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Roman Larshin

Senior lawyer

Roman graduated from the Moscow University named S. U. Vitte (MIAMP) degree in law.


He has passed the following courses:

  • "Civil law: actual problems and analysis of judicial practice" in the "Russian Academy of national economy and public administration under the President of the Russian Federation".
  • "Organization of work of state civil servants of the Federal courts, responsible for maintaining confidential paperwork" in "Russian state University of justice"
  • Federal education program "Service 3D: Dialogue, Trust, the Income of" NPP "Garant-SERVIS"
  • The basic course of Communication in "Rusfinance Bank" LLC.

Roman has worked with Zuykov and partners LLC since 2017 and specializes in:


Experience


  • 2010–2013 — Court clerk in Moscow Arbitration Court, dealing with deals corresponding to the intellectual property issues.
  • 2013–2017 — Court clerk, assistant to the judge of the Court for intellectual property rights.


Achievements


  • Roman rewarded with the Moscow Arbitration Court Gratitude, the Court for intellectual property rights Gratitude and the Trade Union organization of the Court for intellectual property rights Diploma;
  • In February 2017 he participated in the national contest "Model of the Court on intellectual rights" held within the V jubilee IP Forum ("Legal protection of intellectual property: theory and practice") as the presiding judge.


Articles

Preclusive Effect in Disputes Over Intellectual Property
This paper is a reflection on issues related to the exemption from proving in a civil action the circumstances established by a legally effective judgment on a previously considered case, using the example of various court cases on disputes about the protection of intellectual property rights.

Prejudice is a beautiful word, isn’t it? This legal term derives from the Latin praejudicialis which means relating to a previous judicial decision or, simply put, standing by what’s decided.

The literal translation from Latin, however, does not clarify what “standing to a prior court decision” means, so I refer the reader to the explanation by the Constitutional Court of the Russian Federation in its Decision No. 30-П of December 21, 2011 on the ruling concerning the complaint submitted by V.D. Vlasenko and E.A. Vlasenko and examining the constitutionality of Article 90 of the Code of Criminal Procedure of the Russian Federation (hereinafter the Code of Criminal Procedure).

Based on the fourth and fifth paragraphs of clause 3.1 of the above decision, the general rules of distribution of the burden of proof in all types of legal proceedings provide for exemption from proving the circumstances related to the subject of proof, where the procedural legislation includes circumstances established by a judgment that took legal effect in an earlier case as provided for in Article 90 of the Code of Criminal Procedure, Article 61 of the Code of Civil Procedure of the Russian Federation. 

This ground for exemption from proving manifests prejudicialness as a property of the legal force of judicial decisions, the binding nature and enforceability of which as acts of the judiciary is due to its prerogatives. Recognition of the prejudicial value of a judicial decision, being aimed at ensuring stability and binding nature of a judicial decision, excluding possible conflict of judicial acts, implies that the facts established by the court in one case, until their refutation are accepted by another court in another case in the same or another type of proceedings, if they are relevant to resolving the case. Thus, the prejudicial nature serves as a means of maintaining consistency of judicial acts and ensures the principle of legal certainty.

The Supreme Court of the Russian Federation described in very beautiful legal language what prejudice is and what it serves for in judicial disputes. I am afraid, however, that for a non-lawyer, these explanations will be difficult to grasp, so I will try to formulate in simple words in one sentence what will be clear to all readers.

Prejudice are specific facts established by the court, enshrined in the reasoning and (or) the operative part of the enforceable court decision, not subject to proving and when the court considers another case involving the same persons. The legislator refers these circumstances to the grounds exempt from proving.

At the same time, it should be taken into account and remembered that the factual narrative when considering another case, rather than procedurally relevant conclusions, legal assessments of the court in an earlier case, have preclusive effect, since the assessment of evidence with the presentation of the relevant conclusions in the judicial act is the competence of the court considering the case. That follows from the principle of judicial independence and is one of the manifestations of discretionary powers of the court of appropriate judicial instance, as required by the law.

In the case of consideration of issues of preclusive effect in relation to disputes over intellectual property protection, the parties often resort to such a legal mechanism in proving the existence of an exclusive right, the fact of illegal use of the intellectual property and other circumstances. 

For instance, the right holder in the case of claiming the compensation for the illegal use of the marks in proving the fact of the illegal use of the visual identity may use the court decision on the case by which the infringer was brought to administrative responsibility provided by the part 2 of the Article 14.10 of the Administrative Offences Code of the Russian Federation for illegal use of the marks.

Asimilar situation was in the case No. A46-3137/2019. The plaintiff filed claims for compensation for infringement of exclusive rights to trademarks under international registrations, citing the decision of the Commercial Court of the Omsk Region from September 13, 2017 in case No. A46-14005/17 as evidence of illegal use of trademarks. As a result, the right holder’s claim was partially granted. The courts considering the dispute took into account that the fact of the defendant’s violation of the plaintiff’s exclusive rights to its trademarks was established by enforceable judicial acts with preclusive effect for the present case, which per se excludes the possibility of releasing the defendant from pecuniary liability measures in the form of compensation.

Let us consider this issue using the example of disputes about early termination of legal protection of trademarks due to their non-use. Within the framework of the case No. СИП-889/2020 on the claim of sole proprietor A.V. Ibatullin against Bytovik LLC, the question of early termination of legal protection of the trademark under the certificate of the Russian Federation No. 198937 was considered. The IPR Court in its decision dated February 19, 2021, case No. СИП-439/2019 supposedly acknowledged the lack of the plaintiff’s interest in early termination of legal protection of the  trademark. This was an independent ground for dismissal of the claim.

Another interesting, although rare, case is the use in proving the circumstances established during the consideration of a case on the issue of recognizing the actions of a person as an act of unfair competition. But in this case, what is going to be taken into account is not the circumstances established by the commission of the competition agency and its reflection in its decision, but the facts set forth in the reasoning of the court decision, by which the said decision of the competition agency will be upheld in the framework of judicial control.  

A similar narrative is reflected in the judgment of the Court for Intellectual Property Rights (hereinafter the IPR Court) of March 27, 2014 in case No. A34-3036/2013. In that case, the decision of the Kurgan Regional Department of the Federal Antimonopoly Service on bringing to responsibility under part 2 Article 14.33 of the Code of Administrative Offences of the Russian Federation for unfair competition was challenged. Unfair competition was expressed in the commercialization of goods with illegal use of the results of intellectual activity and similar visual identity of a legal entity.

We would like to pay special attention to a detail that is worth knowing. As indicated above, according to the general principle, the circumstances established by an enforceable judicial act on an earlier case, are not proven again when the court considers another case involving the same persons. In this regard, it can be assumed that if a particular individual or legal entity has not personally participated in any dispute, it cannot be subject to the principle of prejudicialness.  

However, it is not that simple or straightforward. Paragraph 2 of the Resolution of the Russian Federation Supreme Arbitration Court Plenum No. 57 dated July 23, 2009 on some procedural issues in cases related to nonfulfillment or improper fulfillment of contractual obligations provides for as follows. Regardless of the composition of parties to a case over recovery of a debt arising from the contract and regardless of the composition of parties to a case where the contract is disputed, the court takes into account the circumstances which were established in a case considered earlier. In the event that the court hearing the second case comes to a different conclusion, it must indicate the relevant reasons.

This legal approach is applied by the courts not only in disputes relating to non-performance of obligations or contestation of contracts, since the mandatory consideration of judicial acts in other cases is based not on the rules on prejudice (Article 69 of the Code of Commercial Procedure of the Russian Federation), which apply only to disputes between the same parties, but on general principles of procedural law regarding the binding nature of judicial acts (res judicata). Thus, in accordance with paragraphs 1 and 2 of Article 16 of the Code of Commercial Procedure of the Russian Federation, an effective decision of a commercial court is binding on government agencies, local authorities, other bodies, organizations, officials and citizens, and is enforceable across Russia.

Therefore, I would also like to recommend to all litigants who try to criticize the need for the court considering the dispute to take into account the judicial act referred to by the opponents on formal grounds (this does not concern us, as we were not involved in that case), to take all necessary efforts to refute the circumstances established in the previously considered case by presenting relevant evidence. 

To summarize, I would like to note that the preclusive effect is a very convenient and useful tool not only in intellectual property disputes but also in other categories of disputes. In addition to ensuring stability and binding nature of a court decision, exclusion of possible conflict of judicial acts, the preclusive effect is aimed at ensuring procedural economy, which is also of great importance given the huge number of cases that are under consideration by courts. 

Domain Name Dispute Resolution: Evolution and Evidence
In an era of rapid digitalization of all industries, online commerce became part of our lives. This has led to new ways of using intellectual property. Before proceeding to the main topic of the article, let us start with the definition of what a domain name is, and the background of domain disputes.

According to the definition in the Rules of Registration of Domain Names in domains.RU and Russian Federation, approved by the decision of the Coordination Center of National Domain in the Internet of October 05, 2011 No. 2011-18/81 (hereinafter the Rules), a domain name is an identification for network addressing, which uses a system of domain names (DNS[1]). In simple terms, a domain name, or as it is also called a domain, is the address of a website. A domain name allows users to search the Internet, among millions of other websites, to find exactly what they search for.

As the Presidium of Supreme Arbitration Court stressed in its Ruling of January 16, 2001 No. 1192/00 in case No. A40-25314/99-15-271, the main function of the domain name is the transformation of IP addresses (Internet protocol), expressed in certain numbers into a domain name to facilitate the search and identification of the owner of an information resource. Current commercial practice demonstrates that when choosing domain names for the Internet information resource owners stop at the most simple and logical names (word, group of letters, etc.), which are usually associated with consumers directly to a particular economic participant or its activities[2].

If we look at the reflection of evolution of domain dispute resolution in the Russian legislation, it would be as follows. In the wording of the Law of the Russian Federation of September 23, 1992 No. 3520-I On Trademarks, Service Marks and the Appellations of the Origin of Goods (hereinafter the Law on Trademarks, Law), which was effective until December 26, 2002 (hereinafter the Law on Trademarks), the exclusive right to the trademark includes the right to use and dispose of the mark, as well as to prohibit its use by others (paragraph 1 of Article 4).

In this case, under paragraph 2 of Article 4 of the said law, an unauthorized manufacture, use, import, offer for sale, sale, or any other manner of commercialization or storage for this purpose of the trademark or goods having that mark, or designation which is confusingly similar to homogeneous goods shall be deemed to be the infringement of the rights of the trademark owner[3].

Thus, if we literally interpret the above rule of law, the violation of the exclusive right to the trademark was only the cases of commercialization of goods having a trademark or a confusingly similar trademark, without the permission of the right holder.

The legal approach relating to the attribution of the use of a trademark in domain names has been legislated relatively recently and this is due, as it seems, to the moment of the appearance of the Internet in the lives of ordinary citizens, consumers of goods and services who began to use the tools of e-commerce.

It appears that the turning point that marked the need to amend the Law on Trademarks, was the already mentioned above lawsuit filed by the Eastman Kodak Company corporation to Grundul A.V., a non-incorporated entrepreneur to prohibit the use of the Kodak trademark, registered under the name of the claimer, in the domain name of the page defendant in the World Wide Web and to publish the judgment to restore the business reputation of the injured.

Thus, the Presidium of the Supreme Arbitration Court of the Russian Federation, abolishing the decision adopted on August 30, 1999, the appeal decision of October 28, 1999 by the Moscow Arbitration Court on case No. A40-25314/99-15-271 and the decision of the Federal Arbitration Court of the Moscow District of January 17, 2000 on the same case and sending the case for new trial in the court of first instance, in its decision dated January 16, 2001 No. 1192/00 pointed out the following. The arbitration courts, denying the right holder in the protection of exclusive rights with reference to the lack of legislative regulation of relationship with regard to the name of domains on the Internet, and that the domain name is neither a product nor a service, so it is not subject to regulation by the Law on Trademarks, not taken into account that such a legal approach contrary to the rules of said Law, as well as Article 10.bis Paris Convention for the Protection of Industrial Property.

At the same time, the highest court noted that the absence of a direct indication in the said rules of the Law that the use of someone else’s trademark in a domain name is an infringement of the rights of the trademark owner, does not prevent the court from recognizing such actions of an entrepreneur as an offense.

In the next version of the Law on Trademarks, adopted on December 27, 2002 the legislature establishment, taking into account the ongoing changes occurring in social relations, as well as the fact that the legal regulation contained in the original version of the Law is no longer sufficient, amended Article 4 by adding a second paragraph as follows.

“The commercial use of a trademark or a confusingly similar sign on the territory of the Russian Federation in respect of goods for which this trademark has been registered, or similar goods shall be regarded as an infringement of rights of the right holder (illegal use of a trademark), including the use of the trademark or a confusingly similar sign:

- on the goods, labels, packages, which are manufactured, offered for sale, sold, displayed at exhibitions and fairs or used commercially on the territory of the Russian Federation, or stored and (or) transported with this purpose, or imported into the territory of the Russian Federation; - while performing jobs, providing services;

- on documents introducing goods commercially;

- while offering goods for sale;

in the Internet, particularly in the domain names and in other forms of addressing.

The goods, labels, packages of these goods on which the trademark or a confusingly similar sign are used shall be regarded as counterfeits”.

Thus, in order to avoid earlier ambiguous interpretations of this rule, the legislator has specified ways of using a trademark, which are recognized as a violation of the exclusive right of the right holder (illegal use of a trademark), if such use is committed without the permission of the right holder.

At the same time, in the current legislation, namely in the part four of the Civil Code of the Russian Federation (hereinafter - the Civil Code), the provision that refers the use of a trademark in a domain name to the exclusive right of the owner of the trademark has remained almost unchanged and is reflected in subparagraph 5 of paragraph 2 of Article 1484 of the Civil Code.

Paragraph 3 of Article 1484 of the Civil Code also states that no one has the right to use, without the permission of the right holder, similar to its trademark symbols in respect of goods, for individualization of which the trademark is registered, or similar goods, if such use would create the possibility of confusion[4].

Turning to the issue of evidence in domain disputes, we can say the following.

According to the legal position set out in paragraph 55 of the Resolution of the Plenum of the Supreme Court of the Russian Federation of April 23, 2019 No. 10 On Application of Part Four of the Civil Code of the Russian Federation (hereinafter the Resolution No. 10), “When considering cases on protection of infringed intellectual property rights, courts should take into account that the law does not establish a list of admissible evidence, on the basis of which the fact of violation is established (Article 55 of the Civil Procedure Code, Article 64 of the Arbitration Procedural Code of the Russian Federation). Therefore, by virtue of Articles 55 and 60 of the Civil Procedure Code, Articles 64 and 68 of the APC RF the court has the right to accept any source of evidence provided for by the procedural law including those obtained using information and telecommunications networks, in particular the Internet[5].

Meanwhile, the totality of the above-mentioned rules of law establishes a mandatory range of circumstances to be proved in disputes on the protection of the exclusive right to a trademark. In particular, to recognize the use of a designation by a person (not the right holder) in violation of the exclusive right to a trademark, the right holder of such a trademark must prove the identity or confusing similarity of the used designation with the designation protected as a trademark, as well as the likelihood of confusion of the two designations in the eyes of consumers (paragraph 3 of Article 1484 of the Civil Code). At that, the likelihood of confusion of designations is a necessary element of an infringement of an exclusive right.

As it is known, from the paragraph 5 of paragraph 162 of Resolution No. 10, “the establishment of similarity is carried out by the court by comparing the trademark and designation (including graphic, sound and semantic criteria), taking into account the evidence presented by the parties in its judicial activism. The court shall take into account in respect of which elements there is a similarity, i.e.., strong or weak elements of the trademark and designation. Similarity of only unprotected elements shall not be taken into account.

In this case, special knowledge is not required to establish the degree of similarity of designations and homogeneity of goods. This means that in order to prove these circumstances within a domain dispute, there is no need to provide an opinion of a patent attorney that the designation used in the domain name and the trademark are similar, and that the goods or services offered on the website to which the domain name refers, are similar to the goods or services for which the trademark is registered.

Meanwhile, the person seeking protection of an infringed right must prove to the court that such use occurs. Such evidence may serve, including made and certified by persons involved in the case, printouts of materials posted on information and telecommunications network (screenshot), with an indication of the address of the webpage from which the printout was taken, as well as the exact time of its receipt (sub-paragraph 2 of paragraph 55 of Resolution No.10)

In addition, according to the explanation given in sub-paragraph 6 of paragraph 55 of Resolution No.10 states that the evidence necessary for the case may be provided by a notary, if there are reasons to believe that the presentation of evidence later becomes impossible or difficult (Articles 102, 103 of the Fundamentals of the Legislation of the Russian Federation on Notarial System of February 11, 1993 No. 4462-1), including through the certification of website content as of a certain date.

Thus, there are two ways to fix the fact of using designation similar to a trademark in a domain name: by printing pages from the website to which the domain name refers, or by contacting a notary, who will prepare a protocol notarial examination of the website.

At the same time, there may be a reasonable question: who will be the defendant in a domain name dispute?

