Comments of Evgeny Zverev, senior associate of S&K Vertical law firm on the article of Kommersant-S-Peterburg newspaper titled NWT Makes Preparations for Court Proceedings

1 December 2010

Lawyers of OAO (Open Joint-Stock Company) North-West Telecom (NWT) are preparing an action against an operator of cable television and Internet access – ZAO (Closed Joint-Stock Company) Telix which launched Tvoy Avangard tariff into Saint Petersburg market this October. NWT, promoting services of broadband Internet access under Avangard brand since 2006, considered name of Telix tariff to be improper. Telix, in its turn, says that Avangard tariff has already been in the range of company offers for a long time.

Management of NWT selling its services of Internet access under Avangard brand was deeply worried by launching of Tvoy Avangard tariff by Telix this October. Then Oleg Popov, Deputy Director General, Commercial Director of NWT, declared that the company would exert every effort to prevent “brand mixing”. The top manager kept his promise. Subscribers of the operator already started to receive invoices with a notice that only one company, NWT, sells services under Avangard brand. Moreover, as it was explained by NWT, first the company will lodge its claims against Telix and will attempt to settle the conflict in a pre-judicial proceeding. “The term for remedy usually varies from 10 to 30 days. If it (Telix – added by Kommersant) does not wish to change anything, our lawyers already prepare an application to the Federal Antimonopoly Service and a law suit,” one of NWT executes told to Kommersant subject to the terms of anonymity.

ZAO Telix is included in Multiregion group of companies which was acquired by MTS mobile operator this year. In Saint Petersburg Telix renders services of cable television and broadband Internet access. The operator serves about 20 ths users of broadband Internet access. Multiregion Group is currently controlled by COMSTAR-Regiony being amalgamated with MTS.

COMSTAR-Regiony informed Kommersant that Avangard tariff has already been promoted by the company for a long time. “Avangard tariff plan of COMSTAR-Regiony has existed in the mass market in all regions of our presence for several years and it is a part of COMSTAR range of tariffs: Retro, Classica, Modern, Avangard. At present, Multiregion is transferred under control of COMSTAR-Regiony, and we perform harmonization including unification of tariffs,” press service of COMSTAR-Regiony explained. The name of Comstar tariff was changed into Tvoy Avangard so that it would not completely coincide with NWT brand. We shall note that OAO (Open Joint-Stock Company) Saint Petersburg Cable Television Company (CTC), another major player in the market of broadband Internet access and cable television, sells its services under Tvoy Internet, Tvoy Telephone and Tvoe TV brands. But CTC has not made any passes at Telix yet.

Evgeny Zverev, senior associate of S&K Vertical law firm, thinks that if it comes to court proceedings, NWT may well attempt to also recover a monetary compensation from Telix within the framework of its law suit. “If another person has earlier registered a trademark similar to the used brand, the right holder shall be entitled to require that the person performing entrepreneurial activities with the use of the similar brand should cease to use such a brand, compensate for losses or pay compensation,” Mr. Zverev thinks.

Market players make different comments on the conflict of the operators. “Technically, the operator is entitled to file an action if it is a holder of the right to a trademark or a brand. It is protection of its interests. But it is necessary to understand that a law suit on the part of the trademark owner is not the only problem that business of the defendant company will encounter. Another difficulty appears to be much more significant – using a trademark consonant with the competitive one, the company cannot fully control development of the situation. Consonance can bring both advantages and financial and reputational risks. We, in our turn, place stake only on our own developments in our commercial strategy,” Victoria Bragina, chief of the Marketing and Advertising Department of Saint Petersburg branch of OOO (Limited Liability Company) Summa Telecom, says.

Dmitry Anchunov, Director General of InterZet provider, thinks that it would be difficult for NWT to prove that it is right if it comes to court proceedings. “There is a word “Avangard”, and any company can use it. There is no sense in looking for implications here. For example, we used the following slogan in our commercial: “I cannot recommend your Internet, I can recommend only mine”, though it is possible that some market players did not like it,” Mr. Anchunov says.

Boris Gorlin

Kommersant S-Peterburg No. 213 (4513) of November 18, 2010

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