Ferrero Loses Raffaello Trademark Protection in Ukraine

Italian chocolate maker Ferrero has recently lost a lengthy infringement battle in Ukraine over its well-known Raffaello® trademark.

On January 19, 2011, the Higher Commercial Court of Ukraine ruled in favor of the Russian confectionary maker Landrin, selling chocolates similar to Ferrero’s in Ukraine, under the brand Landrin Waferatto Classic, in the dispute with the Belgian company Soremartec, member of the Ferrero Group.

The Ukrainian court canceled the validity of Soremartec’s international trademark registered by the Ukraine PTO under No. 798984, protecting the appearance of Ferrero’s well-known coconut round sweets Raffaello.

The dispute between Landrin and Soremartec began in April 2008, when Soremartec filed a claim against Landrin with the Kiev Commercial Court requesting that Landrin stop using the IR No. 798984 with regard to confectionary goods a and to prohibit the further use of IR No. 798984. The claim was grounded on the arguments that Landrin was producing wafer candies with coconut filling and almond nut, the external appearance and image of which reflect the IR No. 798984. Therefore, Soremartec claimed the production of wafer candies constituted use of IR No. 798984 without the authorization of the owner.

Two months later the Kiev Commercial Court received a counterclaim from Landrin requesting that IR No. 798984 be invalidated as from the filing date and that the corresponding notification be sent to WIPO. The counterclaim was grounded on the arguments that the registration lacks distinctiveness.

Both parties, Soremartec and Landrin, filed replies to their respective claims. In July 2008, Landrin replied to the claim initially lodged by Soremartec, claiming it was not using the trademark in Ukraine. In August 2008, Soremartec also lodged a reply to the counterclaim filed by Landrin, stating that the trademark under IR No. 798984 was distinctive and that the counterclaim was therefore groundless.

The court ruled that in order to make the decision, expert knowledge is required. Therefore a trademark expert was appointed. The expert concluded that that the consumers can recognize the trademark and that by the time of filing the application the trademark had enough distinctiveness and that it acquired even more distinctiveness through its use. Soremartec representatives submitted the evidence of the use of the trademark.

In addition, the expert established that the external appearance of confectionaries produced by Landrin (wafer candies with coconut filling and almond nut) is confusingly similar with IR No. 798984. It was established that Landrin’s confectionaries have the same appearance, when considering the combination of various similar features such as colors, shapes, contours and the general look of the product.

Taking into account the expert’s conclusions and the evidence submitted, the court issued a decision to sustain the claim of Soremartec in full scope and to reject Landrin’s counterclaim as well as the reply filed by the latter.

In early 2009, Landrin filed an appeal against the decision of the Commercial Court of Kiev (first instance), claiming that the court of first instance ruled in this matter in breach of procedural and substantive rules. Namely, Landrin stated that the court of first instance did not take into account the provisions of the Law stating that a trademark serves to mark or identify already produced goods (for instance confectionaries) and that such a mark should be affixed on the packaging or wrapping, and argued that the production of the goods, even if their external appearance resembles a prior trademark, does not infringe the trademark itself. In addition, Landrin requested that a second expert be appointed.

Soremartec, as well as the Ukrainian State Department of Intellectual Property, which was a third party in the proceedings, filed counter-arguments supporting that the decision of the court of first instance was grounded and correct. The court dismissed the replies and appointed a second expert as requested by Landrin.

The second expert established, inter alia, that:

• The trademark lacked distinctiveness at the moment of its creation and had not acquired distinctiveness in relation to the goods of the Soremartec on the date the IR was filed in Ukraine (February 2003);
• Similar confectionaries to the ones produced by Soremartec were present on the Ukrainian (and post USSR) market at least a few decades before the application for IR 798984 was filed. Various receipts confirming the sale of confectionaries, images of products and notifications from producers confirmed such information.

Based on the second expert’s conclusions, the Appeal Court established that the first expert’s results were incomplete. It was established that the shape of the confectionaries produced by Soremartec was not original at the time of fling of IR 798984. In addition, the Appeal Court stated that Soremartec had failed to submit any evidence proving that IR 798984 had acquired distinctiveness, neither by the date of creation nor by the registration date. The evidence provided only showed acquired distinctiveness after 2003; the evidence could just prove that, by the filing date of IR 798984, Soremartec was only advertising and selling confectionaries Raffaello.

The Appeal Court decided that the court of the first instance wrongly took into account the continuous use of IR 798984, since the evidence presented showed the use of the product as marketed, and not the actual object (alone) as it appears on the trademark representation (unwrapped praline). The court stated that the marketed product and the image of IR 798984 had different individual features.

Therefore, the Appeal Court considered the results of the first expert as incomplete and contradictory. In making its decision, the Appeal Court relied on the results of the second expert only. In addition, the Appeal Court ruled that the initial claim was filed before the wrong court and that the proceedings of the initial claim should be stopped, while the counterclaim filed by Landrin was filed in compliance with all jurisdictional requirements.

Finally, the Appeal Court issued a decision sustaining the appeal filed by Landrin, that is, to cancel the validity of IR 798984 in Ukraine and to stop proceedings relating to the infringement claim filed by Soremartec.

By the end of 2009, both Landrin and Soremartec filed cassation claims before the High Commercial Court. Landrin requested that proceedings are not stopped in the course of the infringement claim filed by Soremartec, but to issue a new decision with full dismissal of all claims made by Soremartec. This step was made in order to prevent further efforts Soremartec could try to undertake in order to hinder Landrin’s manufacturing and sales of the confectionaries in question.

Soremartec requested that the High Commercial Court cancel the decision of the Appeal Court since it applied wrong procedural rules. The Ukraine State Department of Intellectual Property also filed a claim with the High Commercial Court supporting Soremartec’s position.

In its cassation claim, Soremartec also stated that stopping the proceedings in the infringement action was groundless and that the statute of limitations for cancelling the trademark, which is 3 years in Ukraine, had expired.

The High Commercial Court ruled that the decision of the Appeal Court should be upheld. Therefore, the cassation claims of all the parties were dismissed.

Soremartec filed the claim with the Supreme Court of Ukraine. In early 2010, the Supreme Court of Ukraine decided to cancel all previous decisions on the matter. Thus, the case was sent back to the court of first instance for re-consideration.

Soremartec, as a plaintiff, added new parties – Baklazhan and M 15 as co-defendants. It is our understanding that these companies are the distributors of Landrin. The Commercial Court ruled in favor of Soremartec.

Landrin has filed an appeal with the Appeal Commercial Court of Kiev asking the Court to reverse the decision of the Commercial Court. On November 1, 2010 the Appeal Court ruled in favor of Landrin. According to Ferrero’s representatives in Ukraine, the hearing took place with blatant violation of basic procedural rules and was held by judges who are not specialized in intellectual property.

Consequently, Soremartec filed the cassation claim with the Higher Commercial Court of Ukraine. The decision of the Higher Commercial Court issued on January 19, 2011 finally cancelled the validity of IR 798984.

For more information, please contact Elena Zubenko at our Ukraine office.

Source: PETOŠEVIĆ