A non-use court action is routine for the IP court. Every
year several hundred cases are considered and granted.
Sometimes, however, a cancellation action stumbles at
Heineken United Breweries initiated a court action in 2016
at the IP court against trade mark WINTER HUNT, Reg. No
236790/1, regarding beer and alcoholic drinks owned by Mr
Yezhikoff, an individual entrepreneur. The basis for the court
action was non-use of the trade mark for three years. The IP
court issued a ruling transferring the case to the Moscow
Commercial Court because it transpired that there was a
bankruptcy case concerning Mr Yezhikoff under consideration in
the Moscow Commercial Court. The IP court reasoned that the
trade mark non-use case should be considered within the
framework of the bankruptcy case.
Heineken appealed the ruling of the IP court to the
cassation instance court which is the Praesidium of the IP
court (there is no appeal route at the IP court).
The Praesidium of the IP court noted that the Commercial
Court of Moscow had recognised Mr Yezhikoff as insolvent and
initiated a six month procedure of disposal of his property.
The IP court explained that the exclusive right for the
disputed trade mark was a property right and it should be
included in the bankruptcy assets. As a result, the case on
termination of the right for the trade mark should be
considered within the framework of the bankruptcy case. It
justified the ruling of the first instance IP court stating
that according to the Code of Commercial Procedure, the case
should not be accepted for consideration if the claim will be
considered within the framework of a bankruptcy case.
Heineken did not agree with this statement and argued that
the case should be under the jurisdiction of the IP court and
should not be considered by the Commercial Court of Moscow. The
argument was based on the earlier ruling of the Supreme
Commercial Court which stated that only property related claims
of creditors against the debtor should be considered within the
framework of a bankruptcy case, and that too, only after the
court recognises the debtor as bankrupt. Heineken is not a
creditor of the trade mark owner. Heineken further argued that
the right for a trade mark was not a proprietary right and at
the time of initiating a court action Mr Yezhikoff was not yet
recognised as bankrupt. The court nevertheless explained that
the right for a trade mark is indeed a proprietary right
according to Article 1226 of the Civil Code. When the issue of
jurisdiction is being resolved during a bankruptcy case it
should be determined whether that specific proprietary
(including trade marks) right should be included in the
bankruptcy assets. The exclusive right, being a proprietary
right, has certain value and as a non-material asset is part of
the property of the insolvent debtor.
If a business has stopped its activity and is undergoing
bankruptcy proceedings, its property should be sold according
to bankruptcy law. When the court starts bankruptcy procedures,
all claims not made in connection with the bankruptcy case
should be left out of the proceedings.
The non-use claim was filed by Heineken after the start of
the bankruptcy proceedings hence the non-use case cannot be
examined. Nevertheless, Heineken is not deprived of the right
to protect its rights. The trade mark is included in the
bankruptcy assets and will be sold together with other property
The trustee of the bankrupt entrepreneur appointed a meeting
of creditors on November 29 2017 where the controversial trade
mark was going to be sold. The starting price was $50. As a
result of the auction the mark was finally sold for $500 to
Kantemirovskaya Ltd. An assignment for that mark was signed but
as the situation stands on February 20 2018 the assignment is
yet to be recorded. As a result, the trade mark is still
formally in the name of the bankrupt owner. According to
judicial practice (even though it is scant), the period of
non-use is not interrupted because of change of ownership.
Hence the option of non-use action is still open for Heineken.
The new owner may invoke force majeure. Is it worth initiating
a non-use case in such circumstances? The answer to this
question remains unanswered as yet.
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