Category: Corporate issues
Legal protection of trademarks in Russia: risks and consequences of non-use
Dear colleagues,
Over the past year, international brands that have reduced their presence or left the Russian market have been registering trademarks in the Russian Federation, which has been widely covered in the media. Having received many questions from companies about the regulation of brand protection in the current situation, we decided to describe in more detail the mechanism of trademark protection in Russia, the existing risks, opportunities and options.
National and international trademarks in Russia
Russia protects both trademarks registered under the Madrid system (international registrations) and national marks registered with the Federal Service for Intellectual Property (Rospatent).
Russia recognizes conventional priority (Article 1507 of the Civil Code of the Russian Federation, Article 4 of the Madrid Agreement), which means protection of rights to a trademark registered in any Paris Convention country.
However
- the introduction of the parallel import regime has partially limited this protection for certain categories of goods;
- legal protection of a trademark may be terminated early if the right holder does not use it for three consecutive years in respect of the goods concerned.
This provision is set forth in Article 1486 of the Civil Code of the Russian Federation and corresponds to clause “c” of Article 5 of the Paris Convention for the Protection of Industrial Property dated 20.03.1883.
How does it happen?
In accordance with clause 1 of Article 1486 of the Civil Code of the Russian Federation, legal protection of a trademark may be early terminated in respect of all or part of the goods for which it is registered, if the mark has not been used for three consecutive years.
An interested person who has reasons to believe that the right holder does not use the trademark shall have the right to send him a proposal for voluntary withdrawal of legal protection.
Such a proposal may contain a claim either to
- submit an application to the federal executive body in the field of intellectual property to waive the right to the trademark, or
- enter into an agreement on alienation of the exclusive right.
This proposal shall be sent not only to the right holder, but also to the address indicated in the State Register of Trademarks or the relevant international register.
It is important to note that it is possible to send such a proposal only after three years from the date of state registration of the trademark. If within two months after receipt of the proposal the right holder does not take the abovementioned actions, the interested party is entitled within the next thirty days to apply to the court with a claim for early termination of legal protection of the trademark due to its non-use.
At the same time, the legislation does not contain an exhaustive list of cases when a person may be recognized as an interested party. The court in each specific case assesses whether the claimant has a legitimate interest in terminating the legal protection of the unused trademark. Any person whose legitimate interests are affected by the existence of an unused registration may be acknowledged an interested party.
Of course, the trademarks of foreign companies that left the Russian market in 2022 face particularly high risks of early termination of protection.
Consequences of loss of legal protection
If a trademark loses legal protection, there is a potential risk that third parties may register it on their names.
In this case, there is a risk that products marked with the trademark of the former right holder will appear on the market, as control over the brand will be lost.
Restoration of rights will require significant time and financial expenses.
Current situation: risks
The current situation with the possible consequences of the loss of legal protection of a trademark remains controversial.
Early termination of protection creates prerequisites for re-registration of a brand or registration of a similar designation. However, despite the significant number of applications duplicating or imitating foreign marks, Rospatent often refuses to register identical or confusingly similar marks held by well-known companies.
Nevertheless, although the implementation of such brand interception is fraught with obstacles and at the moment the practice is ambiguous, and some examples of court practice already exist that are not in favor of the foreign right holder.
Current situation: court practice
A recent example of early termination of trademark protection is the ruling of the Intellectual Property Rights Court dated 30.10.2024 (case No. SIP-334/2024). The court satisfied the claim of LLC “R-Climat” against Telefonaktiebolaget LM Ericsson and terminated the legal protection of the company’s trademarks in respect of goods of the 11th class of International Classification of Goods and Services (equipment for ventilation, heating and air conditioning).
The reason was non-use of the marks for three years, which created an opportunity for their re-registration by other persons.
Another case in a similar situation is the case concerning registration of the trademark “Fantola” (No. 712275), owned by the Russian company “Drinks from Chernogolovka-Aqualife”. The Western right holder Coca-Cola tried to challenge Rospatent’s decision, claiming that the mark was confusingly similar to its brand.
Despite the authority’s initial rejection of the objections, the company appealed to the Intellectual Property Rights Court (IPRC). The court proceedings took an ambiguous turn: at first, the court recognized Rospatent’s actions as invalid, but eventually sent the case for a reconsideration which confirmed that the “Fantola” trademark could be used.
This case demonstrates the complexity of such disputes and the lack of unambiguous judicial practice in matters of trademark similarity.
What can be done?
In order to reduce risks for companies, especially those that have left the Russian market, it is possible to consider maintaining registration or renewing the use of a trademark directly with Rospatent.
