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On March 27, CEE Legal Matters reported that Capital Legal Services had become the first Russian firm to open an office in Finland. The Managing Partner of CLS, Vladislav Zabrodin, has agreed to answer several questions about the new office and the firm’s overall plans for our readers.

   

Vladislav Zabrodin

 CEELM: The first question is the most obvious: Why did CLS open an office in Helsinki, and why now?

VZ: First of all, it is exciting to be the first Russian law firm on the Finnish market. I have been personally and professionally connected with Finland since 1992 and from that point of view this move was a very natural development of the work that we do for our Finnish clients, of our communication and cooperation with our Finnish colleagues and a natural reaction to the mutual interest and cooperation between our neighboring countries. 

We consider Finland an important area for our growth. The decision to come to Helsinki was made after comprehensive evaluation of the Finnish market and discussions with our Finnish colleagues and is based on our understanding of the needs and potential of Finnish business.

As mentioned above, opening the office in Helsinki was a logical step for CLS which has been assisting Finnish companies doing business in Russia since its establishment in 1999.  But it is not only Finnish companies that CLS aims to see as potential clients in Helsinki. Thanks to the city’s good connections and Finland’s reputation as a gateway to Russia, many American, Japanese and Korean companies choose Finland as a last stop before entering the Russian market. The Helsinki office will support CLS’ existing offices in St. Petersburg and Moscow in providing services to all international clients. 

Finland and Russia have long economic ties and it only takes 3.5 hours to get to St. Petersburg from Helsinki by train. It’s important to understand that the Russian market isn’t saturated yet and there is still plenty of room for new products and services and great potential for growth.

It is also our strong belief that the only way to improve understanding and cooperation between Russia and Europe is by cultivating our economic relations. Despite the current troubles, this economic cooperation needs to continue and this is the best way to improve the situation. 

 CEELM: Does CLS have plans to open up offices in any other Nordic/Scandinavian countries, or anywhere else in CEE?

VZ: We have a strong and well-established cooperation with our legal colleagues all around Europe including Nordic countries, and we deal with lawyers and law firms around the globe. The world today is very interconnected and it is no longer a necessity to be in many countries to have a broad international presence.  At this stage, we are still focused on development in Russia which is a huge market with immense potential, CIS countries where our clients are looking for consistent and reliable representation and Finland which has great potential due to interest in the Russian market and historical and business connection to Russia. 

 CEELM: How many lawyers are in the Finnish office now, and is that number expected to grow in the next year or two?

VZ: At the first stage, the firm will employ three people in Helsinki, but the aim is to grow in the coming years. We are clear with our plans for development in Finland for the next 5 years. However, I will not be surprised if we revisit these plans at the end of this year as I strongly believe that the office has great potential and promise.

 CEELM: CLS is perhaps best known for its Corporate/M&A and PPP work — are those the same areas you expect the Finnish office to focus on?

VZ: Many people have a vague understanding of what kind of issues to expect when entering the Russian market. We are very good in supporting companies with their first move into Russia and then in supporting their development on the market. According to information provided by the Association of European Businesses, 70% of European companies that are on the Russian market today, planned well ahead to develop their presence here. We know how to make this progress more efficient and comfortable. 

In addition to the aforementioned, we have very strong teams in real estate, construction, compliance, antitrust, labor, IP and litigation fields. 

The level of technological development and know-how in Finland also means that more and more Russian businesses are or will be looking for joint ventures and technology acquisition there. More and more Russian companies are also looking for public-private partnership projects in Finland. We can offer insight on both markets.

 CEELM: How did the firm come to develop a strong Finnish practice to the point that opening an office there became necessary/possible?

VZ: Our idea is to offer another level of understanding and comfort on the Russian market and being closer to the clients and those companies who are still thinking about joining the Russian market but do not feel comfortable enough to make the first step. We hope our presence in Helsinki will allow us to ease introduction of Russia to Finnish business and through this to build a base on which they can expand into Russia if they so desire. We will also be able to tackle the initial issues of Russian companies when they enter the Western market.

We are going to cooperate with a number of Finnish law firms to improve and diversify the services we offer to Russian, Finnish and international companies entering either or both these markets. We hope to encourage closer ties between companies in the two markets and to bring them closer together. 

 CEELM: Do you expect to see other Russian firms following CLS into the Nordic countries anytime soon?

