Disputes Over the Ownership оf Exclusive Rights

Disputes on the ownership of exclusive rights occupy a special place among cases related to the protection of intellectual property, since the determination of the person who owns the exclusive right depends on whether he has the right to a claim for the protection of intellectual rights, whether he can dispose of this right, whether he has the right to remuneration, and so on.

Such disputes may arise between citizens who consider themselves authors, between an employee (author) and an employer, between a contractor (performer) and a customer in connection with the creation of the results of intellectual activity by order, between the original right holder and the acquirer, between the heirs of the right holder, and even between spouses in the division of jointly acquired property. For example, a group of co-authors of a work believes that they include a person who has not made any creative contribution to its creation, or the employee believes that the employer has illegally obtained a patent for an invention in his name.

In other words, just as the reasons for the emergence of a disputable situation can be completely different, and the results of such disputes can have different, and sometimes non-obvious outcomes.

The specifics of disputes about the ownership of exclusive rights

When such situations arise, the parties are rarely able to avoid litigation because, as a rule, none of the opposing parties is willing to give in. In the event of applying for judicial protection, claims may be made against the defendant, for example:

• on the recognition of a right - to a person who denies or otherwise does not recognize the right, thereby violating the interests of the right holder;
• on the publication of a court decision on the violation committed with the indication of the actual right holder;
• on the invalidation of the transaction and the application of the consequences of the invalidity of the transaction.

If an intellectual property object or a means of individualization is registered with Rospatent and it is necessary to make changes to the registers, as, for example, in the case of objects of patent law, trademarks or computer programs, a claim may be filed for the obligation of Rospatent to perform actions. For example, to revoke a patent for an industrial design and issue a new patent indicating the plaintiff as the patent owner and enter the relevant information in the State Register of Industrial Designs of the Russian Federation. In this case, in this case, there is no need to involve Rospatent as a defendant, it is involved in the case as a third party that does not make independent claims regarding the subject of the dispute, and if the claim is satisfied, the patent office makes appropriate changes to its registers.

The issue of jurisdiction

Disputes over the ownership of exclusive rights also have their own peculiarities regarding jurisdiction.

Thus, according to the general rules, the courts of general jurisdiction have jurisdiction over cases in which the party to the dispute is a citizen who does not have the status of an individual entrepreneur, or a citizen, although he has the status of an individual entrepreneur, but the case is not initiated in connection with the implementation of entrepreneurial activity by him, except for cases when cases of this category are considered by arbitration courts in accordance with the law. In particular, the court of general jurisdiction will have jurisdiction to consider disputes on the inheritance of the exclusive right and on the division of the common property of the spouses, for example, if the exclusive right to the result of intellectual activity was acquired at the expense of the common income of the spouses. Also, the court of general jurisdiction will be able to consider the case of who is the author of the work (book, painting, music, etc.), to resolve a dispute on the ownership of a work for hire between the employee and the employer.

However, disputes on invalidation of a patent for an invention, utility model, industrial design or selection achievement due to the fact that the patent was issued with the indication of a person who is not such as the author or patent owner, or without indicating in the patent as the author or patent owner a person who is such will already be considered by the Intellectual Property Rights Court, regardless of the subject composition of the case.

It is necessary to apply to the arbitration court if the parties to the case are organizations that are legal entities or citizens who carry out entrepreneurial activities without forming a legal entity and have the status of an individual entrepreneur. As an example, we can cite a dispute concerning the invalidation of a contract for the alienation of the exclusive right to inventions and the application of the consequences of the invalidity of the transaction.

At the same time, it should be remembered that also, regardless of the subject composition of the persons participating in the case, disputes on means of individualization (with the exception of disputes on appellations of origin of goods) are subject to consideration in arbitration courts.

Each category of disputes concerning the ownership of exclusive rights to intellectual property objects and equivalent means of individualization has its own features related to the subject of proof.

Disputes between (co)authors who are copyright holders of works are quite common, this is due to the fact that it is not uncommon for one of the authors to be deliberately omitted, depriving him of copyright (exclusive right to a work; right of authorship; author's right to a name; right to inviolability of the work; right to publish the work (Clause 2 of Article 1255 of the Civil Code of the Russian Federation)).

