Responsibility of marketplaces for trademark infringement

The author of the article is Zhanna Sugirbekova, a master's student at St. Petersburg State University, winner of the nomination established by Zuykov and partners within the framework of the All-Russian Youth competition of works on the law of information technologies and intellectual property IP&IT LAW - 2023.

1.    Introduction

With the development of digital technologies, the availability of Internet platforms for doing business, as well as the increasingly loyal conditions for entrepreneurs to stay in the online sphere, it makes trading on marketplaces one of the most popular ways to run your own business. The same simplicity and relatively easily predictable commercial benefit also have a downside in the form of the appearance of a large number of counterfeit goods, which are sold by merchants aimed not at maintaining a reputational image, but at obtaining momentary benefits.

The relevance of the work in the fact that the responsibility of an ordinary online store is no longer a challenge to the law, as it was a decade ago. Discussions about the responsibility of ordinary online stores for the sale of counterfeit goods have been replaced by an ambiguity regarding how the responsibility of a seller who trades in counterfeit goods should be modeled, provided that this product is sold not on its own commercial site, but with the help of an intermediary marketplace. A marketplace is a multi-brand trading platform that sells goods and services of different sellers via the Internet, which does not have its own products. Among them are "Wildberries", "Beru", "Lamoda", "Ozon" and other well-known venues [1].

A more precise definition of a marketplace was formulated by the Court of the Russian Federation for Intellectual Property Rights. Marketplace - an e-commerce platform, an online e-commerce store that provides information about a product or service of third parties whose transactions are processed by the marketplace operator. In general, the marketplace is an optimized online platform for the provision of products and services. You can often buy the same product from several retailers, and the price of the product may vary. In other words, a marketplace is an electronic trading platform that plays the role of an intermediary between the seller of goods and the buyer [2].

Since the placement of product announcements takes place on the marketplace, the coordination of the buyer with the seller who sold the counterfeit goods is carried out using the organizational technologies of the online platform, which gives reason to think about how such participation in the sale of goods should affect the responsibility of the marketplace.

2.    Should the marketplace be liable for the sale or placement of information about a counterfeit product to the copyright holder?

Landmarks for making a decision on the possibility of holding the marketplace liable have not yet been found in Russian doctrine and judicial practice. The involvement of online platforms in the process of selling products means that the sale of counterfeit goods is carried out, although by the seller, who is the direct organizer of the sale and the person who derives the main profit from this activity, but with the participation of the marketplace, which is considered a link in the chain "seller - consumer" . This raises the problem of defining grounds for imposing liability on the marketplace for violation of the exclusive right of the copyright holder.

In accordance with Article 1515 of the Civil Code of the Russian Federation (hereinafter referred to as the Civil Code of the Russian Federation), the right holder has the right to demand withdrawal from circulation and destruction of counterfeit goods at the expense of the violator, as well as compensation for losses and payment of compensation [3]. Undoubtedly, the violators should include the seller directly selling the goods, who enters into a relationship with the marketplace in order to obtain marketing and organizational advantages in order to increase sales efficiency. As for the responsibility of the marketplace, we propose to consider this issue in the context of the opinions of Russian researchers, so far a small amount of Russian judicial practice, as well as foreign practice and doctrine.

2.1.Responsibility of the marketplace depending on the form of participation of the marketplace in the sale of counterfeit goods

In a study on the responsibility of marketplaces, conducted by A.S. Vorozhevich, teacher of the Department of Civil Law of Moscow State University named after M.V. Lomonosov, the following possible forms of participation of the marketplace in the relationship between the consumer and the seller are indicated:

(1)  The sale of goods, when the marketplace concludes an agreement with the sellers on the sale of goods and performs the sale of the goods on behalf and at the expense of the seller, while the payment is received by the marketplace, and the transfer of the proceeds to the seller is made only after deducting a percentage of the fee. For example, such a form of marketplace activity in Russian realities is represented by the Wildberries platform. Wildberries also provides other services: organizing the delivery of goods, accepting returned goods from buyers, etc. [4]

(2)  It is possible to conclude an agreement for the provision of marketplace services: services for placing goods, providing functionality that allows you to conclude a contract for the sale of goods with buyers, organizing delivery, fulfillment services (services for organizing the reception of goods and placing them in a warehouse, warehouse processing of goods, preparation of accompanying documentation etc.). [5] The profit of the marketplace is the remuneration for the services rendered. According to the presented model, the Yandex.market marketplace works.

The dichotomy of possible options for the participation of the marketplace in the chain "buyer - seller" is important because of the definition of the grounds for holding it accountable. In this study, we will try to draw a relationship between the forms of participation of the marketplace in the relationship between the consumer and the seller and the consequences in the form of holding the marketplace liable, as well as outline the range of specific grounds for its responsibility, depending on the form of participation.

3.    Experience of foreign countries

3.1. US Doctrine and Practice

In the United States, the issue of ISP liability, which includes marketplaces, was resolved in § 202 of the Digital Millennium Copyright Act of 1998 (Digital Millennium Copyright Act, or DMCA). ISPs are required to develop and maintain a notice and takedown procedure to handle legitimate copyright complaints. ISPs are only required to act on specific complaints - there is no general duty in the US to monitor websites for illegal content [6]. Thus, the responsibility of the marketplace according to the American model arises only from cases of delay in deleting information about a counterfeit product, when the marketplace receives information about the violation from the copyright holder.

