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Protection of the exclusive right by the copyright holder and the licensee

24 Apr 2023
#License agreement

When creating any object of intellectual property, the right holder, as a kind of remuneration, is granted the exclusive right to use such an object at his own discretion in any way that does not contradict the law, which causes the emergence of a so-called "legal monopoly" for this person. The presence of such a monopoly makes it possible not only to derive property benefits from the use of the result of one's intellectual work, but also the opportunity to protect it from encroachments by third parties.


The essence of the exclusive right is reflected in Article 1229 of the Civil Code of the Russian Federation, which stipulates that “a citizen or legal entity that has the exclusive right to the result of intellectual activity or to a means of individualization (right holder) has the right to use such a result or such means at its discretion in any way not contrary to the law. The right holder may dispose of the exclusive right to the result of intellectual activity or to a means of individualization (Article 1233), unless otherwise provided by this Code.


The right holder may, at its discretion, allow or prohibit other persons from using the result of intellectual activity or means of individualization. The absence of a prohibition is not considered consent (permission).


Other persons may not use the corresponding result of intellectual activity or means of individualization without the consent of the right holder, except for the cases provided for by this Code. The use of the result of intellectual activity or means of individualization (including their use in the ways provided for by this Code), if such use is carried out without the consent of the right holder, is illegal and entails liability established by this Code, other laws, except for cases when the use of the result of intellectual activity or means of individualization by persons other than the right holder, without his consent, is allowed by this Code.


It follows from the above norm that the exclusive right to use, dispose and protect the result of intellectual activity or means of individualization belongs initially to the right holder.


In addition to the general methods of protection given in Article 12 of the Civil Code of the Russian Federation, civil law also provides for special ones - specifically for exclusive rights which are listed in article 1252 of the Civil Code of the Russian Federation, where the right holder has the right, among other things, to demand: recognition of the right; suppression of actions that violate the right or create a threat of its violation; indemnification/recovery of compensation; seizure/destruction of the material carrier in which the object of intellectual property is expressed; publication of the court decision on the violation committed.


At the same time, the current legislation provides for “natural” or “contractual” mechanisms for restricting the legal monopoly that the right holder has by disposing of his rights, including under a license agreement under which the right holder has the right to grant an exclusive or simple (non-exclusive) license.


So, by virtue of paragraph 1 of Article 1236 of the Civil Code of the Russian Federation , “a license agreement may provide for:

1) granting the licensee the right to use the result of intellectual activity or means of individualization with the licensor retaining the right to issue licenses to other persons (a simple (non-exclusive) license);

2) granting the licensee the right to use the result of intellectual activity or means of individualization without retaining the right of the licensor to issue licenses to other persons (exclusive license).


Moreover, according to paragraph 2 of the above article, as a general rule, the licensor, among other things, is deprived of the right to independently use the intellectual property object within the limits granted to the exclusive licensee, unless otherwise provided by the terms of the license agreement.


The norms presented above illustrate such a situation when the monopoly right regarding the use of an intellectual property object in certain ways, in a certain territory and for a certain period of time actually passes from the right holder to the exclusive licensee.


Based on the foregoing, it is clear that the exclusive licensee has more rights than the non-exclusive licensee.


These circumstances necessitated the creation of legislative conditions that would allow protecting the economic interests of the exclusive licensee as a kind of "derivative" right holder.


The prerequisites for such conditions are contained in paragraph 2 of Article 1250 of the Civil Code of the Russian Federation, which notes that “the methods of protection of intellectual rights provided for by this Code can be applied at the request of copyright holders, organizations managing rights on a collective basis, as well as other persons in cases established by law.".


The above norm directly establishes the possibility of protecting intellectual property rights not only by the copyright holder, but also by other persons.


