Franchise Agreements: Part II

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來自 National Research University Higher School of Economics 的課程

Russian Trademark Law in Global Perspective

43 個評分

National Research University Higher School of Economics

Russian Trademark Law in Global Perspective

43 個評分

Learn about legal framework of trademark registration, protection and enforcement in Russia. You can also compare Russian approach with international standards enshrined in relevant treaties and discover problematic arears of trademark protection in the Russia. This course is on legal regulation of trademark protection in Russia. It explains the process of acquiring trademark in Russia, alternatives to trademark protection (such as firm names, trade names, names of origins), requirements for trademark validity, conditions under which trademarks are protected in Russia, scope of excusive trademark rights protection, peculiarities of assignment and licensing practice in Russia. The course also focuses on issues of trademark infringement, criteria applied by the Russian courts and relevant practice of the Russian Intellectual Property Court. It describes different remedies available to the trademark holders, including calculation of statutory damages under the Russian law for trademark infringement. Russian trademark legislation and case law do not have long historical roots. This is the reason why this area of the Russian law may be characterized as very dynamic. Examples will be given to illustrate successful legal solutions (for example, trademark protection in domain names, exhaustion of trademark rights) and ongoing search for proper and balanced regulation (for example, regulation of parallel imports, antitrust regulation in trademark law, application of fair use doctrine o trademarks).

從本節課中

Commercial Exploitation of Trademarks

Trademark owner has many options to exploit its trademark. Among them are self-exploitation, assignment, license contracts, franchising, distributorships agreements and many others. Russian law contains several imperative requirements that parties to such transactions must comply with. They concern form of a contract, registration of transfer of rights, financial provisions and some others. Failure to take them into account may lead to invalidity of a contract or ineffectiveness of transfer of rights.

Commercial Exploitation of Trademarks: General Overview and Assignment: Part I11:01

Commercial Exploitation of Trademarks: General Overview and Assignment: Part II9:26

License Agreements: Part I10:46

License Agreements: Part II9:21

Franchise Agreements: Part I10:07

Franchise Agreements: Part II8:36

與講師見面

Vladislav Starzhenetsky
Associate Professor
Department of International Public and Private Law

And now let's discuss a special provisions in franchise agreement.

Apart from standard contract provisions,

our party may include special provisions concerning their business relations.

This may include obligation of the right holder

not to grant other persons similar IP rights.

The user's obligation not to compete with the right holder,

and not to enter into similar franchise agreements with competitors of the right holder.

User's obligation to obtain approval of the right holder concerning location

of the business premises, as well as their internal and external design.

This is connected with corporate image of the business.

And also their right holder's right to determine or fixed prices,

to establish the upper or lower limit of them,

all together, upper and lower limit of them.

And so, the parties are free to do that.

And now let's turn to drafting of a franchise agreement.

As we have seen in Russian Civil Code provisions are very general.

They do not contain detailed regulations concerning franchising,

it just have a legal framework as we say.

Therefore drafting of such contracts requires a lot of care

and attention in order to eliminate specific risks,

and to balance rights and obligations of the parties.

Many of these risks, and many important provisions,

are not mentioned in the Civil Code at all.

And I may recall about such standard risks

and provisions as duty of disclosure of information of the right holder exclusivity,

quality, liability, provisions of franchise agreements,

procedure for termination or renewal of the contract.

So, the parties would have to decide about these issues themselves.

And I may also recommend to use international soft law instruments such as,

if you need UNIDROIT guide to international master franchise arrangements,

or a UNIDROIT model franchise disclosure law,

they may help in structuring and drafting such franchise contract.

And to illustrate

what I've just said, to illustrate risks of that may be faced by the user or right holder.

I may give you an example of a dispute between a right holder of a trademark PYTEROCHKA,

of grocery stores in Russia, and a user in Tatarstan Republic. And this right holder

and user concluded their franchise agreement that contained exclusivity conditions.

It expressly mentioned that right holder had obligation not to grant

or the persons corresponding exclusive right with regard to trademark PYTEROCHKA.

What happened next?

Our franchisee opened 17 used stores in three years in Tatarstan,

one of the republics in Russia, paid royalties to the franchise on a regular basis.

But then franchisee discovered that franchisor started parallel use

of a trademark PYTEROCHKA on the same geographic territory.

Franchisor started opening new stores with a trademark PYTEROCHKA,

plus basically exactly the same trademark, and started competing with franchisee.

Because the stores were exactly the same in terms of products that they were selling,

and in terms of consumers oriented to.

Of course franchisee was very unhappy about that,

and he charged the franchisor with unfair competition claims.

And the basic question is whether this is a breach of contract,

or whether franchisor is dishonest in such practices,

and this is a very important question in franchising contracts.

And looking towards the court ruled in 2012 in the judgment,

I might say that we always need to pay a lot of attention

to the exact wording of articles of the Civil Code.

And if we read this article, 1033 of the civil code, we will see

that it mentions in other franchise agreement parties

may provide the right holder's obligation

not to grant other persons corresponding exclusive right.

This part of the provision was mentioned

in the contract between franchisor and franchisee.

And further, article 1033 also mentions,

'or to refrain from his own use of IP rights on this territory'.

And this part of the article

was not mentioned in the contract between franchisor and franchisee,

and that was the reason why the court decided in favor of the franchisor.

The court interpreted this provision, in the contract and in the law,

in the way of that the franchisor didn't give consent

to refrain from his own IP rights on the territory of Tatarstan Republic.

And that's why he was entitled to open new shops on this exactly territory

in parallel with the franchisee.

And I may say that this case illustrates some of the weaknesses of the Russian law.

It illustrates that there is no obligation of a franchisor

to disclose all relevant information to franchisee.

And here, in this case,

we see the franchisor failed to inform the franchisee about details of the contract,

its own plan to develop business in Tatarstan.

But according to Russian law he didn't have to.

And we can also see that a parallel use of a trademark rights,

under the Russian law, may be allowed if it's not directly excluded in the country.

So, the parties of the franchising contract should be very careful in this regard.

And at the end let's discuss liability issues in franchise contract.

We see that this is a joint business of franchisor and franchisee,

and that is why they should have a shared liability

with regard to a third parties claims and consumers.

And that is why article 1034 of the Russian Civil Code

contains specific provisions in this regard.

And it says that the right holder that is subsidiary liable

with respect to claims presented to the user,

concerning quality of goods sold, works performed, services provided

by the user under their contract.

And it also mentions that the right holder is jointly liable

with respect to the claims presented to the user as manufacturer of the goods.

Because in the eyes of the consumers, and in the eyes of the third parties,

it may be one in the same business,

and third parties usually do not distinguish where franchisee is and franchisor is.

That's why we have this specific provisions in the Russian law that allows liability,

and not only the franchisee but also the franchisor.

Thank you.

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