Ksenia graduated from The Russian Presidential Academy of National Economy and Public Administration (RANEPA) with a degree in law.
2015 - a distance learning course at WIPO under the program "Fundamentals of Intellectual Property"
2016 – the WIPO summer school on the basis of the Kazan Federal University
2014 – Paralegal in SKB-Bank
2014 – 2018 – Chief Counsel in the field of intellectual property in Cordiant (tiremaker).
2019 – Head of legal in Navitel (development of navigation software and navigation maps)
2020 – Head of intellectual property group in law firm specializing in defense of intellectual property objects
According to paragraph 1 of Article 66.1 of the Civil code of the Russian Federation (hereinafter referred to as the Civil code of the Russian Federation): “Contribution of a participant of an economic partnership or a society to its property may be money, things, shares (stocks) in the authorized (share) capital of other economic partnerships and companies, state and municipal bonds. Such contribution may also be exclusive and other intellectual property rights subject to appraisal and rights under licensing agreements, unless otherwise established by law”.
According to paragraph 2 of Article 15 of the Federal Law of February, 8, 1998 No. 14-FZ on Limited Liability Companies (hereinafter referred to as the Law on LLC): “Appraised monetary value of the property used for payment of shares in authorized capital of a society shall be approved by the decision of general meeting of participants of a company, made by all participants of company unanimously. If a nominal value or increase of nominal value of share of shareholder of a company in authorized capital of a company, paid by non-monetary assets, makes more than twenty thousand rubles, an independent appraiser should be involved for the purpose of calculation of cost of this property, provided that otherwise is not provided by the federal law. The nominal value or increase in the nominal value of a share of a participant of a company, paid by such non-monetary assets, cannot exceed the amount of evaluation of the said property, determined by an independent appraiser”.
The Federal Law of December 26, 1995 No. 208-FZ on Joint Stock Companies (hereinafter referred to as the JSC Law) contains similar provisions (Article 34, paragraph 3): “Monetary value of the property contributed as equity stake when incorporating a company shall be determined by agreement between the founders. When paying additional shares by non-monetary assets, the monetary valuation of property is made by board of directors (supervisory board) of a company according to article 77 hereof. Where payment for shares is made by non-monetary assets, an appraiser must be engaged to calculate the market value of such property, unless otherwise established by federal law. The value of property calculated by founders of a company and approved by the board of directors (supervisory board) of a company cannot exceed the value calculated by the appraiser”.
Since exclusive rights to the results of the intellectual activity are referred to intangible assets, one must also keep in mind the requirements to such rights, which are reflected in the Order of the Ministry of Finance of Russia of December, 27 2007 No. 153н on Approval of the Accounting Reles “Accounting of Intangible assets” (Accounting Rules 14/2007)”. Under paragraph 3 of the mentioned Order: “in order to accept an object for accounting as an intangible asset, the following conditions must be met at a time:
a) The object is capable of bringing economic benefits to the organization in the future, in particular, the object is intended for use in the manufacture of products, the performance of work or rendering of services, for the managerial needs of the organization or for use in activities aimed at achieving the goals of the non-profit organization (including in entrepreneurial activities carried out in accordance with the legislation of the Russian Federation);
b) The organization is authorized to receive economic benefits that this object can bring in the future (specifically, the organization has duly executed documents confirming the existence of the asset itself and the rights of the organization to the result of intellectual activity or visual identity, including patents, certificates, other protective documents, the agreement on the disposal of the exclusive right to the result of intellectual activity or visual identity, or documents confirming the transfer of exclusive rights;
c) The possibility of separating (identifying) the object from other assets;
d) The object is intended to be used for a long time, i.e., a useful life of more than 12 months or a normal operating cycle, if it exceeds 12 months;
e) The organization does not expect to sell the object within 12 months or the normal operating cycle, if it exceeds 12 months;
f) The actual (original) value of the object can be calculated reliably;
g) The object has no tangible physical form”.
Under paragraph 11 of the Order of the Ministry of Finance of Russia of December 27, 12.2007 No. 15н: “The actual (original) cost of an intangible asset contributed to the charter (share) capital (including in case of contribution of state or municipal property as a contribution to the charter capital of open joint stock companies), the authorized fund, a share fund of the organization, is its cash value, agreed by the founders (participants) of the organization, unless otherwise provided for by the legislation’ of the Russian Federation.
According to the Order of the Ministry of Economic Development of Russia of June 22, 2015 No. 385 on Approval of the Federal Standard of Appraisal “Appraisal of Intangible Assets and Intellectual Property (ФСО No. 11), hereinafter referred to as Order No. 385, there are three approaches to appraisal: 1) income approach; 2) cost approach; 3) comparative approach.
In accordance with paragraph 12 of Order No. 385: “The income approach involves discounting cash flows (future economic benefits) generated by the evaluated object, or capitalization of the annual net income (benefits, effects) from the evaluated object, including income from possible compensation to others for access to economic benefits from using the evaluated object”.
According to the current court practice (decision of the Arbitration Court of the Tyumen Region of August 3, 2020 in case No. A70-18226/2018): “the income approach to appraisal of intangible assets is based on the principle of expectation of income from their use and provides for the valuation by calculating the present value of expected income (benefits, effects) from the use of intangible assets in business. The income generated by the evaluated intangible asset may be obtained at the expense of reduced costs, operating costs, additional profit, excess income, etc., which in fact or hypothetically may be obtained by the right holder of the evaluated asset”.
In accordance with paragraph 16 of the Order of the Ministry of Economic Development of Russia of May 20, 2015 No. 297 on Approval of the Federal Appraisal Standard “General Concepts of Appraisal, Approaches and Requirements for Appraisal (ФСО No. 1, hereinafter referred to as Order No. 297: “The income approach is recommended for use when there is reliable information allowing to predict the future income that the object of appraisal is able to bring, as well as costs associated with the object of appraisal”.