If registration/renewal of individual marks (e.g. a series or a family of similar trademarks) is done with a certain periodicity every 3 years, the loss of an older trademark will not entail the loss of other similar trademarks for use in the Russian Federation.
Nevertheless, when deciding on the necessity of such a step it is important to evaluate the totality of factors and assess the degree of risk: the risk is highest if the right holder’s goods are not represented on the Russian market and are not available to Russian consumers for more than 3 years.
In this situation, formal registration of the trademark in the Russian Federation may not be sufficient, as the fact of use/non-use of the brand in the Russian Federation is of priority importance. Such trademarks should be actually used to show the good faith of the right holder.
Thus, it is important to assess the whole issue in a comprehensive manner, taking into account all factors in each individual case.
When considering all options, it is important to assess whether the following issues have been or will be resolved:
- Legal defense – whether there will be an opportunity to stop illegal use of the brand and counterfeit products.
- Right to sue – whether there will be the ability to recover compensation for infringement of exclusive rights.
- Preservation of market position – whether there will be protection against brand takeover and unfair competition.
- Flexibility to return the business – whether it will be possible to resume operations in the Russian Federation without losing trademark rights.
Conclusion
In the context of sanctions and changes in legislation, trademark rights holders need to actively monitor their use in Russia. Otherwise, there is a risk of losing rights, which may lead to serious commercial and reputational losses. Timely legal measures will allow you to retain control over your brand and avoid undesirable consequences.
We will be happy to assist you in solving this task and answer your questions.
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A new stage of localization of work with personal data: changes since July 2025
Dear colleagues,
The improvement of legislation in the field of personal data protection continues.
Since July 1, 2025 the amendments to the Article 18 of the Federal Law No. 152-FZ (introduced by the Federal Law No. 23-FZ from 28.02.2025), which impose additional restrictions for operators and processors of personal information, came into force.
The updated provision explicitly prohibits the use of databases located abroad when collecting the data of Russian citizens:
“When collecting personal data, including through the information and telecommunications network Internet, recording, systematization, accumulation, storage, clarification (update, change), extraction of personal data of citizens of the Russian Federation using databases located outside the territory of the Russian Federation is not allowed, except in cases specified in the paragraphs 2, 3, 4, 8 of the Part 1 of the Article 6 of the present Federal Law.”
Below we will analyze the key changes, consider the risks and offer recommendations for action.
The scope of restrictions
According to the direct interpretation of the article of the law (see above for the complete version), we can conclude that the new rules relate exclusively to the initial collection of personal data.
Subsequent cross-border data transfer is not prohibited – however, it is important to remember and take into account previously introduced requirements (see our review here and here).
Expanded range of responsible parties
Previously the requirements applied directly only to personal data controllers, but now all data processors, such as HR providers, cloud storage services and electronic document management platforms are subject to control.
High fines!
Non-compliance with the rules can lead to serious sanctions:
- Primary violation – a fine of 1-6 million rubles (for legal entities), 100-200 thousand rubles (for company officials).
- Repeated violation – 6-18 million rubles (for legal entities), 500-800 thousand rubles (for company officials).
Recommendations
Definitely, you should start with a process audit. It is necessary to analyze the current company IT infrastructure (including the location of databases and the physical location of servers), making sure that data collection takes place in the territory of the Russian Federation.
It is important not to ignore all data collection channels: for example, the company’s website (often containing forms to fill out or analytical data collection services), mobile applications (if available), etc.
It will be also necessary to check and update internal local regulations and policies, in particular, the regulation on personal data processing.
We will be glad to answer your questions, help you with preparation of the necessary documentation and advise you on this and other issues.
Submit a request
Important! Increase of fines for violations in the field of personal data processing
Dear colleagues,
please note that starting from May 30, 2025, amendments to the Code of Administrative Offenses of the Russian Federation will enter into force, which will significantly increase fines for legal entities and individual entrepreneurs for failure to submit a notification to the Federal Service for Supervision of Communications, Information Technology and Mass Media (Roskomnadzor) concerning the processing of personal data of their employees (as well as other categories of persons whose data was received and is subject to processing). In this case, the processing of personal data means any actions with data, including collection, recording, systematization, storage, updating, distribution, deletion.
These changes are relevant for all employers, since by default any organization or individual entrepreneur with employees processes the personal data of employees (full name, passport data, salary data, etc.), and therefore must be registered accordingly in the register of operators of Roskomnadzor.
