Sputnik Blog

Patent Fees. On August 3, 2020, the United States Patent and Trademark Office (Office or USPTO) issued a Final Rule to set or increase certain patent fees. The “fee adjustments” are needed to provide the Office with a sufficient amount of aggregate revenue to recover the aggregate cost of patent operations in future years and to allow the Office to continue progress toward achieving its strategic goals. As explained in the Federal Register Notice, the fee changes are designed to “provide the USPTO sufficient financial resources to facilitate the effective administration of the U.S. IP system,” including its efforts to improve patent quality and timeliness, support the work of the Patent Trial and Appeal Board (PTAB), and improve the “quality, efficiency, and productivity of patent operations” and the USPTO’s IT systems. The new patent fees are set to take effect October 2, 2020.

https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting#tmfee-info

Sputnik Blog® bottom line: Inventors and potential patent holders (“applicants”) who are in a position to file new patent applications or pay fees in pending applications, and patent holders eligible to pay maintenance fees on issued patents, should do so before October 2, 2020, to avoid paying higher fees.

Trademark Fees. On June 19, 2020, the USPTO issued a notice of proposed rulemaking to set or increase certain trademark fees. The proposed “fee adjustments” are needed to provide the Office with a sufficient amount of aggregate revenue to recover the aggregate cost of Trademark and Trademark Trial and Appeal Board (TTAB) operations in future years and to allow the Office to continue progress towards achieving strategic goals. It is unclear when the new trademark fees will go in effect, but they definitely will.

Under the proposal, the cost for filing a Trademark Electronic Application System (TEAS) “standard” application will rise from US $275 to US $350 per class. The cost for filing a Section 8 declaration of use to maintain the registration after the fifth anniversary from the registration or renew it every ten years (or Section 71 affidavit for Madrid registrations) through TEAS will change from US $125 to US $225 per class. The cost to file a petition for cancellation or notice of opposition will increase from US $400 to US $600 per class.

A full schedule of the proposed adjustments can be found on the USPTO website. see also attached file below.

The proposal also includes new fees for actions currently taken at no cost. For example, deletion of goods, services, and/or classes from a registration will generally cost US $250 when the deletion is requested after submission but prior to acceptance of a Section 8 or Section 71 affidavit. This includes paying this fee when trademark owners delete goods, services, and/or classes in response to a post-registration office action. (Since 2017 and introduction of post-registration audits, such post-registration office actions became more frequent.)

The proposal also includes a significant increase in the fee required to file a request for reconsideration (issued after a final office action). Under the proposal, there is no cost for filing a request for reconsideration within three months of issuance of a final office action. However, a request for reconsideration filed between three and six months after the issuance of a final office action will cost US $400.

Whether this proposal will be implemented (with or without modifications) and when, we will know in the Final Rule to be issued soon. It is certain that the trademark fees will be increased, just like the patent fees.

Sputnik Blog® bottom line: Trademark owners who consider the filing of new applications or those who are in the statutory period already to maintain or renew their existing registrations, they should act now to potentially save on official fees.

Text © 2020 Maxim A. Voltchenko
* This piece is not intended to be a review of U.S. law or USPTO practice. This posting may not necessarily represent the views of the author’s employing law firm. Although every effort has been made to verify the accuracy of items in the Sputnik Blog®, readers are urged to check independently on matters of specific concern or interest.

On March 4, the US Supreme Court rules that that a copyright owner can bring a copyright infringement lawsuit only after the Copyright Register has processed its application for copyright registration, that is, either issued a registration certificate or denied registration. The copyright owner cannot sue shortly after it just filed an application for copyright registration, while the application is still pending.

Fourth Estate Public Benefit Corp. v. Wall-Street.com, 586 U.S. ___ (2019), Docket No. 17-571 https://www.supremecourt.gov/opinions/18pdf/17-571_e29f.pdf

This decision is disappointing news to many copyright owners. By contrast, those who cheer various internet freedoms including the unhindered exchange of ideas (and content) and value the competition, or believe in strict interpretation of laws, might welcome this decision.

