Articles

Unfair competition denotes any actions of economic entities focused on obtaining the advantages in business activity, which contradict the provisions of the current legislation, traditions of business intercourse, requirements of ethics, rationality and justice, and can cause or have caused damage to other economic entities - competitors or cause damage to their business reputation (art. 4 of the RSFSR law «On competition and restriction of monopolist activity in the commodity markets»).

It is conventional that the achievements of scientific and technical progress effectively introduced into manufacture, and also means of individualization of economic entities’ production and services are capable to provide steady position of these entities in the market and give essential advantages in competitive struggle.

According to Part 1 art. 44 of the Russian Federation Constitution [1], freedom in literary, artistic creativity, science, technics and other kinds of creativity is guaranteed to everyone. The intellectual property is protected by the law.

The concept of the intellectual property includes the rights concerning literary, art and scientific works, exclusive activity of actors, sound record, radio and television programs; inventions in all spheres of activity; discoveries; industrial samples; trademarks, service marks, company names, commercial designations; protection against unfair competition, and also all other rights concerning intellectual activity in industrial, scientific, literary and art areas.

There are the following special laws on protection of intellectual property: «The Patent law of the Russian Federation» from 23.09.1992 № 3517-1 [2]; the Law of the Russian Federation from 23.09.1992 № 3520-1 «On trademarks, service marks and names of places of an origin of the goods [3]; the Law of the Russian Federation from 23.09.1992 № 3524-1 «On a right protection of programs for computers and databases » [4]; the Law of the Russian Federation from 23.09.1992 № 3526-1 «On legal protection of integrated circuits typologies» [5]; the Law of the Russian Federation from 09.07.1993 № 5351-1 «On the copyright and the neighbouring rights» [6]. Questions of intellectual property are also governed by a number of the international agreements signed by the USSR and the Russian Federation.

Establishing legal protection of the intellectual property (art. 138 of the Russian Federation Civil code [7]), the law simultaneously forbids the use of the civil rights with a view of competition restriction, and also exploiting a leading position in the market (art. 10 of the Russian Federation Civil code).

Nevertheless, the objects of the intellectual property are more and more often used as the means of unfair competition. The experience of Tomsk OFAS of Russia acknowledges /confirms this.

Whose water is where?

04.08.2004 The commission of Tomsk OFAS of Russia tried the case of the infringement by GSLRU «Sanatorium "Chazhemto" (hereinafter - sanatorium) of the clause 1 art. 10 of the RSFSR Law «On competition and restriction of monopolist activity in the commodity markets» [8] (unfair competition), prosecuted under the statement of the Company Neptune-Aqua, Ltd.
The commission established that since January, 2004 the Company Neptune-Aqua, Ltd. had sold medical table mineral water "Sanatorium Chazhemto" with a label depicting blue sky with clouds, green grass and a branch with three leaves. In June of the same year the sanatorium started to sell medical table mineral water of the same name using the label completely repeating the label of the mineral water produced by the Company Neptune-Aqua, Ltd.

As a result the consumer which has got used to the label, bought the mineral water of both manufacturers, paying attention, as a rule, only to a familiar label. The consequence of this was the reduction of sales volumes of mineral water produced by the Company Neptune-Aqua, Ltd.

The sanatorium’s actions were qualified by the commission as infringing clause 1 art. 10 of the Competition act which excludes the unfair competition, including sale, exchange or other introducing of the goods with the illegal use of intellectual activity results and equal to them means of an individualization of the legal person, an individualization of production, performance of work, services. Besides paragraph 3 art. 10bis of «Paris convention on the protection of the industrial property» was broken according to which all actions capable in any way to cause confusion concerning the enterprise, products and industrial or trading activity of the competitor are subject to an interdiction. The sanatorium was given an instruction according to which it should stop manufacture and selling the mineral water with the disputable label within seven days.

The sanatorium complied with the commission’s instruction by the replacement of the label on production.

Not having agreed with the decision and the instruction of the antimonopoly body, the sanatorium addressed the Arbitration court of Tomsk region with the application for recognition of nullity of the decisions and instructions of Tomsk OFAS of Russia. By the decision of the court from 17.11.2004 the sanatorium’s claims were dismissed. The court specified in the decision, that sanatorium’s actions were correctly regarded by the commission as unfair competition as far as the Company Neptune-Aqua, Ltd. was the first to introduce the mineral water with the disputable label into a turnover of commodities in the market.

The appeals instance of the Arbitration court of Tomsk region, having tried the case 03.02.2005 concerning the sanatorium’s appeal, left the decision of the court of the first instance unchanged.