American researchers propose to rely on this issue also on the Joint Recommendation on the Protection of Trademarks on the Internet, adopted in 2001 by the Standing Committee on the Law of Trademarks, Industrial Designs and Geographical Indications by the World Intellectual Property Organization (The Standing Committee on the law of Trademarks, Industrial designs and Geographical Indications of the World Intellectual property Organization, or SCLT of WIPO) [7]. The recommendation does not define the terms of liability of Internet intermediaries. At the same time, it contains an indication that the use of a trademark on the Internet, in order to apply Article 6 of the Joint Recommendation, must have a commercial effect.

In this sense, the responsibility of the marketplace may not be so obvious if the marketplace provides only information services and it is for them that it sets a fee in relations with the direct seller of the counterfeit goods. In this case, there will be no use of the trademark as such (on the part of the marketplace), since only the seller uses it. On the other hand, when the marketplace is also involved in the sale of this product, then it can obviously be said that the percentage it receives from sales makes the use of a commercial character not only in the activities of the seller, but also in the marketplace.

Judicial practice in the United States usually tends to rule in favor of marketplaces, stating that there are no grounds for liability in their activities. In order to hold the marketplace accountable, the trademark owner must overcome the increased burden of proof – in particular, to prove a violation expressed in a positive action or inaction (for example, failure to take prompt action to remove information about a product when information about counterfeit goods is received). In such cases, the tort standard of liability applies.

For example, in Tiffany, eBay, ruled on July 14, 2008 by the U.S. District Court for the Southern District of New York [8], the applicants insisted that the eBay marketplace should be held liable, since when posting information about a product, the marketplace should be considered obliged to control the illegal activities of the seller. In this case, the district court ruled that the burden of tracking counterfeit goods lies directly with the copyright holder, and later the Court of Appeals for the Second Circuit of the United States agreed with this position. The court also noted the increased burden of proof that the intermediary knew or should have known about the violation.

The factor of efforts already made and taken into account by the marketplace also influenced the decision of the court. Since eBay regularly funds and maintains the VerRO program (Verified Rights Owner Program), which is designed to promptly withdraw counterfeit goods from sale in the event that a notice is submitted by the trademark owner, and in practice 70-80% of detected violations are deleted within 12 hours [9], the marketplace should be considered to have made reasonable efforts to prevent offenses.

I would like to agree with the proposed solution. The principle of reasonableness suggests that the responsibility for detecting and correcting infringement should lie with the trademark owner, who is best able to recognize its mark, and that the responsibility for stopping the infringement should lie with the marketplace, which has direct control over the means of displaying counterfeit products.

Undoubtedly, the availability of financial opportunities to maintain such high-tech software allows us to talk about taking all necessary measures to prevent the situation of selling counterfeit goods through an online platform. But we cannot be sure that the courts would have made a similar decision if the trading was carried out not through a large marketplace with sufficient funds to support such programs, but through a small online marketplace platform . Perhaps, in this case, the burden of tracking counterfeit products would be redistributed to the marketplace itself.

Graeme B. Dinwoody, Professor of Intellectual Property Law and Information Technology at the University of Oxford, proposes in this sense a manifestation of flexibility that would cover the spectrum for "more accurate calibration" and could set different requirements for large and small organizations without capital or the sophistication of eBay [10]. This dichotomy between the responsibility of a large marketplace that has the means to maintain information systems to combat counterfeiting and a small marketplace that is unable to proactively fund the fight against trademark infringement will allow the latter to remain on a plateau when competing with the former. Otherwise, by setting the same liability standards for large and small marketplaces, we run the risk of monopolizing this market by leading companies, since small companies will not be able to bear the risks of imposing on them similar standards of responsibility for counterfeiting with larger companies.

It should be noted that the Court of Appeal in Tiffany vs. eBay recognized the use of the trademark by the marketplace as nominal, which, in our opinion, is due to the fact that the marketplace provides only information services, and does not profit from the direct process of using the trademark.

Thus, although the issues of the terms of liability of Internet intermediaries in the United States are not regulated by law, one can definitely talk about their obligation to facilitate the withdrawal of counterfeit goods from circulation when the copyright holder contacts with a notification of an offense that has arisen, even though the marketplace is not a person who violated the exclusive right to a trademark.

There is another notable feature in US law that deals with secondary liability, covering a number of different model trademark infringement claims, the main purpose of which is that liability does not extend to the defendant himself. The Respondent is being sued for infringement caused by the use of a trademark by a third party. A secondary action can increase the effectiveness of a proceeding by allowing the owner of the mark to secure defense in a single proceeding against a party whose conduct simultaneously permits multiple acts of infringement by a number of primary infringers [11]. Although the application of the doctrine of secondary liability to such cases is debatable, such claims seem to be the most convenient for the copyright holder, since they provide an opportunity to contact not the seller who sold the counterfeit product, which in some cases can be difficult to contact, but known marketplaces.

In conclusion, we note that in the US judicial practice, we can trace the previously noted interconnection of the functions that the marketplace performs in the “buyer-seller” chain and the conditions for imposing liability on it: since in the considered decisions the marketplace is not a subject directly selling goods, its liability is limited in the event making reasonable efforts to prevent the offence.

