Primary user's right to TM: what to do if the trademark is registered by another person?

Although registration of a trademark is a “guarantee of safety” of its owner’s rights, it is not a basic condition for the use of a trademark. Often logos are used in the company’s activities without registration, for example, if TM registration is postponed a little bit. In such a case, there may be a situation when a third party will be the first to register the same TM. 

What consequences may this lead to?

After obtaining a certificate for a trademark, its owner may require from the company that uses it, in particular: 

• prohibition to use the trademark;
• withdrawal of goods marked with this trademark from circulation;
• compensation for losses incurred by the trademark owner.

So what to do in this situation? Let’s consider several scenarios.

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If the trademark is registered by a third party

As a rule, in this situation the trademark owner seeks to sign an agreement on the use of TM, which provides for: 

а) full control over the TM use by the third party that has registered the trademark in its name; 

b) regular payment by the company for the TM use. 

However, the law provides the enterprise with the possibility to establish the primary user right, which allows to use the trademark free of charge. 

The establishment of the primary user right will be successful if the company has previously used or has carried out significant and serious preparation for the use of the trademark: 

• with respect to goods and/or services similar to those for which the trademark is registered; 
• until an application for trademark registration is filed by a third party; 
• in good faith and without prejudice to the rights and/or interests of third parties. 

The establishment of the primary user right allows the enterprise to use the trademark as if it were its owner, albeit with some exceptions. 

Please note! The company can use the trademark on the basis of the established right of the primary user only to the extent that it used the trademark before the application for TM registration was submitted by a third party, or to the extent that it was implied by the preparation for its use. This may concern the volume of goods/services delivered under the logo and the number of points of sale. 

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Limitation of the primary trademark user right

The legislation sets some restrictions on the rights of the primary user. In particular, such enterprise may not: 

• prohibit or grant permission to third parties to use the trademark; 
• protect their trademark rights in case of infringement.

In addition, the transfer of the established primary user right with all the possibilities arising from it is possible only together with: 

• the alienation of the enterprise, which owns such right;
• the transfer of the business practice of such enterprise to a third party; 
• the alienation of a part of the enterprise or business practice in which the trademark was involved or prepared for its use. 

How to establish the primary trademark user right?

The right of the primary user can be established by applying to the court with a corresponding application. In this case, the court in the process of consideration of the application evaluates: 

• when the company began to actually use the trademark (or started a significant and serious preparation for its use); 
• how it was done and to what extent. 

Please note! The court evaluates the above facts based on the documents submitted by the company, which shall confirm such facts. Therefore, the ability of the enterprise to confirm the right of the primary user depends on how well the evidence was selected. 

Our lawyers will help you both with the selection of evidence, and with the formation of the statement of claim and defense in court. If the establishment of the primary use right does not sufficiently solve your problem, we will offer you another solution.

The primary user right allows you to solve an issue of legitimacy of TM use by the enterprise. But due to some restrictions on the use of the trademark, this right does not allow the company to fully implement all the needs arising in its activities. That is why it is so important to take care of brand protection at the stage of planning or starting your business activity. 

If you want to protect your brand by registering a trademark, or to establish the primary user right, don’t hesitate to call us. We will take care of choosing the be3st option for protecting your brand, based on your personal situation.

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