In accordance with sub-paragraph 3 of paragraph 78 of Resolution 10, the owner of the website is the administrator of the domain name that refers to the corresponding website, unless otherwise follows from the circumstances of the case and the evidence presented, in particular from the information posted on the website (paragraph 2 of Article 10 of the Law on Information).

As defined in paragraph 1.1., Administrator is a user in whose name a domain name is registered in the Registry. In this case, paragraph 159 of Resolution No. 10 explains that “the claim to suppress actions that infringe rights to the trademark, manifested in the illegal use of a domain name (subparagraph 2 of paragraph 1 of Article 1252, subparagraph 5 of paragraph 2 of Article 1484 of the Civil Code), may be submitted to the administrator of the domain name.

Information on the domain administrator may be obtained from public sources, including through the WHOIS online service or from the domain name registrar responsible for domain name registration and maintaining the registry of administrators.

Meanwhile, the administrators of domain names are often individuals, who’s details have been protected by the Federal Law of July 27, 2006 No. 152-FZ On Personal Data and not published in public sources. The Registrar may also refuse to provide such information with reference to this law.

In this case, the data on the domain name administrator may be requested by the court from the domain name registrar at the request of the claimer as established in the Article 57 of the Code of Civil Procedure of the Russian Federation and Article 66 of the Arbitration Procedure Code of the Russian Federation.

In my experience, the above list of evidence is sufficient to meet the requirements of the court to stop the illegal use of a trademark in a domain name.

Hopefully, the analysis carried out in this article has been useful to the reader.

 

[1] Rules of Registration of Domain Names in domains.RU and Russian Federation, approved by the decision of the Coordination Center of National Domain in the Internet of October 05, 2011 No. 2011-18/81

[2] Ruling of the Presidium of the Supreme Arbitration Court of the Russian Federation of January 16, 2001 No. 1192/00 in case No. A40-25314/99-15-271

[3] Law of the Russian Federation of September 23, 1992 No. 3520-I On Trademarks, Service Marks and the Appellations of the Origin of Goods, effective until December 26, 2002

[4] Civil Code of the Russian Federation (Part Four) of 18.12.2006 № 230-FZ (ed. of July 26, 2019, as amended on July 24, 2020)

[5] 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


Trademarks and Movies
As we are all well aware, every entrepreneur, regardless of what he or she does, whether he or she sells coffee and hot dogs or owns newspapers, factories and steamships wants to individualize their goods and services so that consumers can distinguish them from the goods and services of other entrepreneurs, so many entrepreneurs use the right provided by law to register trademarks. Trademarks surround us everywhere in the subway train, in the mall, in the wallet, on billboards, and movies are no exception.

If we are not talking about a fantasy movie or a movie about the Middle Ages, but, for example, it would be a romantic comedy, the plot develops in our time, the director, to bring the plot of the movie closer to reality and to convey the spirit of the time in question, is likely to use as a movie set and acting props things and objects from our everyday lives, which often have trademarks. So, for example, according to the screenwriter’s intention, the character prefers a certain brand of clothing, a car or uses iPhone by Apple. And when the intention of the script is realized in the movie, we see the trademarks as we watch it.


I always wondered why some movies or TV series use computer graphics to blur the trademarks that appear in the frame. 

The first thing that comes to mind is the unwillingness of the moviemakers to advertise someone else’s brand for free.


The second is the risk of being prosecuted themselves for illegal use of a trademark in the absence of permission from the copyright holder.

Thirdly, in my opinion, what could push the moviemakers to the need to blur the trademark is a possible damage to the business reputation of the right holder of the trademark, if the movie presents the goods or services of the right holder with a negative connotation.

Regarding the first assumption, I believe that there is no point in speaking out, because this is a business issue, not the legality or illegality of the use of trademarks. But when it comes to the second and third assumptions, they just relate to the right to use trademarks and the associated business reputation of the right holder, so I believe it is necessary to consider these issues from the legal perspective.


Based on the legal position set out in paragraph 157 of the Resolution of the Plenum of the Supreme Court of the Russian Federation dated April 23, 2019 No. 10 On application of Part Four of the Civil Code of the Russian Federation (hereinafter the Resolution No. 10)1, taking into account paragraph 1 of Article 1477 and Article 1484 of the Civil Code of the Russian Federation, the use of a trademark is its use for the purposes of individualization of goods and services of legal entities or individual entrepreneurs.


The main purpose of a trademark is to enable a potential consumer to distinguish services and goods provided or delivered by one person from similar services and goods by others.


Whereupon, by virtue of paragraph 3 of Article 1484 of the Civil Code of the Russian Federation (hereinafter the Civil Code)2, “Nobody has the right without a right holder’s permission to use designations which are similar to his, her or its trademark for goods for the individualization of which the trademark has been registered or homogeneous goods if such use might result in confusion”, as provided for in paragraph 3 of Article 1484 of the Civil Code.

At the same time, in order to deem actions on the use of a trademark as illegal, it is necessary to prove its use in one of the ways specified in paragraph 2 of Article 1484 of the Civil Code, covered by the exclusive right to the trademark, for individualization of goods or services, similar to the goods or services in respect of which the trademark is registered.


Analyzing the judicial practice on the use of trademarks in movies, I found, as it seems to me, a rather interesting example, which is reflected within the case No. A40-64050/20193.


For example, the Federal State Enterprise “SoyuzPlodoImport” filed a lawsuit with the Arbitration Court of Moscow with a statement against the Paradise Productions Film Company Limited Liability Company for compensation in the amount of 100 000 rubles for illegal use of trademarks, (Russian Federation Certificates No.38388, No.262682, No.263741, No.263016, No.275940 and No.275045), including the well-known trademark “Stolichnaya” (Certificate No. 53), as well as trademarks containing the verbal element “Stoli” (Russian Federation Certificates No. 561228, No. 606413).

As it follows from the circumstances of the case and established by the courts, the basis for the right holder’s claim was the use by the defendant without the claimer’s permission in the distribution of the Vzryvnaya Blondinka movie, including a well-known trademark, by demonstrating alcoholic products, namely vodka Stolichnaya, individualized designation, similar to the extent of confusion as the trademarks. According to the claimer, alcoholic beverages, i.e., vodka Stolichnaya are used in the movie as a separate plot-forming (advertised) object and cannot be perceived as a movie prop. In this regard, according to the rights holder, is implemented hidden advertising of vodka Stolichnaya, thereby forming and maintaining the interest of the viewer to the object of advertising, as well as to the right holder of trademarks and a well-known trademark. Such actions of the defendant, according to the right holder, are a violation of the claimer’s exclusive rights to its trademarks.


Meanwhile, the court of first instance dismissed the claims, and the appellate courts upheld the decision of the court of first instance.

Rejecting the claims, the courts came to the following conclusion: “According to Article 3 of Federal Law No. 38-FZ of March 13, 2006 On Advertising (hereinafter the Law on Advertising), the advertising is information, distributed by any method in any form and by any means, addressed to the general public and aimed at drawing attention to the object of advertising, arousing or maintaining interest to it and its promotion in the market.

According to paragraph 9 of part 2 of Article 2 of the Law On Advertising, the mentioned Law does not cover mentions of goods, means of their individualization, manufacturer or seller of goods, which are organically integrated into the works of science, literature or art and by themselves are not advertising information.”


Thus, the courts concluded that simply referring to the claimer’s trademark in the defendant’s work does not constitute trademark use, since the determining factor for deciding whether the defendant uses or does not use the trademark is the identification of the field of activity of the claimer and the defendant. If the defendant does not use the trademark to commercialize goods similar to the goods for which legal protection is granted with the trademark, there is no likelihood of confusion, and therefore such actions are not a violation of the exclusive right to the trademark.


Meanwhile, based on the plot of the movie, the trademark may be presented with a negative connotation, e.g., the car of a certain brand will constantly break down, which will be the kind of adverse publicity, i.e., the action designed not to raise but to reduce interest, or to discredit trademarks, and respectively their right holders and the goods and services offered by them. In this case, consumers can form an unfavorable or negative association with the brand, resulting in damage to the business and reputation of the trademark owner.


Most often, negative associations of consumers to a trademark can be formed when a trademark or its image is placed in the context of obscenity or illegal activities.


In certain cases, it seems to me, it is possible to talk about the dissemination of defamatory information. So, according to the explanations of the paragraph 7 of the Resolution of the Plenum of the Supreme Court of the Russian Federation dated February 24, 2005 No. 3 On Judicial Practice in Cases concerning Protection of Honor and Dignity of Citizens as Well as Business Reputation of Citizens and Legal Entities4, “defamatory information is information containing allegations of a violation by a citizen or a legal entity of current legislation, the commission of an unfair act, wrongful or unethical behavior in personal, public or political life, bad faith in carrying out industrial and business activities, violation of business ethics or customs of business turnover, which belittle the honor and dignity of a citizen or the business reputation of a citizen or legal entity”


At the same time, in cases of this category the following should be taken into account. The circumstances relevant to the case according to Article 152 of the Civil Code of the Russian Federation, which the judge has to determine when accepting the statement of claim and preparing the case for the court proceedings, as well as in the course of the court proceedings, are: the fact that the defendant disseminated information about the claimer, the defamatory nature of such information and the lack of correspondence to its reality. In the absence of at least one of these circumstances, the claim cannot be satisfied by the court.


A rather famous example when a rights holder considered the use of its trademark in a movie unworthy of the company’s reputation was the use of a BMW car one-reel, so BMW Group Russia planned to use the movie to advertise the brand and was ready to provide cars for the shooting. But when the movie director decided to full-length criminal movie, the BMW did not want to take part in shooting and refused to support the project.

Sergey Chliyants, the producer of the Boomer, after filming the picture said that: “The image of the BMW car did not allow the BMW Russian representative office to participate in our project. Obviously, the gangster nature of the movie was meant. When we asked them at least to fix our car, which was badly damaged during filming (it was my own BMW which we had just destroyed) or to lend a similar model for a while, even that was denied. So, no brand supported the project, BMW simply did not approve the idea.”5


However, in this case, we can say that all ended well for the moviemakers; as far as we know, no lawsuits followed, probably because BMW lawyers were not completely confident that the lawsuit would be a success.


So, when you see logos or trademarks blurred in a movie or TV series, it could be because the creators in ambiguous situations are trying to protect themselves and avoid costly trademark litigation.


Summing up the research herein, I conclude that in the case of a simple reference to a trademark in the movie, it is not necessary to blur it and there is no need to require permission for its use, but these rules do not apply to cases where the purpose of the movie is to promote its own goods or services using a similar designation, that is, those cases where the movie is essentially an advertisement.


1 Resolution 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.

2 Civil Code of the Russian Federation, Part Four of December 18, 2006, adopted by the Federal Law No. 230-FZ, ed. on July 26, 2019 and amended on July 24, 2020.

3 Decision of the Court for Intellectual Property Rights of February 10, 2020 No. C01-1426/2019, Case No. А40-64050/2019.

4 Resolution of the Plenum of the Supreme Court of the Russian Federation of February 24, 2005 № 3 No. 3 On Judicial Practice in Cases concerning Protection of Honor and Dignity of Citizens as Well as Business Reputation of Citizens and Legal Entities

5 https://www.drive2.ru/b/1591787/

Right of the author of an official invention to remuneration
As it is known, any invention, utility model or industrial design has an author or a group of authors, whose creative work created the corresponding result of intellectual activity.

Creation of such a result of intellectual activity may take place either on the personal initiative of the author, or by order or in connection with performance of their labor duties.


An invention, utility model or industrial design created in connection with the performance of their work duties or on the specific assignment of the employer shall be recognized as an official invention, an official utility model or an official industrial design, respectively.


And not every author who created a particular result of intellectual activity during the performance of his labor duties knows that in addition to his monthly salary, which he receives, he is also entitled to remuneration.


In this regard, in this article I propose to consider issues related to the obligation of the employer who uses the service invention to pay remuneration to the employee who created such invention within the scope of his employment duties.


Paragraph 4, Article 1370 of the Civil Code of the Russian Federation[i] (hereinafter - the Civil Code, the Code) states that if the employer obtains a patent for an official invention, an official utility model or an official design, or decides to keep the information about such invention, utility model or design secret and informs the employee about it, or transfers the right to the patent to another person, or does not obtain a patent for the filed application for reasons beyond his control, the employee is entitled to remuneration.


Thus, the right to remuneration arises for the employee, who created the service invention, not by virtue of the very fact of creation of a potentially protectable technical solution, but only if the employer performs one of the actions specified in the above rule in respect of this result of intellectual activity, namely, if the employer


- obtains a patent for a service invention,


- Decides to keep the information on such invention secret and informs the employee about it,


- transfers the right to a patent to another person,


- does not obtain a patent on the application filed by him for reasons within his control.


At the same time, the explanations contained in paragraph 132 of the Resolution of the Plenum of the Supreme Court of the Russian Federation of 23.04.2019 № 10 "On application of Part Four of the Civil Code of the Russian Federation"[ii] (hereinafter - Resolution № 10) states that the obligation to pay remuneration by the employer to the employee (the author) does not depend on the actual use or non-use of the service invention, service utility model or service industrial design. However, the actual use, due to the nature of the work, may depend on the amount of remuneration agreed by the employee (author) and the employer.


Moreover, paragraph five of clause 131 of Decree #10 states that in case of joint invention, utility model or industrial design creation by several employees the amount of remuneration shall be determined for each co-author separately, also based on his/her contribution to the final result.


In this regard, there is a reasonable question: "And what is the amount of this remuneration? One salary? A quarterly bonus? An extra day off? Or maybe a voucher to a sanatorium?  


As stated in the above paragraph 4 of Art. 1370 of the Civil Code, the amount of remuneration, the conditions and order of payment by the employer is determined by the contract between him and the employee, and in case of a dispute - the court.


Moreover, with regard to this rule the highest court explained in the fifth paragraph of paragraph 131 of Decree № 10, according to which the amount of remuneration is determined in the event of a dispute - the court under the rules of paragraph 4 of Article 445 of the Civil Code (paragraph 1 of Article 6 of the Civil Code).


It is worth noting that according to the above paragraph 4 of Article 445 of the Civil Code, if a party for which in accordance with this Code or other laws the conclusion of a contract is obligatory, evades its conclusion, the other party is entitled to appeal to court to compel the conclusion of the contract. In this case the contract is considered to be concluded on the conditions specified in the court decision from the moment the relevant court decision enters into legal force.


Meanwhile, the above legislative norms still do not provide a clear answer to the question: "How much is due to the author for the invention created by him, used by the employer?


In my opinion, in a situation where the amount of remuneration is determined by the parties - the employer and employee, the principle of freedom of contract applies, and in this case, the conditions and procedure for payment of remuneration are determined by agreement of the parties.


This point of view is confirmed by the explanations given in the Decree of the Government of the Russian Federation from 16.11.2020 № 1848 "On approval of the Rules for payment of remuneration for service inventions, service utility models, service industrial designs"[iii] (hereinafter - the Rules), which defines the procedure for payment of remuneration. Thus, in the second paragraph of paragraph 1 of the said Rules it is stated that they do not apply in cases where the employer and the employee conclude a contract establishing the amount, conditions and procedure for payment of remuneration.


Thus, I believe that if the amount and procedure for payment of remuneration is determined voluntarily by the parties to the contract, remuneration may be defined as a lump sum payment, and as fixed payments made with a certain periodicity. Moreover, the amount of the remuneration may depend on the number of products produced and sold using the invention, or may be tied as a percentage to the profits obtained from the use of this invention. At the same time, the above list of procedures for payment of remuneration is not exhaustive.


Thus, it should be concluded that the Rules are primarily aimed at facilitating the courts the procedure for calculating the remuneration due to the author, in case of his dispute with the employer.


It is also worth noting that the payment of remuneration to the employee (author) is made during the term of validity of the patent. In case of early termination of the patent for invention, utility model or industrial design (Article 1399 of the Civil Code) the payment of remuneration shall be terminated. At the same time, if the patent for invention, utility model or industrial design is restored (Article 1400 of the Civil Code), the obligation to pay the remuneration shall be restored. (paragraph 133 of the Resolution No. 10).


Moreover, the same paragraph 133 of the Resolution No.10 states that if the early termination of the patent for invention, utility model or industrial design is made for the purpose of termination of the remuneration payment (for example, the invention continues to be used in production), the employee (the author) shall be entitled to claim the damages from the employer (paragraphs 1 and 4 of Article 10 of the Civil Code). This legal approach is designed to protect the author-employee, as obviously the weaker party from the unfair actions of the employer.


This is probably all that we would like to briefly describe the right of the author of a service invention to remuneration.


[i] Civil Code of the Russian Federation (Part Four) of 18.12.2006 № 230-FZ (ed. of 26.07.2019, amended 24.07.2020).


[ii] Resolution of the Plenum of the Supreme Court of the Russian Federation of 23.04.2019 № 10 "On the application of Part Four of the Civil Code of the Russian Federation".


[iii] Decree of the Government of the Russian Federation of 04.06.2014 № 512 "On Approval of the Rules for Payment of Remuneration for Service Inventions, Service Utility Models, Service Industrial Designs".