3.2.Practice of the European Court

A unified position in the European Union on the issue of the conditions for holding the marketplace liable has also not been developed, but the European Court considered in 2011 the exemplary case of L'Oreal SA versus eBay [12], which provided the doctrinal basis for similar cases.

European Court of Justice conclusion in L'Oreal SA versus eBay is similar to that established in the 2001 SCLT Joint Recommendation already mentioned above. of WIPO as a mechanism for holding accountable Internet intermediaries, associated with the need to establish in the actions of an intermediary a use characterized by a commercial effect. The European Court in this case points out that eBay does not directly use the trademark, the use is carried out by eBay customers who sell the goods.

At the same time, in any case, the right holders can demand the suppression of the violation and the withdrawal of the publication of the goods on the marketplace. The intermediary activity of the marketplace can be assessed for secondary infringement (a doctrine already mentioned as existing in the law of the United States and some other countries), as well as for violations established by national laws. The European Court also emphasized that if the marketplace knew or should have known about the circumstances on the basis of which it is possible to conclude that the right to a trademark has been infringed, then it will not be exempted from liability.

The importance of establishing commercial use is also reflected in the relatively recent European Court case Coty Germany GmbH vs Amazon Services Europe Sàrl on April 2, 2020. In this case, the European Court held that there is no commercial exploitation by Amazon when the marketplace stores goods for a third party under the “Fulfilment by Amazon”, since commercial use is associated with active action, which allows profiting precisely from the fact that a counterfeit product is sold.

As can be seen from the practice of the European Court of Justice, the criteria for holding marketplaces liable are defined by indicating the category of "commercial use", which also takes place in the US legal system. In the absence of the fact of commercial use, right holders cannot count on the recovery of losses from the marketplace, but at least they have the right to demand that the violation be stopped and that information about the counterfeit product be removed from the Internet site as soon as possible. It follows from this that in the cases of the European Court of Justice, the form of intermediary activity of the marketplace also plays a key role in shaping the judge's conviction on the issue of the admissibility of his liability.

When determining the grounds for holding the marketplace liable, one should also take into account the fact of its subjective awareness: the marketplace knew or should know about the circumstances that would indicate a violation of the trademark right.

3.3. French jurisprudence

The attitude of the French courts to the responsibility of the eBay marketplace , in contrast to the US courts, is diametrically opposed. In the case dated June 30, 2008, Louis Vuitton vs eBay [13], the Paris Commercial Tribunal decided to recover not only the damages, but also punitive damages and compensation for non-pecuniary damage, as well as legal costs, in favor of the applicant. The French court noted that it is the marketplace that is responsible for the sale of counterfeit products, since it is responsible for checking the presence of registered trademarks in the Ministry of Commerce, as well as monitoring the legality of the trade sold by the seller. Thus, it is the marketplace that should be held responsible for not providing adequate measures to prevent the entry of counterfeit goods into circulation due to the fact that it is an active intermediary.

It is curious that the responsibility of the eBay marketplace receives such ambiguous regulation at the level of European countries and the USA: in France, its activity is recognized as an active intermediary, while in the USA it is recognized as a hoster that provides a number of services to the seller, but does not make commercial use when posting information about the product on their platform.

4.    National doctrine and practice of Russian courts

4.1. Administrative responsibility of the marketplace

From March 1, 2023, Decree of the Government of the Russian Federation of July 29, 2022 No.1351 "On Amendments to the Decree of the Government of the Russian Federation of December 31, 2019 N 1956 and the Recognition of Certain Provisions of the Act of the Government of the Russian Federation as invalid", in according to which marketplaces are now included in the list of legal entities that will be subject to the requirements for the circulation of labeled light industry goods. “The exclusion from the number of participants in the turnover does not apply to the owners of aggregators of information about goods (services), as well as legal entities and individual entrepreneurs providing services for pre-sale preparation of goods, assembly and packaging for delivery to the consumer” [14].

Thus, the responsibility for the sale of counterfeit or unmarked products related to light industry will be assigned to marketplaces from 2023.

According to the information portal RIA Novosti, online platforms will be responsible for not transferring information to the Honest Sign system and selling counterfeit goods. As follows from the presented changes, not only sites like Wildberries, which profit from the direct sale of goods, but also aggregator sites that provide pre-sale preparation, assembly and packaging services for delivery to the consumer can be held liable. Thus, the new rules will even apply to online sites like Yandex.Market. [15]

These measures have been the subject of active discussion since 2019, since marketplaces, being the main link in the interaction between the buyer and the seller, were not required to report on the withdrawal of goods from circulation to the supplier or operator of the labeling system, the Center for the Development of Advanced Technologies of the Chestny Znak system notes. The government twice gave the platforms a delay so that they could prepare for the new requirements [16] and so that the changes made did not lead to too burdensome and unexpected contingencies being imposed on them.

Liability measures for the lack of labeling of goods subject to mandatory labeling are regulated in paragraph 2 of Article 15.12 of the Code of Administrative Offenses of the Russian Federation and provide for the imposition on a legal entity of a fine of fifty thousand to three hundred thousand rubles with confiscation of counterfeit goods.

In response to the measures taken by the Government of the Russian Federation, marketplaces have tightened their fight against counterfeiting - for example, Wildberries launched the Digital Arbitrage service in August 2022 so that copyright holders can independently request information about a product from sellers if they suspect that it is counterfeit, and carry out document verification [17].

