By judgment No. 305-ES21-23755 of April 5, 2022, the Supreme Court of the Russian Federation recalled that in addition to legal instruments clearly provided for by civil law, such as the conclusion of a license agreement or In a trade concession (franchising) agreement, a person who wishes to use a mark that does not belong to him for commercial purposes has another means of confirming the legality of its use – consent to use a mark.
The essence of the dispute was that the company, which has a consent letter from the brand owner, was trying to obtain approval for the placement of the sign through the municipal authority. However, the administrative authority considered that consent to use the trademark would not be enough for this, and the company first had to go through the official procedure of registering a license agreement through Rospatent.
The company, disagreeing with the arguments of the administrative authority, tried three times to appeal the decision before the courts, but each time the courts sided with the administrative authority, citing the absence legal basis in the form of an agreement registered by Rospatent.
The Supreme Court of the Russian Federation, by the above decision, annulled the acts of lower courts. In the judgment, the Supreme Court indicated that, in accordance with the Civil Code of the Russian Federation, the right holder may dispose of the exclusive right to the result of intellectual activity or means of individualization in any way legal. In this case, the right holder, among the legal means, has chosen to give his consent to the use of his mark by a third party. It is their legal right, and it cannot be limited.
Consequently, the administrative authority had no right to refuse the company permission to place the sign. The Supreme Court of the Russian Federation declared the administration’s refusal invalid and ordered it to reconsider the claim.
It is important to understand that despite the decision of the Supreme Court of the Russian Federation, it would be wrong to say that consent to use a trademark can completely replace the legal instruments provided by law, namely the conclusion and registration of a license agreement or a commercial concession agreement (franchise) through the competent authority. As a rule, consent is used for short-term use of an intellectual property object or, for example, to launch a joint advertising project, place a banner with a logo, etc.
The very concept of a letter of consent to the use of a trademark is not in the law. Thus, before granting the right to use his trademark in this way, the right holder must clearly ensure the good faith of his partner. If a long-term cooperation is expected between the owner of the mark and the person wishing to use the mark, it will be more reliable to conclude a license agreement or a commercial concession (franchise) agreement and register it with the competent authority – Rospatent. Thus, the right holder will not only be able to have his exclusive right to an object of intellectual property but above all, provide for measures to protect his rights in disputed situations.