Here is the crux of the legal issue. The US Copyright Act, Title 17 U. S. C. §411(a) states that “no civil action for infringement of the copyright in any United States work shall be instituted until . . . registration of the copyright claim has been made in accordance with this title.” Some have interpreted the wording “registration has been made” that a complete application has been submitted to the Copyright Office, together with the payment of an official fee. (Yours truly has taken this position in some cases advising clients that this position in any circuit is vulnerable to motion practice by defendant.) Indeed, many authoritative experts argued for that position. For example, professor Paul Goldstein wrote in his treatise that permitting an infringement lawsuit as soon as an application for registration was filed was “the better rule” because delays inherent in processing an application could prejudice the copyright holder, especially when seeking immediate injunctive relief.

This is how the case has developed. Fourth Estate Public Benefit Corporation, an online news and content publisher, licensed some of its articles to Wall-Street.com, a news website. (Not to confuse this obscure online publication with the Wall Street Journal.) The license agreement required Wall-Street.com to remove from its website all content produced by Fourth Estate before canceling the agreement. Wall-Street canceled but continued to display articles produced by Fourth Estate. Fourth Estate sued Wall-Street for copyright infringement. The complaint alleged that Fourth Estate had filed “applications to register [the] articles [licensed to Wall-Street] with the Register of Copyrights.” Because the Register had not yet acted on Fourth Estate’s applications, the District Court for the Southern District of Florida, on Wall-Street’s motion, dismissed the complaint, and the Eleventh Circuit affirmed. The Eleventh Circuit held that “registration . . . has [not] been made” under §411(a) until the Copyright Office registers a copyright.

Thereafter, the Register of Copyrights refused registration of the articles Wall-Street had allegedly infringed.

In October 2017, Fourth Estate filed a Petition for Writ of Certiorari with the Supreme Court of the United States. Cert was granted and the Court heard oral arguments on January 8, 2019.

On March 4, the Court, in an 9–0 decision, written by Justice Ginsburg, has ruled that a copyright owner cannot file an infringement lawsuit until the Copyright Office has registered the work at issue, a process that can take many months. Wall-Street won.

It is amazing that in our polarized country the Supreme Court has found an issue on which it ruled unanimously!

The Court relied primarily on legislative history and textual analysis to hold that “[Section 411(a)] focus[es] not on the claimant’s act of applying for registration, but on action by the Copyright Office — namely, its registration or refusal to register a copyright claim.”

The Court paid lip service to the principle that copyright exists from the moment a work is created and fixed in tangible form. That means that copyright protection for US works should be automatic. However, many clients and non-US lawyers wonder what good this principle does if you cannot protect your copyright in court timely and cost-effectively!

The Court recognized that delays in the registration process raise serious concerns. Yet, the Court noted that an expedited registration, for a hefty fee, is available. The Court also pointed out several exceptions to the registration requirement.

What are the implications for businesses? IP attorneys have always advised clients about the importance of timely copyright registration. This Supreme Court’s decision just reinforces this advice.

Copyright law and litigation attorneys and analysts differ on the practical significance of this decision focusing on different aspects.

Here is what Jessica Litman wrote in popular SCOTUSblog:


https://www.scotusblog.com/2019/03/opinion-analysis-a-copyright-owner-cant-sue-for-infringement-before-the-register-has-processed-its-copyright-registration-application/

James Hough of large West-coast based international law firm Morrison & Foerster LLP wrote in Law360:


I tend to agree that this decision is not a game changer, and is not necessarily that bad to copyright owners, as it may seem. Although I do not personally agree with the approach the Court has taken, having certainty is a good thing. In this sense, it is a good development that now we can counsel copyright owners with more clarity. After all, what businesses value the most is the predictability of the legal system. This decision certainly brings more predictability.

Text © 2019 Maxim A. Voltchenko

* This piece is not intended to be a review of U.S. law. This posting may not necessarily represent the views of the author’s employing law firm. Although every effort has been made to verify the accuracy of items in the Sputnik Blog®, readers are urged to check independently on matters of specific concern or interest.

This case Larry Pitt & Assocs. v. Lundy Law LLP got everything. At one point or the other it had virtually every possible legal issue: from a Sherman Act antitrust claim to abuse of process and tortious interference claims (in violation of Pennsylvania’s Dragonetti Act). At least two tribunals have been involved: a federal district court and Trademark Trial and Appeal Board of the U.S. Patent and Trademark Office (TTAB). Would you be surprised to learn that one of the two firms already sued its lawyer for legal malpractice? Incidentally, please read a legal disclaimer at the bottom of this post.