As can be seen, in the field of public relations, the law enforcer sees it necessary to directly fix the responsibility of the marketplace, in contrast to the field of compensation to a private person, where his responsibility is not displayed with such obviousness.

4.2. Responsibility to the copyright holder

4.2.1.    The state of Russian doctrine, legislation regarding information intermediaries and the position of the highest courts

Unlike the administrative responsibility of marketplaces, there are no direct instructions in the Civil Code of the Russian Federation on the grounds on which the marketplace is responsible to the copyright holder.

If we assume the responsibility of the marketplace is possible, it is necessary to determine whether the joint and several liability of the seller and the marketplace is conceivable. In accordance with paragraph 6.1 of Article 1252 of the Civil Code of the Russian Federation, if one violation of the exclusive right to the result of intellectual activity or a means of individualization is committed by the actions of several persons jointly, such persons shall be jointly and severally liable to the right holder [18].

A.S. Vorozhevich, referring to the position of the IP Court of the Russian Federation [19] and clause 73 of the Decree of the Plenum of the Supreme Court of the Russian Federation (hereinafter referred to as the Plenum of the Supreme Court of the Russian Federation) No. 10 dated April 23, 2019, [20] concludes that in cases where the marketplace sells goods on behalf of the offending seller, it should be liable for violation of the exclusive right. At the same time, the responsibility of the seller and the marketplace is joint and several [21]. This is consistent with the positions of the US courts and the European Court of Justice, which we have already considered, which recognize that an indispensable prerequisite for imposing liability on the marketplace is the process of direct use, which must occur for the purpose of making a profit.

Further A.S. Vorozhevich emphasizes that, as a general rule, the measures of responsibility for the violation of intellectual rights committed by the infringer in the course of his entrepreneurial activity are subject to application regardless of the infringer's fault, but information intermediaries are liable on the basis of guilt. The Plenum of the Armed Forces of the Russian Federation narrows this responsibility to the extent of proving the guilt of information intermediaries: if they knew or should have known about the violation of the exclusive right of the copyright holder [22].

I would like to agree with the option proposed by the Plenum of the Armed Forces of the Russian Federation to fill the liability when the guilt of the marketplace is proved. Information intermediaries are characterized by the function of providing information and providing access to this information to interested parties, this is their main activity. If legislation requires an information intermediary to comply with a higher standard of due diligence, such as verifying each published source of information for the authenticity of claimed intellectual property rights, this will simply overload the information intermediary system, and in this case, the benefits from their activities will not match the costs of bearing the burden. verification of ownership of the exclusive right to the declared right holder. Therefore, it is fair that both the Plenum of the Armed Forces of the Russian Federation and Article 1253.1 of the Civil Code of the Russian Federation establish special conditions for their liability.

The information intermediary that provides the opportunity to post material in the information and telecommunications network, in accordance with paragraph 3 of Article 1253.1 of the Civil Code of the Russian Federation, is not liable for violation of intellectual property rights, while meeting the following conditions:

- If he did not know and should not have known that the use of the intellectual property contained in such material is unlawful;

- In case of receipt in writing of the right holder's application for infringement of intellectual rights indicating the page of the site and (or) the network address on the Internet on which such material is posted, took the necessary and sufficient measures in a timely manner to stop the infringement of intellectual rights [23].

Note that these measures are similar to those proposed in the American and European doctrine and judicial practice.

Further, in the already indicated study, it is proposed to think in general about the possibility of classifying marketplaces as information intermediaries. The author of the study offers two answers to this question, depending on the degree of participation of the marketplace in the sale of goods: 1) in the case when the marketplace enters into a contract for the sale of products and receives profit from such activities, it cannot be recognized only as an intermediary of transactions, therefore it must be responsible on a general basis; 2) in the case when the marketplace provides services, but does not participate in the implementation, its liability should be based on the rules of Article 1253.1 of the Civil Code of the Russian Federation.

Based on the analyzed foreign practice, we can also propose the following criterion for resolving this issue: does the marketplace profit from the direct sale of goods? We emphasize that the profit should depend on the completion of a sale and purchase transaction between the person who carries out the sale and the buyer. It can be expressed in a fixed amount or as a percentage of the transaction, but in any case, the receipt of profit by the marketplace is not associated with the provision of services, but with the fact and number of transactions carried out through it. In case of a positive answer to the proposed question, the marketplace will act as a person participating in the sale of goods on an equal basis with the seller, so the qualification of the marketplace as an information intermediary is impossible.

In the case when the marketplace acts as a person facilitating the sale by placing ready-made information about the product (without making changes to this information), its delivery and storage in warehouses, acceptance for return from the consumer, and its remuneration is expressed in the volume of services rendered to the customer, we should talk about information mediation.

At a meeting of the scientific advisory board of the SIP, Svetlana Krupko, researcher at the Sector of Legal Problems of International Economic Relations of the Institute of State and Law of the Russian Academy of Sciences, proposes the same criterion for distinguishing: information mediation can take place when the center of gravity in the activity of an information intermediary lies in the technical sphere, if the intermediary does not interfere in legal relations related to the sale of goods; or, more precisely, if the will of the information intermediary does not directly affect the conclusion and execution of transactions for the sale of goods. Although foreign practice in this matter is not uniform, the idea that information intermediaries should provide technical services and not interfere in the sales process itself is dominant in the world [24].