According to the paragraph 18 of Order No. 297: “The cost approach is a set of methods for assessing the value of the object of appraisal based on determining the costs necessary to acquire, reproduce or replace the object of appraisal, taking into account wear and tear and obsolescence.
According to the paragraph 12 of Order No. 297: “Comparative approach is a set of appraisal methods based on obtaining the value of the appraised object by comparing the evaluated object with similar ones”.
In accordance with paragraph 45 of the 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" (hereinafter referred to as Resolution No. 10): “In the case of making an exclusive right, other intellectual right (for example, the right to obtain a patent) or a right under a licensing agreement subject to monetary appraisal as a contribution to the authorized (share) capital of an economic partnership or society (paragraph 1 of Article 66. 1 of the Civil Code of the Russian Federation), provided that such indication is mentioned in the decision on establishment (the decision on contribution of the property into the authorized (share) capital or the agreement on establishment of the partnership or the company), as well as provided that such decision contains all essential conditions, which shall be respectively included into the contract on alienation of an exclusive right or the license contract, no separate contract on alienation of an exclusive right or the license contract complying with the requirements of Part 4 of the Civil Code of the Russian Federation is concluded (clause 1 of Article 1233) is required. In this case, state registration of the alienation of the exclusive right to the intellectual activity result or visual identity subject to state registration, as well as the right to use such result or means may also be carried out by the request of the founder, provided that the decision on the incorporation of a partnership or a company (in the relevant part) is submitted.
Previously, according to the explanations of the Plenum of the Supreme Court of the Russian Federation and the Plenum of the Supreme Arbitration Court of the Russian Federation dated March 26, 2009 No. 5/29, in case of contributing exclusive rights to the charter capital, it was necessary to conclude a separate agreement on the disposal of an exclusive right or a license agreement in addition to mentioning it in the deed of incorporation.
Monetization on YouTube is a way for an author to generate income from creating and posting video content that meets the rules and restrictions set by the video-sharing platform. Over the period of YouTube’s existence, the rules have undergone various changes, mostly in terms of tightening them.
To monetize a channel, the user has to apply for participation in the Partner Program, then the video-sharing platform administration checks the channel for its compliance with all conditions set. The video hosting checks the content of the entire channel rather than specific video content: the main topic of the channel, the most viewed and the most recently added videos have been analyzed. Here’s what's taken into account: content; title; icon; description and tags.
Here are all the main topics that are not advertiser-friendly:
- Inappropriate language
- Adult content
- Shocking content
- Harmful or dangerous acts
- Hateful content
- Incendiary and demeaning
- Recreational drugs and drug-related content
- Tobacco-related content
- Firearms-related content
- Controversial issues and sensitive events
- Adult themes in family content
YouTube notes that some videos may include inappropriate content but are suitable for monetization. This applies to artistic videos, such as music videos that contain profanity, references to light drugs or sexual material that is not explicit. In such cases, the decision to monetize will depend on the context in which the inappropriate content appears.
More details about the criteria and examples of content types can be found at:
In addition to the above, content should not contain third-party intellectual property unless users have permission from the appropriate person or others in the video hosting channel owner.
Most advertisers use famous music tracks or movie clips in their commercials, but even the mention of any trademark must be confirmed by the right to do so.
If some user wants to run an ad on YouTube using intellectual property, he or she needs to prepare a proper documentation proving rights to use this content in the video. In case of violation of the rules, video hosting takes measures of varying degrees of severity. For example, YouTube can deprive the dishonest creator of the opportunity to monetize content or delete the account.
If there is copyrighted content in your uploaded video, its owner can submit a request through the Content ID system. Such requests are sent on behalf of copyright holders.
Owners of copyrighted content choose what Content ID system will do with videos that illegally use copyrighted content. User cannot monetize video as long as it has been copyrighted in the Content ID system. Instead, the copyright holder can earn revenue from the video. In other cases, for example, if user has used a piece of music in a video, he or she may be able to share the advertising revenue with the copyright holder.
If the channel owner tries to contest the Content ID application without a good reason, the rights holder may request that such a video be removed. In this situation, the channel owner receives a copyright infringement warning. Please note that even if the disputed video has received multiple Content ID requests or requests for removal, the owner will only receive one warning.
Notably, after the first warning, the channel owner will have to take a course at the Copyright School. In it, YouTube explains what copyright is and how it is protected on the video hosting site.
Copyrighted content can be used if the owner of the YouTube channel is guided by the principles of fair use or, accordingly, has a permission from the copyright holder.
YouTube, by analogy with Article 1274 of the Civil Code of the Russian Federation, identifies 4 criteria for fair use, as follows.
- The purpose and character of the use, including whether such use is of commercial nature or is for nonprofit educational purposes.
- The nature of the copyrighted work. Using material from primarily factual works is more likely to be fair than using purely fictional works.
- The amount and substantiality of the portion used in relation to the copyrighted work as a whole. Borrowing small bits of material from an original work is more likely to be considered fair use than borrowing large portions. However, even a small taking may weigh against fair use in some situations if it constitutes the “heart” of the work.
- The effect of the use upon the potential market for, or value of, the copyrighted work. Users that harm the copyright owner’s ability to profit from his or her original work are less likely to be fair uses. Courts have sometimes made an exception under this factor in cases involving parodies.
Some copyright holders, however, permit the use of their creative work with certain reservations when downloading content. If a video is added under a Creative Commons license, it means that in addition to the copyright holder, it can be used by other authors. In this case, the content is copyrighted and other authors may use the content in accordance with the terms of the license. By posting a video under the Creative Commons license, the author permits all YouTube users to reuse and modify it.