VZ: Moscow’s legal market is big and distant from Finland and there is still much development that can be achieved in Moscow. St. Petersburg’s legal market is a more natural place for a step into Finland; however, for significant number of players there, it’s not a natural decision. CLS is setting an example by being the first Russian full service law firm to open office in Helsinki. Our decision is based on strong business relations with major Finnish companies and on the understanding that we will be effective. When other law firms get the same motivation and capabilities, they will be sure to follow.  

 CEELM: Is this a sign that Russian law firms are starting to expand westward, as the English and American firms have been moving eastward?

VZ: It is still early to say this. Russian firms are growing and developing in the strong competition with international firms that operate on the Russian market. We are learning from the best and are competing with them. You can see that inside Russia this competition is growing strong. I am sure that we will get to this level some time, but as of today it is still early and Russia is still offering very good prospects for development.

 CEELM: How did you decide to have Eero Mora lead the office in Finland? How did your relationship with him begin? 

VZ: Eero was recommended to me by my good colleague and he is a very knowledgeable and experienced lawyer, as well as a visible person on the Finnish legal market. After our first meeting, it became clear that he may become a very important asset to our team. He is also a very reliable person and an excellent team player with a very good reputation and these are very important qualities in this situation. Needless to say, my partners and I enjoy working with him. I have reasons to believe that this feeling is mutual.

 CEELM: How and why did the firm develop its Finnish practice in the first place?

VZ: In 1992 I received one of my first international diplomas from the International Trade Law Course in the University of Turku. After returning to Russia, I became the first General Director of Partek’s Russian subsidiary. Since then Partek (now Paroc) has been a client of mine. I am very proud of this long-term relationship. By the way, I am very happy to mention that last year Paroc opened their first production facility in Russia and did it in a record short period of time, and they are now working on the second stage of the factory. 

Since the beginning of 90’s we have always been connected with the Finnish market and working with Finnish clients. I have very good friends there both professionally and personally. Over the years, I’ve met and made friends with many Finnish colleagues. I think that Finnish people in general are extremely honest and hard working, smart and considerate. I have great respect for these qualities. My experience shows that mutual respect and trust eventually result in long term and beneficial cooperation. 

On March 27, CEE Legal Matters reported that Capital Legal Services had become the first Russian firm to open an office in Finland. The Managing Partner of CLS, Vladislav Zabrodin, has agreed to answer several questions about the new office and the firm’s overall plans for our readers.

   

Vladislav Zabrodin

 CEELM: The first question is the most obvious: Why did CLS open an office in Helsinki, and why now?

VZ: First of all, it is exciting to be the first Russian law firm on the Finnish market. I have been personally and professionally connected with Finland since 1992 and from that point of view this move was a very natural development of the work that we do for our Finnish clients, of our communication and cooperation with our Finnish colleagues and a natural reaction to the mutual interest and cooperation between our neighboring countries. 

We consider Finland an important area for our growth. The decision to come to Helsinki was made after comprehensive evaluation of the Finnish market and discussions with our Finnish colleagues and is based on our understanding of the needs and potential of Finnish business.

As mentioned above, opening the office in Helsinki was a logical step for CLS which has been assisting Finnish companies doing business in Russia since its establishment in 1999.  But it is not only Finnish companies that CLS aims to see as potential clients in Helsinki. Thanks to the city’s good connections and Finland’s reputation as a gateway to Russia, many American, Japanese and Korean companies choose Finland as a last stop before entering the Russian market. The Helsinki office will support CLS’ existing offices in St. Petersburg and Moscow in providing services to all international clients. 

Finland and Russia have long economic ties and it only takes 3.5 hours to get to St. Petersburg from Helsinki by train. It’s important to understand that the Russian market isn’t saturated yet and there is still plenty of room for new products and services and great potential for growth.

It is also our strong belief that the only way to improve understanding and cooperation between Russia and Europe is by cultivating our economic relations. Despite the current troubles, this economic cooperation needs to continue and this is the best way to improve the situation. 

 CEELM: Does CLS have plans to open up offices in any other Nordic/Scandinavian countries, or anywhere else in CEE?

VZ: We have a strong and well-established cooperation with our legal colleagues all around Europe including Nordic countries, and we deal with lawyers and law firms around the globe. The world today is very interconnected and it is no longer a necessity to be in many countries to have a broad international presence.  At this stage, we are still focused on development in Russia which is a huge market with immense potential, CIS countries where our clients are looking for consistent and reliable representation and Finland which has great potential due to interest in the Russian market and historical and business connection to Russia. 

 CEELM: How many lawyers are in the Finnish office now, and is that number expected to grow in the next year or two?

