Is it lawful to use someone else’s trademark?

Trademark  is a very valuable non-property asset along with other intellectual property objects,. But its value is underestimated in our country. Thus, trademark facilitates your products (goods or services) identification by consumers, prevents confusion among consumers, is one of the most effective marketing tools, and is also the basis for brand and reputation development. Ensurance of the product distinctive ability is one of the main trademark tasks. So the question whether it is possible for identical trademarks to coexist arises. The answer for this question is yes in case:

  • the same mark applies to goods and services which, according to the Nice Classification, belong to different classes;
  • identical marks are registered in different countries (as trademark is protected if it is registered in a particular territory. Registration of a trademark in one country does not automatically applies to other states);
  • there is no marks confusion.

However, even if the above conditions are met, registration of the identical mark will not be possible if it is well-known.
In addition, the provisions of the Paris Convention for the Protection of Industrial Property shall be taken into account. Pursuant to Convention Parties are obliged to provide efficient protection from unfair competition, including by prohibiting all actions which can cause confusion between enterprises, products, commercial activity of the competitor. That means that there is a possibility of abolition of a similar trademark registration in another country, where your trademark was not registered. But for this provision realization your trademark should have “protective elements”, i.e. not to be commonly used word, to be in color, in special type, etc. There are a lot of examples of cancellation of trademarks, which were registered in other countries, and then illegally used and registered in Ukraine.
So how is it possible to legally use a trademark registered by another person? The current legislation provides two ways: the transfer of mark ownership (in whole or in part concerning the part of goods and services specified in the certificate), as well as the issuance of a license to use the mark. In any case the written agreement shall be concluded, signed by both parties, and registered.
In case information on ownership transfer is published, state duty is paid, Ukrpatent issues a new certificate
It is necessary to take into account who owns the trademark when concluding such agreements.
If trademark belongs to several persons, the agreement regulating relations between co-owners must be concluded. In case there is no such agreement, trademark transfer or license for trademark use is possible only in case there is a consent of all co-owners. In addition, current legislation allows to transfer rights on trademark application. Such agreement shall be registered in Ukrpatent.
Very often question on similar trademark registration arises. In some applicants’ opinion, it is possible in case trademark owner provides his/her consent for this. Such possibility is provided by legislation of some countries, but in Ukraine such consent have no legal force in case existence of two similar trademarks can cause customers’ confusion.
Another important aspect is that appearance of rights on trademark is connected with trademark registration. Therefore, if you use your unregistered trademark, your rights are not protected by law. It means that another person can register your trademark and in this case you can only obtain a right of previous user (i.e. to obtain a right to use trademark, but not to allow or prohibit its use by other persons).
Thus, you have to check whether there are similar registered trademarks and apply for trademark registration before using it. In case there is identical registered trademark, the best option is to conclude agreement on trademark transfer or trademark licensing, or to change mark to extent eliminating the identity of the marks.