Video hosting YouTube actively implements updates to make the terms and conditions of video hosting for advertisers, authors and users of the site most comfortable. Be sure to keep track of changes in rules and policies, and observe copyrights to avoid blocking by YouTube administration.
Patent for inventions, utility models and designs confirms exclusive right which quite often is infringed by unfair manufacturers of goods. Sometimes such infringements can be unintentional: when the competitor is not aware that his business activities infringe somebody’s rights. In this case the right holder can send a letter of claim. The requirements of the letter of claim should be unquestioningly executed. But ignorance of right is no defense against any liability for this right infringement.
More often the unfair competitors infringe patent rights deliberately; they get profit from the sales of goods manufactured with the use of another person's intellectual property.
Today at the top of the list of legal cases there are a lot of cases related to protection and disputing of patents. Such cases are reviewed in Rospatent, courts, including Intellectual Property Court, the Federal Antimonopoly Service (FAS), the police. They can be related to:
- Disputing refusal to grant patent;
- Disputing the validity of patent;
- Illegal use of the registered patents;
- Identification of patent holder;
- Determination of the right of prior use;
- Struggle against counterfeit products;
- Other cases.
Besides the disputes concerning illegal use of the registered patents there are cases related to the competition and division of the market by the large manufacturers. As a rule by disputing existing patent and by prohibiting its use the large companies try to deprive competitor of leadership in the promising market.
There are five ad formats available on Instagram: ads with photos; ads with videos; ads with a gallery ring; a selection (the ad has a main photo and a carousel with the advertised items below it); and ads in Stories.
A large number of instructions on the Internet teach how to promote a personal brand or blog on Instagram and set up ads on Instagram.
Every day, millions of users post thousands of publications on the social network, interacting and leaving comments and liking. The content that users publish is diverse. On Instagram, there is a variety of photos, videos, collages and more. However, in the diversity presented, it is not uncommon to find the posts of the same type. Often, the posts are reposted, third-party photos are posted, and uploaded videos are ubiquitous with popular music.
However, Instagram strictly enforces users’ intellectual property rights in posts. Copyright infringement is one of the frequent reasons for social network blocking and other sanctions that have been imposed.
This includes not only the use of other people’s photos or videos, but also the public use of other companies’ brands.
According to the Instagram Community Guidelines, user should only post photos or videos that the user has personally taken and therefore owns the right to them, or the right to share: “As always, you own the content you post on Instagram. Remember to post authentic content, and don’t post anything you’ve copied or collected from the Internet that you don’t have the right to post. Overstepping these boundaries may result in deleted content, disabled accounts, or other restrictions.”
It is possible to violate someone’s copyright by posting to Instagram, even if you:
- Bought or downloaded the content (example: a song from iTunes);
- Recorded the content onto your own recording device (examples: a song playing in the background during a party, concert, sporting event, wedding, etc.);
- Gave credit to the copyright owner;
- Included a disclaimer that you didn’t intend to infringe copyright;
- Didn’t intend to profit from it;
- Modified the work or added your own original material to it;
- Found the content available on the internet;
- Saw that others posted the same content as well;
- Think that the use is a fair use .
In these cases, such publications are subject to sanctions by the Instagram administration. Sometimes, the publisher may also face legal action initiated by the affected author. Let’s look at some examples.
As of July 1, 2018, E.S. Terekhov., an individual entrepreneur, posted on his personal Instagram account (https://www.instagram.com/) a three-dimensional visualization of the design created with the help of 3ds Max software (link: https://www.instagram.com/p/Bkre4UR1S6O/?taken-by=terehoves). In September 2018, E.S. Terekhov became aware that the official website of the id32 interior design studio, https://www.id32.ru/, on its Portfolio page, in the article Project of an Apartment Building on Spartakovskaya Street
(https://www.id32.ru/%D0%BF%D0%BE%D1%80%D1%82%D1%84%D0%BE%D0%BB%D0B8%D0%BE/) posted 4 photos of three-dimensional renderings of work similar to the work created by the plaintiff.
According to the appeals court’s decision, 150,000 rubles was recovered in favor of the claimer as compensation (Decision of the Twentieth Arbitration Court of Appeal of August 1, 2019 No. 20AP-3035/2019 in case No. A09-12945/2018, upheld by decision of the Court for Intellectual Rights on December 2, 2019).
Masterskie Zlatousta LLC (hereinafter - the claimer) on 20.06.2019 appealed to the Arbitration Court of the Chelyabinsk region with a statement of claim to individual entrepreneur Kuznetsov Dmitry Valerievich (hereinafter - the defendant, Kuznetsov D.V.) with a claim for compensation for illegal use of copyright items in the amount of 400 000 rubles.
In accordance with the decision of the court of first instance, the claims were satisfied. D.V. Kuznetsov, an individual entrepreneur, was ordered to pay Masterskie Zlatousta LLC compensation for illegal use of copyrights in the amount of 400,000 rubles and 11,000 rubles for the payment of state duty.
The claimer submitted a protocol of notarial examination of the website https://instagram.com/goldenhousevip (series 74 AA N 4350733) (case record sheet 14, Bundle 1). The website https://instagram.com/goldenhousevip contains photographs of the images named above, as well as items of arts and crafts for sale, the copyrights to which belong to the claimer.
In order to identify the person who posted the photos on the resource above, as well as to collect and record evidence, on March 14, 2019, the claimer’s representative placed an order for arts and crafts items through the website https://instagram.com/goldenhousevip.
Subsequently, a manager who introduced himself as Dmitry Belov entered into correspondence with the claimer’s representative and sent official documents from firstname.lastname@example.org, as well as the Sales and Purchase Agreement, under which the seller was Kuznetsov D.V., photos and invoice No. 1010 dated March 18, 2019 (case record sheets 52-58, Bundle1).
