Recovery of Damages for Trademark Infringement

According to Part 1 of Article 1477 of the Civil Code of the Russian Federation, a trademark that distinguishes the goods of legal entities or individual entrepreneurs is granted exclusive rights, certified by a trademark registration certificate.

Article 1479 of the Civil Code of the Russian Federation states that within the territory of the Russian Federation, the exclusive right to a trademark is in effect if it is registered by the federal executive authority for intellectual property, or in other cases provided for by international treaties of the Russian Federation.

Following Paragraph 1 of Article 1484 of the Civil Code, the individual or entity in whose name the trademark is registered (the rights holder) holds the exclusive right to use the trademark, as outlined in Article 1229 of the same Code, in any lawful manner (exclusive right to a trademark), including the methods specified in Paragraph 2 of this Article.

In this case, the exclusive right to a trademark may be exercised for the individualization of goods, works, or services in respect of which the trademark is registered, in particular by placing the trademark: on goods, including on labels, packaging of goods that are manufactured, offered for sale, sold, demonstrated at exhibitions and fairs or otherwise introduced into civil circulation on the territory of the Russian Federation, or stored or transported for this purpose, or imported into the territory of the Russian Federation; when performing works, rendering services; on documentation related to the introduction of goods into civil circulation; in offers to sell goods, perform works, render services, as well as in announcements, on signs and in advertising; on the Internet, including in the domain name and in other methods of addressing (clause 2 of the said article).

Claim for damages

Following paragraph 1 of Article 1515 of the Civil Code of the Russian Federation, goods, labels, and packaging of goods on which a trademark or a designation confusingly similar to it is illegally placed are counterfeit.

Subparagraph 3 of paragraph 1 of Article 1252 of the Civil Code of the Russian Federation provides that the protection of exclusive rights to the results of intellectual activity and means of individualization is carried out, in particular, by filing, in the manner prescribed by this Code, a claim for compensation for damages - against a person who has unlawfully used the result of intellectual activity or means of individualization without agreeing with the copyright holder (non-contractual use) or otherwise violated his exclusive right and caused him damage.

At the same time, the given norm does not make any exceptions from the procedure for determining damages established by the general norms of civil legislation.

Clause 14 of the Resolution of the Plenum of the Supreme Court of the Russian Federation dated 23.06.2015 No. 25 "On the application by courts of certain provisions of Section I of Part One of the Civil Code of the Russian Federation" (hereinafter referred to as Resolution No. 25) explains that, within the meaning of Article 15 of the Civil Code of the Russian Federation, lost profit is unreceived income by which the property mass of the person whose right was violated would have increased if the violation had not occurred.

Since lost profits represent lost income, when resolving disputes related to their compensation, it should be taken into account that the calculation provided by the plaintiff is usually approximate and probabilistic. This circumstance in itself cannot serve as grounds for refusing the claim.

If the person who violated the right received income as a result, the person whose right was violated has the right to demand compensation, along with other damages, for lost profits in an amount no less than such income (clause 2 of Article 15 of the Civil Code of the Russian Federation).

Part 2 of Article 15 of the Civil Code of the Russian Federation also defines the concept of the actual damage, which is also included in the concept of losses and is defined as expenses that a person whose right has been violated has made or will have to make to restore the violated right, loss or damage to his property.

By Article 15 of the Civil Code of the Russian Federation, a person whose right has been violated may demand full compensation for the damages caused to him, unless the law or contract provides for compensation for damages in a smaller amount.

Filing a claim

Clause 4 of Article 393 of the Civil Code of the Russian Federation establishes that when determining lost profits, the measures taken by the creditor to obtain them and the preparations made for this purpose are taken into account.

For liability to arise, as established by the rules of Article 15 of the Civil Code of the Russian Federation, it is necessary to have the elements (a set of conditions) of an offense, including the fact of another person’s violation of the duties imposed on him (committing illegal actions or inactions), the presence of a cause-and-effect relationship between the violation committed and the losses incurred by the applicant, as well as the number of losses caused.

The burden of proof of the said circumstances lies with the plaintiff. At the same time, the person demanding through the court from another economic entity to refrain from using the result of intellectual activity and compensation for damages caused must prove the entire specified composition of the offense. The absence of at least one of the conditions of liability entails the refusal to satisfy the claim.

By paragraph 3 of Article 1250 of the Civil Code of the Russian Federation, the absence of guilt of the violator does not release him from the obligation to stop violating intellectual rights and does not exclude the application of measures against the violator aimed at protecting such rights.

It should be borne in mind that the said rule is applicable to methods of protecting the relevant rights that are not related to liability measures. Liability for violation of intellectual property rights (collection of compensation, reimbursement of damages) occurs following Article 401 of the Code.

Based on the provisions of Part 1 of Article 65 of the Arbitration Procedure Code of the Russian Federation, as well as the explanations set out in paragraphs 57, 59-62, 154, 162 of the Resolution of the Plenum of the Supreme Court of the Russian Federation dated 23.04.2019 N 10 "On the Application of Part Four of the Civil Code of the Russian Federation" (hereinafter - Resolution No. 10), the subject of proof in a claim for the protection of the right to a trademark includes the fact of the plaintiff's ownership of the said right and the fact of its violation by the defendant through the use of the trademark or a designation similar to it to the point of confusion, about goods (services) for the individualization of which the trademark is registered, or similar goods (services), in one of the ways provided for in paragraph 2 of Article 1484 of the Civil Code of the Russian Federation.

In this case, according to the meaning of the above provisions, the defendant bears the burden of proof of compliance with the requirements of the law when using the means of individualization, the exclusive rights which belong to another person. Otherwise, the defendant is recognized as a violator of the exclusive right, and civil liability arises for him by the legislation of the Russian Federation. The plaintiff must only confirm the fact of his ownership of the said right and the fact of the use of the corresponding means of individualization by the defendant.

Establishing the said circumstances is essential to the case, and the correct resolution of the dispute depends on them. At the same time, the issue of assessing the evidence presented for the resolution of the dispute for admissibility, relevance, and sufficiency is the competence of the court to resolve the dispute on the merits.

In addition, by Part 1 of Article 65 of the Arbitration Procedure Code of the Russian Federation, the plaintiff in cases on the recovery of damages for the violation of an exclusive right is obliged to prove the use of the disputed trademark by the defendant, the number of damages caused and the causal relationship between the defendant's actions and the damages caused. (clause 59 of the Review of judicial practice in cases related to the resolution of disputes on the protection of intellectual rights (approved by the Presidium of the Supreme Court of the Russian Federation on September 23, 2015)).

Taking into account the above, when making claims for compensation for damages instead of claims for recovery of compensation in the absence of evidence and calculation of the amount of the said damages, it is necessary to take into account that this in itself may be grounds for refusing to satisfy the claims.

Thus, the recovery of damages can serve as a convenient way to protect violated intellectual rights, but in practice this method is not the most popular, giving way to compensation calculated according to the rules of subparagraph 2 of paragraph 4 of Article 1515 of the Civil Code of the Russian Federation (especially in a situation where the plaintiff can comply with the subject of proof for both compositions).