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A new law on virtual assets: the picture is formed, but without details. On September 8, 2021, the Verkhovna Rada has finally adopted the long-awaited law "On Virtual Assets", which clarified many ambiguous points. This is especially true for the status of cryptocurrency and the rules of its circulation in the country. Let`s take a closer look at novelties. An ambiguous term Let's start with what the legislator actually means by "virtual assets". There are the following features:  they are an intangible good (cannot be represented on tangible media)  fall under the list of objects of civil rights (that is, they can be owned and be disposed of)  represent an electronic form of a set of data (essentially, they are blocks of information put in order);  the existence and circulation of assets are due to software tools (specific electronic environment). From these features we can draw the following conclusion: virtual assets are not limited to cryptocurrency. Digital currency is part of the concept, but other instruments, such as tokens, NFTs, or even in-game items, fall under the definition. Actually, the actual existence of most digital products, having a certain value, is due to the software environment (ecosystem), either it is blockchain technology, a trading platform, or an online game server. It should be noted that the attempt to define virtual assets was already made in the adopted Law of Ukraine in counteracting money laundering. In this act, they understand it as digital means of payment, which goes against the new definition. As a result, there are now two different explanations for virtual assets, which causes significant confusion not only in regulation but also in interpretation. It is definitely necessary to expect clarifications from competent state bodies. Let's return to the new law. Its application covers legal relations in which the "Ukrainian element" is present:  provider or recipient of services represented in Ukraine;  an agreement according to which the turnover of virtual assets is carried out in accordance with Ukrainian legislation;  the acquirer of assets (or both counterparties) is a resident(s) of Ukraine. The law also introduces an interesting division of all virtual assets into two groups: secured and unsecured. Here again, there is a problem of interpretation. The first category includes products exchanged for (state) currency, the second category includes instruments that can be exchanged only for other digital assets. There is an alternative opinion: that the turnover of secured assets is supported by real goods (money or other property), while unsecured ones are not supported by anything. The latter interpretation is the most credible, as the new law stipulates that virtual assets are NOT means of payment. Moreover, they cannot be exchanged for real goods, be they property, services or money. This significantly narrows the potential for the use of virtual assets not only for commercial but also for civilian purposes. About obligatory licensing The new law states that in some cases, the use of virtual assets will require licensing. The 4 types of activity are mentioned:  storage and management of virtual assets (or its` keys)  servicing of exchange operations with virtual assets (both for other analogues and for real goods);  translation of digital assets;  any intermediary services. A list is quite impressive, but there are some important exclusions:  if your service works with cryptocurrency wallet (it means users can dispose of accumulations into cryptocurrency independently);  If your service works on smart contracts or decentralized protocol, based on which internal transfers are performed. As to intermediary services, everything is more compicated. Actually, any mediation is based on the public share offering. That is why it is subject to licensing. How to get a license? A company that wishes on legal grounds to engage in virtual assets must satisfy legislative requirements. The key role is played by the minimum amount of the statutory capital, which equals 1,19 million hryvnyas (for non-residents it is 5,95 million hryvnyas) in case of storage and administration. For other types of activity (trading, translation and mediation services) the minimum size of the statutory capital amounts to 595 thousand hryvnyas (for non-residents is 2,98 million hryvnyas). The order of the registration of license:  to compose an application and prepare documents.  to pay state fee (68-136 thousand hryvnyas for residents and 340-680 thousand hryvnyas is for non-residents).  to pend review of the request (30 days).  to get a license. The duration of the license is 1 year. No norms about the continuation of legal force of permission are set (we are expecting amendments or explanations from the Ministry of Digital transformation of Ukraine). Notably that non-residents must pay a far greater sum, than domestic companies. The Ukrainian legislator obviously encourages an internal market, getting rid of a strong foreign presence (that, in fact, coincide with modern politics of the state on the whole). Together with an application, the following documents must be prepared: The access code to the copy of the Statute of the company (or the foundation agreement) kept in an electronic file in the database of the Unified State Register of Enterprises and Organizations (USREO);  Funding sources of the statutory capital (where the money are taken from);  confirmation of the actual injection of money;  information about beneficiaries (special attention must be paid to business reputation);  the information about the director and founders;  the check about payment of state fee;  the internal regulations, in accordance with which ones, the privacy policy rules are regulated. In the terms of volume of necessary documentation of licensing is very alike with complete registration of legal entity. It is understood that the state wants the severe adjusting of activity of organizations that will engage in virtual assets. Is it already possible to get a license? The adoption of the law by the parliament is a significant step forward in adjusting and legal market of virtual assets creation in Ukraine. However, the new rules haven`t come into effect yet - their term of introduction depends on making amendments in the Internal Revenue Code. It is yet unknown, when a legislator will decide to enter the renewed system of taxation for such assets. Being "IT-hub" and territory, where cryptocurrency enjoys large popularity, the question of taxes must be decided maximally safely. Despite the presence of obvious gaps in interpretation, a new law on virtual assets gives the official narrative of what takes place and that, how the legal relationships related to cryptocurrency will be regulated. It is to be hoped that in the nearest time the Ministry of digital information will give out the detailed explanations concerning debatable norms.
20/01/2022

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