There is also the opposite situation, when the number of co-authors includes citizens who did not take a creative part in the creation of the work, but only supervised the activities. At the same time, the fact that such persons are among the co-authors, in addition to the fact that they receive the right to be called the authors of the work, may impose unreasonable restrictions on the other co-authors related to the need for joint disposal of the exclusive right, that is, in order to alienate the rights to the work or conclude a license agreement, it is necessary to obtain the consent of all co-copyright holders. With a large number of co-authors, it is sometimes difficult to find unanimous agreement. In addition, such co-authors will have the right to receive part of the income from the use of the work.

Authorship and copyright ownership

In the above paragraph, the mention of co-authors and co-right holders is interspersed, since by virtue of paragraph 3 of Article 1228 of  the Civil Code, the exclusive right to the result of intellectual activity created by creative work initially arises with its author. Yes, this right can be transferred by the author to another person under a contract, and can also be transferred to other persons on other grounds established by law, but so far we are talking about the case when co-authors are at the same time co-owners, and a disputable situation arises between them, which led to litigation.

When considering a dispute about whether a work was created in co-authorship, the court establishes whether the person claiming co-authorship took a creative part in the creation of the work. It should be noted that for co-authorship it does not matter the size of the contribution of each of the participants to the creation of the common work, it is important that this contribution is creative, and does not consist only in technical assistance, since the provision of technical and other assistance to the author or co-authors that is not of a creative nature (selection of materials, drawing schemes, diagrams, graphs, making drawings, photographs, models and samples, making calculations, drawing up documentation, conducting an experimental check, etc.). At the same time, as mentioned above, co-authors also cannot be recognized as persons who only supervised the activities of the author (authors), but did not take a creative part in the creation of the result of intellectual activity (for example, managers, other officials).

The authorship of a particular person can only be established by evidence confirming the fact of the creation of the work by a specific person (for example, preparatory materials obtained during the development of the program, witness testimonies, publications, drafts) (Ruling of the Supreme Court of the Russian Federation dated 17.09.2020 No 305-ES20-8198).

In a similar way, the law characterizes the establishment of authorship in disputes on authorship (co-authorship) of an invention, utility model or industrial design (Articles 1347 and 1348 of the Civil Code of the Russian Federation), since the court, when considering such a case, should establish the nature of the participation of each of the persons claiming authorship (co-authorship) in the creation of a technical solution, a solution to the appearance of the product.

Service invention

Disputes between an employee (author) and an employer on the ownership of the exclusive right to the official results of intellectual activity (works, inventions, utility models, industrial designs, selection achievements, topographies of integrated circuits), as a rule, arise on the basis of monetary disagreements or insufficiently clear and understandable agreements at the stage of concluding an employment contract and determining the employee's labor duties.

For example, the employer believes that everything created by employees belongs to him, does not pay employees any remuneration for the creation and use of objects created by them, but forgets that not everything that employees provided to him during the term of the employment contract can be considered the official results of intellectual activity. Having received a refusal to pay remuneration from the employer, the employee remembers that in fact the disputed object was created by him even before employment, and then a dispute arises about who is the owner of the exclusive right.

According to the explanations given in the Resolution of the Plenum of the Supreme Court of the Russian Federation dated 23.04.2019 No 10 "On the Application of Part Four of the Civil Code of the Russian Federation", the content of the employee's job duties and the fact of its creation within the limits of these duties, the content of which may follow from the job function or can be expressed in the form of a specific task, is decisive for the recognition of an intellectual property object as official. The following may be taken into account: acts of the employer containing instructions to the employee, the correlation of the activities carried out by the employer with the sphere in which the object was created, the limits of the employee's labor duties, the place of work on the creation of the objects, the source of equipment and means used for their creation, the possibility of the employer exercising control over the work within the framework of which the object was created, the purpose of its creation, the subsequent behavior of the employee and the employer, documents drawn up by them in the course of the employee's labor activity, which in the aggregate could testify to such creation in connection with the performance of labor duties, other circumstances in the aggregate. All these circumstances in the aggregate and interconnection are established by the court considering the dispute, on the basis of their assessment decides whether the result of intellectual activity is official or not.

For example, in the case SIP-229/2020, the plaintiff (author) managed to prove that the solution to the appearance of the product (design), on the basis of which the employer obtained the patent of the Russian Federation No 116537 for the industrial design "Enclosure for a video module", was created before the date of his employment with the defendant. Despite the arguments of the employer (defendant) that the employee (plaintiff) participated in the discussion of the production of products using the disputed patent, took part in its creation (business trips and witness testimony), the court concluded that these circumstances cannot confirm the creation of the design of the video module in connection with the performance of labor duties, since the date of creation of the design in an objective form preceded the date of conclusion of the employment contract. In this regard, the court satisfied the claim and declared this patent invalid in terms of incorrect indication of the patent holder, obliging Rospatent to make the appropriate changes to the State Register of Industrial Designs of the Russian Federation.