Prior to the aforementioned changes entering into force, organizations committing a violation of such rules could be subject to a warning or a fine of up to 5 000 rubles in accordance with Article 19.5 of the Code of Administrative Offenses of the Russian Federation. In practice, however, the supervisory authority would usually limit itself to requiring notification to be submitted within the specified time period.
Starting from May 30, 2025, the fines for failure to submit a notification to Roskomnadzor will be as follows:
– for company officials and individual entrepreneurs – from 30 000 to 50 000 rubles;
– for legal entities – from 100 000 to 300 000 rubles.
Therefore, if your company has not yet sent the relevant notification to Roskomnadzor, it must be submitted as soon as possible. You can check whether your company is included in the register of Roskomnadzor by following this link.
The notification can be sent to the department on paper, through the Unified Identification and Authentication System on the internet Portal of Government Services, or in electronic form using a qualified electronic signature.
We also recommend that you read the department’s comments and answers to frequently asked questions.
We are ready to help prepare a personal data processing notification and support you in promptly sending it to Roskomnadzor.
We will be happy to answer your questions.
Your contacts on this topic:
Maria Matrossowa
Nadezhda Maskaeva
Сhanges in transfer pricing and notifications of controlled transactions
Dear colleagues,
A year earlier we have informed you of major changes in transfer pricing effective from 01.01.2024 (link). We kindly remind you the main aspects and inform of the recent innovations:
1. Withholding tax on services of foreign related parties
We kindly remind you that withholding tax of 15% shall on mandatory basis be withheld from services of foreign related parties – residents of the country with which the DTT has been suspended.
On April 7, the Ministry of Finance officially updated the list of countries with relevant information of current DTTs, in particular, the information on the termination of the DTT with the UK on its initiative was added, in which regard a separate information message was also published.
For transactions with companies from countries with continuing DTTs, it is necessary to study the terms of the international agreement.
2. New format for notification of controlled transactions
On December 28, 2024, the Federal Tax Service issued the Order No. ED-7-13/1088@ “On approval of the form, procedure for filling out and format for submitting a notification of controlled transactions in electronic form” dated December 02, 2024, and on March 13, 2025, the Tax Service issued clarifications (Letter of the Federal Tax Service of Russia dated March 13, 2025 No. ShYu-4- 13/2827@* (ШЮ-4-13/2827@) on ensuring the proper application of the Letter of the Federal Tax Service of Russia dated May 25, 2022 No. ShYu-4-13/6384@* (ШЮ-4-13/6384@).
One of the key points is that for transactions proceeded after January 01, 2024, the taxpayer is to specify in the notification of controlled transactions (and in the documentation submitted at the request of the Federal Tax Service of Russia or in accordance with the paragraph 8 of the Article 105.15 of the Code) the applied transfer pricing method (as provided for in the Chapter 14.3 of the Code or a combination thereof) used to justify the market price level in the controlled transaction.
The changes also imply the disclosure of more information about controlled transactions, including prices in transaction chains (applicable to previous purchase / subsequent sale) for certain categories of transactions (for instance, exchange goods).
We kindly remind that for transactions proceeded in 2024, the notification in the new format is to be submitted not later than on May 20, 2025.
Non-submission by a tax payer to the tax authority within the prescribed time limits a notification of controlled transactions proceeded within one calendar year, or submission by a taxpayer to the tax authority of a notification of controlled transactions including unreliable information, shall entail a fine of RUB 100,000. Non-submission by a taxpayer to submit documentation regarding a specific transaction (group of similar transactions) within the prescribed time limits shall entail a fine of RUB 500,000.
3. Verification of transactions with a foreign “unrelated” counterparty
We kindly remind that since January 1, 2024, transactions with “unrelated” companies registered in countries in the offshore zones list may be automatically classified as controlled transactions for transfer pricing purposes (since July 1, 2023, the list of offshore zones was expanded to 91 jurisdictions by the Order of the Ministry of Finance of Russia dated June 05, 2023 N 86n and includes, for example, the countries of the European Union, Great Britain, Japan, the USA).
Regardless of the actual interdependence of the parties, the transaction will be recognized as controlled transaction if the income for the calendar year exceeds the limit of RUB 120 million.
Exceptions are being made for transactions, where one of the counterparties is a resident or a tax resident of a foreign state with which the Russian Federation has a DTT, the effect of which was suspended by the Decree of the President of the Russian Federation, when:
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transactions were concluded before March 1, 2022,
-
the procedure for determining prices and (or) pricing methods (formulas) applied in such
transactions remain unchanged after March 1, 2022,
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transactions are not recognized as controlled transactions in accordance with the criteria in
effect as of March 1, 2022.