Ответственность за незаконное использование авторских и смежных прав eng
Ответственность за незаконное использование авторских и смежных прав
Allegation on Falsification of Evidence During Arbitration
The word falsification derives from Late Latin word falsificationem, noun of action from past-participle stem of falsificare which means act of making false representation or being erroneous.

According to the reference literature (Explanatory Dictionary of the Russian Language by D. N. Ushakov, http://dic.academic.ru) the noun FALSIFICATION is feminine and derives from Latin falsificatio and has several meanings as follows.

  1. Forging something. Being engaged in falsification of ancient manuscripts. Falsification of witness statements. Altering the appearance or property of an object for the purpose of deception, in order to pass it off as an object of another kind or quality. Falsification of comestible.
  2. Figuratively, the substitution of something which is real and authentic by fake.
  3. A counterfeit thing, pretending to be an authentic object. Example: it is not a true coffee, but a forgery.

Thus, the definition of the word “falsification” is a deliberate act of misrepresentation so as to deceive. 

At the same time, arbitration procedure legislation does not contain a specific definition of the term “falsification of evidence”, so when applying Article 161 of the Arbitration Procedure Code of the Russian Federation (hereinafter the Arbitration Procedure Code) should be guided by the concept used in criminal law.

Thus, the falsification of evidence should be understood as the distortion of factual data, which are material or written evidence, including the introduction of knowingly false information in the documents (their forgery, erasure), the destruction of material and other evidence, preparation of completely false evidence. The subject of falsification may be both official documents and written evidence coming from individuals. Falsification of written and physical evidence can be made in various forms as follows.

1) Intellectual forgery, which involves the initial compilation (creation) of evidence that does not correspond to the content of reality, false in substance;

(2) Substantive forgery, which means altering the original evidence by deleting part of the information and/or supplementing it with information which is untrue.

In adjective law, the allegation on falsification of evidence shall be applied to eliminate doubts about the objectivity and reliability of the evidence based on the claims or objections of the persons involved in the case, in respect of which the possibility of its production at the illegal discretion of the interested person is not excluded.

Within the framework of consideration of court disputes, in particular, economic disputes considered by arbitration courts, there are situations when one of the persons participating in the case has doubts as to the reliability of the evidence presented by the other party. For example, such doubts are connected with the date of creation of the document or with the authenticity of the signature in the document.

The question is what to do in this situation and what is the procedure for a person involved in a case who has doubts about the authenticity of a document or the information provided in it.

In accordance with the reasoning set forth in paragraph 1 of Article 161 of the Arbitration Procedure Code, the person participating in the case has the right to apply to the arbitration court with a written allegation on falsification of evidence submitted by another person.

In this case, according to the explanations given in paragraph 36 of the advisory circular of the Presidium of the Supreme Arbitration Court of the Russian Federation dated August 13, 2004 No. 82 On some Issues of Application of the Arbitration Procedure Code of the Russian Federation, in accordance with paragraph 1 of Article 161 of the Code, in the case of an oral pleading on falsification of evidence, the court should reflect this pleading in the report and explain to the person participating in the case the right to submit a written allegation on falsification of evidence.

Thus, a person involved in a case who believes that another person has submitted falsified evidence must first prepare a written statement about the falsification.

The court, having received the corresponding statement, carries out the following legal proceedings:

  1. Clarification of the criminal law consequences of such statement;
  2. Exclusion of the contested evidence with the consent of the person who presented it from the evidence in the case;
  3. Verification of the validity of the statement on falsification of evidence, if the person, who presented this evidence, has stated the objections concerning its exclusion from the evidence in the case.

Let us take a closer look at each of the mentioned legal proceedings separately and consider what they mean.

Clarification of the criminal consequences of the court to the person who claimed forgery and to the person who presented allegedly falsified evidence is to explain to these persons the content of Articles 303 and 306 of the Criminal Code of the Russian Federation (hereinafter - the Criminal Code). Offences under these articles are classified as crimes against justice. In particular, article 303 of the Criminal Code establishes criminal liability for falsification of evidence in a civil or administrative case by a person participating in the case or by his or her representative, while article 306 establishes criminal liability for knowingly false denunciation of an offence. After clarifying the criminal consequences, the court takes away from the above persons receipts that are attached to the case file.

The court further proposes that the person who presented the contested evidence exclude this evidence from the evidence in the case. If a person agrees to exclude this evidence, this circumstance is recorded in the record of trial, and the excluded evidence is not examined by the court.

At the same time, if a person objects to the exclusion of the contested evidence, the court shall verify the validity of the statement on falsification of evidence. The validity of the statement of forgery (falsification) has to be checked on the basis of the arguments relating to forgery recognized by the court as convincing. That is, the party claiming that the evidence is false (falsified), must have the appropriate arguments confirming the validity of the statement, which are a prerequisite for its subsequent verification by the court.

In this case, the arguments in favor of falsification (forgery) of evidence relate to counterfeiting, cleaning up, making corrections that distort the actual meaning and contain false information, as well as creating new evidence.

The person alleging falsification of evidence shall specify in the statement on falsification of evidence the circumstances that cause doubts about the authenticity of evidence or the information contained therein, and information about what exactly is expressed falsification of evidence called into question: a distortion of the form (means of proving) or information, the carrier of which is the questionable evidence.

At the same time, the applicant should clearly indicate in which part of the evidence is allegedly falsified: one of the details of the document (date, signature) is falsified, the content of the document is falsified due to erasures, additions to the text or the evidence contains inaccurate information in the absence of visible defects.

If the arbitration court finds the arguments of a person alleging a falsification of evidence convincing, it shall take measures provided by federal law to verify the authenticity of an allegation on falsification of evidence, including assigning an expert examination, claim other evidence or take other measures.

Surely, as it might seem, the court must always order an expert examination to verify whether the evidence has been falsified, but that is not entirely true.

Within the meaning of the provisions of the subparagraph 2 of paragraph 3 of Part 1 of Article 161 of the Criminal Procedure Code of the Russian Federation (hereinafter the Criminal Procedure Code), the presence of an application for falsification of evidence is not an unconditional basis for the appointment of a forensic examination, taking into account the fact that the reliability of the evidence can be verified by other means, including its evaluation in conjunction with other evidence in the manner provided for in Article 71 of the Criminal Procedure Code.

Appointment of an expert examination for the purpose of verification of an allegation on falsification of evidence is one of the measures that may be taken by the court to verify the validity of an allegation on falsification of evidence and, accordingly, the choice of such method and verification measure is the prerogative of the court.

It should also be noted that the legal significance of the expert examination report is defined by law as evidence that has no pre-determined force, is not binding, and by virtue of Article 71 of the Criminal Procedure Code is subject to assessment by the court on a par with other submitted evidence.

This legal approach is reflected in judicial acts, including those of higher courts, for example, in the ruling of the Supreme Arbitration Court of the Russian Federation of February 26, 2013 No. VAS-1749/13 in the case N A76-16977/2011.

Thus, to verify the validity of an allegation on falsification of evidence, the court does not always need to conduct an expertise. Thus, for example, in order to establish the actual date of the contract, if there is evidence of the parties' fulfillment of the terms of this contract (payment orders, delivery notes, act of work performed, etc.), the court does not need to appoint an expert examination of the statute of limitations for the preparation of documents or the statute of limitations for signing documents, because if the person involved in the case is disputed only the date of the contract, and other documents relating to this transaction is not disputed, the court may compare the date of the contract and the date of the transaction related to the contract.

At the same time, by virtue of paragraph 2, Article 71 of the Arbitration Procedure Code, the arbitration court evaluates not only the relativity, admissibility and reliability of each evidence, but also the sufficiency and mutual connection of the evidences in their totality. The evidence is recognized by the arbitration court as reliable, if as a result of its examination and research shows that the information contained therein is true.

With regard to Article 161 of the Code of the Arbitration Procedure Code, the allegation on falsification of evidence is intended to exclude the relevant evidence from the evidence in the case and to actually compel the party that submitted the evidence to base its arguments and objections regarding the subject matter and the basis of the claim on other evidence.

If, as part of the audit, the court found that the evidence was falsified, it should be excluded from the evidence in the case.

Agreement of Lawsuit in Cases Challenging Rospatent Decisions
This paper addresses the possibility of entering into an agreement of lawsuit as part of the court consideration of the case on invalidating decisions of the Russian Agency for Patents and Trademarks (Rospatent). In cases where it is possible to enter into such an agreement, we will consider who are the parties to that agreement and how it is approved by the court.

The disputes in question are those on accordance or closure of defense of a right to the results of creation of the mind and the equivalent visual identities of legal entities, goods, works, services and enterprises, except for the objects of copyright and related rights and integrated circuit topography. That includes cases on challenging non-regulatory acts and decisions and acts or omissions by the federal executive authority on intellectual property.  Only the inferior intellectual property courts are competent to try such cases (paragraph 2 of Part 4 of Article 34 of the Arbitration Procedure Code of the Russian Federation).

The order of proceedings on challenging non-regulatory acts, decisions, acts and omissions of state authorities in arbitration courts is defined by Chapter 24 of the Arbitration Procedure Code of the Russian Federation. These cases are governed by administrative procedure.

As it is known, in court proceedings on cases arising from administrative legal relations, the parties to the dispute are the claimants and interested persons. The term “interested person” refers to a body exercising public powers, decisions and acts or omissions disputed by the claimant. Rospatent acts as an interested party since within the framework of consideration of such cases, the court reviews the legality of a decision taken by Rospatent.

Paragraph 1 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation of 18.07.2014 № 50 "On reconciliation of the parties in the arbitration process" (hereinafter - the Resolution № 50) states the following.

“In accordance with the Arbitration Procedure Code of the Russian Federation, the legal proceedings in arbitration courts is a procedure to promote the establishment and development of partnership business relations, the formation of customs and ethics of business (paragraph 6 of Article 2 of the Code); the purpose of preparing a case for litigation is reconciliation of the parties (paragraph 1 of Article 133 of the Code). On this basis and on the basis of paragraph 1 of Article 138 of the Arbitration Procedure Code of the Russian Federation, the arbitration court, when considering a case, shall take measures to reconcile the parties, assist them in settling the dispute, guided by the interests of the parties and the objectives of court proceedings in arbitration courts”.

Therein, according to paragraph 7.1. of Rospatent's order No. 18 of February 4, 2014 On Approval of the Regulations of the Russian Agency for Patents and Trademarks (registered with the Ministry of Justice of Russia on April 29, 2014 No. 32154) states the following.

The Head of the Agency may act as a representative of Rospatent in the court and shall be entitled to perform on behalf of Rospatent all procedural actions, including the right to file a lawsuit and sign the points of defense, sign an application for injunctive relief, a full or partial withdrawal of a claim and acknowledgement of a claim, change of the grounds or subject matter of a claims, enter into agreement of lawsuit, an agreement on state of affairs, as well as the right to sign a statement on revision of judicial acts due to newly discovered evidence, challenge the decision of the Ministry of Justice of the Russian Federation and receipt of adjudicated funds and other property”.

Taking into account that the Arbitration Procedure Code of the Russian Federation does not limit Rospatent in the agreement of lawsuit and the head of Rospatent is endowed with such right, it can be concluded that in disputes on the invalidation of Rospatent's decisions, the agreement of lawsuit can be concluded between the claimant and Rospatent, as they are the parties to the dispute considered by the arbitration court.  

In fact, everything is not as unambiguous as it seems at first sight, and here is why. First of all,  it raises concern as the analysis of judicial practice in such cases has not revealed any judicial acts in which Rospatent would be a party to the agreement of lawsuit, which, as it seems, is related to the position of the agency which is not ready to revise its conclusions set forth in the decision made by it and to recognize possible mistakes made when considering the opposition.

Secondly, it would appear that the conclusion of an agreement of lawsuit only between Rospatent and the claimant is unacceptable in itself, since a judicial act adopted in the course of consideration of such a case may affect the rights of third parties. Thus, in cases concerning the challenge of non-regulatory acts, decisions and acts or omissions of Rospatent, as a rule, as a third party, which does not claim under its own right in respect of the subject matter of the dispute, it is either the owner of the challenged patent , certificate or visual identity, which have been upheld by the challenged decision, or the person who filed an opposition to the grant of a patent or the granting of a defense of right to a visual identity, if this opposition has been sustained.

At the same time, in this category of disputes, third parties, mainly, protect and support the decision taken by Rospatent, since it is aimed at protecting their interests. Therefore, the conclusion of an agreement of lawsuit only between the claimant and Rospatent without taking into account the position of a third party is inappropriate.

However, in practice, there are situations when, for example, the person who filed an opposition to the defense of a right to the trademark, in the course of the dispute resolution, came to the conclusion that under certain conditions (for a fee or taking into account the delimitation of the commodity markets), where allowed by law, it is ready to give its consent to the registration of the disputed trademark notice. In this regard, there is no need to recognize the defense of a right to the visual identity invalid and the grounds that served as a basis for the adoption of the contested non-regulatory act.

After all, the decision of Rospatent to invalidate a patent or grant defense of a right to trademark or protected designation of origin entails the revocation of a patent, termination of defense of a right to trademark and termination of the relevant exclusive right from the date of filing an application to Rospatent for the grant of a patent, registration of a trademark, annulment of an entry in the State Register regarding all certificates of exclusive right to such a protected designation of origin (paragraph 139 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).

In this regard, the desire of the person who filed the opposition to actually withdraw from it to restore the defense of a right to the contested trademark on favorable terms is not enough, since the decision of Rospatent remains valid.

So, what can be done in a situation like this? Can an agreement of lawsuit be concluded between a third party and Rospatent or a trilateral agreement between a claimant, Rospatent and a third party? The answer to this question is contained in paragraph 33 of Resolution No. 50, which provides the following clarification:

“Subject to the principles of discretionary and voluntary mediation by the parties, in arbitration proceeding, conciliation may result in other agreements between individuals if such agreements effectively result in settlement of the dispute.

Thus, when considering cases on challenging the decisions of the federal executive authority on intellectual property to sustain the opposition against the defense of a right to trademark by the reasoning that the defense of right to trademark has been granted in violation of the requirements of civil legislation in connection with the lack of consent of the body or person whose consent is required in cases stipulated in paragraphs 2, 4, 6, subparagraphs 1 and 2 of paragraph 9 of Article 1483 of the Civil Code of the Russian Federation, the courts should take into account the following issues.

If the said consent of the respective person (including the person involved in the case as a third party without independent demand regarding the subject matter of the dispute) is obtained in the course of consideration of the dispute by the court, including by entering into an agreement between the party to the dispute and this person, such consent (agreement) cannot be qualified by the court as an agreement of law suit, since it was not concluded between the parties to the lawsuit.

At the same time, this consent (agreement) is a result of reconciliation of the party to the case and the person whose consent to provide defense of a right to trademark is necessary in accordance with the requirements of the civil legislation with regard to the provisions of Article 138 of the Arbitration Procedure Code of the Russian Federation”.

Interestingly, the approval of such an agreement does not result in a court ruling to terminate the proceedings, as we used to see in cases that ended in an agreement of lawsuit. The result is a court decision (ruling), by which the court cancels the decision of the federal executive authority on intellectual property and obliges it to consider again the opposition, which served as the basis for the decision of this authority contested in court, which follows from the explanations contained in sub-paragraph 5 of paragraph 33 of the Resolution No. 50.

It is worth saying that the same legal approach shall be applied in the cases on challenging the decision of the Russian Agency for Patents and Trademarks to grant defense of a right to invention, utility model or industrial design on the grounds that the defense of a right was granted to them in violation of the requirements of civil legislation. Such legal position was reflected in the decision of the Court for Intellectual Property Rights of November 21, 2019, case No. CIP-280/2019.

To summarize, in cases on challenging the decisions of Rospatent the conclusion of an agreement of lawsuit is possible, but no confirmation of this fact has been found in the court practice. At the same time, under such a category of disputes, it is allowed to conclude an agreement between the claimant and a third party which is not an agreement of lawsuit but testifies to the reconciliation of the claimant and the third party and serves as a basis for Rospatent to reconsider the opposition. 

Failure to submit a report on the use of the trademark. Risks and consequences for a licensee.

The trademark owner, who grants the right to the use of the means of individualization belonging to him, is interested in the user’s (licensee’s) use of this right to the extent and subject to the terms and conditions stipulated in a license agreement. As a way of monitoring the use of the trademark, the reports are used, where the licensee provides the licensor with the different information on the use of the mark (the period, the quantity of the products, the territory of the use and other information).

Whereby, the condition obliging the licensee to provide the licensor with the reports on the use of the result of the intellectual activity or the means of individualization is contained directly in the Civil Code of the Russian Federation (hereinafter referred to as the C.C.R.F., the Code). Thus, according to Paragraph 1 of Article 1237 of the C.C.R.F., the licensee shall submit the reports on the use of the result of the intellectual activity or the means of individualization to the licensor, unless otherwise is stipulated by the license agreement.

However, Paragraph 1 of Article 1237 of the Code also contains a provision saying that: “If the license agreement that stipulates submitting the reports on the use of the result of the intellectual activity or the means of individualization does not contain the conditions on the period and procedure for submitting them, the licensee shall be obliged to submit such reports to the licensor at his request.”

