The sale of affiliated companies can trigger conflict linked to “common” brand

Two Russian insurance companies fight in court because their trade names are very similar. The trade name of one company is “RusStateInsure” (abbreviated RSI) and the trade name of second company is so far “RSI life”. RusStateInsure has file a lawsuit against RSI life for trademark infringement and despite the decision of RSI to change its tradename, the RusStateInsure does not intends to withdraw the lawsuit.

The both companies are major market players in the industry of insurance. The decision to change trade name can indicate the wish to avoid the costly and lengthy courts litigation. RusStateInsure sought approximately 120 billion Roubles in damages for trademark infringements. Rebranding would cost RSI Life about 1 mln Roubles and take not so long. The new trade name is very different from previous – “Capital life.” New name and new web-site do not save from costly lawsuit, said representative of RusStateInsure. RSI Life believes and claims it does not infringe trademark of RusStateInsure. RSI believes it uses trademark absolutely in accordance with law.

Both companies were controlled by one person. This businessman has sold both companies to different buyers and after this deals both companies can’t “share” trademark in question. RusStateInsure welcomes changing of RSI’s trade name because these both companies “are not affiliated anymore”, but RSI tradename “contradicts to Russian insurance law and confuses consumers creating illusion that both companies are affiliated”. After the changing of trade name “the consumers would receive the truly information that Capital Life has no any relation or affiliation to RusStateInsure”.

But the changing of trade name resolves only part of all “questions” to RSI insists RusStateInsure. RSI infringed RusStateInsure’s trademark in the past and should pay for this. RSI believes the sum RusStateInsure seeks to receive is reasonless. But RusStateInsure has increased the claim amount to almost 150 billion Roubles. This increasing is linked to the time from the moment when the lawsuit against RusStateInsure has been filed, something like interest of bank.

The RusStateInsure has also filed a motion to make expertise. RSI Life used RusStateInsure’s “brand” and paid for this “nonmarket price”, in other words the price was mush lower its market value. The court leaved this motion opened. The RSI believes it is absurd to raise claim amount. The final claim amount substantially exceeds the RSI’s revenues. RSI believes they exploited trademark in question in accordance with license agreement not terminated by any of its parties and the court confirmed that the license agreement is in place.