4. Updated list of countries which tax authorities conduct an automatic exchange of information
On December 20, 2024, the Federal Tax Service published an Order No. ED-7-17/915@ dated October 30, 2024 “On approval of the List of foreign states (territories) whose competent authorities automatically exchange country-by-country reporting”.
We kindly remind that the effective order of the Federal Tax Service of Russia dated December 20, 2022 No. ED-7-17/1226@ became void with the adoption of the above-mentioned document.
The current version specifies 45 countries and 10 territories with which automatic exchange is carried out, which is amended compared to the previous list in terms of the exclusion from this list of a number of “unfriendly” European countries, which have ceased to carry out automatic exchange of country-by-country reporting with the Federal Tax Service of the Russian Federation (for example, Germany, France, Luxembourg, Italy, Spain, Greece and other countries).
We kindly remind that subsidiaries – residents of the Russian Federation, which parent companies are registered in jurisdictions with which automatic exchange has ceased, may have to submit a country-by-country reporting upon request from the tax authorities.
Non-submission a country-by-country reporting within the within the prescribed time limits either submission of a country-by-country reporting including unreliable information entails a fine of RUB 100,000 for periods before 01.01.2024 and a fine of RUB 1,000,000 for periods starting from 2024 (the fine may be applied to one calendar year).
We have been working with transfer pricing for many years and are engaged in preparing documentation for our clients.
We will gladly support you in the process of preparing documentation and answer questions that arise in connection with the changes specified.
Your contacts on this topic:
Elena Kameneva
Olga Kireeva
Regular (annual) general meeting of LLC participants
Dear Colleagues,
please note that in accordance with Article 34 of the Federal Law dated February 08, 1998 No. 14- FZ “On Limited Liability Companies” it is necessary to hold an ordinary (annual) general meeting of LLC participants in the period from March 01 to April 30, 2025 to approve the results of the previous year (annual reports and annual accounting (financial) statements).
Penalties may be imposed for failure to convene a meeting within the specified deadline. According to clause 11 of Article 15.23.1 of the Code of Administrative Offenses of the Russian Federation, unlawful refusal to convene or evasion from convening a general meeting, as well as violation of the requirements to the procedure for convening, preparing and holding general meetings of LLC participants shall entail the imposition of a fine. For officials (general directors) it ranges from 20,000 to 30,000 rubles, for legal entities – from 500,000 to 700,000 rubles.
Previously we informed you about changes in the procedure for holding meetings of participants of Russian LLCs starting March 01, 2025. We would like to remind you that the legislation establishes a prohibition on holding the ordinary general meeting of participants as an absentee meeting. During the COVID-19 pandemic, absentee voting at the annual meeting was possible, but the prohibition is now back in force.
In 2025, it is permitted to hold an annual general meeting of participants through combining absentee voting by ballot with a physical meeting (with some of participants present in person).
We will be glad to support you in preparing and holding an ordinary meeting to approve the results of the year by the general meeting of LLC participants, as well as to prepare the relevant minutes of the meeting or a resolution of the sole participant of the company.
Your contacts on this topic:
Maria Matrossowa
Nadezhda Maskaeva
swilar has won the Russian Business Guide. PEOPLE OF THE YEAR award
On March 26, for the seventh time in a row, the international magazine RBG, with the support of the Chamber of Commerce and Industry of the Russian Federation, held an award ceremony for the winners of the “Russian Business Guide. PEOPLE OF THE YEAR” award. Over the years of its existence the award has gained wide popularity and support among the business community becoming a significant award for domestic business, and has made an important contribution to the popularization and support of the business community. The status of the award is recognized both in Russia and abroad.
The award winners are not just successful entrepreneurs, public figures and opinion leaders but also true innovators who make a significant contribution to the development of business and the economy of Russia.
The swilar group of companies was recognized as the winner in the nomination “Best HR and Outsourcing Services Provider”.
The Managing Partner of swilar group Daria Pogodina highlighted the specifics of work in this area in an article in the latest issue of RGB:
“We see that in the conditions of general turbulence company management wants and must focus on solving operational business problems and at the same time is forced to develop new strategies or make adjustments to the plans being implemented. Of course, this leaves its mark on the expectations of companies towards their business partners: not just to work out tasks or, in the case of, for example, accounting outsourcing, to reflect documents but to point out proactively certain nuances and offer solution options. This fits perfectly into our concept of support, and this is precisely why, according to reviews, our clients value us. Of course, one of the most important areas of the past year was the constant monitoring of the situation with international payments and the search for the best solutions for clients. Performing, among other things, the functions of the treasury, we monitor and analyze the situation in this area with special attention.” We invite you to read the full article at the link.