Thus, it turns out that if the parties to the license agreement have forgotten to negotiate the condition for providing/not providing the reports, the licensee will be forced to do so at the request of the licensee by virtue of express reference by the law.

On the one hand, the aim of the licensee’s obligation to provide the report on the use of the trademark enshrined in the law is to provide the right holder with a tool that allows monitoring the use of the right belonging to him, including monitoring the quality of the products or services for the individualization of which this designation is used, monitoring the territory or the period of the use, and exercising statistics and analytics. In addition, using the reports, one can get the information on the volumes of the products, what is of absolute importance in the cases, when remuneration for the granted right to the use of the trademark is calculated based on the percentage ratio of the cost of the sold products marked with the trademark.

But if to look at this matter on the other side, then in the case, when the parties have forgotten to determine the conditions on the period and procedure for submitting the reports, or if the right holder has not indicated this specifically in the license agreement, there may be a situation, when the right holder can use the provisions of Paragraph 1 of Article 1237 of the C.C.R.F. in bad faith.

Thus, due to the fact that the licensee will be obliged to submit such reports to the licensor at his request, the licensor can send such requests every day, while establishing the minimum periods for providing the report, or he will establish a list of the criteria that should be reflected in the report, what will lead to the situation that the user will be engaged only in preparing the reports instead of being engaged in his commercial activities.

You will most probably say that this is unlikely, because if the right holder behaves like this, then no one will conclude the license agreements with him, and therefore, he will not earn money by selling the right to the use of the trademark.

I would partially agree, but I will still afford assuming the following situation. The right holder concludes the license agreement and receives the lump sum remuneration. The licensee, in turn, invests his efforts and resources in the development, advertising and, as a result, the recognition of the trademark at the market. Further, the right holder being aware of the fact that the trademark has become recognizable enough and he does not need investing in advertising himself, and existing without the competitors in the person of the very licensee, he will earn much more, the licensor is trying to terminate the license agreement due to a substantial breach of its terms and conditions, indicating as such condition, for example, the failure to submit the report in time or that the report is incomplete or inaccurate, for which reason the right holder, in his opinion, loses control over the use of the trademark.

Of course, it is impossible to affirm categorically that if the first breach by the licensee of the period or procedure for submitting the report has occurred, the right holder’s statement of claim for the termination of the license agreement will be immediately satisfied. However, the right holder, who intends to terminate the agreement on these grounds, may use the previous judicial acts as evidence of the repeated breach.

Thus, it can be concluded that one of the risks of the failure to submit the report on the use of the trademark can be judicial proceedings on the termination of the license agreement due to the substantial breach of the terms and conditions. The consequence of such statement of claim, accordingly, can be the termination of the license agreement and, as a result, the loss of the right to the legal use of the trademark.

At the same time, when concluding the license agreement, the parties may also establish the licensee’s liability for the failure to submit the report or the failure to submit the report in time. As a rule, such liability for the failure to fulfill the obligations for submitting the reports is expressed in the form of the user’s obligation to pay a penalty or fine in the amount determined by the parties.

It should be noted that the current legislation of the Russian Federation does not contain the norms that stipulate applying liability measures against the licensee for the failure to submit the report on the use of the result of the intellectual activity, thereupon determining the liability measures for the failure to fulfill such obligation lies solely with the parties to the agreement.

At the same time, this conclusion is partially confirmed by the legal position reflected in Decision of the Supreme Arbitration Court of the Russian Federation of 21.12.2010 No. VAS-17168/10 in case No. A40-18624/10-51-122, according to which the satisfaction of the claims for the recovery of damages regarding the license agreement is refused, since the defendant’s failure to submit the report on the use of the result of the intellectual activity is not the basis for applying the liability measures to the defendant.

Thus, summing up the article, we can conclude that the party’s failure to submit the reports on the use of the trademark or the failure to submit them in time can entail applying financial liability measures to it, if it is determined by the agreement, and in the case of the repeated breach of its obligations for providing the reports, in my opinion, this can entail the termination of the license agreement due to the substantial breach of its terms and conditions.

Russian and foreign companies. Are they competitors?
In practice, there are cases when goods are produced by a foreign company, then imported by various organizations, including Russian ones, to the territory of the Russian Federation, where they are sold to final consumers.But at some point on the territory of the Russian Federation a trademark is registered in the name of a Russian company, similar to the designation used on the packaging of goods of a foreign company, and the rights holder of the trademark begins to raise difficulties on the import and sale of goods of a foreign legal entity, putting it out of business.In the described situation, a classic example of unfair competition from the rights holder can be seen.Article 14.4 of the Federal Law of 26.07.2006 No. 135-FZ “On Protection of Competition” (hereinafter - the Law on Protection of Competition) provides a tool to fight this kind of abuse by recognizing the actions of the rights holder to acquire and use the exclusive right to a trademark (service mark) as an act of unfair competition.Another example: a foreign company is the rights holder of a trademark protected in the Russian Federation, in the territory of which various business entities begin to sell goods using this trademark.Such actions can be qualified as an act of unfair competition, which contradicts paragraph 1 of Article 14.6 of the Law on Protection of Competition.As you know, the fundamental condition for the initiation and consideration by the antimonopoly body of a case of violation of antitrust laws is the establishment of competitive relations between the applicant and the defendant.So, from the provisions of paragraph 5.1 of Article 45 of the Law on Protection of Competition, it follows that when considering a case of violation of the antimonopoly legislation, the antimonopoly body analyzes the competitive situation in the amount necessary to make a decision on the presence or absence of violation of the antimonopoly law.Thus, the analysis of the competitive situation and, accordingly, the preparation of an analytical report (review of the competitive situation) based on its results is an obligatory step in the consideration of each case of violation of antitrust laws, regardless of the composition of the alleged violation.In the absence of competition between the applicant and the defendant, the antimonopoly body refuses to initiate proceedings on violation of the antimonopoly legislation or terminates the proceedings if the lack of competition is identified after the initiation of the case.It is logical to assume that the foreign organization itself does not conduct activities on the territory of the Russian Federation, and therefore the conclusion suggests itself that it cannot be a competitor to the Russian company and cannot exercise its right to file a statement recognizing the actions of the copyright holder as an act of unfair competition.However, if we look more in detail, it will become clear that everything is not so easy.Part 1 of Article 3 of the Law on the Protection of Competition stipulates that this Federal Law applies to relations that are related to the protection of competition, including the prevention and suppression of monopolistic activity and unfair competition, in which Russian legal entities and foreign legal entities/ organizations participate.By virtue of Part 2 of this Article, the provisions of this Federal Law shall apply to agreements reached outside the territory of the Russian Federation between Russian and (or) foreign individuals or organizations, as well as to actions performed by them if such agreements or actions affect the competitive situation on the territory of the Russian Federation.This provision establishes the general principle of extraterritorial application of the Russian antitrust laws to agreements reached outside the territory of the Russian Federation between Russian and / or foreign individuals or organizations, as well as to actions taken by them if such agreements or actions affect the competitive situation in the Russian Federation.

Competition, in turn, means rivalry between business entities, in which the independent action of each of them excludes or limits the ability of each of them to unilaterally affect the general conditions for the circulation of goods in the relevant product market (paragraph 7 of Article 4 of the Law on Protection of Competition).According to paragraph 4 Article 4 of the Law on the Protection of Competition, the commodity market is understood as the sphere of circulation of goods (including goods manufactured abroad), which cannot be replaced by other goods, or interchangeable goods, within the boundaries of which (including geographical ones) based on economic, technical or other possibility or expediency, the acquirer may purchase the goods and such an opportunity or expediency is impossible outside of it.At the same time, the existence of competitive relations between the relevant persons is to be established by identifying the facts of the direct sale of homogeneous or interchangeable goods in the relevant market.Thus, within the meaning of the Law on the Protection of Competition, competitors are business entities that sell goods on the same product market or business entities that purchase goods on the same product market.As can be seen from the above legal norms, the Law on Protection of Competition allows the existence of competitive relations between Russian and foreign legal entities.In addition, the legislator does not make the presence or absence of competitive relations dependent on the place of registration of an economic entity, since it is obvious that in the open trading space, goods produced in different countries of the world are on the same product market, and therefore manufacturers of these goods (willing or not) become competitors and must comply with the norms and principles of competition law.An interesting example of this situation, in my opinion, is the case of violation of antitrust laws in relation to Doshirak-Kazakhstan LLP (Republic of Kazakhstan), initiated by the claim of DOSHIRAK KOYA LLC.The plot of this case is the fact that a Kazakh company put into civil circulation on the territory of the Russian Federation “Doshirak” instant noodles (90 g tray) with beef and chicken flavor in packaging, the design of which imitated the packaging design of DOSHIRAK KOYA LLC products.Moreover, the trademark  was used in the design of the packaging of noodles, according to international registration No. 897236, owned by the Korean company Paldo Co., Ltd.Having examined the case, the commission came to the conclusion that such actions could lead to the confusion of products of different manufacturers on the Russian instant food product market and cause an outflow of consumer demand from the products of DOSHIRAK KOYA LLC, marked with the Doshirak trademark, which became famous in Russia in 1996.By the decision of the FAS Commission of Russia dated 26.12.2016 in case № 1-14-93/00-08-16 on violation of antimonopoly legislation, the actions of Doshirak-Kazakhstan LLP were recognized as an act of unfair competition and contravene paragraph 2 of Article 14.6 of the Law on Protection of Competition.Upon the results of consideration of the case, the FAS Commission of Russia issued an order to terminate unfair competition.

Is a contract a copyright object?
It is interesting if the contract is a copyright object, isn’t it? Honestly, starting to write this article, I have not yet found the answer to this question and do not yet know if I will find it by the end of the article, but I promise that I will try to do it.After reading the opinions of lawyers practicing in the field of intellectual property, I realized that there is no consensus among my colleagues on this issue either. Some say that a contract is not an object of copyright, since it is not a literary work, since its creative nature is not obvious, and the sequence of setting the rules of law in a contract cannot be recognized as creative activity.Others, on the contrary, argue that the texts of contracts drawn up either by a lawyer or a nanny in the kindergarten, have the same legal protection as the articles of Nobel laureates in astrophysics published in Reviews of Modern Physics.I propose to start exploring this issue on the basis of the norms of Russian legislation on intellectual property, as well as the norms of international law in force in our country.Since May 27, 1973, the USSR (and the Russian Federation as the legal successor) is a party to the 1952 World (Geneva) Convention on Copyright, and from March 13, 1995, the Berne Convention for the Protection of Literary and Artistic Works of 1886 (hereinafter the Berne Convention).These international treaties are an integral part of the legal system of the Russian Federation.Article 1 (1) of the Berne Convention provides that the term “literary and artistic works” covers any production in the field of literature, science and art, regardless of the method and form of its expression.Moreover, in accordance with Article 5 (2) of the Berne Convention, in addition to the provisions established by it, the scope of protection, as well as the means of protection presented to the author to protect his rights, are regulated exclusively by the legislation of the country in which protection is sought.In accordance with paragraph 1 of Article 1259 of the Civil Code of the Russian Federation, the objects of copyright are works of science, literature and art, regardless of the dignity and purpose of the work, as well as on the method of expression, including audiovisual works, works of painting , sculptures, graphics, design, graphic stories, comics and other works of art.According to the clarifications of the highest court, set out in paragraph 80 of the decision 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”, the list of copyright objects contained in paragraph 1 of Article 1259 of the Civil Code of the Russian Federation is not exhaustive. When resolving the issue of attributing a specific result of intellectual activity to copyright objects, it should be borne in mind that, according to the meaning of Articles 1228, 1257 and 1259 of the Civil Code of the Russian Federation, only the result created by creative work is such an interaction. It should be borne in mind that, unless proven otherwise, the results of intellectual activity are assumed to be created by creative work. The lack of novelty, uniqueness and (or) originality of the result of intellectual activity itself cannot indicate that such a result was not created by creative work and, therefore, is not a copyright object.At the same time, paragraph 5 of Article 1259 of the Civil Code of the Russian Federation contains a special clarification that with the help of copyright ideas, facts and other similar objects (ideas, concepts, principles, methods, processes, systems, solutions to technical, organizational or other tasks, discoveries, facts, programming languages) regardless of the form of their expression.This norm is based on the fact that copyright cannot prevent the use of any technical or organizational solutions for the protection of which other intellectual property institutions can be applied, for example, patent law, provisions on the protection of production secrets (know-how), etc.From the analysis of the above legal norms, it follows that the form of expression of the content (description) is protected by copyright, at the same time the construction model itself, the concept and the organizational decision are not protected by copyright.In addition, according to paragraph 6 of Article 1259 of the Civil Code of the Russian Federation non-copyright objects are:1) official documents of state bodies and local governments of municipalities, including laws, other regulations, court decisions, other materials of a legislative, administrative and judicial nature, official documents of international organizations, as well as their official translations;2) state symbols and signs (flags, emblems, orders, banknotes and the like), as well as symbols and signs of municipalities;3) works of folk art (folklore) that do not have specific authors;4) messages about events and facts that are purely informational (news of the day, television programs, vehicle schedules, etc.).Thus, in order to answer the question whether the text of the contract is the object of copyright or not, it is first necessary to analyze whether this object belongs to the exceptions contained in paragraphs 5 and 6 of Article 1259 of the Civil Code of the Russian Federation.After analyzing these rules of law, I believe that the contract does not apply to any of the above objects that are not subject to the legal protection of copyright.At the same time, even if the agreement does not apply to objects that are not the objects of copyright, then it is not yet possible to draw an unambiguous conclusion that it is such an object, since in order to be recognized as an object of copyright, it must be:1) an independent result of the creative work of the author,2) expressed in an objective form.If we are talking about a contract made in simple written form, then, of course, it is expressed in an objective form.But, analyzing the question of whether the contract is the result of creative work, the answer will not be so clear. If the author of the contract was limited to quoting the rules of law, then such a contract can hardly be attributed to the object of copyright.However, if we are not talking about a standard contract for the supply or provision of services, but, for example, a commercial concession agreement, which by its legal nature is a comprehensive agreement designed to transfer business experience, skills and knowledge in a specific area of ​​commercial activity with the provision of the possibility of using means of individualization, objects of copyright, the know-how of their copyright holder, then in this case the contract can indeed be a literary work describing the conditions and features of the legal relations of the contracting parties.Such a document, in my opinion, will certainly be subject to copyright, since the drafting of such a contract will definitely require not only knowledge in the field of law, but also a creative contribution to its creation.At the same time, which is typical, in Russian judicial practice I did not find a single case where the subject of the dispute would be the text of the contract, which was used without the permission of the copyright holder. This is probably due to the fact that in 90% of cases unique contracts are simply not needed by the parties for whom this contract was drawn up, and they perfectly use universal forms, which are available in huge numbers on the Internet, and it is no longer possible to establish authorship of these documents.The second criterion which in my opinion does not lead to the emergence of judicial practice in which the contract would be the subject of a dispute as a copyright object, is related to the fact that the preparation of an exclusive contract is ordered by a lawyer, who, having prepared the text of the contract for a fee, transmits it to the customer. So, the original author (copyright holder) disposes his right (alienates it or grants the right of use to the customer).Further, the customer uses it in relations with his counterparties legally and, as a rule, the text of such an agreement does not become public, as the parties agree to maintain confidentiality with respect to the terms of the agreement, and therefore third parties do not have free access to this work and cannot use it.In this regard, in my opinion, there are no examples of judicial practice in disputes with violation of rights to this object. However, it would be extremely interesting to know the position of the courts whether they attribute the contract to objects of copyright.And what do you think, is a contract a copyright object?
Consequences of indication in a patent of a person as a patent holder who is not such

We often come up against situations in our lives when someone wants to embezzle something that does not belong to him. Speaking of this, one should not be limited only by an ordinary shoplifting. So, for example, one assigns authorship of an art work. Someone’s glory is galling the other, and a man makes up stories about himself in which he allegedly performed a heroic act.

There are cases of misappropriation with the objects of a patent law. Such assignments include the indication in a patent of a person who is not a real patent owner. I will try to explain to you how this can happen on the simple example.

So, in a company engaged with production and sale of dairy products there is an accountant who has a talent in drawing.

Out of duty, in the evening, over a cup of tea, this employee draws a composition, which depicts the decoration of the dairy stores’ facade.

The employee decides to show the results of his work to his manager and offered him to buy the rights to the design so that the company could later use it for decoration of its stores, which, in turn, would attract additional customers.

The manager tells that he would consider the employee’s proposal and, if he decides to use the design invented by the employee, he will certainly inform him and pay a fee.

The design, invented by the employee, really turns out to be unusual and interesting, the company begins to decorate the stores in one style using the above design, but the employee doesn’t receive any compensation for this. Having mentioned about the promised payment to the manager, he is cursed and shown the door with the words that he is getting a salary and there is no question of any reward, and he will be fired if mentions about the reward once again.

At the same time, the employee also learned out that the employer, in order to protect himself from copying of the stores’ design by competitors, registered a patent for a design in the name of the company.

Thus, the employer actually appropriated the rights to the patent that does not belong to him. In order to understand this situation and find a way out, I propose to turn to the legislation.

