History of the Origin of Trademarks (part 3, final part)

Gradually, trademarks became a kind of “business card” of goods, and in this connection national laws of states began establishing legal regulations for their registration, use and protection. Mostly, these laws provided for granting the exclusive right to use a trademark within a certain territory for a certain time period to a businessman. In order to secure this right, the state registration of trademarks was introduced that provided for the protection of the trademark owner’s rights and holding infringers liable. In the same period, first international agreements were concluded. In particular, on March 20, 1883 the Paris Convention for the Protection of Industrial Property was adopted, according to which the protection of industrial property had as its object patents, utility models, industrial designs, trademarks, service marks, trade names, indications of source or appellations of origin, and the repression of unfair competition. It should be noted that unfair competition, unlike the other industrial property, is a kind of violation of common rules and norms of competition, which may have the form of an intentional totality of various interrelated actions aimed at deriving illegal benefits in business or other activities. Due to this, repression of unfair competition is, according to our opinion, a measure of influencing economic subjects whose behavior on the market does not comply with the requirements of fairness, rationality and justice, rather than an industrial property object for which, as is known, a protection document is granted.

On April 14, 1891, the Madrid Agreement Concerning the International Registration of Marks took effect that provides nationals of the contracting countries with the possibility of securing protection, in all the other countries party to the Agreement, for their marks registered in the country of origin  by filing such marks at the International Bureau of the World Intellectual Property Organization. Later, on June 27, 1898, the Protocol Relating to the Madrid Agreement was adopted which purposes are to harmonize it with national laws of a number of states and create more favorable conditions for applicants.

In general, speaking strictly, the protection of trademarks in foreign laws originated from prohibition of unfair competition in the field of business. Trademarks of the first generation were closely associated in the legal sense with the identity of a manufacturer per se as the origin of goods. It is just this fact that can explain the emergence of the “goodwill” notion meaning reputation of a manufacturer of goods and his good name. Due to the fact that counterfeit goods of third persons negatively affect reputation of a businessman, it is just his reputation that should be protected, rather than his trademarks or goods bearing same. Consequently, a trademark, as being closely connected with the businessman’s identity rather than with his goods, may not become an object of property relations from the legal point of view. This means that a trademark may be transferred to another businessman together with the transfer of the whole business. The possibility of granting a license for a trademark without transferring the respective business appeared only in 1946 in the USA after the trademark law (Lanham Act) entered into force.

From that time the second generation of trademarks emerged, which role was to identify goods as such, rather than identify manufacturers of goods. The new role of trademarks was based on the fact that the consumer dealt with goods first, rather than with a manufacturer. Consequently, the consumer became the main person whose interests should be protected, which was confirmed by the appearance of the doctrine of “confusingly similar trademark” aimed at the average consumer. Thus, trademarks drifted away from their owners more and more and began being used for designating goods as such, and the very trademarks turned to be objects of property relations. In the result, radical changes in the essence of a trademark took place that were manifested not only in the appearance of the possibility of alienating exclusive rights to a trademark and transferring same for use under license and other contracts, but also in the possibility, available to any person, of becoming the holder of the rights to a trademark, including any person not engaged in business activities.

In particular, according to the French Intellectual Property Code, a trademark or a service mark is a graphic symbol used for distinguishing between goods or services of individuals or legal entities. Similarly, Article 7 of the German law on the protection of trademarks and other symbols teaches that natural and legal persons as well as partnerships capable of acquiring rights and bear responsibilities may be holders of rights to trademarks. Article 5 of the Council Regulation (EC) “On the Community Trademark” also states that any natural and legal persons, including authorities established under public law, may be proprietors of Community trade marks.

Similarly, it follows from the teachings of paragraph 1127 of the US Lanham Act that, since a trademark is used for identification of goods involved in the property circulation, rather than for identification of their manufacturers, not only businessmen, but also persons not engaged in business activities are eligible to hold the rights to trademarks[1].

Surely, all this is correct, but practically holders of trademarks in the USA and other countries in the world are primarily persons engaged in business activities, since it is tem who manufacture goods and/or provide services. Taking into account that, in order to have a trademark registered in the USA,  the applicant should either present evidence on use of the trademark at the market, or file a declaration on intention of such use, the possibility of holding a trademark for a natural person not engaged in business activities turns out to be a simple illusion. As far as any nonprofit organizations are concerned, they may become real holders of trademarks in spite of the fact that their main purpose is socially useful activity, rather than profit-making. In particular, this is possible when a non-profit organization is engaged, apart from the main non-profit activities, in side production of goods or provision of services. A similar approach to the possibility of holding a trademark for non-profit, e.g. religious, organizations, provided they are engaged in side activities mentioned in the constituent documents, may be seen in the Russian legislation. This may be, in particular, the activity of a religious organization aimed at publishing and disseminating religious literature bearing its trademark, cult objects and souvenirs of religious nature.

It can be seen from the above that international conventions, agreements, treaties as well as national legislations on trademarks are in progress. In order to follow the spirit of the time, these documents are periodically revised. In particular, the Paris Convention and the Madrid Agreement and nearly all national laws of various countries are revised repeatedly. The reasons for introducing amendments into these documents are the appearance of new goods and technologies, the necessity to harmonize national legislations with international legal acts more deeply, enlargement of the trademark generic range, and the related necessity to specifically identify some unconventional designations, such as smells, sounds, taste, color, etc.


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