VZ: At the first stage, the firm will employ three people in Helsinki, but the aim is to grow in the coming years. We are clear with our plans for development in Finland for the next 5 years. However, I will not be surprised if we revisit these plans at the end of this year as I strongly believe that the office has great potential and promise.

 CEELM: CLS is perhaps best known for its Corporate/M&A and PPP work — are those the same areas you expect the Finnish office to focus on?

VZ: Many people have a vague understanding of what kind of issues to expect when entering the Russian market. We are very good in supporting companies with their first move into Russia and then in supporting their development on the market. According to information provided by the Association of European Businesses, 70% of European companies that are on the Russian market today, planned well ahead to develop their presence here. We know how to make this progress more efficient and comfortable. 

In addition to the aforementioned, we have very strong teams in real estate, construction, compliance, antitrust, labor, IP and litigation fields. 

The level of technological development and know-how in Finland also means that more and more Russian businesses are or will be looking for joint ventures and technology acquisition there. More and more Russian companies are also looking for public-private partnership projects in Finland. We can offer insight on both markets.

 CEELM: How did the firm come to develop a strong Finnish practice to the point that opening an office there became necessary/possible?

VZ: Our idea is to offer another level of understanding and comfort on the Russian market and being closer to the clients and those companies who are still thinking about joining the Russian market but do not feel comfortable enough to make the first step. We hope our presence in Helsinki will allow us to ease introduction of Russia to Finnish business and through this to build a base on which they can expand into Russia if they so desire. We will also be able to tackle the initial issues of Russian companies when they enter the Western market.

We are going to cooperate with a number of Finnish law firms to improve and diversify the services we offer to Russian, Finnish and international companies entering either or both these markets. We hope to encourage closer ties between companies in the two markets and to bring them closer together. 

 CEELM: Do you expect to see other Russian firms following CLS into the Nordic countries anytime soon?

VZ: Moscow’s legal market is big and distant from Finland and there is still much development that can be achieved in Moscow. St. Petersburg’s legal market is a more natural place for a step into Finland; however, for significant number of players there, it’s not a natural decision. CLS is setting an example by being the first Russian full service law firm to open office in Helsinki. Our decision is based on strong business relations with major Finnish companies and on the understanding that we will be effective. When other law firms get the same motivation and capabilities, they will be sure to follow.  

 CEELM: Is this a sign that Russian law firms are starting to expand westward, as the English and American firms have been moving eastward?

VZ: It is still early to say this. Russian firms are growing and developing in the strong competition with international firms that operate on the Russian market. We are learning from the best and are competing with them. You can see that inside Russia this competition is growing strong. I am sure that we will get to this level some time, but as of today it is still early and Russia is still offering very good prospects for development.

 CEELM: How did you decide to have Eero Mora lead the office in Finland? How did your relationship with him begin? 

VZ: Eero was recommended to me by my good colleague and he is a very knowledgeable and experienced lawyer, as well as a visible person on the Finnish legal market. After our first meeting, it became clear that he may become a very important asset to our team. He is also a very reliable person and an excellent team player with a very good reputation and these are very important qualities in this situation. Needless to say, my partners and I enjoy working with him. I have reasons to believe that this feeling is mutual.

 CEELM: How and why did the firm develop its Finnish practice in the first place?

VZ: In 1992 I received one of my first international diplomas from the International Trade Law Course in the University of Turku. After returning to Russia, I became the first General Director of Partek’s Russian subsidiary. Since then Partek (now Paroc) has been a client of mine. I am very proud of this long-term relationship. By the way, I am very happy to mention that last year Paroc opened their first production facility in Russia and did it in a record short period of time, and they are now working on the second stage of the factory. 

Since the beginning of 90’s we have always been connected with the Finnish market and working with Finnish clients. I have very good friends there both professionally and personally. Over the years, I’ve met and made friends with many Finnish colleagues. I think that Finnish people in general are extremely honest and hard working, smart and considerate. I have great respect for these qualities. My experience shows that mutual respect and trust eventually result in long term and beneficial cooperation. 

The Hungarian Copyright Act (Act LXXVI of 1999 as amended) grants legal protection to all categories of works as well as to all subject-matters that are protected by related rights in the European Union.

In the Hungarian system of copyright protection, “copyright” is to be understood as an author’s right and all other protectable subject-matters are protected under the umbrella of related rights, which in turn covers neighboring rights (the protection of performances, sound recordings, films and radio and television programs) and the sui generis protection of databases. 

