Now we'll learn,
briefly discuss financial
terms of the licence agreement.
Under article 1235 of the Russian Civil Code,
it is presumed that a trademark license is concluded on remuneration basis.
So the licensing, which pays something for the use of the trademark.
But of course, this is optional and parties may decide otherwise.
So, this is covered by freedom of contract principle.
But in case they would like to mention this remuneration in the contract.
There may be different kinds of ways how it can be done.
It can be a fixed amount of payment, periodic payments,
interest deductions, or any other forms.
And here at the Russian legislation, it's very flexible so,
this is basically any way you want to describe this close.
And perhaps one more important remark is that during registration all
these financial terms may be kept by the parties confidential.
And as we have seen there is no duty to disclose this
information during registration procedure.
They are not mentioned, this financial provisions
among mandatory in this list for registration procedure.
So in other question here is whether gratitudes or
license of women would be valid until the Russian ball or not.
And there is only one restriction under Article 1235 of
the Russian Civil Code which says that license agreement between
commercial entities would be invalid if it represents an exclusive license for
the entire term and territory of trademark protection.
And that's basically the only red line that we may not cross.
Other license that does not fall into this definition is permitted for
example any non-exclusive license that is protrude will be.
And any exclusive license limited to in geographic terms or
in terms of time, for example, which was given only for
one year or two years would still be okay.
Perhaps, we should also discuss quality provisions and
this is a very important when we now talk about licence agreement.
Under mandatory provisions of the Article 1489 of
the Russian Civil Code, licensee has a legal duty to ensure
that the quality of produced goods and sold goods or
provided services meet qualitative requirements set by the licensor.
This is one the specific features of the license agreement.
In this regard, licensor has a right to monitor and
control compliance with this provision And the license contract may provide for
different inspection proceedings, reports for the licensee,
any other way the licensor would wish to control actions of the licensee.
This is a discretion and provision if parties would like to
decide otherwise, it would be possible.
If they want to exclude this one-to-one control
powers of the licensor, they may do that.
And perhaps one more remark concerns liability issues.
And Russian law provides that licensee and licensor are jointly liable.
with regard to third parties claim as manufacturers of the goods or
service providers.
This is a specific partition included in the Russian board for
protection of the consumers.
And the justification for
that is not consumers may regard use of the trademark by licensee and
licensor as one single business and they do not have to care and
ask every time who is actually using this trademark.
For consumers it's just not important.
And that's why licensee and
licensor are regarded as jointee in rival when regard to such claims.
Now, let's turn to Exclusivity provisions.
Parties of course are free to include in a license agreement any
provisions they seem to in order to secure exclusivity of the license.
These may be provisions concerning relations of the parties with
other competitors and specific applications not to
enter into similar agreements with other parties and etc.
And the most important question in this regard is whether licensor retains any
rights to use a trademark in the case of granting an exclusive license.
In others words, is a paralleled use of a trademark by licensor and
licensee, is possible and admissible under the Russian law.
In the past, that was the general rule,
I mean the parallel use of a trademark by a licensor and licensee.
But since 2014, provisions of the Russian law have changed.
And now article 1236 of the Russian Civil Code provides that
licensor is precluded from using IP right to the extent to which such right
is already granted to the licensee under exclusive license.
So, this parallel use is treated negatively by the Russian Civil Code.
However, this provision is again of this positive character.
And if parties have important reasons to
provide otherwise, they can still do it.
Let's discuss Restrictions.
Other instances when trademark license is not allowed under the Russian law,
and there is only one exception that is included in
Article 1489 of the Russian Civil Code.
And this stipulates that a license agreement concerning
a trademark which includes as an element of a trademark,
a part of a trademark, designation of the place of origin is
allowed only if the licensee is entitled to use such designation.
It means that licensee should be one of the right holders of
such a designation in order to use under a license agreement,
a trademark that contains such a designation.
And if this condition is not fulfilled, a rough patent may refuse
to register such transfer of trademark fliers from licensor to licensee.
And now let's turn to Special Remedies provisions in a license contracts.
Perhaps the most frequent violation of license agreement in Russia and
worldwide is non-payment of remuneration by a licensee in the due time.
And such non-payment may amount of course fundamental breach of contract.
And I would highly recommend to include special and
detailed provisions concerning such a situation in a contract and
how the licensor, which is a guarantee it's right to obtain such payment.
A remuneration, but in the case a contract contains,
no such specific provision, licensor may still avail to
remedies provided by Article 1237 of the Russian Civil Code.
And this article says that in such a situation,
licensor is entitled to declare the contract avoided unilaterally and
may claim damages from the licensee.
And if licensor would like to do that he would have to notify the licensee
about its intent to avoid the contract and such avoidance automatically
becomes effective after exploration of 30 days period,
after receipt of the relevant notification by the licensee.
Of course unless licensee complies with it's application and
pays grant remuneration unto the licensor.
[MUSIC]
Vladislav StarzhenetskyAssociate Professor