The legislator also included the exclusive licensee among other persons who have the opportunity to apply the methods of protection of intellectual property provided for by the Civil Code of the Russian Federation, stating in Article 1254 of the Civil Code of the Russian Federation that “if third parties violate the exclusive right to the result of intellectual activity or to a means of individualization, for the use of which an exclusive license has been issued If a license affects the rights of the licensee received by him on the basis of a license agreement, the licensee may, along with other methods of protection, protect his rights in the ways provided for in Articles 1250 and 1252 of this Code.”.


It is noteworthy that in the original version of this article, the legislator, along with the methods of protection provided for in Articles 1250 and 1252 of the Civil Code of the Russian Federation, also provided the opportunity for the exclusive licensee to use the remedy provided for in Article 1253 of the Civil Code of the Russian Federation, which fixes the liquidation of a legal entity or the termination of the activity of an individual entrepreneur in connection with with repeated or gross violation of exclusive rights by a court decision. Subsequently, this right of the exclusive licensee was limited and left within the jurisdiction of the right holder himself, probably due to the seriousness of the consequences of applying this construction, the initiation of which should come only from the owner of the exclusive right.


Therefore, since the above article regulates the legal status of the exclusive licensee and provides special protections similar to those of the right holder, the owner of a simple (non-exclusive) license can only be guided by the protection methods provided to him under the concluded license agreement.


Continuing the discussion of the protection of an exclusive right by an exclusive licensee, the Plenum of the Supreme Court of the Russian Federation, in order to specify the mechanism of Article 1254 of the Civil Code of the Russian Federation, presented a number of clarifications in paragraph 79 of Resolution No. Article 1254 of the Civil Code of the Russian Federation, it must be taken into account that it does not provide licensees - holders of a simple (non-exclusive) license with the right to protect their rights in the ways provided for in Articles 1250 and 1252 of the Civil Code of the Russian Federation. On the basis of this article of the Civil Code of the Russian Federation, only licensees - holders of an exclusive license have such a right.


The basis for the licensee to claim compensation for violation of the exclusive right is the violation of the rights of the licensee itself, and not the right holder, received on the basis of a license agreement.


With this in mind, licensees - holders of an exclusive license can protect their rights in the ways provided for in Articles 1250 and 1252 of the Civil Code of the Russian Federation, only if the committed violation affects the rights granted to them to use the result of intellectual activity or means of individualization.


Based on the above rules, it follows that the resolution of the issue of whether or not the exclusive licensee has the right to judicial protection from a specific violation committed depends on the scope of rights granted to him on the basis of a license agreement, as well as the validity period of such a license agreement.


Here it is necessary to make a reservation that with all of the above, the right holder himself does not lose the possibility of independently protecting his exclusive right, despite some limitation when granting an exclusive license to a third party.


Is it possible in this case to apply for protection of the exclusive right to the right holder and the exclusive licensee at the same time? Wouldn't that violate the principle of good faith?


The current legislation does not contain restrictions on applying for the protection of exclusive rights, along with the copyright holder, as well as the exclusive licensee. At the same time, it must be borne in mind that the exclusive licensee can apply for protection only of those rights that were granted to him under the license agreement, and not earlier than the date of registration of this license agreement with the Federal Service for Intellectual Property (Rospatent), since, by virtue of paragraph 6 Article 1232 of the Civil Code of the Russian Federation, the granting of the right to use is considered to have taken place from the date of state registration of the granting to another person the right to use such a result of intellectual activity under a license agreement.


A similar conclusion can be drawn from the analysis of judicial practice, namely the rulings of the Intellectual Property Rights Court of October 21, 2016 in case No. A40-176412/2015 and of May 29, 2020 in case No. A66-18127/2018, where the courts drew attention to the illegality of the appeal in defense of the rights of a non-exclusive licensee, and not on the simultaneous presentation of claims by the right holder and the licensee.


Thus, we can conclude that Russian legislation guarantees the right to protection of an intellectual property object not only on the part of its right holder, but also on the part of a person who has been granted the exclusive right to use such an object under a license agreement, which, of course, has a positive effect on the economic development of civil circulation of objects of intellectual rights.