At the end of 2019, the entrepreneur filed a lawsuit against the decision of the Cabinet of Ministers of Ukraine “On the approval of licensing conditions for conducting business activities in the production of medicinal products, wholesale and retail trade of medicinal products, import of medicinal products (except active pharmaceutical ingredients)” regarding the placement conditions on the signboard and external advertising structures of the pharmacy, in particular, the sign for goods and services (logo) belonging to the licensee.
The plaintiff referred to the fact that the disputed resolution established requirements for the signboard and external advertising structures of the pharmacy, which, in his opinion, contradict the provisions of the laws of Ukraine, violate the principle of freedom of entrepreneurial activity, and the principle of inviolability of intellectual property rights. He also believed that this resolution was adopted by the Cabinet of Ministers outside of its powers, violating the rights and legitimate interests of a person who, under the license agreement, acquired the right to use the mark for goods and services “Pharmacy wholesale prices”.
By the decision of the court of the first instance, which was left unchanged by the court of appeal, the claim was satisfied in full. Passing such decisions, the courts of previous instances proceeded from the fact that the defendant, adopting the disputed resolution, did not take into account the provisions of the Law of Ukraine On the Protection of Rights to Marks for Goods and Services – special in disputed legal relations, and the act adopted, which is subordinate to the law regulatory act, cannot in its legal essence contradict the provisions of the specified Law. The courts also noted that the plaintiff had the right to use the trademark, in particular, by applying it to the signboard and external advertising structures of the pharmacy.
However, the Supreme Court overturned the decisions of the courts of previous instances and passed a new decision – to reject the claim.
The panel of judges noted that the use of property, including objects of intellectual property rights in the field of business, which includes trademarks, cannot harm the rights and freedoms of citizens. The use of the property is not allowed to the detriment of a person and society, and designations that are misleading or that can mislead about a product, service, or a person who produces a product or provides a service cannot receive legal protection in accordance with the Law of Ukraine On the Protection of Rights to Marks for Goods and Services, which also prohibits the transfer of ownership of a sign, if it may cause the consumer to be confused about the goods and services or about the person who manufactures the goods or provides the service.
At the same time, taking into account the analysis of the norms of the Law of Ukraine On the Protection of Consumer Rights, the panel of judges draws attention to the fact that any activity (action or inaction) that misleads the consumer is recognized by law as an unfair business practice and such practice is prohibited. In particular, if a business practice induces or may induce a consumer to consent to a transaction to which he would otherwise not have consented, such practice is misleading regarding, in particular, the price or the method of price calculation or the availability of discounts or other price advantages. Business practice is misleading if, during the offering of products, the consumer is not provided, or is provided in a vague, unclear, or ambiguous manner, with the information necessary to make an informed choice.
Therefore, the judges came to the conclusion that the Cabinet of Ministers in the disputed legal relationship acted in accordance with the requirements of the law and within the limits of its powers in the field of licensing types of economic activity, following the principle of legal certainty and the principle of proportionality, which requires achieving a reasonable balance between the interests of the individual and society, because it is precisely for the purpose of protecting the economic and social interests of the state, society and individual consumers, including against dishonest business practices and misleading them.