According to Ukrainian regulations, there may be several owners for one mark. But what if one of such owners decides to sell the exclusive right without the consent of the other owners? Eventually, disputes may arise, and Ukrainian courts happened to resolve such a case recently. This dispute was not the first legal battle between the claimant and the defendant. Therefore, some facts that had been earlier established, were taken into account in this case.
History of proceedings
In the mid-2015, one of the owners (claimant) of the Registration Certificate granted for AQUALIFT mark filed a lawsuit against the National Center for Medical Technologies LLC (NCMT) and NIC.UA. The claimant required to discontinue the use of AQUALIFT mark on the website and in the domain name without the claimant’s consent, and as well to cause NIC.UA to nullify the registration of the domain aqualift.pro.
For your awareness, NIK.UA LLC is a domain name registrant, i.e. a company providing domain name registration services in Ukraine.
The claimant supported the claim with the following arguments:
- The claimant and the physical person (Party_1) are the co-owners of AQUALIFT trademark.
- In March 2015, the claimant found out that NIC.UA was the domain registrar for the website pro registered on December 24, 2013.
- The domain name pro was registered by NCMT.
- Considering that AQUALIFT mark was used in the domain name without the claimant’s consent, the defendants infringed the rights of the co-owner of this mark.
Consequently, the claimant filed a lawsuit with the court.
Having examined the arguments of the parties, the court found that:
On August 27, 2007, the claimant and the Party_1 obtained the trademark registration certificate, which was recorded in the State Certificates Register of Ukraine (AQUALIFT trademark).
Consequently, the claimant and Party_1 became the co-owners of the registered trademark.
On March 25, 2015, the claimant’s attorney requested information from NIC.UA about the registrant of the domain name. On April 3, 2015, NIC.UA responded that NCMT was the registrant of the domain name.
In addition, NIC.UA informed that the registrant had not verified the documents certifying the registrant’s right to use aqualift.pro domain name and AQUALIFT trademark. The regulations of the “pro” domain zone did not stipulate the registrant’s obligation to verify whether trademarks were used legitimately.
The court found that the co-owner had not agreed on the use of the trademark.
On November 20, 2007, Party_1 and NCMT made the commission agreement, according to which NCMT had agreed to act on behalf of Party_1 in the sphere of manufacturing and involving manufacturing and distribution of medical products signed with AQUALIFT trademark.
Consequently, NCMT was entitled to represent one of the co-owners of certificates issued for the said trademarks.
According to the court decision in the other civil case, the court found that as of the date of execution of the said agreements, the claimant had been employed by NCMT as the deputy operations director. Therefore, the claimant was aware of the said agreements, since they were binding to the parties thereto, including the claimant.
The court provided the following reasoning for its decision:
According to the Civil Code of Ukraine, in the event one of the co-owners effects a transaction to dispose of joint common property, this transaction shall be deemed effected upon the agreement of all co-owners.
The court found that the commission agreements dated November 20, 2007 had been executed under the claimant’s consent.
According to the Civil Procedure Code of Ukraine, the circumstances defined by the court decision in civil, commercial or administrative case that has come into legal force, shall not be proved when considering other cases involving the same person or persons relevant to whom these circumstances were defined.
Therefore, the claimant’s arguments as to the use of AQUALIFT trademark without the claimant’s consent resulting in the infringement of intellectual property rights were not confirmed.
Based on the foregoing, on June 7, 2016, the court dismissed the claim.
The claimant lodged the petition of appeal. The court of appeal examined the facts of the case and pointed out the following.
According to the court decision dated November 5, 2014, regarding the infringements of exclusive proprietary rights on trademarks, including AQUALIFT, in particular, by NCMT, the court found that the claimant had not provided the consent to NCMT to use the trademark on the Internet, including domain names.
The court as well noted that the defendants in the case had failed to provide the proper evidence to prove that the claimant had permitted NCMT to use AQUALIFT trademark on the website aqualift.pro.
The representative of NCMT argued that according to the ruling of the Kyiv Court of Appeal in the civil case dated July 5, 2012, the court found that there had been an agreement between the co-owners of trademarks. However, the court of appeal did not take this fact into account, since it had no prejudicial value.
Based on the foregoing, the court of appeal considered the claimant’s arguments to be well-found and proven: NCMT used AQUALIFT trademark on its website and the domain name without the claimant’s consent and infringed the claimant’s rights as the trademark co-owner; NIC.UA unlawfully registered the domain name for NCMT; therefore, the claimant’s infringed right required to be protected.
In view of the aforesaid, on November 9, 2016, the court of appeal reversed the decision of the lower court and sustained the claim in full.
In view of this, the disposal of intellectual property rights causes numerous disputes, in particular, when proprietary IP-rights belong to co-owners. The judicial practice has shown that intellectual property rights may be executed provided that all co-owners have agreed upon such execution.
Elena Polosmak, Crane IP Law Firm Managing Partner