A draft law proposing the introduction of a state fee for use of foreign trademarks and names in advertisements was submitted for the consideration of the Russian Parliament.

Draft law No. 638479-6[1] (the “Draft Law”) was submitted to the State Duma (the lower chamber of the Russian Parliament) on 29 October 2014.  By 18 December 2014, no readings had taken place. The Draft Law introduces a new article into the Federal Law No. 38-FZ of 13 March 2006 “On Advertising” (the “Advertising Law”) under which the use of trademarks and names in Latin font and foreign language in advertisement shall entail a state fee.  The Draft Law states that this fee should be paid by Russian legal entities and individual entrepreneurs which advertise the goods and services produced by them using trademarks and names in Latin font and foreign language. The Draft Law further stipulates that the amount of the fee and the rules for its payment shall be established separately by the Russian Government.

According to the explanatory note to the Draft Law, such amendments are aimed at fighting the current trend of Russian businesses which use foreign words to distinguish their goods and services which are of Russian origin. The note claims that use of brands in Latin font and foreign language by such Russian persons may create an impression that they are of foreign origin.

Though at the first sight the Draft Law is aimed only at Russian goods and services, it is not clear whether its provisions would be interpreted as covering the goods and services produced or provided locally under franchise agreements concluded with foreign right holders.

Most specialists criticise the Draft Law’s provisions. The Russian Government has also provided a negative opinion on the Draft Law arguing that Russian law already provides for sufficient protection against possibility to mislead consumers and a general obligation to use the Russian language in advertisement.  We will carefully monitor this legislative initiative and follow up with an update if any substantial developments take place.