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A new development in competition law will improve the position of IP right holders

On 5 January 2016, amendments to the Federal Law "On the Protection of Competition" (the "Law") came into force. The amendments include significant changes to the rules on unfair competition (on which we previously reported) and are designed to assist businesses in resisting unfair practices deployed by their competitors.

The Law provides for a separate chapter devoted to the prohibition of unfair competition. This chapter sets out seven instances which will constitute unfair competition. The list is open-ended and other misleading practices that are not expressly set out in the Law may also constitute unfair competition.

These developments reflect the current trend in Russian law enforcement and judicial practices, but at the same time have regard to the well-established body of international competition law. Notably, unfair competition related to the unlawful use of intellectual property is now prohibited. This is a positive development for right holders whose intellectual property rights are often infringed by their competitors in Russia.

In light of this, the unlawful use of trademarks, company names or commercial names on the internet in general and, in particular, in domain names will amount to unfair competition.

The Law introduces a ban on copying or imitating the appearance of a product, its packaging, name, colours or other distinct characteristics, if that may reasonably lead to confusion between products. This is intended to allow companies to protect their interests in connection with the appearance of a product in respect of which no intellectual property rights have been registered.

The changes brought about by the Law undoubtedly improve the legal position of companies adversely affected by the unfair practices of their competitors, providing a range of legal mechanisms to protect their interests. That said, all companies now need to check more carefully that their products and advertisements comply with the Law in order to avoid claims from their competitors.

We hope that this legislative change, which is positive for good faith market players, will help improve the role of the Russian anti-monopoly authorities in their fight against unfair competition. Until now, their role has been somewhat conflicting and has not always been wholly in favour of the good faith market players.

Authors

Bankovskiy Anton
Anton Bankovskiy
Partner
Moscow