We agree that the focus of the marketplace should be assessed for its impact on the conclusion and execution of transactions for the sale of goods. When the marketplace introduces any additional information into the characteristics of the product to promote a greater volume of sales (influence on the conclusion of purchase and sale transactions), or creates conditions for the execution of transactions, it cannot be classified as information intermediaries when deciding on liability, therefore it must answer jointly and severally with the seller.

This corresponds to the criteria developed at the time in the Plenum of the Supreme Court No. 10: if the site owner makes changes to the material posted by third parties on the site containing the results of intellectual activity or means of individualization, the resolution of the issue of classifying it as information intermediaries depends on how active the role he performed in the formation of the placed material and (or) whether he received income directly from the illegal placement of material. Significant processing of the material and (or) receipt of the indicated income by the owner of the site may indicate that he is not an information intermediary, but a person directly using the relevant results of intellectual activity or means of individualization [25].

Thus, on the basis of the foregoing, let us return to the theses that were proposed at the very beginning of this study. We noted that determining the options for the participation of the marketplace in the transaction for the sale of counterfeit goods is key to addressing the issue of bringing it to justice.

Having done an analytical dive into the practice of foreign countries, the Russian doctrine and the positions of the highest courts, we propose to outline the circle of grounds for holding the marketplace liable, depending on the form of participation. We consider it possible to solve the problem of grounds for placing on the marketplace in the following way:

1)    The marketplace may be held jointly and severally liable with the seller of the goods if it influences the conclusion or execution of the contract by significantly changing the information about the goods and (or) subject to the circumstance of commercial use for profit in its actions. Joint and several liability in this case will arise in connection with the joint infliction of harm by the marketplace and the seller to the trademark owner. Joint and several liability mechanisms mean that the right holder has the right to file a claim for compensation or losses against any of them, and already in the internal fork, the marketplace and the seller bear the risks of insolvency (bankruptcy) of each of them.

2)    The marketplace can be considered an information intermediary: in this case, the product will be held jointly and severally liable with the seller only if he knew and should have known about the fact of illegal use of the trademark or if he did not take timely and sufficient measures to stop the illegal use. If his activity is not characterized by the foreseen offenses, he will not be liable to the copyright holder, but in any case he will be obliged to control the removal of information about the counterfeit goods from his sites.

4.2.2.    The practice of Russian courts on specific disputes

In conclusion, we propose to consider the state of judicial practice on the issue of liability of marketplaces in order to assess how the attitude of the courts to this issue correlates with our assumptions.

Let us turn to the Ruling of the Court for Intellectual Rights of the Russian Federation dated October 21, 2016 in case No. A40-26217/2015 [26]. Veksel LLC presented Kupishuz LLC (an organization founded by the Lamoda marketplace) to recover compensation for violation of the exclusive right to a trademark in the amount of 5,000,000 rubles. The claim for compensation was satisfied only by 50,000 rubles, which is significantly less than the amount claimed by the plaintiff. The Court of Appeal saw from the case file that the right holder did not use his trademark in relation to shoes. At the same time, the court of cassation noted that this in itself cannot indicate that the trademark was registered not for the purpose of independent use, but only for the purpose of prohibiting third parties from using the corresponding designation, which could be seen as an abuse of the right [27]. The IP Court agreed with these arguments. At the same time, the question of the criteria for holding the marketplace liable was not the general problem of this case, so we suggest moving on to the next case.

In the Ruling issued by the Ninth Arbitration Court of Appeal dated November 06, 2020 in case No. A40-302888/19, the courts of first instance and appeal concluded that Vallar LLC (direct seller) and Wildberry LLC (marketplace) are jointly and severally liable for trademark infringement. In this case, the manufacturer of wafer rolls marked with the designation “ Lafinel ” indicated that the defendants are introducing into civil circulation goods marked with a designation confusingly similar to the trademark owned by the plaintiff [28].

The courts in this case, in our opinion, quite rightly held the marketplace liable jointly with the seller, since, as we noted above, the Wildberry marketplace concludes an agreement with the sellers on the sale of goods and is the direct recipient of funds under the sale and purchase agreement, in connection with which, with each sale, there will be a fact of commercial use of the trademark by the seller. “The defendant’s argument that he did not participate in the sale of goods, but only performed the function of an Internet site, is subject to rejection, since according to the public offer posted on the date of purchase, Wildberry LLC is indicated by the seller.” [29]

Suppose that such a model for concluding contracts for the sale of goods outweighs for Wildberry the costs associated with not recognizing it as an information intermediary and bringing it to justice in cases of infringement of exclusive rights to a trademark, since otherwise the marketplace could switch to an alternative system of making a profit for providing services to sellers, for example, according to the Yandex.Market model. We are ready to think that remaining within the framework of the contract for the sale of goods for Wildberry is still more justified from a financial point of view, since the online platform has taken the path of creating a system that tracks counterfeit goods, which in turn involves large investments. Probably, these investments are still less expensive than the transfer of the entire system to contracts for the provision of services by the marketplace.

Let's get back to jurisprudence. The following conclusions were reached by the courts considering the case of Comfortplus LLC against Wildberry LLC and Stroy Materials Holding LLC on the need to impose joint and several liability on the defendants for infringement of the exclusive right to the plaintiff's trademark - Ruling of the Court for Intellectual Rights dated June 22 2022 in case No. A41-85375/2020 [30], where the marketplace objected to bringing him to justice, referring to paragraph 3 of Art. 1253.1 of the Civil Code of the Russian Federation on information intermediaries. The courts did not agree with this qualification, since the seller is aware of the content of the information posted on his website, and also has the opportunity to make changes to the content of the information published on this website, even taking into account the fact that the seller independently posts information about the offer for the sale of goods [31].

