TRADEMARK OWNER’S LOSSES. COMPENSATION AMOUNT JUSTIFICATION

Compensation calculator

Trademark owner’s losses are the damage incurred by a legal entity in connection with illegal actions of another legal entity (misleading consumers, using confusingly similar designations). Possible consequences of violation of trademark rights for trademark owners include loss of revenue due to decreasing levels of consumer trust, increased advertising expenses to win back consumers, or decreased market share. After the relevant illegal actions are proven, an adequate compensation must be determined from the losses incurred by the trademark owner. If you order a survey to determine whether consumers have been misled or whether there is a confusing similarity, the Sociology Expert Laboratory of the Institute of Sociology of the Russian Academy of Sciences will evaluate the losses free as an additional service.

Damage can be calculated as the amount of expenses that the owner will suffer in order to restore the previous level of demand for its products or services. The amount of damage may depend on the cost of taking the steps necessary to win back consumers, namely:
• price reductions that will ensure that consumers resume buying the original products or services;
• an average quantity of goods purchased that will ensure that new loyalty is created.

As provided by law, the injured party may claim a compensation to be ordered at the court’s discretion (art. 1515 of the Civil Code of the Russian Federation). If the injured party files a petition for a compensation to be ordered, no proof of loss are required. But in this case, there is a high risk that the owner will not be satisfied with the compensation awarded.
Compensation is usually calculated using a formula accounting for the actual damage sustained by the owner and the loss of profits. Loss of profits for a certain period includes such factors as:
• revenue generated by consumers who bought a copy instead of the original;
• revenue generated by consumers who neither bought a copy nor the original;
• total number of consumers in the given territory;
• sampling fraction of consumers who bought a copy instead of the original;
• average number of times consumers were buying a copy instead of the original;
• the price of the original that the consumers were ready to pay;
• average number of times the relevant action was taken per consumer, etc.

The suggested approach is not recommended for persons who don’t have professional training in sociology and experience in conducting formal population surveys, since in that case there will be no guarantee that the results obtained will be reliable and accurate. Examples of use of sociological surveys as evidence in court may be found here or may be requested through the “Ask a Question” form.

For more information on “Trademarks. Owners’ Losses. Adequate Compensation” or to order a survey, please call 8-800-500-97-95 or inquire by email to: info@socexpertiza.ru.

See also sections “Confusing Similarity”, “Art. 1474 of the Civil Code of the Russian Federation”, “Art. 1515 of the Civil Code of the Russian Federation”.