This blog only will address a Lanham Act claim of false advertising. The federal Lanham Act prohibits the “false or misleading description of fact, or false or misleading representation of fact, which … in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities…” 15 U.S.C. §1125(a)(1).

The facts are relatively straightforward. One prominent and successful personal injury firm sued its crosstown competitor. It all started in 2013 when Lundy Law LLP accused Larry Pitt & Associates (“Pitt”) of trademark infringement. Pitt was using an advertising slogan “Remember this Number.” Lundy Law alleged that the slogan was too close (and confusingly similar) to its heavily advertised in a tri-state area slogan “Remember this Name.”





Lundy Law dropped its trademark infringement against Pitt relatively quickly. However, Pitt thought the timing of such voluntary dismissal was too suspicious. Lundy Law withdrew its lawsuit the next day it learned that Pitt’s insurance would cover its defense. In turn, Pitt filed a lawsuit accusing Lundy Law of malicious prosecution, and false and misleading advertisements in violation of the Lanham Act, among other things.

The lawsuit has been very contentious and involved significant motion practice. After two motions to dismiss and two amended complaints, only a handful of claims survived.

On February 15, 2018, U.S. District Judge Cynthia M. Rufe dismissed the remaining claims of Pitt’s lawsuit, specifically its Lanham Act’s false advertising claims. 2018 BL 52844, E.D. Pa., No. 13-2398, 2/15/18.

In Pennsylvania an attorney or a law firm is permitted to refer a case to another attorney or law firm and earn a portion of the clients’ fees without performing any work on the case, so long as the arrangement is disclosed to the client and the fee is not excessive. However, a law firm may not actively advertise in its own name for certain categories of cases for the purpose of referring those cases to other law firm

Pitt’s false advertising claim under the Lanham Act and deceptive marketing claim under Pennsylvania unfair competition law are both based on Lundy Law’s extensive advertisements for workers’ compensation and social security cases, which Lundy Law agreed to refer to certain other law firms in exchange for referral fees.

The facts differed somewhat as to workers’ compensation cases and social security cases.

Initially, Lundy Law indeed did not handle workers compensation cases itself. However, around in 2009 Lundy Law added an attorney (Leonard Cohen) the sole proprietor of one of these firms (the Law Offices of Lenard A. Cohen, P.C. or “LOLAC”) as “of counsel.” Lundy maintained that LOLAC’s sole proprietor, Lenard Cohen, had been “of counsel” to Lundy since 2009, and Lundy could therefore truthfully advertise Mr. Cohen’s legal services as those of an attorney at Lundy Law.

Lundy’s position relied on the following facts, which Pitt has not disputed:

⦁ In 2009, Mr. Cohen was added to Lundy Law’s professional liability insurance as “Of Counsel” to the firm.

⦁ Mr. Cohen currently carries Lundy Law business cards, maintains a Lundy Law email address, appears on Lundy Law’s website, and sometimes attends Lundy Law attorney meetings and marketing meetings.

⦁ Since September 2012, LOLAC has been located within the office space rented by Lundy Law.

Pitt nonetheless contested Mr. Cohen’s status as “Of Counsel” to Lundy. Specifically, Pitt has cited to evidence that LOLAC remains an independent law firm in terms of ownership and control, that LOLAC maintains separate fax and telephone numbers from Lundy Law and pays rent to Lundy Law, that neither Mr. Cohen, LOLAC’s associate, nor LOLAC’s staff are W-2 employees of Lundy Law, and that Mr. Cohen does not identify himself as “of counsel” to Lundy Law on LOLAC’s website, on the Pennsylvania Bar Association’s listing of Workers’ Compensation Lawyers, on social media, or in entering his appearances.

Pitt’s arguments did not convince the Court. The Court noted that there was no indication that Lundy and Mr. Cohen adopted the “of counsel” title solely for this litigation because both the title and the relationship had existed since 2009. Under these circumstances, Pitt has not met its burden of raising a genuine question of fact as to whether Mr. Cohen is an attorney at Lundy Law, or even if he is not, whether the particular differences between Lundy Law’s relationship with Lenard Cohen and a law firm’s relationship with its own attorneys would be material to potential clients. Accordingly, Pitt has not provided sufficient evidence to support its Lanham Act claim based on Lundy’s workers’ compensation advertisements.