No less interesting is the following argument of the IP Court Judicial Collegium: “The judicial collegium also takes into account that in case N A40-251307 / 2020, to which Wildberry LLC refers, Internet Solutions LLC (Ozon) promptly removed illegal materials from its website, therefore, it was released by the court from liability as an information intermediary, which Wildberry LLC did not do in a timely manner in the present case [32]. I would like to note that the IP Court judicial board apparently assumes that, despite the direct use (sale) of a product by a marketplace marked with a trademark confusingly similar to the trademark of the copyright holder, it is possible to recognize it as not liable when it promptly deletes information about counterfeit products.

This conclusion is very interesting from the point of view of the thesis we have already noted that when concluding a contract for the sale of goods, the marketplace should be liable in any case. After all, the timely removal of information about the product in accordance with paragraph 3 of Article 1253.1 of the Civil Code of the Russian Federation excludes the liability of only the information intermediary, but not the person who sells the product.

The violation of the exclusive right to a trademark by the Wildberry [33] marketplace was also established in the Decision of the Arbitration Court of the Moscow Region dated September 28, 2020 in case No. A41-84058 / 2019, but the court did not come to a conclusion about liability for the use of a confusingly similar designation, limited to the conclusion that it is necessary to remove information about the product from the Internet page. At the same time, in the Resolution of the Tenth Arbitration Court of Appeal dated December 1, 2021 in case No. A41-73925 / 2020 [34] (hereinafter referred to as 10 AAS), Wildberry is recognized as an information intermediary and in connection with the fulfillment of the conditions provided for in paragraph 3 of Art. 1253.1 of the Civil Code of the Russian Federation on the release of an information intermediary from liability was not held liable for payment of compensation.

The court's reasoning in its decision was that:

- Wildberry LLC receives from the seller only remuneration for providing an information platform for the seller to sell goods directly to buyers, and does not receive income directly from posting materials / information on the site;

- LLC "Wildberry" does not profit from the information placed by the sellers;

- LLC "Wildberry" does not act on its own behalf, carrying out transactions for the sale of goods, and, therefore, cannot be held responsible for the illegal distribution of goods by another person;

- Wildberry LLC accepts payment for goods from buyers and transfers the proceeds from the sale of goods to the Seller [35].

Thus, in order to hold Wildberry LLC liable in the opinion of 10 AAC, it must be recognized that the marketplace profits from the placement of information by the seller or must carry out transactions for the sale of goods on its own behalf. Also, Wildberry LLC, although it is the recipient of funds for the purchased goods, transfers the proceeds from the sale of the goods to the seller.

We would like to disagree with this position, because with such a deep narrowing of the responsibility of the marketplace to the limits of profit from the placement of information by the seller or the transaction for the sale of goods on its own behalf, as well as to the preservation of the entire amount from the sale of goods behind the marketplace, it makes attracting him to liability is potentially impossible. After all, to carry out transactions on one's own behalf or to fully withhold payment for the sale of goods does not mean at all the marketplace nature of the site's activity - the marketplace in this case would be a direct seller. Or, if he had to make a profit only from the information posted, and not from the totality of the services provided, then the amount of his profit would be so insignificant that it would be more profitable for the marketplace to refuse to conduct its activities in such cases.

Thus, the fulfillment of these conditions is rarely conceivable in real life, and therefore holding the marketplace liable only for these cases is extremely unfair and would mean that the marketplace should not be held liable for violation of exclusive rights at all, in whatever form of relationship it may take. was with the seller. Such a universalization of the exclusion of marketplace liability is also unfair from the point of view of the interests of the right holder, since the mechanisms of joint and several liability give him more chances to be satisfied in the course of enforcement proceedings, in contrast to holding only the seller liable.

In the Resolution of the Ninth Arbitration Court of Appeal dated April 21, 2022 in case No. A40-197360/2021 [36], Internet Solutions marketplace (Ozon.ru) is also recognized as an information intermediary, since “the purpose of the information platform is to provide an opportunity to conclude a sale and purchase agreement between the user (consumer) and the store (seller), while not being a party to the legal relationship between the user (consumer) and the store (seller), and access to the information platform is provided to the user (consumer) free of charge. Further, the court draws an analogy to the similarity of the principles of operation of the marketplaces "AliExpress", "Yandex.Market", "Wildberries" [37]. Meanwhile, we have repeatedly noted that the principles for building the activity of marketplaces differ depending on the nature of the agreements concluded between the marketplace and the seller - an agreement for the sale of goods or an agreement for the provision of services, so put both Wildberry and Yandex on the same scale. Market does not seem quite correct to us.

We would also like to suggest thinking about the connection between the thesis of gratuitous provision to the consumer information platform and the characteristics of the marketplace as an information intermediary. Apparently, the Ninth Arbitration Court proposes, in cases where information is provided to the consumer on a paid basis, to recognize the marketplace as a person who profits from the use of a trademark, since the cost of services, for example, is taken into account as included in the cost of goods.

