The Supreme Commercial Court of the Russian Federation (the “SCC”) has reviewed a dispute between OAO Moscow Winery and Brandy Distillery KiN (the “Distillery”) and OOO Rekona (the “Company”) in respect of the “KiNovsky” brand name of brandy.

Details of the case

The Distillery had been producing brandy under the “KiNovsky” brand name, with the consent of the Company, which had previously received the rights to the brand name from the Distillery itself. According to the Distillery’s shareholders, the lack of registered rights to the trademark resulted in an increase in the cost of brandy distilled and a decrease in the dividend pay-outs.

Consequently, one of the Distillery’s shareholders (the “Applicant”) appealed to Rospatent, and had the legal protection of the disputed brand name successfully cancelled. The Company challenged this ruling in the courts. The court of the first instance and the appeals court both indicated that the rights of the Applicant as a shareholder to intervene in the activity of the Distillery are limited as per the federal law “On Joint-Stock Companies”. At the same time, the courts recognised the Applicant’s interest in the protection of the trademark.

Position of the Federal Commercial Court of the Moscow District and the SCC

The court of cassation cancelled the acts of the afore-stated courts, indicating that either party which demonstrates an actual interest may be considered a concerned party. Consequently, the Applicant, as a shareholder, has the right to demand the cancellation of the legal protection of the disputed brand name.

The SCC put an end to this dispute by decreeing that:

  • a shareholder of the Distillery may be recognised as an interested party even though the Distillery itself did not challenge the registration of the trademark under the Company’s name; and
  • the legal protection of the disputed trademark could result in a consumer becoming confused in respect of the producer of the relevant goods.

[For more information on this case in Russia, please see the Supreme Commercial Court’s site here]