In accordance with article 1347 of the Civil Code of the Russian Federation, the author of an invention, utility model or industrial design is the citizen by whose creative labour the relevant result of intellectual activity has been created. Unless otherwise proven, the person mentioned as the author in a patent application filed for an invention, utility model or industrial design shall be deemed the author of the invention, utility model or industrial design.

By virtue of paragraph 2 of Article 1345 of the Civil Code of the Russian Federation, the author of an invention, utility model or industrial design owns the following rights: 1) an exclusive right; 2) the right of attribution. In the cases envisaged by the present Code the author of an invention, utility model or industrial design also owns other rights, including a right to obtain a patent, a right to a fee for a service invention, utility model or industrial design (clause 3 of the same article).

According to paragraphs 1 and 2 of Article 1357 of the Civil Code, the right to obtain a patent for an invention, utility model or industrial design initially is owned by the author of the invention, utility model or industrial design. The right to obtain a patent for an invention, utility model or industrial design may pass to another person (successor) or may be assigned thereto in the cases and on the grounds established by law, including in line of universal succession or under a contract including a labour contract.

Clause 1 of Article 1374 of the Civil Code of the Russian Federation states that a patent application for an invention, utility model or industrial design shall be filed with the federal executive power body charged with intellectual property matters by a person entitled to obtain a patent according to the present Code (applicant).

Thus, the right to obtain a patent for an industrial design originally belongs to its author. The indicated right can be transferred to another person only on the grounds established by Article 1357 of the Civil Code of the Russian Federation, including the conclusion between the author and such a person a labor contract or an alienation agreement to obtain a patent for an industrial design.

As we can see, an alienation agreement to obtain a patent between the employee and the employer was not concluded. However, a labor contract was concluded between them. Perhaps the employer, receiving a patent in his name, considered that that was enough?

According to paragraph 1 of Article 1370 of the Civil Code of the Russian Federation, an invention, utility model or industrial design created by an employee in the course of his duties or a specific assignment of the employer shall be deemed a service invention, utility model or industrial design, the right of attribution in respect of which is owned by the employee (author), the exclusive right to them and the right of obtaining a patent are owned by the employer, except as otherwise envisaged by a labor contract or civil law contract between the employee and the employer.

 In this case, if an employee creates a service invention, a service utility model or an industrial design, an agreement is not required between him and the employer to alienate the right to a patent. This right arises from the employer on the basis of the law by virtue of the creation by the employee of the corresponding result of intellectual activity during his labor duties or a specific task of the employer.

The existence of such duties or tasks is possible only within the framework of an employment relationship.

Clause 129 of the resolution of the Plenum of the Supreme Court of the Russian Federation dated 23.04.2019 No. 10 “On the application of part four of the Civil Code of the Russian Federation” contains an explanation according to which the recognition of a technical solution as official does not require that the document, defining the employee’s labor duties (employment contract, job description), there was a specific indication of the performance of work to create specific patentable objects or to improve known technical solutions.

The fact that it is created within the framework of labor duties, the content of which can follow from the labor function or can be expressed in the form of a specific task, is crucial for the recognition of a technical solution as official.

In particular, acts of the employer containing instructions given to the employee, the activities carried out by the employer, with the sphere in which the patentable object is created, the limits of the employee's labor duties, the place of work, the source of equipment and tools  used for their creation, the possibility for the employer to control the work in the framework of which the patentable object is created, the purpose of creating the patentable object, subsequent behavior of the employee and the employer, documents drawn up by them in the course of the employee’s labor activity, which together could indicate the development of technical solutions in connection with the performance of labor duties, other circumstances as a whole.

If there is a dispute between the employee and the employer about whether a particular invention, utility model or industrial design is an official one (clause 1 of Article 1370 of the Civil Code of the Russian Federation), it should be considered that the content of the employee’s labor duties, the presence or absence of a specific task from the employer and the fact of an invention, utility model or industrial design creation in connection with the performance of these duties or tasks are proved by the employer.

A similar legal position was reflected in the ruling of the Presidium of the Intellectual Property Rights Court dated 01.11.2019 in case No. SIP-598/2018.

As mentioned above, a labor contract was concluded between the employee and the employer, according to which the employee was hired as an accountant. It is obvious that the accountant’s labor duties are unlikely include design of the stores’ appearance or other creative activities for promoting the company among consumers. There was no task to create a design either.

Thus, based on the above legal norms, the employer did not have the right to receive a patent in the described situation. Then what should the employee do in this situation?

In accordance with subparagraph 5 of paragraph 1 of Article 1398 of the Civil Code of the Russian Federation, a patent for an invention, utility model or industrial design may be declared invalid in full or in part if the patent has been issued with an indication therein as the author or patent holder of a person not being such in accordance with this Code or without an indication in the patent as the author or patent holder of the person being such in accordance with this Code.

According to clause 122 of Resolution No. 10, disputes regarding the establishment of a patent holder (recognition of the patent holder right), that is, disputes about who owns the exclusive right to invention, utility model or industrial design (subparagraph 2 of paragraph 1 of Article 1406 of the Civil Code of the Russian Federation), are examined in the lawsuit proceedings on the claim of a person who considers himself an appropriate patent holder to the person indicated in the patent as the patent holder by contesting the granted patent on the basis of subparagraph 5 of paragraph 1 of Article 1398 of the Civil Code of the Russian Federation.

In case a patent for an invention, utility model, and industrial design is established partially invalid, the federal executive body for intellectual property grants a new patent. That is, the obligation of Rospatent to grant a new patent is established by law, and this patent should include information about the author and the patent holder determined by the court, the court only indicates the person in whose name a new patent should be issued as an author and patent holder.   

In the event a court recognizes a patent for an invention, utility model or industrial design, a new patent is partially granted by the federal executive authority for intellectual property. That is, the obligation of Rospatent to grant a new patent is established by law, indicating in it the author and patent holder of a person determined by the court, the court only indicates the person in whose name a new patent is to be issued as the author and the patent holder.

Thus, if the court concludes that a person indicated as a patent holder is not such, then the patent  will be the recognized invalid in this part and a new patent will be issued by the Rospatent with indication of the appropriate patent holder.

In which intellectual property disputes is a complaint procedure required?

Legal arguments in the field of intellectual property, as well as disputes in other categories, have their own peculiarities in terms of preparing the plaintiff before going to court with a lawsuit.Of course, any trial must be prepared before initiating it. At least you need to collect evidence, prepare a statement of claim, send these documents to the court.At the same time, these measures are not always sufficient for the court to consider the substance of the dispute submitted to its consideration; in some cases, before applying to the court, the plaintiff is required to observe the pre-trial procedure for the settlement of the dispute, which also includes the claim procedure.Within the meaning of clause 8 of part 2 of article 125, part 7 of article 126, clause 2 of part 1 of article 148 of the Arbitration Procedure Code of the Russian Federation, the claim procedure for resolving a dispute in judicial practice is considered as a way to restore violated rights and legitimate interests voluntarily without additional costs for paying state fees with a significant reduction in time. Such a dispute settlement procedure is aimed at its prompt resolution and serves as an additional guarantee of protection of rights.According to part 5 of article 4 of the Arbitration Procedure Code of the Russian Federation, civil-law disputes on the recovery of funds for claims arising from contracts, other transactions, as a result of unjust enrichment, may be referred to the arbitration court after the parties take measures for pre-trial settlement after thirty calendar days from the day the claim (demand) is sent, unless otherwise specified by law or contract.After analyzing the above norm, we can conclude that its provisions are applicable to the following disputes in the field of intellectual property:- on debt collection or unjust enrichment under agreements on disposal of the exclusive right;- on termination of the contract on disposal of the exclusive right (in this case, the document may be called “notice on termination of the contract”).This conclusion follows from the fact that in accordance with clause 2 of article 1233 of the Civil Code of the Russian Federation (hereinafter – CC RF, the Code) to agreements on the disposal of the exclusive right to the result of intellectual activity or to means of individualization, including to agreements on the alienation of the exclusive right and to license (sublicense) agreements, the general provisions on obligations (Articles 307–419 of CC RF) and on the agreement (Articles 420–453 of CC RF) apply.At the same time, the clause of the second part of Article 4 of the Arbitration Procedure Code of the Russian Federation indicates that other disputes arising from civil matters are referred to the arbitration court after observing the pre-trial procedure for resolving the dispute only if such a procedure is established by federal law or by contract.In order to understand what kind of intellectual property disputes the pre-trial (claim) procedure for resolving the dispute is mandatory, I propose to turn to part four of the Civil Code of the Russian Federation, which enshrines the legal regulation of relations in the field of intellectual property in the Russian Federation.Clause 5.1 of Article 1252 of the Civil Code of the Russian Federation states that in case the right holder and the infringer of the exclusive right are legal entities and (or) individual entrepreneurs and the dispute is subject to arbitration, before filing a claim for damages or payment of compensation, the rightholder must submit a claim.A claim for damages or payment of compensation may be brought in the event of a complete or partial refusal to satisfy a claim or for not receiving a response to it within thirty days from the day the claim is submitted, unless otherwise specified by the agreement.At the same time, I consider it important to note that if in a case of violation of the exclusive right to the results of intellectual activity or means of individualization, in which recovery of losses or compensation can be used as a way to restore the violated right, and the violator or copyright holder is an individual, the dispute in this case is subject to review in court of general jurisdiction.As you know, when considering civil disputes in courts of general jurisdiction, the Civil Procedure Code of the Russian Federation is subject to application, which, unlike the Arbitration Procedure Code of the Russian Federation, does not establish a mandatory claim procedure for this category of disputes.

Moreover, paragraph 3 of clause 5.1. of article 1252 of the Civil Code of the Russian Federation clarifies that the mandatory claim procedure does not apply to disputes regarding the recognition of rights; on suppression of actions that violate the right or create a threat of its violation; the seizure of tangible media in which the result of intellectual activity or means of individualization is expressed; on the publication of a court decision on a violation; on withdrawal from circulation and destruction of tools, equipment or other means that are mainly used or intended to commit a violation of exclusive rights.Also, a certain analogy of the claims procedure for dispute settlement applies to cases of early termination of legal protection of a trademark due to its non-use.Clause 1 Article 1486 of the Civil Code of the Russian Federation provides that an interested person who believes that the copyright holder does not use the trademark in relation to all goods or a part of goods for the individualization of which the trademark is registered, sends such a copyright holder a proposal to apply to the federal executive body for intellectual property with a statement on the waiver of the right to a trademark or to conclude an agreement with an interested person on the alienation of the exclusive right to a trademark in relation to all goods s or parts of goods for the individualization of which the trademark is registered. The proposal of the interested person shall be sent to the copyright holder, as well as to the address indicated in the State Register of Trademarks or in the corresponding register provided by the international treaty of the Russian Federation.If within two months from the day of sending the proposal of the interested person, the right holder does not file an application for waiver of the right to a trademark and does not conclude an agreement with the interested person to alienate the exclusive right to the trademark, the interested person is entitled to apply to thirty days after the specified two months court with a statement of claim on the early termination of legal protection of a trademark due to its non-use.

In accordance with paragraph 6 of clause 2 of part 4 of article 34 of the Arbitration Procedure Code of the Russian Federation, cases of disputes on the early termination of legal protection of a trademark due to its non-use as a court of first instance are considered by the Intellectual Property Rights Court.Thus, an interested person who believes that the rightholder does not use the trademark must, before applying to the Intellectual Property Court, send a proposal to the rightholder. Moreover, such a proposal is in essence an analogue of the claim letter.Moreover, it should be noted that the documents confirming the plaintiff's compliance with the claim or other pre-trial order are referred to the formal requirements for the composition of the documents attached to the application provided for in paragraph 1 article 126 of the Arbitration Procedure Code of the Russian Federation. These documents confirm the existence of the conditions necessary to initiate proceedings.Failure to provide evidence, the plaintiff's compliance with the claim or other pre-trial procedure, is the basis for leaving the claim without motion in accordance with part 1 of article 128 of the Arbitration Procedure Code of the Russian Federation.At the same time, the court also has the right to return the statement of claim without leaving it without movement if, when considering the adoption of the statement, it establishes that the plaintiff has not complied with the claim or other pre-trial procedure for resolving the dispute with the defendant, provided that such an order is mandatory by law (clause 5 of part 1 of article 129 of the Arbitration Procedure Code of the Russian Federation).If, after accepting the claim for proceeding, the court determines that the plaintiff has not complied with the claim or other pre-trial procedure for resolving the dispute with the defendant, the court leaves the statement of claim without consideration, but this rule does not include cases when its observance is not provided for by federal law (paragraph 2 of part 1 of article 148 of the Arbitration Procedure Code of the Russian Federation).Meanwhile, returning the statement of claim or leaving it without consideration does not deprive the plaintiff of the right to apply to the arbitration court again with a statement in the general manner after observing the claims procedure.To summarize, I would like to state the following legal position. The mandatory pre-trial procedure for resolving a dispute is not a barrier to appeal to the court, but a way of resolving the dispute peacefully (clause I of Recommendation N R (86) 12 of the Committee of Ministers of the Council of Europe “On Measures to Prevent and Reduce Excessive Workload on Courts” (adopted on 16.09.1986 at the 399th meeting of the representatives of the ministers). The pacific settlement allows to minimise the likelihood of further contradictions between them and, in the end, reduces the strife. The pacific settlement solves the problem of promoting the establishment and development of partnership business relations (clause 1 of the resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated 18.07.2014 No. 50 “On reconciliation of the parties in the arbitration process”).

Thus, the purpose of a mandatory pre-trial procedure for resolving a dispute is to try to resolve the dispute peacefully without involving a court or other mediators for such a settlement.Moreover, the settlement of the dispute before the court allows in most cases not only to maintain or establish partnerships between the disputing parties, but also to minimize their costs, including for lawyers, state duty, collection of evidence and others.

The criteria of the violation of the rights to a manufacturing secret

Each of the subject matters of intellectual property or the means of individualization enshrined in the Civil Code of the Russian Federation (hereinafter referred to as the C.C.R.F., the Code) has its own criteria, on the basis of which it is possible to conclude whether the actions are a violation of the intellectual property rights or not.

To determine these criteria, I suggest that we should refer to Part Four of the Code, which stipulates for each of the protected results of the intellectual activities and the means of individualization, depending on the peculiarities of these subject matters, a peculiar set of the methods of their use, which are referred to the exclusive right.

At the same time, the violation of the exclusive right, as a general rule, is the use of one of the methods stipulated for a particular subject matter committed without a permission of the right holder.

Thus, in order to determine whether the certain actions constitute the violation, it is necessary to compare these actions with the methods of the use determined for the disputed subject matter of intellectual property and to determine whether the alleged violator has obtained the permission of the right holder.

In the case, it the permission has not been given, such actions may be recognized as a violation of the exclusive right.

For example, it is stipulated for the subject matters of the copyright that the recording of a work on an electronic medium, including the recording in the memory of an electronic computing machine is considered to be a reproduction, which is one methods of the use of the work.

It is worth noting that a program for the electronic computing machine or, as the Ministry of Education and Science has suggested that it should be called, having prepared amendments to Part Four of the Code – “a computer program,” is also a subject matter of the copyright and it is protected as a literary work.

At the same time, we understand that the so-called “pirated” version of the computer program implies that it has been obtained by the user bypassing the defense established by the right holder and without his permission.

In this regard, if such unlicensed version of the computer program has been downloaded and is being stored in the memory of the computer, then such actions being a method of the use of the subject matter of intellectual property, which are committed without the permission of the right holder, may be recognized as a violation of the exclusive rights.

The utility models being the subject matters of the patent law have their own particular criteria. So, the use of the utility model shall be considered to be, in particular, the following: importing into the territory of the Russian Federation, manufacturing, applying, offering for sale, selling, otherwise introducing into the civil circulation or storing for such purposes the product, in which the invention is used (Subparagraph 1 of Paragraph 2 of Article 1358 of the C.C.R.F.).

Herewith, by virtue of Unnumbered Paragraph Two of Paragraph 3 of Article 1358 of the C.C.R.F., the utility model shall be considered to be used in the product, if the product contains each feature of the utility model given in the independent claim of the claims of the utility model contained in the patent.

Thus, in order to recognize the actions as violating the rights to the utility model, a set of conditions must be established, for example: importing into the territory of the Russian Federation of the products that contain each feature of the utility model given in the independent claim of the claims of the utility model contained in the patent.

I am not going to go into details in respect of the issue of the use of a trademark and the criteria of its illegal use, because everybody is more familiar with them quite well, and I shall just note that by virtue of Paragraph 3 of Article 1484 of the C.C.R.F., no one shall be entitled to use without the permission of the right holder the designations that are similar to his trademark in respect of the products for the individualization of which the trademark is registered, or of the homogeneous products, if as a result of such use a possibility of confusion appears.

Now I suggest that we should consider the situation with the criteria of the violations of the rights to a manufacturing secret, and I would better begin with a definition of what the manufacturing secret is, which is also used to be called know-how.