Pitt’s allegations concerning the falsity of Lundy Law’s social security advertisements were somewhat stronger. The parties stipulated that between November 8, 2008 and October 31, 2013, Lundy Law referred all of its potential social security cases directly to other law firms. In 2013, Lundy Law engaged a social security attorney to handle social security cases at Lundy. Because Pitt demanded damages for allegedly false advertisements in 2008-2013, the Court wanted to see a causal link between Pitt’s alleged injury and Lundy’s alleged misrepresentations by showing that Lundy’s statements actually deceived and influenced consumers. Pitt failed to establish such a causal link. In particular, the Court noted, Pitt has provided no surveys or consumer testimony that show clients would have responded differently to Lundy Law’s advertisements if they omitted references to its social security practice or expressly disclosed that Lundy Law would refer rather than handle social security cases.

The Court granted Lundy Law’s motion for summary judgment with respect to Pitt’s Lanham Act claim in its entirety.

While Lundy Law seemingly may be tempted to celebrate its legal victory, this victory may be somewhat premature. First, there is still a pending TTAB case. Larry Pitt & Associates, P.C. v. Lundy Law, LLP, File No: 91210158. The TTAB case focuses on a completely different aspect: whether the slogan REMEMBER THIS NAME can function as a service mark. Second, Judge Rufe ended her opinion with a not-so-subtle suggestion to Pitt: consider filing an ethical claim with the state attorney disciplinary board:


Somehow it is doubtful that Pitt will remain content with the recent decision and not take further action hinted at by the federal judge. Therefore, stay tuned for further developments.

Text © 2018 Maxim A. Voltchenko

* This piece is not intended to be a review of U.S. case law. This posting may not necessarily represent the views of the author’s employing law firm. Although every effort has been made to verify the accuracy of items in the Sputnik Blog®, readers are urged to check independently on matters of specific concern or interest.

No matter how you feel about President Trump’s campaign promises and now his administration's actual policies, few disagree that Mr. Trump is business savvy in many things he does. Mr. Trump's branding illustrates that point the best. He gets it. Days before swearing in as the nation’s 45th president, he already came up with a slogan for his re-election campaign in 2020, “Keep America Great.” What’s more he instructs his trademark lawyer to apply to register the slogan with the U.S. Trademark Office the same day.

The story goes that, on January 18, 2017, during an interview with a news reporter, the reporter asked President (then President-elect) about his slogan, “Make America Great Again.” Donald Trump suddenly paused the interview and called out to his staff, “Get me my lawyer.”

Donald Trump understands the urgency. If you don’t act fast enough, somebody else will. And you would get in a situation, when you must claw back the name or slogan that you made famous, whereas somebody else is trying to taking advantage of and ride on your coattails.

If you search the U.S. Trademark Office’s (USPTO) register, you will find almost a half dozen of pending applications for MAKE AMERICA GREAT AGAIN for various items owned by somebody other than Donald Trump. Of course, Donald Trump himself owns two registered marks and two pending applications for the slogan. Mr. Trump first applied to register his slogan in November 2012 (more than two years before he formally announced his candidacy!) and got his registration in July 2015. Here is a sample of use of the mark that Mr. Trump submitted to the USPTO as a specimen for one of the two registrations.

Even if you are smart as Donald Trump, there is almost always someone out there who might outsmart you. Case on point, someone from Washington DC, named Andreas Mueller, filed an application for the trademark KEEP AMERICA GREAT on July 6, 2016. This is more than four months before the historical elections of November 8, 2016 and more than six months before Mr. Trump himself came up with this slogan! Amazing anticipation.

Mr. Mueller is trying to register the mark for sunglasses, t-shirts, tank tops and hats. So far, the Trademark Office is resisting Mr. Mueller’s application, but not because Mr. Mueller obviously was inspired by Mr. Trump’s campaign slogan. The slogan clearly is playing on Mr. Trump’s famous slogan. But seemingly on a technicality. According to the USPTO examiner, the slogan as displayed on a sample of use fails to function as a trademark. Put differently, consumers will not perceive the phrase as a brand, but would perceive it as something else (for example, as a political statement).