With a pick hammer … against competitors

04.10.2004 Tomsk OFAS of Russia tried the case under the application of Tomsk Vakhrushev Electromechanical Plant, JSC (hereinafter – JSC “TEMZ”, plant) about the facts of unfair competition on the part of SibTechService, CJSC. The commission established, that  JSC “TEMZ” had been engaged in manufacture of the mining equipment for more than 80 years, and since 1967 had been producing pneumatic pick hammers with short designations МО-8P, МО-9P, МО-10P, МО-1, МО-1M, МО-2М, МО-2А, МО-3А and others.

Abbreviation МО (pick hammer) has also been used by the plant since 1967 inpick hammer, by scientific institutes and other Russian manufacturers of similar production, by the Ministry of coal industry of the USSR, by coal-mining enterprises, so it became common. the engineering specifications, delivery contracts for

The head of CJSC “SibTechService” earlier worked as a marketing engineer for JSC “TEMZ” and was informed of the wide application of the abbrevation МО without its registration as a trademark. 29.092003 SibTechService submitted an application to Rospatent for registration of the exclusive right for trademark "МО". 13.02.2004 CJSC “SibTechService” received the certificate for trademark (service mark) МО, conferring an exclusive right to its use during manipulation with the goods of the corresponding class. Thus CJSC “SibTechService” does not manufacture the production for which it received the trade mark, but sells the pick hammers made in China, marking them by the sign МО on the handle.

By the application of the rightholder trademark МО was registered in the customs list of objects of the intellectual property; as a result Tomsk customs repeatedly made the decision to suspend the output of the production with the abbrevation МО by JSC “TEMZ”. Besides in July, 2004 CJSC “SibTechService” addressed the arbitration court of Tomsk region with the application for the termination by the company Pneumatica, selling the production of JSC “TEMZ” of infringement of the exclusive right for the trade mark and destruction of the goods belonging to it, and also the engineering specifications using the abbreviation МО.

The commission of Tomsk OFAS of Russia, having tried the case 04.10.2004, regarded the specified actions of CJSC “SibTechService” as infringing clause 2 art. 10 of the Competition act which excludes the unfair competition connected to purchase and use of exclusive rights for the means of individualization of a legal person, production, executed work or rendered services. The decision of the commission was sent to the Federal Executive authority in the field of patents and trademarks to solve the question on the recognition of nullity of this trade mark registration. By the decision of Federal agency of intellectual property, patents and trademarks from 23.12.2004 granting the right protection to trademark МО was nullified.

The arbitration court of Tomsk region, 27.12.2004 having considered the application of CJSC “SibTechService” for the recognition of the decisions of Tomsk OFAS of Russia as void, refused to satisfy the declared requirements. Thus the court in the decision specified that registration of the trademark МОgives CJSC “SibTechService” an advantage in business activity, and actions on its registration contradict requirements of ethics, rationality and justice. As purchase and use of exclusive rights were carried out with a view of unfair competition, these rights, mentioned the court, and are not subject to judicial protection. The appeals instance left the decision of court of the first instance unchanged.

To be continued…

The experience of Russian antimonopoly bodies testifies that antimonopoly legislation contains the mechanisms effectively allowing to stop attempts to use exclusive rights for the intellectual property with a view of unfair competition. But the number of those who wish to line their pockets from the registration of well-known "inventions" is only increasing. The temptation is very great, not making any efforts, to bypass all competitors at ones. Therefore there are more and more cases of the given category in practice.

In the end of March this year Tomsk OFAS of Russia received the application from JSC “Manotom” that a certain competitor sells the manometers of the Chinese origin using the designations of types of the devices used by JSC “Manotom”, and counterfeit verification mark of metrological service of JSC “Manotom” …

[1] «Rossiyskaya gazeta», № 237, 25.12.1993.
[2] Bulletin SND and VS RF, 1992, № 42. Art. 2319.
[3] See above. Art. 2322.
[4] See above. Art. 2325.
[5] See above. Art. 2328.
[6] Bulletin SND and VS RF, 1993, № 32. Art. 1242.
[7] Collected Legislation of the Russian Federation, 05.12.1994, № 32. Art. 3301.
[8] Bulletin SND and VS RF, 1991, № 16. Art. 499; Collected Legislation of the Russian Federation, 1995, № 22. Art. 1977; Collected Legislation of the Russian Federation, 2000, № 2. Art. 15; Collected Legislation of the Russian Federation, 14.10.2002, № 41. Art. 3969. Hereinafter – Competition act.

I.V. Butenko,

Постоянный адрес: http://www.temz.tomsk.ru/company/articles/201676/