How to choose a trademark, which can be easily protected against unlawful encroachments

In one of the previous articles, we discussed how legally use trademark owned by another person legally. In this article we will share some secrets and tips on how to choose your own trademark for goods and services that can be protected from copying and other misuse as easy as possible.
The current legislation establishes that the following objects may be objects of legal protection:
1) verbal in the form of words or combinations of letters;
2) figurative in the form of graphic compositions of any forms on the plane;
3) three-dimensional in the form of figures or their compositions;
4) combinations of the above-mentioned marks.
Such signs may be done in any color or combination of colors. It may be an audio-sign, light-sign, as well as a color or combination of colors.
However, not every designation receives proper legal protection, which requires the designation to possess a distinctive feature. The distinctive feature means that the consumer can easily establish an associative connection between a particular trade mark and the product or service which it designates. Trademarks, that have such distinctive feature, are called “strong”. The stronger the designation, the more likely it will be successfully registered, and the greater identification and highlighting of your product among similar will be, and the higher level of protection in case of violation of your rights by a third party will be, including protection in court. So which designations can be considered strong? The World Intellectual Property Organization allocates five categories of trademarks with distinctive capability – from the strongest to the weakest:

  1. Fictional trademarks which are fictional words or notations that have no real meaning behind them. Because they are the result of your imagination, competitors that provide similar services or produce/distribute similar products will not be able to justify usage of a similar or resembling designation. In addition, such trademarks do not usually indicate directly the product they designate, so customers may have some difficulty memorizing such designation or establishing an associative connection.
  2. Arbitrary trademarks are words or symbols that have a real meaning (they really exist and are not fictional), but there is no logical connection between them and the products that they represent (for example, the use of the word SUN for the designation of bakery products; competitors in the same industry have no reason to use the same word to indicate their products). Such trademarks are also strong, easy to protect, but they are also not very popular for the same reasons as fictional trademarks. In addition, the likelihood of successful registration of such trademark is rather high.
  3. Trademarks that hint at the goods/services they represent are words or signs that contain indications of nature, certain qualitative or other characteristics of the product, while not describing it to the full extent (for example, the use of the word SUN to designate LED products). However, such trademarks have a lower degree of protection because they partly point to the product itself. Thus, they receive less protection than fictional or arbitrary trademarks.
  4. Descriptive trademarks are trademarks that describe a particular feature of a product or service (for example, quality, type, form, origin, materials used to crate product, etc.). And although such trademarks could be very useful for marketing purposes, they have a weak degree of protection. Moreover, the likelihood of their registration is very low, as according to the current legislation, legal protection of designations, which consist only of signs, or data that are descriptive when used in connection with or relating to the goods and services that are indicated, or designations that reflect only the form of the product specified by its nature, technical result or goods value cannot be obtained. In particular, such data includes the type, quality, composition, quantity, properties, purpose, value of goods and services, place and time of production or sale of goods or services.
  5. Common designations – words or signs that are directly referred to as products with a particular trademark. Such designations have no distinctive feature. Such designations are no subject to legal protection in accordance with the current legislation of Ukraine.

Thus, before filing trademark registration documents, it is necessary to scrutinize the designation for compliance with all the requirements of the law for obtaining legal protection, and to keep in mind that the distinctive feature of the sign can be increased, in particular, by using a special font, color, as well as sign combinations.]]>

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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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