The Copyright Act provides for a term of protection of 70 years for authorial rights and 50 years for neighboring rights (and 70 years for published sound recordings).

Economic rights of authors can be licensed, and in some cases can be assigned, during an owner’s lifetime, with regards to software, database, employees’ works, and works created for films and for publicity purposes, as well as  collective works. Economic rights in works created for or used in a film – with some exceptions – can be and are typically assigned to the film producer.

Licenses can be granted exclusively or non-exclusively, for a definite or indefinite term, with or without any territorial restriction, for specified or all modes of exploitation, with or without a right to sub-license. These permissive rules are aimed at preserving the equilibrium between  parties to a licensing agreement, e. g. by prohibiting the buy-out of all future works of an author or the abuse of an exclusive license. The related right is licensable and assignable.

Foreign copyright laws are enforceable before Hungarian courts, due to national treatment (for right holders of Berne Convention/TRIPs member states) and due to the non-discrimination provision of the TFEU Article 20. Foreign right-holders have the same legal standing as their Hungarian counterparts except for the procedural obligation that foreigners appoint a Hungarian entity on whom court documents can be served. 

The Copyright Act uses the term “service works” for works created by employees in labour relationships. A work qualifies as a service work if the creation of the work was an authors’ obligation within the scope of his/her employment. Unless agreed otherwise, the employer, as the legal successor to the author, obtains economic rights in the service work on the condition that the work is delivered by the employee to the employer.  

Patent

According to Hungarian law, the creator of an invention has an exclusive right to exploit the invention. The right is also assignable. Patent protection is valid for up to 20 years from the day on which the patent application was filed and it applies for all countries where the protection was granted.

A Hungarian patent may be obtained by national or European application or by an application submitted within the framework of the Patent Cooperation Treaty (“PCT”) provided that the application and the invention comply with requirements set out in applicable laws and regulations.

Unless there is a provision of an international treaty to the contrary, foreign applicants shall be represented by an authorized patent attorney or an attorney-at-law in all patent matters within the competence of the Hungarian Intellectual Property Office (“HIPO”).

Hungarian patent law also provides for the notion of service inventions. The employer may become the rightful holder of a patent that is granted in respect of an invention created by its employee by fulfilling his/her labor responsibilities. The inventor of a service invention has a statutory right to remuneration in the case of any type of utilization, including utilization as a trade secret (know-how), even in the absence of a remuneration contract; remuneration must be calculated using the license analogy or a lump sum payment.

Trademark

Trademark protection lasts 10 years from filing date of the application and it may be extended through further 10-year periods at  the registered owner’s request. A trademark may be obtained in Hungary by either filing (i) a Hungarian trademark application with the HIPO or (ii) an international trade mark application with WIPO requesting protection in Hungary, as Hungary is a member of the Madrid System or (iii) since Hungary is part of the European Union, filing a community trademark application with OHIM.

Unless otherwise prescribed by international agreement, foreign nationals shall be required to authorize a patent agent or an attorney to represent them in all trademark matters falling under the jurisdiction of the HIPO.

By Gusztav Bacher, Partner and Gabor Faludi, Associate, Szecskay Attorneys at Law

This Article was originally published in Issue 1 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Just a few months have passed since the new Russian IP Court opened its doors on July 3, 2013. Too short a time to draw full conclusions, perhaps, but sufficient to accumulate and share some experience in pleading before this new Russian judicial institution.

Currently the majority of IP disputes in Russia are heard on the merits by the Russian state commercial (“arbitrazh”) courts and courts of general jurisdiction. Simultaneously, for specific types of actions Russian administrative bodies continue to serve as appropriate forums, such as the Federal Antimonopoly Service (FAS) for unfair competition actions, and the Chamber for Patent and Trademark Disputes (Chamber) for patent and trademark invalidity actions.

The Russian IP Court’s competence currently extends to the following cases:

• Those brought against rulings of Russian administrative bodies in the area of IP protection including, e.g., rulings of the Russian Patent and Trademark Office, the Chamber and FAS;
• Those concerning termination of legal protection for objects of IP rights (invalidity actions);
• Those concerning patent ownership; and
• Those concerning early termination of trademark protection as a result of non-use. 

The Russian IP Court also serves as a court of second appeal for cases considered initially considered by the IP court as a court of first instance (first appeals are heard in the Russian state commercial courts), and for IP disputes considered by the Russian state commercial courts of first and appeal instances.