However, interestingly, the term “know-how” (from English “to know how”) has been first introduced by the English judicial practice and initially it has been the expression “to know how to do it.” This term in the form “know how,” which is familiar to us, was first used in the American judicial system (case “Dizend vs D. Brown,” 1916).

As follows from Paragraph 1 of Article 1465 of the C.C.R.F., the manufacturing secret (know-how) shall be deemed the information of any nature (manufacturing, technological, economic, organizational and others) on the results of the intellectual activities in the scientific and technological field and on the methods of carrying out the professional activities that has a real or potential commercial value due to the fact that it is unknown to the third parties, if such information is not freely accessible to the third parties on legal grounds, and the holder of such information undertakes the reasonable measures aimed at keeping it confidential, including by introducing a commercial secret regime.

We see that the definition of the manufacturing secret given in Article 1465 of the Code contains a fairly general concept that does not disclose the essence of what this subject matter is, since know-how is the information, and the information of any nature. Moreover, it is important that such information does not necessarily include only the results of the intellectual activities.

At the same time, the important criteria of the protectability of the manufacturing secret are:

  • the actual or potential commercial value of the information;
  • the fact that the information is unknown to the third parties;
  • the fact that the right holder has undertaken the reasonable measures to keep this information confidential.

Now, according to the above examples concerning the methods of the use of the work, the utility model, the trademark, I suggest that we should analyze the Article of the Code, where the methods of the use of the manufacturing secret are set out.

It is indicated in Article 1466 of the C.C.R.F. that the holder of the manufacturing secret has the exclusive right to the use of it in accordance with Article 1229 of this Code in any method, which does not contradict to the law (the exclusive right to the manufacturing secret), including while manufacturing the products and implementing the economic and organizational solutions.

Is that all???

If we turn to Article 1270 of the C.C.R.F., which defines the methods of the use of the subject matters of the copyrights, it contains 11 subparagraphs devoted to this issue, which occupy more than a page of a printed text. While in the case of the manufacturing secret, only two and a half lines are devoted to this.

However, one should not be in despair, because, if we turn to Paragraph 1 of Article 1472 of the C.C.R.F., which enshrines the liability for the violation of the exclusive right to the manufacturing secret, we shall see that the violator of the exclusive right to the manufacturing secret may also be recognized to be the person, who has received unlawfully the information constituting the manufacturing secret, and who has disclosed or used that information, as well as the person liable for keeping the manufacturing secret confidential in accordance with Paragraph 2 of Article 1468, Paragraph 3 of Article 1469 or Paragraph 2 of Article 1470 of the this Code.

Thus, we can clarify that in order to recognize the actions as violating the exclusive right to the manufacturing secret, the set of conditions is necessary, namely: unlawful obtaining the information constituting the manufacturing secret, and disclosing it or using it without the permission of the right holder, including while manufacturing the products and implementing the economic and organizational solutions.

In this case, it is indicated in Paragraph 2 of Article 1472 of the C.C.R.F. that the person, who has used the manufacturing secret and who has not known and should not have known that using it was illegal, including due to the fact that he has gained access to the manufacturing secret accidentally or by mistake, shall not be liable in accordance with Paragraph 1 of this Article.

Moreover, by virtue of Paragraph 2 of Article 1466 of the C.C.R.F., the person, who has become a holder of the information constituting the protected manufacturing secret in good faith and independently from other holders of the manufacturing secret shall acquire an autonomous exclusive right to this manufacturing secret and therefore cannot be recognized as a violator of the rights to know-how.

However, the issue is still open: what are the criteria of the violation of the rights to the manufacturing secret? Let us try to find out in it using an example.

Let us imagine that company A holds the manufacturing information concerning the manufacture of a tonic beverage, in particular, a recipe and technology of its manufacture, and it uses them in the manufacture.

The commercial secret regime ensuring that the third parties do not have access to this information has been introduced at the company.

Moreover, this information has been obtained by company A in the course of its own independent developments, what may indicate to the fact that this information is unknown to the third parties.

The similar beverage, which manufacturer is company B, appears at the market of tonic beverages. According to the assurances of company B, their beverage is as good as the products of the competitors regarding all indicators, and it is even superior regarding some aspects.

Company A, having carried out a chemical analysis and the tests of the beverage of company B, comes to a conclusion that the beverages has the similar composition and results of drinking, therefore it is suspected that the confidential information leakage from company A has taken place, and as a result this information is in the hands of the competitors.

The right holder of the manufacturing secret starts an active campaign to struggle the violation; it files a statement of claim to the court against company B.

Then, in the course of the court proceedings, the court appoints an expert examination in the case, within the framework of which it puts a question to the expert: “Has the manufacturing secret of company A been used in the manufacture of the products of company B?”

The expert starts examining the technical documentation of both companies, he is present during the process of the manufacture at the enterprises, records the instrument reading and the proportions of the ingredients, measures the temperature, time and density, measures the length of hoses with a tape ruler, and raps the tanks for the presence of the hidden cavities.

In the end, the expert concludes that a part of the information constituting the manufacturing secret has been used in the manufacture of the beverage of company B, the beverages have different tastes, one beverage has a taste of melon, and another one has a taste of strawberry, in addition, the toning effect of the beverage of company B lasts 30 minutes longer than that of the beverage of company A, and also, the freckles disappear after drinking it.

From what we can conclude that it is quite possible that some part of the commercially valuable information, knowledge and skills, expressed in the form of the technical documentation, the equipment, which are necessary to launch the manufacturing process could have been used by company B, but it is not clear how significant this part is. It is also not clear whether this part is an independent protected subject matter of the intellectual rights to the manufacturing secret, and whether it is possible to speak on the violation of the right to the manufacturing secret in general, if the part is used.

Moreover, I believe that when considering the disputes of such kind, it is necessary to evaluate not only the comparison of the manufacturing secret and the disputed products or the manufacturing technology of these products, but also the information that is in the public domain, which could have been used by both parties, in this connection, the popular wisdom is recalled: “All that glitters is not gold,” in other words, not all the information that lies in the safe is really a secret. Although, of course, it will be a secret, but a Polichinelo’s secret.

In addition, in the situation described by me, the actions of company B could have been recognized as a violation only in the case, if, among other things, the direct proofs had been submitted to the court confirming the fact of the so-called commercial espionage, during which that information being really a secret, would have been stolen from company A.

At the same time, it is characteristic that the cases of such category, when the manufacturing secret is being defended, are very few, and the reason for that can only be guessed. Maybe it is because this subject matter is insufficiently studied, or maybe the violations involving the use of the manufacturing secret are few, due to the fact that the right holders keep their secrets artfully.

Summing up this article, I would like to say that, unfortunately, in the legislation and indeed, truth be told, in the judicial practice, there is still a large gap concerning the criteria of the evaluation of the fact of the violation / non-violation of the rights to the manufacturing secret.

For me, as a practicing lawyer, it is not clear what criteria or terms should be applied in this regard: equivalent features, reprocessing, confusing similarity, and identity, maybe something else?

At the same time, I must admit I have held out a hope that the Supreme Court of the Russian Federation would somehow touch upon this issue and give its clarifications regarding this issue in Resolution of the Plenum of 23.04.2019 No. 10 “On the Application of Part Four of the Civil Code of the Russian Federation.” But, unfortunately, this has not happened.

In this context, the issue of the criteria of the violation of the rights to the manufacturing secret remains open and unclear for me.

However, all those who are interested in the topic of the disputes on the defense of the intellectual rights, and in particular, the rights to know-how, I would recommend to read case A40-180850/2017, I suggest that special attention should be paid to the Resolution of the Intellectual Property Court of 10.10.2020, especially to the part of the judicial act, in which the Court gives or rather does not give its evaluation of the arguments of the appealer, as well as to the special opinion of judge T.V. Vasileva of 15.10.2020.

It seems to me that the special opinion reveals the secret literary talents of the judges, which are hidden behind the iron-clad templates of the court decisions and resolutions, and the special opinion of dear Tatyana Vladimirovna is a vivid example of this.

 

P.S. I shall be happy to read the opinions of the colleagues regarding the issue of the criteria of the violation of the rights to the manufacturing secret.

The application of Paragraph 6 of Article 1252 of the Civil Code of the Russian Federation in the disputes on the defense of the exclusive right to the means of individualization.

According to the legal positions expressed in Resolution of the Presidium of the Intellectual Property Court of 28.03.2014 No. SP-21/4 “On the Approval of the Reference Regarding the Issues Arising During the Consideration of Domain Disputes,” the exclusive right to the use of a trademark as an absolute right shall be corresponded by the obligation of an indefinite number of third parties to prevent the use of the designations that are identical or confusingly similar to the right holder’s trademark in respect of the similar products.

When analyzing this legal approach of the Intellectual Property Court, then at first glance it may seem that the person having the exclusive right to the trademark has an “absolute power” over this designation.

For some reason, I immediately think of the Ring of Omnipotence, Gandalf, Sauron, Orcs, the All-Seeing Eye... Oh, it seems that I was carried away in a wrong direction.

So, according to Paragraph 1 of Article 1484 of the Civil Code of the Russian Federation (hereinafter referred as the C.C.R.F., the Code), the person, in whose name the trademark is registered (the right holder) has the exclusive right to the use of the trademark in accordance with Article 1229 of the C.C.R.F. in any way that is not contrary to the law (the exclusive right to the trademark). The right holder may dispose of the exclusive right to the trademark.

According to Paragraph 2 of Article 1484 of the C.C.R.F., the exclusive right to the trademark can be implemented for the individualization of the products, works or services, in respect of which the trademark is registered, in particular by placing the trademark: on the products, including on the labels, the packages of the products that are manufactured, offered for sale, sold, demonstrated at exhibitions and fairs or otherwise introduced into the civil circulation on the territory of the Russian Federation, or stored, or transported with this purpose, or imported into the territory of the Russian Federation; at performing works, rendering services; on the documentation related to the introduction of the products into the civil circulation; in the offers for sale of the products, for performing works, for rendering services, as well as in advertisements, on outdoor signs and in advertising; in the network Internet, including in a domain name, and by other ways of addressing.

No one shall be entitled to use without the right holder’s permission the designations that are similar to his trademark in respect of the products for the individualization of which the trademark is registered, or the similar products, if as a result of such use the possibility of confusion appears (Paragraph 3 of Article 1484 of the Code).

Thus, Article 1484 of the C.C.R.F. defines a list of the ways to use the trademark, under which the person, who uses without the right holder’s permission the designations that are identical or confusingly similar to his trademark in respect of the similar products or services for the individualization of which the trademark is registered, can be recognized as a violator.

Let us imagine the following situation:

An individual entrepreneur has been engaged in the commercial activities related to computer repairing since 2005 in the city of Tomsk under the commercial designation “Transistor.” This designation has not been registered by him as a trademark. In addition, the entrepreneur is an administrator of the domain name tranzzzistor.ru.

In 2018, in Nizhniy Novgorod, LLC Transistor was formed, which also began to carry out the computer repair activities and filed an application for the registration of the trademark of the same name in respect of the services of the 37th class of the ICGS.

In 2019, the company obtained the right to the trademark and filed a statement of claim to the court against the entrepreneur on prohibiting the use of the designation “Transistor,” as well as the designations derived from it, while carrying out the commercial activities for installing, maintaining and repairing computers. The company also asked the court to prohibit the entrepreneur to use those designations in the domain name and at the website, and claimed damages.

If to be guided exclusively by the legal position set out in Article 1484 of the C.C.R.F. and the explanations of the Intellectual Property Court, then, at first glance, the entrepreneur is in a tight corner, and most likely, he will have to say goodbye to the well-known by the natives of Tomsk designation, domain name, and some part of the funds earned as he will have to pay to their right holder as the damages for the illegal use of the trademark.

Meanwhile, if to take a close look at this situation, the entrepreneur has rather good chances of winning, and here is why.

As mentioned above, the entrepreneur started his activities under the disputable designation in 2005 and he has been doing it continuously since that time, while the company was formed only in 2018, so it turns out that the entrepreneur is the holder of the “senior” right to the use of the designation “Transistor” as a commercial designation.

At the same time, in my opinion, there is a certain analogy with the regulation of the rights to the patents, in respect of which the legal regime of the prior use right can be applied.

The prior use right is the right of the person, who is not the patent holder to the gratuitous use of the solution that is identical to the patented one. The prior use right does not refer to the intellectual rights, on the contrary, it acts as the restriction of someone else’s exclusive patent right. Accordingly, the prior user’s actions are not a violation of the rights of the patent holder: “the prior use right refers to the conditions that exclude liability for the use of the subject matters of the patent right.”

Although the legal norms regulating the relations related to the trademarks, unlike the patents, do not contain the concept of the prior use, but one should not forget about the provisions of Paragraph 6 of Article 1252 of the C.C.R.F., which regulate the legal relations under the conditions of the competition of various means of individualization.

Thus, in accordance with Paragraph 6 of Article 1252 of the C.C.R.F., if various means of individualization (a company name, a trademark, a service mark, a commercial designation) are identical or confusingly similar, and as a result of such identity or similarity, the consumers and (or) counterparts can be confused, the advantage shall belong to the means of individualization, the exclusive right to which has arisen earlier, or, in the cases of establishing a priority under the Convention or an exhibition priority, to the means of individualization, which has an earlier priority.

If there is such competition, the relevant dispute on the grounds of Paragraph 6 of Article 1252 of the C.C.R.F. shall be resolved in favor of the right holder of the means of individualization that has the earlier priority.

By virtue of Article 1480 of the C.C.R.F., the state registration of the trademark shall be carried out by the Federal Executive Authority on Intellectual Property in the State Register of Trademarks and Service Marks of the Russian Federation pursuant to the procedure established by Articles 1503 and 1505 of this Code.

It is stipulated by Paragraph 2 of Article 1481 of the C.C.R.F. that the certificate for the trademark shall certify the priority of the trademark and the exclusive right to the trademark in respect of the products indicated in the certificate.

In accordance with Paragraph 1 of Article 1494 of the C.C.R.F., the priority of the trademark shall be established on the date of filing the application for the trademark to the Federal Executive Authority on Intellectual Property.

By implication of Article 1538 of the C.C.R.F., both the word and figurative or the combined designations shall be protected as the commercial designations.

The exclusive right of the use of the commercial designation on the grounds of Paragraph 1 of Article 1539 of the C.C.R.F. shall belong to the right holder, if such designation has sufficient distinctive features and its use by the right holder for the individualization of his enterprise is well-known within some certain territory.

In this connection, the right to the commercial designation arises not earlier than the moment of the beginning of the actual use of such designation for the individualization of the enterprise (for example, a shop, a restaurant and so on) (Paragraph 177 of Resolution of the Plenum of the Supreme Court of the Russian Federation of 23.04.2019 No. 10 “On the Application of Part Four of the Civil Code of the Russian Federation.”

Thus, if the court finds that the actual continuous use of the commercial designation “Transistor” by the entrepreneur began in 2005, and also that this designation has acquired sufficient distinctiveness and popularity on some particular territory, the court can take into account the earlier date of the arise of the right to the entrepreneur’s commercial name than the company’s rights to the trademark, what may serve the grounds for the court’s conclusion that there are no grounds for satisfying the statement of claim.

The analysis of the judicial practice regarding the application of the provisions of Paragraph 6 of Article 1252 of the C.C.R.F. shows that the courts rather often apply this norm starting to defend the economic entities that are under the threat of being held liable for the illegal use of the trademark.

The similar legal position was reflected in Resolutions of the Intellectual Property Court of 31.05.2018 in case No. А27-5416/2017 and of 28.04.2018 in caseNo. A56-58258/2016.

At the beginning of the article, I cited the legal position indicated in the reference of the Intellectual Property Court, according to which the exclusive right to the use of the trademark as the absolute right is corresponded by the obligation of the indefinite number of third parties to prevent the use of the designations that are identical or confusingly similar to the right holder’s trademark in respect of the similar products.

However, if to compare this legal position with the provisions of Paragraph 6 of Article 1252 of the C.C.R.F., it is possible to conclude that the right to the trademark is not so absolute, since it may be restricted, due to the presence of another person's earlier right to the commercial designation.

Recovering damages for the illegal use of a trademark by the right holder, who is under the bankruptcy proceedings

“One is never safe from misfortune and trouble” is a popular expression that everyone has heard at least once in his life. Today, this is a prosperous company, tomorrow, this is a bankrupt – it is a truth of the modern realities.

According to the statistics of the court cases published on the website of the Judicial Department of the Supreme Court, the Arbitration Courts received 61,455 applications for declaring debtors as bankrupts during January-June 2019. As of the middle of 2019, 117,650 cases on bankruptcy remained in the judicial proceedings of the Arbitration Courts, of which 64,992 cases are the cases on bankruptcy of individuals, and 46,659 ones are the cases on bankruptcy of legal entities.

At the same time, as is often happens, the organizations that are subject to the bankruptcy proceedings have a portfolio of various subject matters of intellectual property and the means of individualization equated to them.

I have long been interested in the question: is it possible to defend the intellectual property rights, in particular, by recovering damages for the illegal use of a trademark by the right holder, who is under the bankruptcy proceedings?

After analyzing the judicial practice, I was disappointed, as I had found nothing or almost nothing suitable.