According to Resolution of the 18th Arbitration Court of Appeal of June 22, 2020 in case No. A76-21548/2019, the judgement of the Arbitration Court of the Chelyabinsk region of March 3, 2020 in case No. A76-21548/2019 was reconsidered as follows. The paragraphs 1 and 2 of the operative part are set out in the following wording:
“The claim of the Masterskie Zlatousta LLC shall be satisfied in part. It was decided to recover from an individual entrepreneur Kuznetsov Dmitry Valerievich (OGRNIP 418745600921918) in favor of the Masterskie Zlatousta LLC (OGRN 1057402533484) compensation for illegal use of copyright items in the amount of 100 000 (One hundred thousand) rubles and the cost of a state duty in the amount of 2 750 (Two thousand seven hundred and fifty) rubles.
Thus, by posting to Instagram posts that fully or partially contain third-party copyrighted items, the Instagram user has to expect that this will violate someone else’s copyrights, and, accordingly, it is quite realistic to get penalized for such actions, as the above current court practice confirms.
To avoid such situations, user has to try to publish only the material of which he or she is the author!
By and large, it is difficult to apply paragraph 1 of Article 1274 concerning citation, because the Civil Code does not clearly regulate either the definition of citation or the quoting procedure.
Earlier, the Supreme Court of the Russian Federation in its ruling No. 78-G03-77 of December 5, 2003, stated that “Citing means including one or more passages from the work of one author in the work of another author. In particular, a graphic reproduction of a part of a work of fine art should be regarded as a citation, too. The latter include art works of painting, graphics, design etc.”
Case No. A40-142309/2015 clearly characterizes the litigation practice concerning the application of citation provisions to photographs. In its decision of October 27, 2015, the Arbitration Court of Moscow stated that “At the same time, the legislation does not contain any restrictions related to the type of copyright-protected items that can be quoted, and does not exclude citation of photographs. Citation is the inclusion of someone else's work (part of it) in another work. Since a photo may be included in another work, including a text work, while becoming an integral part of it, such inclusion may be recognized as citation”.
The court of first instance did not recognize the defendant's violation of the plaintiff's exclusive rights and dismissed a claim. The Ninth Arbitration Court of Appeal agreed with the arguments of the court of first instance and upheld the decision. In its ruling dated April 25, 2016, the court of cassation explained: “That is, citation is a literal repetition of any part of the author's text, not another graphic form (photo and video images). Thus, the use of photographs, fully expressed in graphic form, is not a citation, as they are actually used as illustrations to articles, which is allowed only in educational publications in accordance with the provisions of subparagraph 2 of paragraph 1 of Article 1274 of the Civil Code. In this case, the illustration is an additional material that enhances the reader's perception, but its absence does not affect the overall information component of the work, while the citation is an integral part of it. That is, citation cannot be removed from such a work without significant damage and distortion of meaning. In this regard, the Court of Cassation considers the provisions of subparagraph 1 of paragraph 1 of Article 1274 of the Civil Code not applicable to the dispute under consideration, since the disputed photographs, according to the circumstances of the case under claim, were used by the defendant as illustrations of the article itself”.
Having made the corresponding conclusions, the Court for Intellectual Property Rights overturned the decision of the court of first instance and remanded the case for a new trial.
At the new hearing, the Moscow Court of Arbitration satisfied the claims, recognizing the use of the disputed photos as illegal and not subject to common use in as a citation. The court of appeal also found that the use of photographs is illegal and not subject to common citation. However, as soon as the case reached the court of cassation again, the Court for Intellectual Property Rights in its ruling of June 5, 2017 made the opposite conclusions regarding the dispute in question: “It follows from the content of this rule that any works of science, literature and art protected by copyright, including photographic works, can be commonly used without the consent of the author and payment of remuneration subject to the presence of four conditions: the use of the work for information, scientific, educational or cultural purposes; citation with obligatory indication of the author; source of borrowing and to the extent justified by the purpose of citation. According to the above rules of law, a work may belong to the fields of science, literature and art regardless of its dignity and purpose, as well as the way it is expressed. That is, an article, other text work, a photograph, etc., is a way of expressing the work. Since a photograph may be included in another work, including a textual work, while becoming an integral part of it, such inclusion may be recognized as a citation”.
The court of cassation reversed the decisions of lower courts and refused to satisfy the claims, recognizing the use of photographic works as lawful in the order of citation.
Summarizing the case under consideration, the Supreme Court of the Russian Federation in a review of the litigation practice No. 3 (2017), approved by the Presidium of the Supreme Court of the Russian Federation on July 12, 2017 stated that “Any works of science, literature and art, including photographic works, can be commonly used without the consent of the author and payment of remuneration for citation purposes, subject to conditions established in the subparagraph 1 of paragraph 1, Article 1274 of the Civil Code of the Russian Federation.”
Finally, the issue was clarified in the Resolution of the Plenum of the Supreme Court of the Russian Federation on April 23, 2019 No. 10 On the application of the fourth part of the Civil Code of the Russian Federation, paragraph 98 of which states that “it is allowed to cite any work”.
This position regarding the conditions of citation lawfulness was supported and stated in the case No. A40-5830/2017. A common use without the author's consent and payment of remuneration is allowed with simultaneous compliance with 4 conditions: (1) the work must be used for information, scientific, educational or cultural purposes; (2) the author of a copyright-protected item is indicated; (3) the source of the original creation of the mind is indicated; (4) the use must be made to the extent justified by the purpose of the citation.
The above conditions, except for references to authors and sources of the original creation of the mind, are speculative in nature and are at the discretion of a particular court.
