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EXHAUSTION OF EXCLUSIVE TRADEMARK RIGHTS IN RUSSIA

This principle means that after the sale of goods marked with a trademark, either by the right holder himself or by another person with his consent, the right holder loses the wright to control the further sale of such goods, as well as any other form of its commercial use.

The principle of exhaustion of rights is inherently territorial, depending on the territory of the introduction of goods into circulation, distinguish between national, regional, international and mixed principles of exhaustion of the right.

At the moment, the relevant governing document is the Treaty on the Eurasian economic Union dated 29th of May, 2014, namely – article V of the Protocol on the protection and enforcement of intellectual property rights, which retained the regional principle of exhaustion of exclusive rights to the trademark.

The principle of exhaustion of trademark rights is closely related to the problem of “parallel import” (import of the original goods without the permission of the right holder).

At the moment, the judicial practice on the exhaustion of trademark rights and the prohibition of parallel import is well-established. Court decisions are made with reference to the national (or regional) principle of exhaustion of trademark rights.

The courts justify the fact that the import into the territory of the Russian Federation of goods with a trademark placed on it, the use of which was not given the consent of the owner, is a form of use of the trademark, such import is qualified as a violation of exclusive rights. Meanwhile, the arguments of the defendants that the goods are rejected.

Judicial practice develops in favor of the right holders, the courts agree that in accordance with art. 1484 and 1487 of the civil code import into the territory of the Russian Federation of goods with trademark on them is an independent way of using this trademark; the importer of such goods into the territory of the Russian Federation without the consent of the right holder, thus carries out unauthorized use of such trademark and, therefore, is a violator of the exclusive rights of the plaintiff, even if the goods are original.

At the moment there are ongoing he discussions on parallel import, the replacement of the national principle by the international principle of exhaustion of the right to a trademark is being lobbied.
The issue remains relevant, as there is a conflict between the free transfer of goods and the territorial principle of exhaustion of trademark rights, which prevents the expansion of trade opportunities. On the one hand, in case of preservation of the national principle of exhaustion of trademark rights, Russia will look like a more attractive market for foreign trade houses, as right holders will be more protected and will have more tools to deal with parallel importers. On the other hand, the application of the international principle of exhaustion of rights can give a positive impetus to the development of competition and lower prices on goods.

EXHAUSTION OF EXCLUSIVE TRADEMARK RIGHTS IN RUSSIA | LMAsupport.com This principle means that after the sale of goods marked with a trademark, either by the right holder himself or by another person with his consent, the right holder loses the wright to control the further sale of such goods, as well as any other form of its commercial use. The principle of exhausti...

Controlled foreign companies

Since 01.01.2015, the Tax code has been significantly reformed in terms of international taxation. The concept of controlled foreign companies is introduced and the order of accounting of their profit as a part of profit of the Russian resident is established.

A controlled foreign company (CFC) is a foreign organization, the controlling person of which is an organization and (or) an individual recognized as tax residents of the Russian Federation.
This institution was introduced in order to control and account for the receipt of profits by Russian residents in foreign jurisdictions, and, as a consequence, in order to obtain taxes by the state.
The controlling person must meet certain requirements: 1) he must be a resident of the Russian Federation, and 2) must have a certain minimum share in a foreign company.
The minimum share of participation in a foreign company, both for individuals and legal entities is 25%, or 10 % - if the share of participation of all persons recognized as tax residents of the Russian Federation in this company (for individuals - together with spouses and minor children) is more than 50%. It should be noted that the share of both direct and indirect participation in a foreign company is taken into account

Taxpayers recognized as tax residents of the Russian Federation are required to submit the following notifications to the territorial tax office:
- About the participation in the foreign organizations (about establishment of foreign structures without formation of legal entity) within three months from the date of emergence (change of the share) of participation in such foreign organization;
- About CFC no later than March 20 of the year following the tax period.

CFC profit is equal to the profit of the organization (income of individuals) and is taken into account in determining the tax base for taxes from taxpayers recognized as its controlling persons. The supporting documents are the financial statements of the CFC or the auditor's report.
The first payment of income tax, as well as the first reporting of taxpayers taking into account the profit of the CFC should be provided before 28.03.2017. Thus, persons having business abroad still have time to analyze the requirements of the law and prepare all the necessary documents. We should not forget that, despite the fact that the liability in the form of a fine for non-payment/ incomplete payment of tax (in the amount of 20% of the amount of unpaid tax) will be applied from 2018, there is another responsible for failure to submit notifications about participation in a foreign organization and the CFC.

Controlled foreign companies - LMAsupport.com Since 01.01.2015, the Tax code has been significantly reformed in terms of international taxation. The concept of controlled foreign companies is introduced and the order of accounting of their profit as a part of profit of the Russian resident is established. A controlled foreign company (CFC) is a...