Judging based on public sources for the period from July 2, 2013, to the end of January 2014, the Russian IP Court has handled more than 300 of the 500 cases filed (with approximately 200 of these rulings made in its capacity as court of second appeal, and the remaining 100 in its capacity as court of first instance). About 30 of these rulings cancelled the decisions of the courts of lower instances fully or partly and/or returned corresponding cases to the courts of lower instances for review, and in several other instances the decisions of the lower courts were changed or reversed by the Russian IP Court itself.

When returning the cases to the lower courts, the Russian IP Court referred mainly to procedural non-compliance by the lower courts and, particularly, to improper examination of evidence or the failure to obtain additional evidence considered vital for proper case consideration. For example, in patent disputes the Russian IP Court regularly stressed that patent expert opinion is vital to establish of equivalence of inventions and, therefore, such expert opinion constitutes mandatory evidence. Remarkably, many cases reviewed by the Russian IP Court and returned to the lower courts for re-consideration related to termination of trademark protection as a result of its non-use.

To sum up, the increasing recognition of the Russian IP Court by IP right holders is naturally based on the competence of judges and their proactive approach in performing a critical review of the rulings of the lower courts. The new court seems to aim at elaborating unified approaches to IP dispute resolution in Russia – which should also be beneficial for the consistency of court practice. While it remains untested yet, how efficient the Russian IP Court will be in serving as a court of second appeal for cases earlier considered by the Russian IP court as a court of first instance, the Russian IP community believes that the new court will operate to the best expectations of  IP right holders and further persuade foreign IP practitioners in the fact that smooth IP enforcement may be achievable in Russia.

By Natalia Gulyaeva, Partner, Hogan Lovells (CIS)

This Article was originally published in Issue 1 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Trademark protection in Austria is undergoing some significant strengthening following a recent change in the structure of appeals against decisions of the Austrian Patent and Trademark Office. As one of its last actions, the former highest instance issued several decisions making it easier for trademark owners to register suggestive marks.

In one of its last actions, the former court of highest instance, the OPM, issued several decisions making it easier for trademark owners to register suggestive marks. 

First, the OPM found the trademark WONDERFUL TONIGHT registrable for goods in class 3 (“body care products and cosmetics”):

The first and the second instance of the Austrian Patent Office had refused – based on the ground of lack of distinctiveness – to register the trademark WONDERFUL TONIGHT. With regard to the goods applied for, “WONDERFUL TONIGHT” would be a laudatory message or an advertising promise, meaning “being wonderful this evening”, to look wonderful / to smell wonderful / to feel wonderful with the help of the goods. According to the first and second instance, the sign WONDERFUL TONIGHT would be a promotional message only, but could not function as a trademark as a means of identifying its origin. 

However, the former court of highest instance held that the sign WONDERFUL TONIGHT would be a word combination of the English words “wonderful” and “tonight”, which is grammatically incomplete and open to various interpretations. The sign WONDERFUL TONIGHT would not contain an exact or a comprehensive description of the goods. The average consumer would not immediately perceive, without further thought, a description of the characteristics of the goods. On the contrary, the consumers would be stimulated to think about what or who will be wonderful tonight – the product (e.g. a soap), or the consumer after application of the product? The sign contains a hint – which however, is just a flowery description of the effect of the products without an exact and  comprehensible meaning.

Further, the OPM held that the registration of the sign WONDERFUL TONIGHT for goods in class 3 is not barred by an absolute need to preserve its availability. The English word combination WONDERFUL TONIGHT would not be a common description for the relevant goods.

In another recent decision, the OPM held that the sign PRIMERA was registrable for goods in class 12 (“vehicles and their components”). The first and the second instance of the Austrian Patent Office refused registration of the trademark as the relevant public would understand the Spanish word “PRIMERA” as meaning “first class” (“erstklassig”) as the Spanish word stem “prima” would be used also in the German language.

Contrary to the lower instances, the OPM held that it could not be assumed that the major part of the relevant public in Austria would know the meaning of the Spanish word “PRIMERA”; furthermore, mere associations would not be sufficient to enable the public immediately to perceive a clear meaning. Apart from that, the general term “first class” would not be a concrete and meaningful description of the designated goods either.

Summary:

A sign is descriptive and thus not registrable if there is a direct relationship between the sign and the goods or services in question to enable the relevant public to immediately perceive, without further thought, a description of the goods or services in question. Signs which do not contain an exact description of the goods or services, but only suggest or evoke the characteristics of the goods or services in question are not descriptive, and thus registrable.    

By Barbara Hieger, Associate, Schoenherr

This Article was originally published in Issue 1 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.