Let us take a look on the volume of citation, since this volume is not defined anywhere and in case when dispute is assessed by the enforcement agency, along with other circumstances of the case.
Case No. A40-69432/15, in turn, clearly characterizes the court practice concerning the determination of the volume of citations. Prospekt Publishing House LLC filed a lawsuit with the Arbitration Court of Moscow claiming recovery of compensation from the Moscow Institute of Technology for violation of exclusive rights to a copyright-protected item. In support of its position in the case, the plaintiff pointed out that the defendant had violated its exclusive rights, since the volume of authors is 35 copyright sheets and the part of the work posted on the defendant's website is 5.11 copyright sheets, which is 14.6% in relation to the volume of the whole work.
The plaintiff considered that such use of the work could not be considered as a citation, since this volume is not justified by the purpose of the citation. The Moscow Court of Arbitration rejected claim, stating that “Upon examination of the submitted evidence, and taking into account the circumstances of the case under consideration, the court, based on the criterion for determining the admissible amount of citation, established in paragraph 1 of Part 1 of Article 1274 of the Civil Code of the Russian Federation, namely, the purpose of citation, found the following. The use of the part of the text of the work History of Russia, 2nd Edition by the authors Shabelnikova N. A. and Derevyanko A.P. on the defendant's website as a the History training course content, was carried out to illustrate the statements of the author in the form of a citation in the original legally published work with an indication of the authors of the work and the source of original text, in the amount justified by the purposes of citation, which does not prevail over the volume of the main text, namely, for educational purposes and purposes of disclosure of the creative intent of the author to convey to students discussed in the training course the general idea of the authors of the work”.
The Ninth Arbitration Court of Appeal agreed with the arguments of the court of first instance and upheld the decision. The court of cassation, in the decision dated April 11, 2016 has made opposite conclusions concerning the considered dispute: “Taking into account the stated above, the courts should have determined whether the training course published on the Institute's website has its own text of the author, which includes excerpts (citations) from the disputable works, or the training course represents the consecutive copying of various parts (excerpts) of the works of other authors in the absence of its own text, any own statements of the author of the training course. However, in order to examine the question of the extent of citations and their appropriateness to the purpose of citations, it is necessary to determine whether the reproduction of excerpts of controversial works was their citation in the author's text or whether such reproduction is a copy of such excerpts. As it follows from the materials of the case, the courts have not established the circumstances on the basis of which it was possible to conclude that the volume of the text of the works of the Publishing House used by the Institute was acceptable as a citation, namely, the courts have not established the ratio of the volume of the cited text to the volume of the work of the Institute, the ratio of the volume of the cited text to the volume of the author's text, as well as whether the quoted text was used as an illustration, confirmation or refutation of the author's statements”.
In view of the above, the Ninth Arbitration Court of Appeal remanded the case for a new trial to the Arbitration Court of Moscow.
In a new trial, the Moscow Court of Arbitration Court satisfied plaintiff’s claim, stating that “Thus, the citation looks like one or more excerpts from the works of other authors, on the basis of which the citing author illustrates his theses, confirms his assumptions, criticizes or challenges the arguments with which he does not agree, which determines the difference between citing and copying. The volume of the plaintiff's work is 35 sheets of authors' work. The part of the work placed on the defendant's website is 5.11 sheets. One sheet of authors is an average of 16 pages of the book, so the defendant “cited” more than 80 pages of the textbook. Thus, the defendant illegally used 80 pages of the plaintiff's textbook as sections of its course of study, which cannot be considered a quotation, but a copy of the work”. The Court of Appeal upheld the decision of the court of first instance dated March 6, 2017.
Let us consider another example, which is the case No. A40-48760/2016. The lawsuit was motivated by the fact that the defendant, without the consent of the rights holder, illegally used the work Eat, Move, Sleep by Tom Rath, translated by the author Shalunova M.S., the rights to which belong to the plaintiff, through public disclosure, dissemination on the website www.smartreading.ru. The Moscow Court of Arbitration concluded that “since the summary is an excerpt of the main ideas of the original book, the Court concludes that it is possible to quote some excerpts from the original book.
The Ninth Arbitration Court of Appeal upheld this decision without bringing new arguments. Disagreeing with the judicial acts adopted in the case, the plaintiff appealed to the Court for Intellectual Property Rights with a cassation appeal. The Court for Intellectual Property Rights agreed with the arguments of the lower courts, noting that “the court of first instance, taking into account the conclusion by the expert Savina V.S. dated February 15, 2017 that the defendant's work coincided with 13% of the plaintiff's text, based its reasoning on the fact that when creating the disputed work, the defendant legally used the quotation of the plaintiff's literary work. Having reviewed the dismissal of the claim on these grounds, the Court for Intellectual Property Rights considers that the decision on the specified grounds corresponds to the circumstances established, the evidence available and the law”.
To summarize, it is worth noting that everything associated with copyright is a complex and nuanced relationship. The file of lawsuits is a clear example of different decisions made by different courts make decisions on similar situations.
If you decide to use other people's copyright-protected items without the consent of the authors, please carefully read Article 1274 of the Civil Code and make sure that you adhere to all conditions of common use of an item.
For lawyers specializing in intellectual property law, this Resolution is important because some decisions are not subject to the appeal procedure.
In accordance with paragraph 1 of Article 268 of the Arbitration Procedural Code of the Russian Federation: “when considering a case by way of appeal proceedings the arbitral tribunal reconsiders the case on the evidence available in the case andthe additional evidence submitted”. Pursuant to paragraph 2 of the above Article of the Arbitration Procedural Code of the Russian Federation: “additional evidence shall be accepted by the arbitration court of appeal if a person involved in the case justified the impossibility of submitting it to the court of first instance for reasons beyond its control, including in cases where the court of first instance had rejected a pretrial discovery claim, and the court finds these reasons to be valid.”