What does it mean for Mr. Trump’s newly-filed applications? Assuming Mr. Mueller’s application remains active with the USPTO, it will almost certainly block Mr. Trump’s application. What Mr. Trump is going to do about that we don’t know. He does have some legal options, which we will not go into now…

The moral of this story is that once you conceive or pick your trademark or marketing slogan or logo for your business or other activity, you do want to rush to the Trademark Office and reserve it. What you want to do is to file a so-called "intent-to-use" application. The date of your filing will function as your “priority date.” This is like a number ticket you get in a deli of a supermarket. The filing will start the Trademark Office’s examination process in about three months after the filing date. The only major prerequisite for filing such an application is that you are doing it in good faith and do plan to use the mark eventually. When/if the application makes it through the examination successfully, the USPTO wouldn’t register the mark until you present sufficient evidence that you are using the mark in the marketplace.

Of course, like with anything, a good name or slogan may help you sell the product, but whether or not your product will succeed on the market will depend on the quality of your product. So far, President Trump is keeping his campaign promises and does exactly what he promised the American people he would do. Whether Mr. Trump’s presidency will be successful, we will know soon enough.

Text © Maxim A. Voltchenko 2017

* This piece is not intended to be a review of U.S. law or politics. This posting may not necessarily represent the views of the author’s employing law firm. Although every effort has been made to verify the accuracy of items in the Sputnik Blog®, readers are urged to check independently on matters of specific concern or interest.

My generation (generation X) who grew up in the Soviet Union in late 1970s-early 1980s all remember the first thing we were taught in school about capitalism: При капитализме человек человеку волк or in capitalist’s West “man is to man a wolf” or what they say here: “Dog eat Dog.” Russia’s Communist Party officially named as “Communist Party of the Russian Federation” learned that principle hard way from what should be their ideological allies: another communist party, namely the party Communists of Russia.

In a nutshell, two far left political parties in Russia found themselves in a legal dog fight regarding their names. Ask someone who is not familiar with Russia’s political landscape: Is the name “Communists of Russia” confusingly similar to the name “Communist Party of the Russian Federation” (“CPRF”)? The answer would most likely be Yes. Yet CPRF could not find pravda in court. In Russian, the term “pravda” is not only the name of communist’s newspaper, but it also means truth and justice.

CPRF (cprf.ru) led by political heavyweight and veteran Gennady Zyuganov is often viewed as the immediate successor of the Communist Party of the Soviet Union, which was banned in 1991 by then-President Boris Yeltsin. It is the second largest political party in the Russian Federation, after ruling party United Russia.



The party “Communists of Russia” is a group that has broken with the CPRF relatively recently. Its website komros.info states that the party was formed in April 2012. The Ministry of Justice registered that party in June 2012. The leader of the party of Communists of Russia is Maxim Suraykin (party nickname is “Comrade Maxim,” just like a main character from a popular Soviet movie of 1930s).




Political observers generally agree that CPRF is the only opposition party that can compete with the governing party United Russia in the upcoming parliamentary elections on September 18, 2016. Many critics of the Kremlin and what is considered its political party United Russia have long argued that the Kremlin has employed all strategies and tactics to consolidate the party of power United Russia and split and weaken the opposition parties, namely CPRF. Some suggest the party of Vladimir Zhirinovsky, the Liberal Democratic Party of Russia (LDPR) and party of Sergey Mironov (Справедливая Россия or Just Russia) were created solely to take away votes from CPRF. Personally, I do not believe those conspiracy theories. However, the creation of a political party with a confusing name—Communists of Russia—indeed plays into the popular belief that such a party was created solely with the purpose of syphoning the votes away from CPRF.

According to CPRF’s legal counsel, CPRF may lose 1.5-2% of votes because of the similarity in the names. In my view, this calculation is very conservative and real loss of votes could be much larger, given than a significant part of CPRF’s electorate constitutes senior citizens who may not necessarily follow all the nuances of Russia’s political life and terminology.

Form a trademark law perspective, there is little doubt that CPRF should be able to stop the party Communists of Russia from using a confusingly similar name. Generally, under any legal system (whether in Russia or any country with developed legal rules), there are several factors that courts consider when determine when the junior user’s name or trademark is confusingly similar to the senior user’s mark. The main two factors are the similarity or dissimilarity of the marks and the similarity/dissimilarity of the goods or services identified by the respective marks.