We thank the organizers of the award for the high assessment of our work!
Information on participants of a foreign organization for 2024 – submit before 03/28/2025
Dear Clients,
please pay attention that the term for submission of information on the participants of a foreign organization for 2024 expires on March 28th, 2025.
All foreign organizations and foreign structures without formation of a legal entity registered with tax authorities in the Russian Federation are obliged to inform the tax authorities of all direct participants and beneficiaries regardless of the share of participation, as well as of indirect participation of an individual or a public company (if their share exceeds 5%).
The above-mentioned information is to be submitted to the tax authority not later than on March 28th each year. An exception is foreign organizations that are registered with a Russian tax authority only for provision of services in electronic form.
Non-submission or late submission of the information entails a fine of RUB 50,000.
You can find our earlier publications on this issue here and here.
We will gladly support you in preparing and submitting information on the participants/beneficiaries of a foreign organization to the tax authorities.
Сhanges to corporate legislation: holding of meetings in companies
Dear Sirs or Mesdames,
we would like to inform you about the changes in the field of corporate law which will be important in the nearest time.
From March 01, 2025, significant new developments made by the Federal Law dated August 08, 2024 No. 287-FZ will come into force. A number of changes relates to limited liability companies (LLC).
So, the rules of holding general meetings of LLC participants have been amended, the related terminology has been changed. New rules will be applied, namely, while holding the annual meetings of participants according to the results of the year 2024.
Main changes are as follows:
The expression “general meeting” has been changed to “adoption of a resolution by the general meeting” or “meeting or absentee voting for adoption of a resolution by the general meeting”.
The meeting chairman will be elected only if the company does not have a Board of Directors (Supervisory Board). If it exists, the Chairman of such Board of Directors will take chair.
The forms of the general meeting will be as follows:
- a meeting, possible with remote participation;
- absentee voting, incl. by e-bulletins;
- a meeting combined with absentee voting.
In case of remote participation:
- participation will be executed using electronic/technical communications;
- a possibility is established to attend a meeting at the place of its holding or to hold a meeting without determining a place of holding;
- a possibility is established to make an online-broadcasting with access for the registered persons (upon a participant’s demand the company is obliged to provide access to the broadcasting recording).
Additionally, the rules of holding meetings combined with absentee voting have been fixed. Such meetings may be held in the cases stipulated by the company’s articles of association or by a unanimous resolution of all the company participants. Approval of annual reports and accounting (financial) statements is admitted at such meetings.
A separate article has been introduced dedicated to drafting and contents of the minutes of an LLC general meeting. It also stipulates that signing of the minutes by the secretary of the meeting will not be required.
Furthermore, a procedure was established in relation to adopting resolutions by the Board of Directors (the supervisory authority which is formed when it is stipulated by the articles of association). This authority may adopt resolutions at meetings (including those with remote participation) or by means of absentee voting. Similarly to meetings of company’s participants, meetings of the Board of Directors will be held with the possibility of personal attendance at the place of their holding as well as without determining such place.
The quorum when adopting Board resolutions will be not less than 1/2 of the number of Board members (if the greater number is not stipulated by the articles of association). The meeting may be combined with absentee voting.
The minutes according to the results of the meeting or the absentee voting will be prepared not later than 3 calendar days after the meeting or the end of document acceptance from the Board members (in case of absentee voting).
We will be happy to answer your questions arising in connection with the specified changes.
Your contacts on this topic:
Maria Matrosova
Nadezhda Maskaeva
SWISS & RUSSIAN VIEWS AND PERSPECTIVES BY ACADEMIA AND BUSINESS
Daria Pogodina spoke at the conference “Swiss & Russian Views and Perspectives by Academia and Business” with the report on the topic “Practical Experience in Intercultural Communication with German-Speaking Countries”. As a part of the presentation, the speaker shared practical observations and cases from professional interaction with partners from Germany, Austria and Switzerland. The issues of differences in business culture, communication models were considered, and recommendations were given on how to build cooperation in an intercultural environment effectively. The report aroused keen interest among participants from the academic and business environment.
Online seminar 13.12.2024: Doing Business in Russia – Practical Experience in New Circumstances
PROGRAM
Detailed reviews and Q&A session with experienced experts on the following topics
1. Doing business in Russia
Legal, tax, HR and migration issues. Basics.
2. Overview on bank transaction with Russia
SWIFT, currency exchange and other.
3. Practical experience of foreign companies in Russia
FAQ in the regular business processes.