In the case of LLC Firm Zdorovye the Constitutional Court found the clauses of the Civil Code on the collection of compensation for violation of an exclusive right to be inconsistent with the Constitution

Currently, the Intellectual Rights Court is considering a cassation appeal filed by Maximus LLC against the decision of the Ninth Arbitration Court of Appeal dated June 23, 2021, on the claim of Maximus LLC and a foreign entity Forianelli Trading Limited against Firm Zdorovye LLC for the recovery compensation for violation of exclusive rights to a trademark under Russian Federation Certificate No. 527696.

The interests of the Zdorovye Firm in this case are represented by the company Zuykov and partners.

By ruling dated 02.22.2023 in case No. A40-215387/2021, the Intellectual Rights Court, including at the request of Firm “Zdorovye” LLC, decided to apply to the Constitutional Court of the Russian Federation with a request regarding the compliance of the Constitution of the Russian Federation with the provisions of paragraph 3 of Article 1252 and paragraph 4 Article 1515 of the Civil Code of the Russian Federation, suspending the proceedings until the judicial act of the Constitutional Court of the Russian Federation on the specified request enters into force.

Based on the results of consideration of the request, the Constitutional Court of the Russian Federation decided to recognize paragraph 3 of article 1252 and subparagraph 2 of paragraph 4 of article 1515 of the Civil Code of the Russian Federation not corresponding to the articles 17 (part 3), 19 (parts 1 and 2), 34 (part 1), 35, 55 (part 3) and 751 Constitution of the Russian Federation to the extent that they are in the system of current legal regulation, including in conjunction with other provisions of this Code, when the court considers a claim for recovery of compensation for violation of the exclusive right to a trademark in the amount of twice the value of the goods on which it is illegally placed trademark, do not allow to reduce the amount of such compensation or refuse to collect it, in the event that previously, at the claim of another copyright holder (including the affiliation of such copyright holders), compensation has already been recovered from the infringer for violation of the exclusive right to a confusingly similar a trademark, calculated at twice the cost of the same goods (Resolution of the Constitutional Court of the Russian Federation dated December 14, 2023 No. 57-P).

Considering the above request, the Constitutional Court of the Russian Federation referred to its previously adopted Resolution No. 40-P of July 24, 2020, indicating that in practice, plaintiffs-right holders are inclined to the most severe option for the violator among the permissible methods of calculating compensation, which turns them into the economically stronger person in the dispute. Accordingly, the court does not have the power to reduce the amount of compensation required by the copyright holder, despite the fact that by a judicial act that has entered into legal force, the compensation determined according to the rules of subparagraph 2 of paragraph 4 of Article 1515 of the Civil Code of the Russian Federation has already been recovered for violation of the right to a confusingly similar trademark in favor of another copyright holder, may entail - contrary to the legal positions of the Constitutional Court of the Russian Federation and contrary to the requirements of fairness and reasonableness - a clear disproportion of the property sanction imposed on the defendant to the damage caused to the plaintiff, and causing an imbalance in their rights and legitimate interests, which are protected by Articles 17 (Part 3), 19 (parts 1 and 2) and 55 (part 3) of the Constitution of the Russian Federation. Such disproportionality, which is not reducible to the burdensomeness of sanctions for the violator, can occur both in the case of affiliation of copyright holders, and in other circumstances of their use of confusingly similar trademarks, which affect the amount of losses incurred by copyright holders.

Thus, the conclusions of the Constitutional Court of the Russian Federation, set out in Resolution No. 57-P dated December 14, 2023, confirm the legal position taken by the Health Firm company, represented by Zuykov and partners, in the framework of case A40-215387/2021.