Maybe, of course, I have been looking for in a wrong way or not in a proper place, but the only court case concerning this topic that I have found was case No. A05-9476/2014, according to the circumstances of which, the courts found that the plant recognized as a bankrupt, and an entrepreneur had concluded an agreement on the alienation of the exclusive right to the trademark.

Subsequently, the entrepreneur (a licensor) and the company Russkiy Sever (a licensee) concluded a license agreement, in accordance with which the licensor granted the licensee the right to use the indicated trademark for marking alcoholic beverages.

However, within the framework of the case on insolvency (bankruptcy) of the plant, the court, at the request of a bankruptcy manager declared the agreement on the alienation of the exclusive right to the trademark belonging to the plant as invalid, due to a significant excess of the market value of the debtor's property over the price of a transaction for its alienation (the court decision of 20.03.2014 in case No. A05-313/2012). As the consequences of declaring the agreement as invalid, the court pointed to the restoration of the plant's right to be indicated in the State Register of the Trademarks and the Service Marks of the Russian Federation as the right holder of the disputed trademark.

After the plant’s rights to the trademark were restored, the bankruptcy manager on behalf of the plant filed to the Arbitration Court a statement of claim for recovering damages for the illegal use of the trademark against the entrepreneur and the company Russkiy Sever jointly in the amount of 29,651,742 roubles calculated pursuant to Subparagraph 2 of Paragraph 4 of Article 1515 of the Civil Code of the Russian Federation (hereinafter referred to as the C.C.R.F.), according to which the right holder is entitled to claim at his discretion from the violator of the right to the trademark instead of compensating for losses the payment of damages in double the amount of the value of the products, on which the trademark is placed illegally, or in double the amount of the value of the right of the use of the trademark determined on the basis of the price, which under the comparable circumstances is usually charged for the legal use of the trademark.

At the same time, the plant’s claims were refused to be satisfied in full.

The courts of three instances, while refusing to satisfy the claims, proceeded from the fact that the actions of the defendants regarding the use of the trademark before the recognition of the agreements as invalid were not a wrongful violation of the exclusive right of the plaintiff to the trademark, and therefore the liability in the form of damages for the illegal use of the trademark could not be applied to them.

Although, to be fair, it should be noted that the courts in their judicial acts regarding this case did not make any different conclusions indicating that there were the grounds for the refusal to satisfy the claims lodged.

At the same time, it seems rather strange to me that there is only one court case found regarding this topic. In my opinion, the issue on the illegal use of the subject matters of intellectual property and the means of individualization equated to them that belong to the bankrupt company should be much more acute.

I believe that the company being strong yesterday and having a well-known brand, but being a bankrupt now, which is on the verge of death, should attract even more “carrion eaters” wishing to take advantage from the reputation of the organization that has recently been successful, which is not able of defending its rights currently due to its disastrous situation.

Although, perhaps, this is an answer, because few people want to be near a dying person fearing to become infected with an incurable disease, and in this case, no one wants to assume the reputation of the bankrupt company fearing to “follow in its footsteps.”

At the same time, in order to get onto the issue whether it is possible in principle to recover damages for the illegal use of the trademark in favor of the right holder, who is under the bankruptcy proceedings, with the purpose of increasing the bankruptcy assets, I have decided to write this article, where I shall try to give the answers regarding this issue, while being guided by the norms of the Civil Code of the Russian Federation and Federal Law of 26.10.2002 No. 127-FZ “On Insolvency (Bankruptcy)” (hereinafter referred to as the Law on Bankruptcy).

By implication of the Law on Bankruptcy, insolvency (bankruptcy) (hereinafter referred to as bankruptcy) is the debtor's inability recognized by the Arbitration Court to satisfy in full the claims of the creditors regarding the monetary obligations, regarding the payment of severance allowances and (or) regarding the payment of the labour of the persons, who are employed or who have been employed under a job agreement, and (or) regarding the fulfillment of the obligation to pay the obligatory payments.

At the same time, the restoration of the financial solvency is understood as the debtor’s achievement of such economic indicators that would allow satisfying in full the claims of his all creditors.

Inability to satisfy in full these claims shall entail bankruptcy of the organization and opening the bankruptcy proceedings in respect of its property (Unnumbered Paragraphs Two and Sixteen of Article 2, Unnumbered Paragraph Three of Paragraph 1 of Article 106, Unnumbered Paragraph Five of Paragraph 6 of Article 119 of the Law on Bankruptcy), according to the results of which, the claims shall still be subject to satisfaction, though not in full (proportionately).

Thus, the main objectives of the insolvency (bankruptcy) proceedings are the financial sanation of the debtor and the satisfaction of the creditors’ claims.

In accordance with Articles 131, 134–137 of the Law on Bankruptcy, the debtor's property that is available on the date of opening the bankruptcy proceedings and that is identified during the bankruptcy proceedings shall constitute the debtor's bankruptcy assets, at the expense of which the claims of the debtor’s creditors are subject to be satisfied.

At the same time, the generalized concept of the debtor's property is what he owns (the capital assets and the operating assets) expressed in a monetary form and reflected in the independent balance sheet of the enterprise.

The composition of the debtor's property may include all kinds of property that are necessary for carrying out the economic activities. Typically, tangible and intangible elements are included in property.

The tangible and intangible elements include land plots, buildings, constructions, machinery, equipment, raw materials, semi-finished products, finished products and monetary funds.

The intangible elements are created in the course of the company's life. These include: the company’s reputation and the circle of regular customers, the company name and the trademarks used, the management's skills, the personnel qualifications, the patented manufacture methods, the know-how, the copyrights, the contracts, etc. that can be sold or transferred. In addition, it also follows from Article 2 of the Law on Bankruptcy that the debtor's property is his assets.

The similar legal position was reflected in the Resolution of the Second Arbitration Court of Appeal of 29.03.2018 in case No. А82-10678/2015.

Ii is determined in Unnumbered Paragraph Twenty-Six of Article 2 of the Law on Bankruptcy that the bankruptcy manager is an insolvency officer approved by the Arbitration Court for carrying out the bankruptcy proceedings and for exercising other powers established by the Law on Bankruptcy, or the State Deposit Insurance Agency that exercises these powers in the cases established by the Law on Bankruptcy.

By implication ofParagraph 1 of Article 129 of the Law onBankruptcy, the bankruptcy manager, who is a professional participant in the field of bankruptcy, is endowed with competence to manage operatively the bankruptcy proceedings.

Proceeding fromUnnumbered Paragraph 5 of Paragraph 3 of Article 129 ofthe Law on Bankruptcy, the bankruptcy manager shall be obliged to file to the Arbitration Court on behalf of the debtor the claims for recognizing the transactions and decisions as invalid as well as for the application of the consequences of invalidity of the void transactions concluded or performed by the debtor, the statements of claim for recovering the losses caused by the actions (inaction) of the debtor’s head, the persons included in the Board of Directors (the Supervisory Council), the Collegial Executive Body or other management body of the debtor, of the owner of the debtor’s property, the persons acting on behalf of the debtor in accordance with a power of attorney, of other persons acting in accordance with the debtor’s constituent documents, to file the statements of claim for reclaiming the debtor's property from third parties, for the termination of the agreements concluded by the debtor, and to perform other actions stipulated by the federal laws and other regulatory and legal acts of the Russian Federation and aimed at returning back the debtor's property.

By virtueof Paragraph 4 of Article 20.3 of the Law on Bankruptcy, the bankruptcy manager shall bear an independent obligation to act in the interests of the debtor and the creditors in good faith and reasonably. The bankruptcy manager shall perform this obligation regardless of whether the creditors have approached him with any offers or not. This means that the measures aimed at increasing the bankruptcy assets shall be planned and implemented primarily by the insolvency officer himself as the professional, who is entrusted with the current management of the bankruptcy proceedings (decision ofthe Supreme Court of the Russian Federation of 12.09.2016 No. 306-ES16-4837).

As it is known, the intellectual rights shall be defended by the ways stipulated by the Code taking into account the essence of the violated right and the consequences of the violation of this right (Article 1250 of the C.C.R.F.).

It is stipulated by Subparagraph 3 of Paragraph 1 of Article 1252 of the C.C.R.F. that the defense of the exclusive rights to the results of the intellectual activity and to the means of individualization shall be carried out shall be carried out, in particular, by lodging a claim for compensating for losses – against the person, who has used illegally the result of the intellectual activity or themeans of individualization without concluding an agreement with the right holder (a non-contractual use), or who has otherwise violated his exclusive right and caused him losses.

In accordance with Paragraph 3 of Article 1252 of the C.C.R.F., in the cases stipulated by the Code for the certain kinds of the results of the intellectual activity or the means of individualization, in the case of the violation of the exclusive right, the right holder shall be entitled instead of compensating for losses to claim from the violator the payment of damages for the violation of the said right. The damage shall be recovered, if the fact of the legal violation is proved. In this case, the right holder, who has approached for the defense of the right, shall be exempted from proving the amount of the losses caused to him.

In addition, by virtue ofParagraph 47 of the Judicial Practice Review on the Cases Related to the Settlement of the Disputes on the Defense of the Intellectual Rights (approved by the Presidium of the Supreme Court of the Russian Federation of 23.09.2015), recovering damages for the illegal use of the trademark, by implication of Paragraph 3 of Article 1252 of the C.C.R.F., is an alternative to recovering losses in the case, when proving their particular amount is not possible.

It is established by Paragraph 4 of Article 1515 of the C.C.R.F. that the right holder shall be entitled to claim at his discretion from the violator instead of compensating for losses the payment of damages:

1) in the amount from ten thousand roubles to five million roubles determined at the discretion of the court on the basis of the nature of the violation;

2) in double the amount of the value of the products on which the trademark is placed illegally, or in double the amount of the value of the right of the use of the trademark determined on the basis of the price, which in the comparable circumstances is usually charged for the lawful use of the trademark.

Proceeding from the overall interpretation of Articles 1252 and 1515 of the C.C.R.F. in conjunction with Articles 20.3 and 129, 131 of the Law on Bankruptcy, one can draw the following conclusions:

- the bankruptcy manager shall carry out the powers of the debtor’s head;

- the range of the main obligations of the bankruptcy manager shall include the formation of the bankruptcy assets;

- to form the bankruptcy assets, the insolvency officer shall make the managerial decisions aimed at searching, identifying and returning back the debtor’s property held by third parties, he shall be entitled to file to the court at his own initiative the statements of claim, including for recovering the losses caused to the debtor by the actions of other persons;

- the damages for the illegal use of the trademark, by implication of Paragraph 3 of Article 1252 of the C.C.R.F., are an alternative to recovering losses.

Thus, it can be concluded that the bankruptcy manager, by virtue of the powers granted to him by the Law on Bankruptcy, is entitled to identify the facts of the illegal use of the subject matters of intellectual property, including the trademarks belonging to the debtor, and in accordance with the norms of Part Four of the Civil Code of the Russian Federation, to lodge claims against the violators for recovering damages for the illegal use, and to direct the damages recovered to form the bankruptcy assets for the subsequent satisfaction of the creditors’ property claims.

A domain name as a subject matter of the law

A number of the disputes involving domain names is growing more and more every day, and an issue on the legal nature of a domain name arises even more often, in particular, what rights the domain name confers on its owner and how the domain name can be a participant in the civil legal relations.

The domain name individualizes in a specific way the website, where the addressing is exercised to. Despite this fact, the domain name shall not be a result of the intellectual activities or a means of individualization, which exhaustive list is contained in Paragraph 1 of Article 1225 of the Civil Code of the Russian Federation (hereinafter referred to as the C.C.R.F.).

The results of the intellectual activities and the means of individualization protected according to this order, except the domain names, shall not include, in particular, the names of non-commercial organizations (Article 4 of Federal Law of 12.01.1996 No. 7-FZ “On Non-Commercial Organizations”), the names of the mass media (Article 2 of Law of the Russian Federation of 27.12.1991 No. 2124-1 “On Mass Media”).

The domain name shall not be granted the legal protection on the grounds and according to the order stipulated by Part Four of the C.C.R.F. The right to the domain name is subject to be protected on the grounds of the general provisions of the C.C.R.F. on the ways to defend the civil rights.

In accordance with the provisions of Article 128 of the C.C.R.F., the subject matters of the civil rights include things, including money and securities, other property, including the property rights; works and services; the protected results of the intellectual activities and the equated to them means of individualization (intellectual property); intangible benefits.

Taking into account the fact that the information technology has a certain value and can be a subject of a transaction, the domain name, the right to administer it, should be qualified as the property right, which essence is in the ability of the person, who has registered the domain name, to place on the Internet the information resource that is accessed by a user of the Internet by typing some certain characters that make up the domain name.

Moreover, according to Paragraph 57 of “GOST R 51303-2013. The National Standard of the Russian Federation. Trade. Terms and Definitions” approved by Order of the State Standard of 28.08.2013 No. 582-st (Standard), an online store shall mean a part of the trade enterprise/trade organization or the trade organization intended to provide the buyer via the Internet with the information necessary for making a purchase, including on a range of the products, the prices, the seller, the methods and the conditions for the payment and the delivery, to receive from the buyers via the Internet the messages on an intention to purchase the products, and also to ensure a possibility of delivering the products by the seller or its contractor to the address indicated by the buyer or to a self-pickup point.

A commercial designation shall be the means of individualization of the enterprise. If the point is about the online store, an individualizing function may be performed by the domain name that may coincide with the commercial designation and/or with a trademark.

The owner of the property right shall be an administrator. In accordance with the Rules for the Registration of the Domain Names in the Domain RU, the administrator is the person, who has concluded an agreement on the registration of the domain name and he carries out administering the domain, that is, he determines an order for using the domain. The right of administering exists by virtue of the agreement for the registration of the domain name and it shall be valid since the moment of the registration of the domain name during the registration period.

Administering shall include: ensuring the functioning of the server, where the website is located; maintaining the website in working order and ensuring its availability; performing the backuping of the website components and the parameters of the database setting; carrying out the organizational and technical arrangements to defend the information on the website from unauthorized access; installing the software necessary for the operation of the website, including in the event of an emergency; registering the employees serving the website, and granting the right to change the information on the website; performing a routine maintenance on the server (replacing or adding the components of the website, keeping the log backup files, controlling the availability of a free table space of the database, etc.); ensuring the placement of the information on the website; carrying out the permanent monitoring of the state of the safety system of the web services required for the correct operation of the application and the information on the website; performing the works for updating and improving the functional services of the website; amending the structure and the design of the website; other kinds of the works.

A domain administrator is an individual or an individual entrepreneur, or a legal entity, which the domain name is registered to.

The Supreme Court of the Russian Federation in Resolution of the Plenum of 23.04.2019 No. 10 “On the Application of Part Four of the Civil Code of the Russian Federation” summarized the judicial practice. It follows from the Resolution that the website owner shall determine independently the order for using the website (Paragraph 17 of Article 2 of Federal Law of July 27, 2006 No. 149-FZ “On the Information, Information Technology and the Protection of the Information”).

In the case of placing on the website the material that includes the results of the intellectual activities or the means of individualization, the burden of proving the legality of such placement shall rest with the administrator. In the absence of such proofs, it shall be presumed that the website owner is the person, who directly uses the relevant results of the intellectual activities or the means of individualization. Accordingly, the responsible for the use of the subject matters of intellectual property shall rest with the administrator.

If the website owner makes changes to the material placed by third parties on the website that contains the results of the intellectual activities or the means of individualization, resolving the issue on attributing him to the information intermediaries depends on how active role he has played in the formation of the material placed and (or) whether he has gained income directly from the illegal placement of the material. Significant processing the material and (or) gaining the above income by the website owner may point to the fact that he is not the information intermediary, but the person, who directly uses the relevant results of the intellectual activities or the means of individualization.

Unless otherwise follows from the circumstances of the case and the proofs submitted, in particular, from the information placed on the website (Part 2 of Article 10 of the above Law), it shall be presumed that the website owner shall be the administrator of the domain name that is addressing to the appropriate website.

The responsibility for the content of the information on the website shall rest with the domain administrator, as the actual use of the website resources is impossible without the participation in one form or another of the domain administrator, who is the person, who has created the correspondent technical conditions for the visitors of his Internet resource.

The administrator of the domain name shall prescribe the order for the use of the domain, bear responsibility for choosing the domain name, the possible violations of the rights of third parties related to the choice and the use of the domain name, as well as bear the risk of the damages related to such violations.

The actions of the administrator related to getting the right to the domain name (including taking into account the circumstances of its subsequent use) may be recognized as an unfair competition act. Based on the purposes of the registration of the domain name, the very registration may be recognized as the violation of the exclusive right to the trademark.

The court may satisfy the claim for compelling the cancellation of the registration of the domain name, if it is exactly getting the right to the domain name that has been recognized as the violation of the exclusive right.

The claim for suppressing the actions that violate the right to the trademark and which are expressed in the illegal use of the domain name (Subparagraph 2 of Paragraph 1 of Article 1252, Subparagraph 5 of Paragraph 2 of Article 1484 of the C.C.R.F.) may be filed against the administrator of the corresponding domain name.

