Communist Party of the Russian Federation Learns a Tough Lesson of Capitalism: Dog Eat Dog and that You Need to Protect Your Intellectual Property

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Communist Party of the Russian Federation Learns a Tough Lesson of Capitalism: Dog Eat Dog and that You Need to Protect Your Intellectual Property

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.

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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).

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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