Here, both factors arguably support CPRF’s case. First, the marks (the parties’ names) are highly similar in all three aspects: appearance, sound and especially in meaning. Generally, to cause a confusion the marks need not be identical. The similarity in one of the three elements may suffice. For example, a vacuum cleaner under the brand name STORM would be confusingly similar to a vacuum cleaner under the brand name HURRICANE. In our case, the respective parties’ marks are virtually identical in meaning.
There is no question that many people in Russia know and may even refer to CPRF as “Communists of Russia.” Moreover, under the Constitution of the Russian Federation, the terms “Russia” and “Russian Federation” are considered legal equivalents. Thus, the parties’ names which function as their service marks are highly similar.

I am curious if somebody created a political party and named it Партия Единороссов (The Party of United Russians) или Россия Единая (Russia United), how would United Russia feel about such parties-copycats?

There are many other similarities. Both parties use hammer and sickle as their emblem or logo. Both parties use a branded color. Guess what color is that? You are right: it’s red. Both parties use a slogan: "Workers of the world, unite!" Both parties use the political program that consists of 10 steps if they win the elections… The list can continue.

Second, the activities identified by the respective parties’ names (marks) are identical. Indeed, CPRF and the Communists of Russia appeal to the same voters and indeed directly compete with one another. Both parties wish to reinstate some form of socialism. This factor also supports strongly the position of CPRF.

Another factor looks at the junior user’s motivation for adoption of the mark, that is whether or not it adopted with the purpose to benefit from the public’s familiarity with the senior user’s mark. Russian courts lately have taken a more active role in policing against unfair competition when junior players, in bad faith, adopt marks that are similar or identical to the well-known marks. We don’t know what the real motivation is of the founders and leaders of the Communists of Russia, namely Comrade Maxim’s ulterior motives, if any. Even if we give them the benefit of doubt, you still would think CPRF should easily win this trademark dispute, but not so fast…

Here is what happened. CPRF filed a lawsuit with the Moscow Arbitrazh Court demanding that the party Communists of Russia change its confusing name. After the consideration of the case has been dragged on for months, on July 11, 2016 the Court bounced CPRF’s lawsuit on technical grounds. The Court did not even consider the dispute on the merits. It has found that this dispute does not belong to the types of disputes that Arbitrazh courts adjudicate, but should be adjudicated by another type of courts, apparently Courts of general jurisdiction.

Similar to, say, United States’ court system, Russia has more than one category of courts. In fact, the judiciary in Russia is split into several branches: the “regular” court system (Courts of general jurisdiction) and the Arbitrazh courts with the Highest Court at the top of these two branches, and the Constitutional Court as a single body with no courts under it. In July 2013, a new, specialized court, the Intellectual Property Rights Court (“IPR Court”), was also introduced into the Russian judicial system.
The term “Arbitrazh” may be confusing to westerners. It has nothing to do with arbitration as alternative dispute resolution. Russia also has what we consider “arbitration courts”: they are called treteyskie sudy.

Generally, whenever there is a dispute between legal entities or when a party is a sole entrepreneur, the case is taken for trial by Arbitrazh courts, which in essence are business or economic courts. But if a party to a civil case is a private citizen, not involved in business activities, the dispute must be handled by a Court of general jurisdiction.

Arbitrazh courts have traditionally adjudicated disputes involving trademarks and unfair competition. Courts of general jurisdiction, like state courts in U.S., usually adjudicate small claims disputes, family law disputes and criminal cases. They rarely adjudicate trademark disputes.

In refusing to take on the case by CPRF, the main argument of the Moscow Arbitrazh Court is that the parties to this dispute are political parties, and not business entities. This argument seems very suspect. The procedure rules under which such a court operates state that Arbitrazh courts adjudicate “economic disputes and other cases in connection with business and other economic activity.” Article 27 of the Arbitrazh Procedure Code.

Curiously, on December 2, 2014, another political party Just Russia won a trademark case. Just Russia defended its trademark registration for "Родина" (MOTHERLAND), its initial name, against a challenge by another political party with the name RODINA in the IPR Court. Thus, Russian courts recognize trademark rights of political parties. The IPR Court did not refuse to adjudicate a trademark dispute between two political parties on a formal ground that such organizations are not engaged in any business or economic activity.

In its defense, it is not uncommon for the Moscow Arbitrazh Court to take the position it has taken. It is very possible that its decision was not motivated by any political consideration. Several years ago, this Court has taken a somewhat similar position involving the musical band MIRAGE, a popular band of late 1980s-early 1990s.

