08 July 2021

Court Considered Specifics of Using Engineering Papers as Contribution to Partnership

The court granted the claims of the developer of the design documentation of a shopping mall to recover compensation for infringement of the exclusive right. In doing so, the court rejected the infringer’s position that the use of the particular intellectual property was legitimate as a contribution to a partnership in which the defendant was a member.

The design developer filed a lawsuit to indemnify for copyright infringement in the amount of about 1.5 million rubles, which is double the value of the right to use the work. 

The engineered the project for the construction of a shopping mall. According to the contract, the customer had the right to use the design and estimate documentation for the construction, but the rights to all other uses of the documentation, including exclusive rights, were not transferred to the customer.

The customer entered into a partnership, within the framework of which it contributed the design documentation in question. Due to the need for redevelopment, one of the partners asked the plaintiff to correct certain sections of the engineering papers. This contract also did not provide for the transfer of the exclusive right to the documentation.

The plaintiff learned that the same entity had shared the engineering papers with another company for redevelopment and, as a result, the design had been substantially altered. The courts found the claim well-reasoned. Although the design documentation was contributed by the prime customer as a contribution to the partnership, the courts noted that the parties merely undertook to combine the contributions and act together to construct the mall. In doing so, the customer company’s contribution to the common property of the partnership was unchanged under the agreement. Given that the plaintiff did not consent to the transfer of the project to others in order to make changes, the courts found the defendant's actions to be in violation and found the amount of compensation reasonable.

The defendant argued that it had the affairs of the partnership in accordance with Article 1044 of the Civil Code of the Russian Federation (hereinafter the Civil Code), so lawfully concluded project related contracts on behalf of and in the interests of all partners. According to the defendant, the project was developed as a contribution without any restrictions, as a result of which the rights to it passed into the ownership of Partners in full.

In rejecting these arguments, the courts correctly noted that no contracts transferred the plaintiff’s exclusive rights to the defendant or the partnership.

The plaintiff also pointed out that the court unreasonably ignored Article 1296 of the Civil Code, according to which the exclusive right to the work created by order belongs to the customer, unless the contract provides otherwise. 

However, the legal relationship between the plaintiff and the prime customer was regulated by paragraph 1 of Article 1297 of the Civil Code, according to which the exclusive right to the work created in the performance of the contractor agreement, which did not directly provide for its creation, belongs to the contractor, if the contract does not provide otherwise.

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