Thus, the possibility of appeal is of great importance for the parties to a judicial dispute, as it allows in some cases to re-examine the case.
In accordance with paragraph 2 of Article 273 of the Arbitration Procedural Code of the Russian Federation, legally effective decisions of the IPR Court, which were adopted by it as a court of first instance, may be appealed in cassation proceedings in whole or in part by persons participating in the case, as well as by other persons in cases stipulated by the Arbitration Procedural Code of the Russian Federation.
The IPR Court is simultaneously a cassation instance for all arbitration courts in cases of protection of intellectual rights, as well as a cassation instance in cases heard by it as a court of first instance.
In accordance with paragraph 1 of Article 286 of the Arbitration Procedural Code of the Russian Federation: “arbitration court of cassation reviews the legality of judicial decisions and resolutions adopted by the arbitration court of first and Board of Appeals, establishing the correctness of the application of substantive and procedural law norms when considering the case and adopting the appealed judicial act and on the basis of the arguments contained in the appeal and objections to the complaint, unless otherwise provided for hereof”.
Thus, under current Russian law, the court of cassation does not consider new evidence.
Paragraph 29 of the Resolution of the Plenum of the Supreme Court in question states: “When deciding on accepting additions, written explanations to a cassation appeal or a defense to it, the courts have to assume that the parties are entitled to give legal rationale for arguments and objections at all stages of the proceedings, if they are based on the evidence available in the case file and if such additions, explanations to a complaint contain neither new claims, nor new evidence, which, due to the Arbitration Procedural Code of the Russian Federation provisions, cannot be considered and examined.
At the same time, when receiving additions and written explanations to the cassation appeal the court shall verify the compliance of the person who sent them with paragraphs 3 and 4 of part 4 of Article 277 of the Arbitration Procedural Code of the Russian Federation. If these requirements are not complied with, the appeal court will not have to accept the submitted documents.”
Paragraph 30 of the Resolution of the Plenum of the Supreme Court under consideration additionally discloses: “New and (or) additional evidence relevant to the establishment of circumstances in the case shall not be accepted by the court of cassation instance.
If a person involved in a case has submitted additional evidence to the cassation instance court which was not submitted by it to the court of first or appellate instance, including an attachment to a contesting reply to the appeal, such evidence shall not be attached by the cassation instance court to the case materials and if necessary, shall be returned, of which the order shall be rendered. The appeals court shall be entitled to render such an order together with the order that the cassation appeal has been admitted to proceeding.
The arguments of the persons involved in the case regarding fact patterns, which were not previously referred to by such persons, which are not supported by available evidence in the case and were not established by the courts of the first and appellate instances, are not taken into account and cannot be the basis for the ruling of the court of cassation instance.
This position is already being implemented in court practice, including Decision of the IPR Court of July 27, 2020 No. C01-558/2020 in case No. A12-40395/2019; Decision of the Presidium of the IPR Court of November 13, 2020 No. C01-1139/2020 in case No. СИП-214/2020; Decision of the Presidium of the IPR Court of November 16, 2020 N C01-1246/2020 in case No. СИП-152/2020; Decision of the IPR Court of July 20, 2020 No. C01-1177/2019 in case No. A52-5093/2018, Decision of the IPR Court of July 29, 2020 N C01-994/2017 in case No. A56-73772/2016.
If a person involved in a case has submitted to the court of cassation instance evidence not accepted by the court of first or appellate instance in support of the argument that the court violated or misapplied the rules of procedural law, which led to the adoption of a wrong decision, ruling (expressed, for example, in refusal of the court to grant a request for the admission of such evidence or for a pretrial discovery), then if the court of cassation instance comes to the conclusion that there are Arbitration Procedural Code of the Russian Federation, the said evidence may not constitute grounds for it to take a judicial act on the merits of the dispute. In this case, the case shall be forwarded for a new examination to the court of appropriate instance.
The Supreme Court of the Russian Federation has drawn the attention of the courts of cassation instance to the fact that the cassation instance must take into account the arguments of applicants on the unreasonable refusal to accept evidence by courts of lower instances and on the justification of the appealed judicial act on inadmissible evidence.
This position is also reflected in the judgment of the Arbitration Court of the Far Eastern District dated August 7, 2020 No. F03-1636/2020 in case No. A51-17085/2019.
Thus, subject to the conditions stipulated in the paragraph above, it is allowed to attach new evidence in cassation instance.
Summarizing the above, in general, the provisions of the considered Resolution of the Plenum of the Supreme Court do not contain fundamental innovations or significant changes to the existing proceedings in courts of cassation instance.
The inclusion in the Customs Intellectual Property Register (hereinafter referred to as the CIPR) allows right holders, first of all, to defend themselves and direct consumers from the appearance of counterfeit products in the market, which are usually of poor quality; to identify the violators of the exclusive rights, to estimate the real volume of imported original products, to prevent the loss of profit and the decrease of the sales of the own products, respectively, and to strengthen the own positions in the market.
A large volume of non-original products in the market leads inevitably to the decrease of the investment attractiveness of Russia, the competitiveness of the Russian enterprises, as well as to the decrease of the number of jobs, what also affects the country’s image in the international arena.
The Federal Customs Service of Russia is designed to counteract the import of the counterfeit products into the territory of the Russian Federation. The greatest effectiveness in combating the import of the non-original products is achieved mainly, when the trademark is included in the Customs Intellectual Property Register.
5141 subject matters are included in the CIPR as of December 31, 2019. Although the subject matters’ number is growing, these indicators are too small compared to, for example, the number of the trademarks registered in Rospatent, where more than seven hundred thousand subject matters are registered as of the date of writing this article.