The court came to similar conclusions in the Resolution of the Ninth Arbitration Court of Appeal dated April 7, 2022 in case No. A40-192739 / 2021 [38] and in the Resolution of the Ninth Arbitration Court of Appeal dated February 4, 2022 in case No. A40-154619 /2020 [39]. Since “it follows from the materials of the case that Internet Solutions LLC does not introduce goods into civil circulation, does not determine their price and description of goods, does not become the owner of goods that sellers place on the site in any period of time, is not a manufacturer, importer or the seller of the disputed goods specified in the statement of claim, then the company is an information intermediary [40]. It also emphasizes that “in Russia, both www.ozon.ru and similar sites are officially recognized as marketplaces and socially significant Internet resources (clause 337 of the List of socially significant information resources in the Internet information and telecommunications network, approved by Order of the Ministry of Communications of Russia dated 03/31/2020 No. 148)" [41].

It should be noted that despite the special social significance of marketplaces in the Internet media space, this should not predetermine the court's conclusions about their responsibility. However, from recent decisions in which the courts refused to recognize the need to hold marketplaces accountable, one gets the impression that the courts, putting in the argument the special importance of marketplaces in the development of turnover, are ready to protect them despite the accompanying offenses. It seems to us that such an arrangement is not entirely correct. It would be more correct, in our opinion, to allow any incentive measures that could be applied to marketplaces for a special role in the development of online commerce, and not to predetermine the conclusion that it is impossible to hold them accountable for a special role, since the latter creates an unfair advantage towards the interests of the state and economic turnover to the detriment of the interests of the trademark owner.

5.    Conclusion:

According to the results of the study, we came to the conclusion that the state of foreign and Russian doctrine and practice on holding marketplaces accountable is still only at the stage of formation. This is due to the fact that this problem has relatively recently made itself felt in practice in connection with the ubiquity of marketplaces and online trading.

We summarize that the responsibility of marketplaces should arise depending on the form of its relationship with the seller. The Marketplace can be held jointly and severally liable with the seller of the goods if it influences the conclusion or execution of the contract by significantly changing the information about the product, as well as under the condition that in its actions the commercial use of the trademark for profit is established. If the marketplace does not influence the conclusion or execution of the contract and the fact of commercial use of the trademark for profit is not detected in its actions, then it will be liable as an information intermediary, but only in cases where it knew and should have known about the fact of illegality use of the trademark or if he did not take timely and sufficient measures to stop the misuse.

At the same time, the criterion of information mediation, as follows from Russian judicial practice, sometimes does not work when the courts decide to hold the marketplace liable, since the courts, even after stating the fact of receiving payment in the name of the marketplace, do not refuse to qualify its activities as an information intermediary. Also, the courts recognize the activity of marketplaces as similar in content, even despite the different contracts that marketplaces conclude with sellers: contracts for the sale of goods or contracts for the provision of services.

The only conclusion that we can draw with reliable accuracy is that the liability of the marketplace should be excluded if, upon receipt of information about the violation of the exclusive right to a trademark from the copyright holder, the marketplace took all measures within its power to prevent the violation (withdrawal of counterfeit products, reporting a violation directly to the seller selling the goods, etc.).

The rawness of the practice of Russian courts with regard to the issue of criteria for bringing the marketplace to liability for trademark infringement is noticeable at least in the way the opinions of the courts differ on the issue of bringing the same Wildberry marketplace to liability - according to the position of some courts, it should be recognized information intermediary, while others conclude that Wildberry should be jointly and severally liable with the seller, since the marketplace sells the goods. This state of practice does not bring certainty to the issues under study, but gives hope that with an increase in the number of cases on the responsibility of marketplaces, the corresponding clarifications of the Supreme Court of the Russian Federation will soon appear, which will become the starting point in subsequent court decisions.

References:

[1] What is a marketplace and how to sell on it [Electronic resource]. – URL: https://www.sberbank.ru/ru/s_m_business/pro_business/chto-takoe-marketplejs-i-kak-na-nem-prodavat/ (date of access: 01/17/2023).

[1] Resolution dated March 18, 2022 in case No. А40-92572/2021 / Court for Intellectual Property Rights of the Russian Federation. – Access mode: ATP "Consultant Plus".

[3] Art. 1515 of the Civil Code of the Russian Federation (part four) dated November 24, 2006 No. 318-FZ (as amended on June 11, 2022). – Access mode: ATP "Consultant Plus".

[4] Vorozhevich A.S. Disputes over violations of exclusive rights to trademarks in marketplaces // Journal of the Court for Intellectual Property Rights. 2021. No. 2. S. 133-141

[5] Ibid.

[6] Digital Millennium Copyright Act (DMCA) of 1998.

[7] The Standing Committee on the Law of Trademarks, Industrial designs and Geographical Indications of the World Intellectual Property Organization (SCLT of WIPO) of 2001.

[8] Tiffany (NJ) Inc. and Tiffany and Company v. Ebay , Inc., No. 04 Civ. 4607, Southern District of New York, July 14, 2008.

[9] Katja Weckstrom, Secondary Liability for Trademark Infringement in the United States, 49 U . Louisville L. R EV. 555 (2011). – URL: https://heinonline.org/HOL/P?h=hein.journals/branlaj49&i=566 (accessed: 17.01.2023).

[10] Graeme B. Dinwoodie, Secondary Liability for Online Trademark Infringement: The International Landscape, 37 COLUM. J. L. & Arts 463 (2014). – URL: https://heinonline.org/HOL/P?h=hein.journals/cjla37&i=483 (accessed: 17.01.2023). 