The consistency of the Moscow Arbitrazh Court does not help CPRF. CPRF seems to have given up on the idea of stopping a rival communist party with a confusingly similar name before the elections on September 18. Apparently, CPRF has not appealed the dismissal of this complaint and has not taken its case to a different court, whether the Court of general jurisdiction or IPR Court.

It is unclear whether CPRF owns trademark registration in the name “Communist Party of the Russian Federation” and its logo. It appears CPRF only relied on a provision in the Russian Civil Code that relates to “trade names.” Article 1473 of the Civil Code. Perhaps the result would have been different, had CPRF asserted a trademark infringement as opposed to just a violation of its trade name. It also would have been interesting to learn whether or not it could have obtained trademark registration for the term “Communist Party.” The full name of the party Communists of Russia is “communist party ‘Communists of Russia.”

There are several lessons to be learned from this case. First, any nonprofit (called “non-commercial organization” in Russia) should consider registering its name as a service mark (trademark) with Russia’s Patent and Trademark Office called Rospatent. CPRF has learned its lesson—it needs not only to study the works of Vladimir Lenin and Karl Marx, but also the laws and court practice of modern Russia. Communists should play by the rules of a capitalist economy. The should master one of the most important legal instruments of a market economy such as use of intellectual property rights. Obviously, communists’ political opponents use IPRs masterfully.

This also concerns foreign nonprofits and NGOs operating in Russia. You want to register your name as a service mark to protect the goodwill that you are building and which you may need to use against potential unfair competition. After all, isn’t Russia now governed by the same principles as capitalist’s West: Dog eat Dog?

Text © Maxim A. Voltchenko 2016

* This piece is not intended to be a review of Russia’s intellectual property laws and court practice. This posting may not necessarily represent the views of the author’s employing law firm. Although every effort has been made to verify the accuracy of items in the Sputnik Blog®, readers are urged to check independently on matters of specific concern or interest. This Blog is not connected or affiliated with Russia's state online news and radio service Sputnik International

The U.S. legal system is currently adjudicating at least two high profile cases that, I dear to say, have geopolitical implications. One case is in a D.C. federal court where former Yukos Oil shareholders are asking the court to enforce a $50 billion award against Russia issued by a Permanent Court of Arbitration tribunal in 2014. (The award is worth around one-quarter of Russia’s total government budget.) The Arbitration tribunal found that Russia engaged in an illegal campaign to disband Yukos and transfer its assets to the state-owned oil company Rosneft. Russia urges the D.C. federal court to dismiss this lawsuit saying it never agreed to arbitrate the claims. The case is Hulley Enterprises Ltd. et al. v. Russian Federation, case number 1:14-cv-01996, in the U.S. District Court for the District of Columbia.

The second case is the one involving the ownership of the iconic STOLICHANYA vodka brand (or STOLI) in United States and the right to sell this popular vodka brand in U.S. The Sputnik Blog® discusses some of the salient points of this litigation saga and latest developments.

The STOLI case has a long history, several court decisions and a complicated set of facts. In a nutshell, in the U.S. the dispute started when the Russian government filed a lawsuit in 2004, through its agency, a government-owned entity, to reclaim the ownership of the mark in U.S. from SPI Group. The brand STOLICHNAYA used to belong to the Soviet government. "Stolichnaya" is Russian for "from the capital." The Soviets created a legal entity, which had marketed vodka under that brand both domestically and abroad, since 1944 and prior to the collapse of the Soviet Union. The state-owned entity, The All-Union Association Sojuzplodoimport ("V/O-SPI";), registered a trademark for "STOLICHNAYA" with the United States Patent and Trademark Office in February 1969 (Registration No. 865,462), as the primary STOLI brand (the STOLI Marks”).

In early 1990s, the Soviet government began reforms to change its centralized planned economy into a market economy, and state-owned enterprises were privatized. As the privatization legislation was only being drafted, V/O-SPI was purportedly privatized by its directors and mangers under the new name “VAO-SPI.” VAO-SPI later became controlled by SPI, the defendant entity.