In 2019, the customs authorities of the Russian Federation identified 11.94 million units of the counterfeit products (the proceedings in respect of 4.28 million units are not completed as of 31.12.2019), while in the monetary terms, the prevented damage that could have been caused in connection with the introduction of the counterfeit products into civil circulation amounted to 8.1 billion roubles.
Thus, the Federal Customs Service has special powers in the field of the defense of the rights to the subject matters of intellectual property. The defense of the intellectual rights by the customs authorities is, without exaggeration, a main barrier at the border that prevents the free movement of the counterfeit products.
But currently, the matter of improving a procedure for entering the subject matters of intellectual property in the CIPR is acute again. Earlier, the relevant task has been to replace the obsolete Administrative Regulations of the Federal Customs Service for executing the state function of maintaining the Customs Intellectual Property Register, approved by Order of the Federal Customs Service of Russia of August 13, 2009 No. 1488 (hereinafter referred to as the obsolete Regulations) with a new one corresponding to the modern realities and trends of the informatization of the customs environment.
The specialists in the field of the customs law (for example, P.N. Afonin, E.S. Lebedeva) have proposed to make the following, in their opinion, key changes, such as:
- A possibility to file an application via electronic portals – the Personal Account of the participant of the international economic activity and the website of the State Services;
- Minimizing the number of the documents required to file the application for the inclusion of the subject matters of intellectual property due to obtaining the required documents and the information from the authorized agencies through the IEIS;
- Reducing the time period for making a decision from 1 month to 20 days, etc.
The new Regulations, approved by Order of the Federal Customs Service of Russia of January 28, 2019 No. 131, entered in force on July 8, 2019 (hereinafter referred to as the current Regulations). But instead of simplifying the process of the initial inclusion of the subject matter of intellectual property in the CIPR, they contain the paragraphs that are contrary to a sound logic and they have always raised questions. Let us examine, in my opinion, the most odious paragraph.
In accordance with Paragraph 19.3 of the current Regulations, the application for the inclusion of the subject matter of intellectual property in the Register must contain the information on the identified cases of the violation of the right holder’s rights. Thus, if the applicant fails to give documentary evidence of either the import of the counterfeit homogeneous products marked with a confusingly similar designation, or of the fact of parallel imports, then the Federal Customs Service of Russia will simply refuse to include them in the CIPR. And what, in this case, should be done by those right holders, who have just started manufacturing their products? Should they create such cases themselves? In any case, it also takes some time for this and requires the right holders’ money.
And if earlier the obsolete Regulations (Paragraph 95) has allowed to dispute the decision on the refusal in the inclusion in the CIPR according to a pre-judicial procedure in the Federal Customs Service of Russia, then in accordance with Paragraph 90 of the current Regulations, the pre-judicial (extra-judicial) appeal of the decisions and actions (inaction) of the Federal Customs Service of Russia, as well as of its officials, is not stipulated by Part 2 of Article 286 of the Federal Law, what is also not to the benefit of the right holders, because it increases significantly the time period for disputing the illegal decision of the Federal Customs Service of Russia.
Do you remember Solomon’s decision of the Constitutional Court of the Russian Federation of February 13, 2018, which became a turning point in the field of parallel imports? Then, the decision of the Constitutional Court of the Russian Federation imposed in fact a prohibition on unfair competition, by means of which foreign importers were receiving hundreds of billions of dollars from Russia.
In the case of the mandatory submission of the information on the identified cases of the violation of the right holder’s rights at the stage of filing the initial application for the inclusion in the CIPR, Limited Liability Company Trivium-XXI went all the way. And already Solomon’s decision was made by the Supreme Court of the Russian Federation on January 21, 2020 in case No. A40-241863/2018.
When resolving the dispute, the courts, while guided by the provisions of Articles 305, 306 of the Federal Law of November 27, 2010 No. 311-FZ “On the Customs Regulation in the Russian Federation” (hereinafter referred to as the Law on the Customs Regulation), by the obsolete Regulations, proceeded from the fact that the appeal to the customs authorities with the purpose of the inclusion of the trademark in the Customs Intellectual Property Register was possible, only if there was the reliable and sufficient information on the actual violation of the rights of the owner of the trade mark by other persons during the customs clearance of the product.
The courts upheld the position of the customs authorities that the applicant, when filing the application, had not provided evidence of the violation of his rights to the trademark, which should be obligatory attached, when filing the application for the inclusion of the information on the subject matters of intellectual property in the CIPR.
As the Judicial Chamber on Economic Disputes of the Supreme Court of the Russian Federation established in its decision of January 21, 2020 in case No. А40-241863/2018, the obsolete Regulations established for the right holders a declarative nature of the procedure regulated in the legislation for the purpose of suppressing promptly the facts of importing into the customs territory of the Russian Federation the products violating the rights of intellectual property, for example, marked with someone else’s trademark. In this regard, the interpretation of Paragraph 25 of the obsolete Regulations as prescribing to provide together with the application the additional information on the facts of the already committed violations of the right holder’s rights was incorrect, since it did not correspond to the purpose of the measures stipulated by Chapter 57 of Law No. 289-FZ. Otherwise, the actions of the customs authorities for maintaining the CIPR would be associated only with the facts of the already committed violations of the law, what, in turn, would make it meaningless to maintain the CIPR as the means of contributing to the identification and the prompt suppression of the violations of the law and as the means of the defense of the right holders’ rights.
The court session in the Arbitration Court of the City of Moscow in case No. A40-241863/2018 is scheduled for August 12, 2020. We shall continue to monitor the outcome of the dispute with the Federal Customs Service of Russia.