At the same time, it is also not uncommon for employers, having received information from employees about the object they have created, to "put it on the shelf" and forget about it.

In this regard, it is important for both employees and employers to remember the following in relation to the official results of intellectual activity:

Intellectual property under the contract

Disputes arising between the contractor (executor, author) and the customer in connection with the creation of the result of intellectual activity by order are also quite remarkable.

Firstly, by virtue of the provisions of the Civil Code of the Russian Federation, not every result of intellectual activity created by order belongs to the customer a priori by virtue of the law.

In most cases, by virtue of a direct provision of the law, the exclusive right to objects created under a contract belongs to the customer, unless the contract between the contractor (performer) and the customer provides otherwise (for example, Article 1296 of the Civil Code of the Russian Federation Works Created to Order; Article 1298 Works of Science, Literature and Art Created under a State or Municipal Contract; Article 1373 Invention, Utility Model, Industrial Design, created during the performance of work under a state or municipal contract).

However, there are exceptions to this general rule. Thus, the exclusive right to a work created under a copyright contract belongs to the author of the work, but the copyright contract may provide for the alienation to the customer of the exclusive right to the work to be created by the author, or the granting to the customer of the right to use this work within the limits established by the contract (Article 1288 of the Civil Code of the Russian Federation).

In addition, the right to obtain a patent and the exclusive right to an invention, utility model or industrial design created in the course of the performance of a contract for work or a contract for the performance of research, development or technological work, which did not directly provide for their creation, belong to the contractor (performer), unless otherwise provided for by the contract between him and the customer (Article 1371. Invention, utility model or industrial design created in the course of performance of work under a contract).

In this regard, when concluding contracts for the creation of the results of intellectual activity, it is worth paying special attention to both the provisions of the articles of the Code governing legal relations related to the conclusion of such contracts, and the terms of these contracts, directly prescribing the person to whom the exclusive right will belong, as well as the moment of transfer of such right, in order to avoid litigation in the future.

Court practice

In the light of the topic raised related to disputes arising between contractors (performer) and customers in connection with the creation of the result of intellectual activity by order, the position of the courts expressed during the consideration of case No A40-14932/2023 seems interesting for coverage. Although the subject of the claim was the claim for compensation for the illegal use of the copyright object, and not the recognition of the plaintiff as the copyright holder, the topic of the moment of the emergence of the exclusive right was the subject of study by the courts, since it depended on whether the defendant would be recognized as an infringer or not.

As follows from the circumstances of the case, on 01.07.2020, Smart Systems (plaintiff, contractor) and Rosinter Restaurants (defendant, customer) entered into a contract for the development of the website, which included obligations to provide services/perform work, including those related to the development of software and the transfer of rights to such software to the defendant.

The Agreement provided that all exclusive intellectual property rights to the results of intellectual (creative) activity of the claimant under the contract or third parties engaged by him, obtained in the course of the performance of this Agreement, are transferred in full to the defendant after payment for the work under the Specification within the framework of which the development was carried out, unless otherwise specified in the Specification.

The plaintiff pointed out that by virtue of clause 9.2 of the Contract, the intellectual property right to the transferred products was transferred to the defendant in full only in October 2022, while the defendant used the specified results of the plaintiff's intellectual activity for the entire time from the date of transfer of the results of work without the necessary rights, which, in the plaintiff's opinion, was a violation of his exclusive right and served as the basis for applying for judicial protection.

At the same time, the court of first instance dismissed the claim, and the courts of appeal and cassation agreed with this decision, on the following grounds.

As it was established by the courts, by its legal nature, the disputed contract contains elements of a contract for ordering a work. The exclusive right to a computer program, database or other work created under a contract, the subject of which was the creation of such a work (by order), belongs to the customer, unless the contract between the contractor (performer) and the customer provides otherwise (paragraph 1 of Article 1296 of the Civil Code of the Russian Federation).

In accordance with Clause 3 of Article 1296 of the Civil Code of the Russian Federation, in the event that, in accordance with the agreement between the contractor (performer) and the customer, the exclusive right to the work belongs to the contractor (performer), the customer is entitled to use such work for the purposes for which the relevant contract was concluded, on the terms of a gratuitous simple (non-exclusive) license during the entire term of the exclusive right, unless otherwise provided for by the contract.

