in connection with the transition ownership of the TM to another person.

Thus, the Supreme Court prematurely partially terminated the certificate of Ukraine of January 17, 2005 on the trademark "Chamomile", concerning services of 35 class of the International Classification of Goods.

At the same time, the court acknowledged that in obtaining the right to sign for goods and services (at the time of signing the contract and acquiring the rights to an already existing trademark), the new owner of the mark should assess all the risks of possible non-use of the mark by the previous owner. At the same time, it is the responsibility of the owner to prove the validity of the reasons for not using the mark for goods and services.

The decision of the Supreme Court in the case described above No. 760/9576/16-c can be found here http://reyestr.court.gov.ua/Review/78627468.