[11] Graeme B. Dinwoodie, Secondary Liability for Online Trademark Infringement: The International Landscape, 37 COLUM. J. L. & Arts 463 (2014).

[12] L'Oréal v eBay [2009] EWHC 1094 (Ch).

[13] Louis Vuitton Malletier v. eBay Inc., and eBay International AG, June 30, 2008 (Tribunal de Commerce [T.C.] [Commercial Court] Paris, June 30, 2008, RG No. 2006077799. 

[14] Decree of the Government of the Russian Federation of July 29, 2022 No. 1351 "On Amendments to the Decree of the Government of the Russian Federation of December 31, 2019 No. 1956 and Recognizing Certain Provisions of the Act of the Government of the Russian Federation as invalid". – Access mode: ATP "Consultant Plus".

[15] Marketplaces will be responsible for counterfeit [Electronic resource]. – URL: https://ria.ru/20220805/marketplays-1807452248.html

(date of access: 01/17/2023).

[16] Ibid.

[17] Wildberries will launch a service to combat counterfeiting - through it, copyright holders will be able to check sellers themselves [Electronic resource]. – URL: https://vc.ru/trade/478021-wildberries-zapustit-servis-dlya-borby-s-kontrafaktom-cherez-nego-pravoobladateli-smogut-sami-proveryat-prodavcov (date of access: 01/17/2023).

[18] Article 1252 of the Civil Code of the Russian Federation (Part Four) dated November 24, 2006 No. 318-FZ (as amended on June 11, 2022). – Access mode: ATP "Consultant Plus".

[19] “Solid and several liability arises for the domain name administrator and the person who directly posted on the site information about a product marked with someone else’s trademark” // Certificate of the Intellectual Property Rights Court on some issues of applying the norms of Section III “General Part of the Law of Obligations” of Part One of the Civil Code of the Russian Federation, with the exception of Chapter 23 (“Enforcement of Obligations”) (approved by the Resolution of the Presidium of the Court for Intellectual Property Rights dated September 3, 2015 No. SP-23/24). Cit. by: Vorozhevich A.S. Decree. op.

[20] “The use of an intellectual property object on behalf of or on behalf of a person who violated the exclusive right of the copyright holder also constitutes a violation of the exclusive right” // Decree of the Plenum of the Supreme Court of the Russian Federation dated April 23, 2019 No. 10 “On the application of part four of the Civil Code of the Russian Federation”. Decree of the Plenum of the Supreme Court of the Russian Federation dated April 23, 2019 No. 10 Cit. by: Vorozhevich A.S. Decree. op.

[21] Vorozhevich A.S. Decree. Op.

[22] Resolution of the Plenum of the Supreme Court of the Russian Federation of April 23, 2019 No. 10 "On the application of part four of the Civil Code of the Russian Federation".

[23] Article 1253.1 of the Civil Code of the Russian Federation (Part Four) dated November 24, 2006 No. 318-FZ (as amended on June 11, 2022). – Access mode: ATP "Consultant Plus".

[24] Minutes No. 10 Meetings of the working group of the Scientific Advisory Council at the Court for Intellectual Property Rights April 22, 2015 [Electronic resource]. – URL: http://ipcmagazine.ru/official-cronicle/protocol-10-of-the-meeting-of-the-scientific-advisory-council-at-the-court-for-intellectual-property-right  (date accessed: 01/17/2023). Cit. By: Vorozhevich A.S. Decree. op.   

[25] Resolution of the Plenum of the Supreme Court of the Russian Federation of April 23, 2019 No. 10 "On the application of part four of the Civil Code of the Russian Federation". – Access mode: ATP "Consultant Plus".

[26] Resolution dated October 21, 2016 in case No. А40-26217/2015 / Court for Intellectual Property Rights of the Russian Federation. – Access mode: ATP "Consultant Plus".

[27] Ibid.

[28] Resolution dated November 06, 2020 in case No. А40-302888/19 / Ninth Arbitration Court of Appeal of the Russian Federation. – Access mode: ATP "Consultant Plus".

[29] Ibid.

[30] Resolution dated June 22, 2022 in case No. А41-85375/2020 / Court for Intellectual Property Rights of the Russian Federation. – Access mode: ATP "Consultant Plus".

[31] Ibid.

[32] Ibid.

[33] Decision dated September 28, 2020 in case No. А41-84058/2019 / Arbitration Court of the Moscow Region. – Access mode: ATP "Consultant Plus".

[34] Decree of December 1, 2021 in case N A41-73925 / 2020 / Tenth Arbitration Court of Appeal of the Russian Federation. – Access mode: ATP "Consultant Plus".

[35] Ibid.

[36] Resolution of April 21, 2022 in case No. A40-197360 / 2021 /Ninth Arbitration Court of Appeal of the Russian Federation. – Access mode: ATP "Consultant Plus".

[37] Ibid.

[38] Resolution of April 7, 2022 in case No. A40-192739 / 2021/Ninth Arbitration Court of Appeal of the Russian Federation. – Access mode: ATP "Consultant Plus".

[39] Resolution of February 4, 2022 in case No. A40-154619 / 2020 / Ninth Arbitration Court of Appeal of the Russian Federation. – Access mode: ATP "Consultant Plus".

[40] Ibid

[41] Ibid