In this regard, the courts stated that regardless of who, in accordance with the terms of the agreement on the creation of a computer program or database, acquires exclusive rights to the created computer program or database, the counterparty of the owner of exclusive rights acquires the right to use the relevant copyright object for its own needs. At the same time, the absence of the fact of alienation of the right to the program to the defendant during the disputed period (until the fulfillment of the obligations to pay the fee) does not mean that the customer is deprived of the opportunity to use the corresponding work for the purposes for which he intended to use it, entering into an order agreement for the creation of such a work.

Thus, until the transfer of rights, the defendant had the right to use the result of intellectual activity on the basis of a gratuitous non-exclusive license in accordance with paragraph 3 of Article 1296 of the Civil Code of the Russian Federation.

Interesting, one might even say exotic for Russian judicial practice, are disputes between spouses in the division of jointly acquired property. The legislation and clarifications of the highest court formulate the following approach regarding the division of the exclusive right to the results of intellectual activity that arose from one of the spouses during marriage:

• The exclusive right to the result of intellectual activity created by one of the spouses is not included in the common property of the spouses, another regime of the exclusive right can be established only by a marriage contract that complies with the norms of the Family Code of the Russian Federation (Paragraph four of Clause 2 of Article 256 of the Civil Code of the Russian Federation, Clause 3 of Article 36 of the Family Code of the Russian Federation);
• The exclusive right to the result of intellectual activity acquired at the expense of the common income of the spouses under the agreement on the alienation of the exclusive right (Article 1234 of the Civil Code of the Russian Federation) is their common property (unless otherwise provided by the agreement).

As an example, I will cite the case No A19-17458/2020 on infringement of the exclusive right to a trademark, where the Intellectual Property Court, in my opinion, came to a rather controversial conclusion regarding the ownership of the exclusive right to a trademark registered in the name of one of the spouses during the marriage.

As follows from the circumstances established by the courts, the plaintiff is the owner of the trademark registered during the marriage with the defendant. After the dissolution of the marriage, the plaintiff and the defendant divided the property, including the business, the exclusive right to the trademark remained with the plaintiff. At the same time, the outlets remained with the defendant, who continued to carry out entrepreneurial activities in them - trade in goods for animals using the disputed trademark.

Applying to the court, the plaintiff pointed to the defendant's illegal use of a designation confusingly similar to the disputed trademark by placing signs on stores.

At the initial consideration of the case, the courts of the first instance and the court of appeal dismissed the claim on the grounds that since the division of the right to the disputed trademark between the former spouses had not been made; there is no agreement between them on the procedure for using the rights to the disputed trademark, in connection with which the defendant had the right to use the disputed designation.

The Intellectual Property Court in cassation proceedings did not agree with this approach of the lower courts, canceled the judicial acts, sent the case for a new trial, indicating that since the plaintiff is the only primary owner of the disputed trademark, the existence of a marriage contract between the parties was not established by the courts, the exclusive right to the trademark, despite the fact that such a right was acquired by the plaintiff during the marriage, cannot be the joint property of the parties of the present case.

Such a position of the Intellectual Property Court looks rather controversial, due to the fact that the registration of a trademark in itself is not an act of creation of an object, and therefore the approach regarding the fact that the exclusive right to the result of intellectual activity created by one of the spouses is not included in the common property of the spouses cannot be applied.

In support of the fact that, from the point of view of the law, means of individualization, including trademarks, originally acquired or derivative, are in the regime of common property, within the framework of the meeting of the working group at the Intellectual Property Court dated 01.02.2022, Korneev V.A. spoke out, pointing out that: "Unlike the results of intellectual activity, which appear as a result of creative activity only, for the emergence of an exclusive right to a trademark, it is necessary to spend property, common property. This applies, for example, to the payment of a fairly significant state fee." Therefore, in the opinion of Korneev V.A., there is no reason to believe that the result of these actions is not part of the common property.

As can be seen from the analysis carried out in this article, the issues related to the ownership of the exclusive right to the results of intellectual activity and equated means of individualization are complex and multifaceted, sometimes not all questions can be answered clearly and unambiguously in the legislation. Writing legislation that could become a universal tool for regulating all aspects of human relationships is probably an impossible task, so disputes will always arise, even in cases where the answer may seem obvious. But perhaps this is for the best, because when a healthy argument arises, there is hope that the truth will be born in it.