P.S. I wonder whether the current Administrative Regulations of the Federal Customs Service of Russia for executing the state function of maintaining the Customs Intellectual Property Register, approved by Order of the Federal Customs Service of Russia of January 28, 2019 No. 131, in connection with decision of the Supreme Court of the Russian Federation of January 21, 2020 in case No. A40-241863/2018, will be revised, or the customs will further have its own way?
We shall omit the fact that the percentage of the cases lost by the administrative authorities tends to zero, but even if there are positive decisions, the heads of the organizations for some reason make a decision not to recover the judicial costs from the administrative authorities.
Apparently, many heads do not want to spoil their relations with the administrative authorities, because the latter have much more opportunities to “answer back,” for example, during new checks.
The same refers to the disputes on the subject matters of intellectual property, which are a long list of different situations that business may face, ranging from disputing the decisions of Rospatent regarding the registration of the subject matters of intellectual property to, for example, the disputes on the violation of the exclusive right to a trademark.
However, there are many judicial decisions on the recovery of the judicial costs from the administrative authorities in reference systems and on the Internet, in the case with the subject matters of intellectual property – from the Federal Service for Intellectual Property (Rospatent). Not everyone is ready to “forgive” Rospatent his lost time and nerves, while proving his truth. Below, there are just some of them.
Thus, according to the decision of the Intellectual Property Court of December 10, 2014 in case No. SIP-161/2013, 986,541 (Nine hundred eighty-six thousand five hundred and forty-one) roubles 34 kopecks were recovered from the Federal Service for Intellectual Property (Rospatent) in favor of EuroImp, Limited Liability Company to pay the judicial costs.
According to the decision of the Arbitration Court of the City of Moscow of July 24, 2015 in case No. A40-82525/2011, 47,750 roubles 20 kopecks were recovered from Rospatent in favor of OKB RITM, CJSC.
Again, according to the decision of the Intellectual Property Court of October 19, 2016 in case No. SIP-670/2014, 307,218 (Three hundred seven thousand two hundred and eighteen) roubles 75 kopecks were recovered from Rospatent in favor of Delta, Limited Liability Company to cover the judicial costs.
According to the decision of the Intellectual Property Court of November 26, 2018 in case No. SIP-411/2017, already 880,353 (Eight hundred and eighty thousand three hundred and fifty-three) roubles 44 kopecks were recovered from the Federal Service for Intellectual Property (OGRN 1047730015200) in favor of Hlebprom, Open Joint Stock Company (OGRN 1027402543728) to pay the judicial costs.
However, not everything is so transparent and not in every dispute, where Rospatent is a party to the case, it is possible to apply subsequently to the court and to recover the costs incurred in connection with its consideration in the court.
On December 26, 2015, the Presidium of the Intellectual Property Court approved by its resolution No. SP-23/3 the Certificate on some issues of the payment of the state fee, when applying to the court and paying the judicial costs in the cases considered in the civil and administrative proceedings.
The most controversial issues on the payment in favour of the parties involved in the case, the costs incurred in connection with the consideration of the case in court were analyzed in the Certificate.
The Intellectual Property Court, in particular with regard to the recovery of the judicial costs from Rospatent, notes:
1. In the disputes on appealing against the decisions of Rospatent, the court shall be entitled to refuse to pay the judicial costs in favour of the filer of the statement of claim, who has successfully appealed against the decision of Rospatent, if the court has made the decision being positive for the filer on the basis of the documents not disclosed at the stage of considering the objection by Rospatent (while the filer has not had the objective obstacles to the timely receipt of relevant evidence and its submission to Rospatent);
1.1. This rule shall not be applicable to the right holder, whose trademark has been unlawfully cancelled by Rospatent on the initiative of the third party;
1.2. Another exception to this rule is the cancellation of the Rospatent’s decision in favor of the Plaintiff on the basis of establishing the fact of the abuse of the right on the part of the right holder;
1.3. If the fact of the unfair competition on the part of the right holder is established, the judicial costs of the party, who has appealed against the decision of Rospatent on granting the legal protection to the trademark, shall not be paid by Rospatent.
Developing the above thought, the Presidium of the Intellectual Property Court approved by its resolution of January 17, 2020 No. SP-21/1 the Review of the practice of the Intellectual Property Court on the issues for distributing the judicial costs in the cases falling within the competence of the Intellectual Property Court as the first-instance court.
The Review further notes:
1. In the case of the refusal to recover from Rospatent the judicial costs recognized as actually incurred and reasonable, the judicial costs shall be distributed on the basis of the actual procedural behavior of the parties involved in the case, but they shall not be laid upon the winning party. At the same time, the court shall determine independently the proportion of such costs;
2. When considering the issue on the recovery of the judicial costs, at first, it should be established in what part the judicial costs claimed for the recovery and actually incurred are reasonable, and then in what part the judicial costs incurred by the plaintiff (filer) are due to the actual procedural behavior of the particular party;
3. Unless otherwise is proved, it shall be assumed that the judicial costs regarding each of the asserted claims are incurred equally. Such costs shall be divided by the number of the asserted claims and they shall be paid separately for each of the claims based on satisfaction, partial satisfaction, or refusal to satisfy each of the claims.
The practice of paying the judicial costs is very diverse and it largely depends on how much the applicant will be able to justify the sums claimed for the recovery. For the recovery of the judicial costs to the maximum, it is advised to describe fully and in detail the complexity of the case and the volume of the work performed. One should not rely on the payment of the judicial costs in full; the court will find obligatory a way to reduce them. This happens in the majority of the cases. But it is still worth trying to recover them, it will not be superfluous.
Summing up the above, it can be asserted that the recovery of the costs incurred in connection with the consideration of the case in court form the opponent is becoming less and less similar to the “secondary” stage of the proceedings and it is increasingly acquiring the features of the full scale proceedings, where an important role is the analysis of the actual circumstances of the case and their legal qualification.