In 2000s, the Russian government under President Putin began to scrutinize many of the murky privatization deals of the 1990s, and courts found the privatization of V/O-SPI illegal. The court held that ownership of the STOLI Marks had remained with Russia. The Russian government created a legal entity, the Federal Treasury Enterprise Sojuzplodoimport ("FTE";), that the Russian government authorized to own and enforce its rights to the STOLI brand. The legal battles over the popular brand outside Russia ensued.

Sputnik Blog® already wrote about one of the STOLI decisions in U.S. (though from a different angle). In 2013, in a prior suit, a New York judge dismissed the complaint of the Russian government on formal grounds, without even reviewing the merits of the case. On August 28, 2013, the Court of Appeals affirmed the district court’s decision that FTE lacked standing to bring a lawsuit in a U.S. court.

In 2013, this Blog questioned the rationale of the LGBT activists who boycotted the STOLI brand over Russia’s alleged mistreatment of gays. The posting Is Stoli Really a Russian Vodka? discussed the case Federal Treasury Enterprise Sojuzplodoimport, et al. v. SPI Spirits Ltd., et al., case number 11-4109, 726 F.3d 62, 85 (2d Cir. 2013). This Blog noted that the Russian government did not suffer from the LGBT boycott at all, because Russia did not (and still does not) control the STOLI brand in United States, where all the boycott effectively occurred.

Recently, there have been developments in the STOLI case. On January 5, 2016, the U.S. Court of Appeals for the Second Circuit (that includes New York) reversed the district court ruling that FTE lacked standing to assert trademark infringement claims.

The Appeals Court reversed the prior district court’s decision in part, specifically the part in which the district court ruled that the assignment through which the Russian government transferred “entire right, title, and interest in and to the [STOLI Marks]” was invalid. The Appeals Court applied two legal doctrines one of which is international comity. Under international comity, courts should refuse to review actions of foreign governments, unless those actions would be contrary to the policies of the United States. The Appeals Court found no countervailing policy interest to justify the district court’s decision, and sent the STOLI case back to the district court.

What the Appeals Court essentially said is as follows. "Listen, Ms. Judge, you cannot tell the Russian government that it violated its own law. The Russian government probably knows better whether or not its decree is legal, and whether the assignment is valid. It’s none of our business to evaluate the Russian government’s acts. We must presume that they are valid under Russia’s own law." Makes sense, doesn’t it?

Victory to the Russkies? Not so fast. First, the Appeals Court said no word on the merits of the case. It did not even hint which side has superior rights to the STOLI Marks: the Russian government/FTE or SPI. It only held that Russia’s agency FTE had the standing. In fact, the Court stressed that “whether those rights, if validly assigned, prevail against alleged infringers is very much an issue confided to the United States courts; the distinct question whether the government of a foreign sovereign has effectively and legally allocated its rights and powers among its agencies and instrumentalities under the foreign sovereign‘s law, is not.” (Emphasis added.) So, even though Russia’s FTE is probably going to have its “day in court,” it does not necessarily mean it will prevail.

Second, the defendants, SPI Group et al., on April 4, 2016, requested a stay of the entire STOLI litigation pending a “planned petition for a writ of certiorari” from a Second Circuit ruling in January. So, the defendants are asking that the U.S. Supreme Court take on the issue whether Russia’s FTE has standing to sue. FTE surely will oppose this move. It would undoubtedly be very interesting to see how the U.S. Supreme Court would rule on this issue. However, there is no certainty that the case would even get to the Supreme Court. What is certain is that this move by the defendants means more delay before an ultimate resolution. And, for the time being, the defendants continue to exploit the STOLI brand in U.S.

Thus, Russia appears to have won the battle, but it is not necessarily winning the war. The STOLI legal battle increasingly is becoming to look more like a frozen conflict, the state of affairs that certainly benefits the defendants, not Russia.

Legal theories aside, how do you think the U.S. courts should decide? Shall the U.S. rule that the STOLI brand should be returned to the Russians? Is there a risk that the U.S.-Russia confrontation may intensify if the Russians do not get their vodka brand back, and on top of that the U.S. rules that Russia must pay $50 billion to the former Yukos shareholders?

Text © Maxim A. Voltchenko 2016

* This piece is not intended to be a review of U.S. law. This posting may not necessarily represent the views of the author’s employing law firm. Although every effort has been made to verify the accuracy of items in the Sputnik Blog®, readers are urged to check independently on matters of specific concern or interest.