The claim for the damages for the illegal use of the trademark in the domain name, as well as the claim for recovering the damages (Subparagraph 3 of Paragraph 1, Paragraph 3 of Article 1252 of the C.C.R.F.) may be filed against the administrator of the corresponding domain name and against the person, who has actually used the domain name being identical or confusingly similar to the trademark regarding the products that are homogeneous with the ones for the individualization of which the trademark has been registered. At the same time, such persons shall be jointly responsible to the right holder. If there are the appropriate grounds, the administrator of the domain name shall be entitled to file a recourse claim against the person, who has actually placed the information on the homogeneous products on the corresponding Internet resource under the disputed domain name.

According to the plaintiff’s petition, the information on the administrator of the domain name shall be required from the registrar of the domain name according to the order stipulated by Article 57 of the Civil Procedural Code of the Russian Federation, Article 66 of the Arbitration Procedural Code of the Russian Federation.

According to the claim for suppressing the actions that violate the right to the trademark and which are expressed in the illegal use of the domain name, in order to prevent causing significant damage to the applicant, the interim measures that are aimed at preserving the existing state of the relations between the parties may be applied, in particular a prohibition to the administrator to perform any actions aimed at refusing or transferring the domain name, including a replacement of the registrar, as well as a prohibition to the registrar to cancel the domain name and to transfer the rights of administering the domain name to another person.

Having analyzed the established judicial practice, it is possible to conclude that the domain name is not only the means of addressing on the Internet, but it is also the property rights related to this means that can be implemented by the administrator of the domain name.

Securing proofs in patent disputes

The disputes in the field of intellectual property are referred to the category of the disputes of increased complexity. Undoubtedly, the patent disputes are the most complex ones, as their consideration requires experience and relevant qualifications. The judges, who consider the patent disputes and the representatives of the persons involved in such cases, often have technical education in addition to legal education.

However, the complexity of the patent disputes is not only in the consideration, but also in preparing the case for the judicial proceedings and in collecting the proofs.

When applying to court with a claim to defend the violated right, the plaintiff must prove the existence of an exclusive right to the result of the intellectual activity and the fact of a violation on the part of the defendant. To prove the existence of the right does not cause any complications. The document certifying the exclusive right is a patent granted by the Federal Executive Authority on Intellectual Property.

To prove the fact of an illegal use is not just complicated, but very complicated and often impossible. Due to the complications associated with collecting the proofs, a patent holder often refuses from the very idea to defend his exclusive right. In some cases, the refusal from the defense of the exclusive right is justified, but the patent holder often simply does not know about his opportunities, in particular, about the opportunity to use a mechanism of securing the proofs.

In accordance with Paragraph 55 of Resolution of Plenum of the Supreme Court of the Russian Federation of 23.04.2019 No. 10 “On the Application of Part IV of the Civil Code of the Russian Federation,” “While considering the cases on the defense of the violated intellectual rights, the courts should take into account the fact that the law has not established a list of the admissible proofs based on which the fact of violation shall be established (Article 55 of the Civil Procedural Code of the Russian Federation the Russian Federation, Article 64 of the Arbitration Procedural Code of the Russian Federation). Therefore, while resolving an issue on whether such fact has taken place, the court, by virtue of Articles 55 and 60 of the Civil Procedural Code of the Russian Federation, Articles 64 and 68 of the Arbitration Procedural Code of the Russian Federation, shall be entitled to admit any means of proving stipulated by the procedural legislation, including the ones obtained with the use of information and telecommunication networks, in particular the Internet.”

All proofs shall be assessed by the court, while considering the case (Article 67 of the Civil Procedural Code of the Russian Federation, Article 71 of the Arbitration Procedural Code of the Russian Federation). If the circumstances based on the information contained in the Internet are to be proved in the case, such information may be captured and formalized by a notarial protocol of inspection of a material proof – a protocol of inspection of the website. This is a rather time-consuming and costly procedure, which is associated, first of all, with the fact that the preparation of the protocol requires time, which the patent holder often does not have.

According to Paragraph 18 of Article 35 of the Outlines of the Legislation of the Russian Federation on Notary of 11.02.1993 No. 4462-I, securing the proofs shall refer to the notarial actions being made by notaries. According to Article 1 of the Outlines of the Legislation of the Russian Federation on Notary, a notary, while performing the notarial actions, shall act on behalf of the Russian Federation.

It is stated by Article 102 of the Outlines of the Legislation of the Russian Federation on Notary that at the request of the interested parties, the notary shall secure the proofs necessary in the case of considering the case in the court or the administrative authority, if there are the grounds to believe that submitting the proofs will subsequently become impossible or complicated.

Securing the proofs shall be carried out by inspecting them (Article 103 of the Outlines of the Legislation of the Russian Federation on Notary) and capturing them by means of drawing up the protocol with an indication of the circumstances discovered during the inspection (Paragraph 45 of Order of the Ministry of Justice of the Russian Federation of 15.03.2000 No. 91 “On Approval of the Methodological Recommendations Regarding Certain Kinds of the Notarial Actions Carried out by the Notaries of the Russian Federation”).

The notarial protocol of inspection of the proofs itself is admitted by the courts as a written proof, which complies with an admissibility criterion.

Capturing the fact by the notary may be carried out without notifying the violator as due to the opportunity of removing such information, this case may be referred to the exigent circumstances. This opinion has been confirmed in the judicial practice.

The Court explains in the above Resolution of the Plenum of the Supreme Court of the Russian Federation of 23.04.2019 No. 10 that along with the proof, which has been inspected by the notary, the printouts of the materials placed on the Internet may be considered as an admissible proof. At the same time, the printout materials should contain an address of the webpage, which the printout has been made from and the time of getting it should be reflected as well. It is admitted for these printouts to be made and certified by the persons involved in the case.

A document confirming the payment for the product and the one based on other proofs, such as audio or video recordings, may be submitted as the proofs of the illegal use.

If there are the grounds to believe that submitting the proofs will subsequently become impossible or complicated, then the proofs necessary for the case may be secured by the notary (Articles 102, 103 of the Outlines of the Legislation of the Russian Federation on Notary).

It is quite complicated to collect independently the proofs regarding the use of the invention that is defended by the patent of the Russian Federation. This is especially true for the invention, which is a method of the manufacture of the product. It is necessary to know and understand a technological process of the manufacture of the products and to have access to it to capture it.

In accordance with Paragraph 1 of Article 72 of the Arbitration Procedural Code of the Russian Federation “The persons involved in the case, who have the grounds to fear that submitting the necessary proofs to the Arbitration Court will become impossible or complicated, may file a petition on securing these proofs.”

Securing the proofs is carried out by the Arbitration Court according to the rules established by the Arbitration Procedural Code of the Russian Federation to secure the claim.

Following the petition filed by an organization or a citizen, the Arbitration Court shall be entitled to undertake the measures to secure the proofs before lodging the claim.

The persons involved in the case, who have the grounds to fear that submitting the necessary proofs to the Arbitration Court will become impossible or complicated may file the petition on securing these proofs (Paragraph 1 of Article 72 of the Arbitration Procedural Code of the Russian Federation), as well as they may apply on securing the proofs before lodging the claim (Paragraph 4 of Article 72 of the Arbitration Procedural Code of the Russian Federation). The petition shall specify the proofs that need to be secured, the circumstances that need to be confirmed by these proofs, the reasons that have forced to file the petition on securing them (Paragraph 2 of Article 72 of the Arbitration Procedural Code of the Russian Federation).

The courts resolve the issue on a need to secure the proofs taking into account the information indicated in the corresponding petition, including the information on the content of the case being considered, on the proofs that need to be secured, on the circumstances that need to be confirmed by these proofs, as well as on the reasons that have forced the applicant to file the petition on securing the proofs (Paragraph 7 of Resolution of the Plenum of the Supreme Court of the Russian Federation of 15.06.2010 No. 16 “On the Practice of the Application by the Courts of the Law of the Russian Federation “On Mass Media”).

The need to secure the proofs arises, if it is obvious that the sources of the information on the facts can be destroyed, will disappear, will change their properties or their use will become impossible or complicated.

In accordance with Article 90 of the Arbitration Procedural Code of the Russian Federation, the secure measures shall be the urgent temporary measures aimed at securing the claim or the property interests of the applicant. The secure measures shall be admitted at any stage of the arbitration process, if the failure to undertake these measures may cause complications or make it impossible to execute the judicial act, as well as in order to prevent causing significant damage to the applicant. The secure measures must be proportional to the claim lodged.

The Arbitration Court shall find the party’s petition on applying the secure measures to be justified, if there are the proofs confirming the existence of at least one of the grounds stipulated by Paragraph 2 of Article 90 of the Arbitration Procedural Code of the Russian Federation and it shall be entitled to apply the secure measures provided there are both grounds. In addition, by virtue of Paragraph 4 of Article 93 of the Arbitration Procedural Code of the Russian Federation, securing the claim cannot be refused, if the person applying on securing the claim has submitted counter security.

In the case the petition is satisfied, the bailiffs may come to the manufacture in order to capture the manufacturing process. However, as a rule, such petitions are not satisfied by the court because while applying on securing the proofs, the plaintiff cannot determine the proof, which he cannot obtain independently. In addition, the plaintiff often cannot indicate the place, where the proof is located. This argument is confirmed by the judicial practice, “the applicant has not indicated (has not concretized) the place and the method of securing the proofs. In particular, there has not been indicated the location of the applicant's personal computer, at which the documents should be reviewed according to the applicant's petition pursuant Article 72 of the Arbitration Procedural Code of the Russian Federation).” in the Decision of the Intellectual Property Court in case No. SIP-213/2018 of 03.05.2018.

In the cases of emergency, when preparing the case for the judicial proceedings, as well as during hearing the case, the court, according to Paragraph 10 of Part 1 of Article 150 and Article 184 of the Civil Procedural Code of the Russian Federation the Russian Federation, Article 78 and Paragraph 3 of Part 1 of Article 135 of the Arbitration Procedural Code of the Russian Federation, shall be entitled to carry out inspection of the proofs and studying them at place pursuant the manner stipulated by these Articles (in particular, to review the information posted at a certain resource of the information and telecommunication network in real-time).

Summing up, it can be concluded that it is often not so complicated to obtain the legal protection of the result of the intellectual activity compared to its defense.

Is the use of anyone else's trademark as a keyword in contextual advertising on the Internet a violation?

The Internet has rapidly burst into our lives, and very few people can imagine how we have lived without it before. It is through the Internet that we learn the latest news, keep an eye on the lives of celebrities, listen to music and watch movies, become acquainted, communicate, fall in love, buy shares of large companies and baby diapers. Even to send a person to the final journey honorably, we go to the World Wide Web.

In connection with the rapid development of the digital technologies, the ways of promoting products and services among consumers are also changing. Fifteen or twenty years ago, the most famous ways of buying the products remotely were perhaps the Shop on the Couch or ordering the products through the catalogs that were distributed through mailboxes. But the majority of the consumers still went shopping to stores and markets.

Once the Internet appeared in our lives, many people refused from going shopping to the stores and they make orders at the websites: air tickets and bicycles, clothes and seedlings, animators for children holidays and the food from a supermarket, they seek for translators, teachers, loaders, and lawyers.

Due to the fact that the trade “moved” to the Internet, its main engine – advertising – followed it as well.

The main kinds of the Internet advertising are: search advertising, contextual advertising, media advertising, and geotargeting.

Singers, football players, actors, bloggers are engaged in the Internet advertising placing promotional video clips or photos on their pages in the social networks.

Moreover, the said list of the ways of the Internet advertising is not exhaustive. However, one way or another, but all of these ways of advertising are based on the analysis of the needs of buyers.

Advertisements usually correspond to a theme (context) of the webpage, where the advertisement is displayed, and/or they correspond to the interests of the user, whom the advertisement is displayed to, the theme of such advertisement, which is determined according to a totality of keywords/combinations of words during the visits of the website and the search queries.

The advertiser carries out independently preparing and editing an advertising campaign, including composing/changing the advertisements, including selecting the keywords according to which a search system will display the advertisement.

While carrying out the preparation of the advertising campaign, the advertisers often resort to the dishonest ways of struggle using the word elements of someone else's trademarks, including the trademarks of their competitors, as a keyword to display their advertisement.

It looks something like in the example that I am going to give using one of the cases[1] run by our company:

LLC ADL being a right holder of the trademarks according to certificates of the Russian Federation No. 277433 with the word designation “GRANFLOW” and No. 277474 with the word designation “GRANTOR” established that while inputting the keyword “GRANTOR” in a search bar at the website Yandex , the first link displayed by the search system was the link to the advertisement offering to purchase the GRANTOR Control Cabinets at the website of LLC GC MFMC, and while inputting the keyword “GRANFLOW” in the search bar at the website Yandex, the first link displayed by the search system was the link to the advertisement offering to purchase the GRANFLOW Pumping Units also at the website of LLC GC MFMC.

At the same time, LLC ADL and LLC GC MFMC are the direct competitors, the right holder's products were not sold at the website mfmc.ru, where the above advertisements led to, LLC GC MFMC sold its own products.

LLC ADL, considering the actions of LLC GC MFMC to be illegal as they were connected with the use without a permission of the right holder of the word designations “GRANTOR” and “GRANFLOW” in the texts of the advertisements for advertising the products being homogeneous with the products, for which the legal protection to the trademarks had been granted, filed a statement of claim to the Arbitration Court indication as the grounds for the claims lodged the fact that LLC GC MFMC was using the word designations “GRANFLOW” and “GRANTOR” that were similar to the plaintiff’s trademarks in the Internet advertising through the service “Yandex. Direct” for advertising the engineering equipment – the OMEGA Control Cabinets and the ALPHA Pumping Units, which LLC GC MFMC manufactured and marked with its own designations.

The Arbitration Court of the City of Moscow refused to satisfy the claims proceeding from the fact that LLC GC MFMC had not used the plaintiff's trademark by implication of Article 1484 of the Civil Code of the Russian Federation (hereinafter referred to as the C.C.R.F.), since the use of the combination of words being similar to the registered word trademark as a keyword for the search on the Internet could not be equated to the use of the trademark. The keywords cannot be referred to the ways of using the trademark, taking into account the lack of an individualizing ability.

The right holder disagreed with the decision made and filed an appeal petition, in which it asked to cancel the decision of the court, to adopt a new judicial act on satisfying the claims lodged.

According to the Resolution of the Ninth Arbitration Court of Appeal of 20.09.2017, the Decision of the Arbitration Court of the City of Moscow of 13.07.2017 in case number A40-55417/17 was canceled, the damage in the amount of 550,000 (Five hundred and fifty thousand) roubles was collected from LLC GC MFMC in favor of LLC ADL for a violation of the exclusive rights to the trademarks.

The Court of Appeal established a cause and effect relationship between the defendant’s actions for composing the disputable advertisements, selecting the keywords to display those advertisements, launching the advertising campaigns on the Internet directed to the promotion of its products through the use of the plaintiff’s trademarks and the violation of the rights of LLC ADL to the trademarks expressed in the illegal use of the word designations being confusingly similar to the trademarks owned by the plaintiff in respect of the products being the homogeneous products, for which the legal protection of the trademarks had been granted.

The Intellectual Property Court shared the findings of the Court of Appeal and upheld the Resolution.

However, in this case, the fact that the disputable designations had been used by the competitor not only as a keyword, but also, as it can be seen, directly in the advertisements was in favour of the right holder. And such presumption and impudence to some extent on the part of LLC GC MFMC led to the fact that suppressing their unfair activities was a success.

However, there are more cautious advertisers, who do not place someone else's trademarks directly in their advertisements, but they use them in the formation of the advertising campaigns only as the keywords.

As the judicial practice shows, many rights holders have tried to struggle against this, but the courts in such cases adhere consistently to the position that the keywords used on the Internet, being a technical parameter, serve to the search for the information by the users and they cannot serve as a means of individualization of the products and services, and therefore, there is not the violation of the exclusive rights of the plaintiff to the trademarks in this case.

In addition, the courts, while refusing to satisfy the claims lodged, conclude that the keywords are not a part of the very advertisement, they are not included in its content and they are not demonstrated to the users. In this regard, the users do not have the information on the fact according to what keywords the advertisement shown to them by the search system is placed, and they also cannot correlate the certain advertisement with the particular keywords.

As it follows from the judicial acts, this finding of the courts is based on the rules of displaying the advertisements through the search services, by analyzing which, the courts conclude that the keyword does not have the individualizing ability even in respect of the particular advertisement as it is impossible to identify the particular advertisement among all the rest on the basis of the keyword.

The similar legal approach was reflected in the Resolutions of the Intellectual Property Court of 25.04.2019 in case No. A40-167611/2018, of 26.09.2018 in case No. A40-200682/2017, of 26.11.2013 in case No. A40-164436/2012.

In my opinion, this legal position is rather disputable, because it entails abusing by the dishonest sellers, while advertising the products and services.

Using someone else's trademarks, especially the trademarks of their competitors as the keywords in contextual advertising, the advertisers get unreasonable advantages, because many consumers, while inputting the keywords into the search bar and getting the search results, visit the first few links that are at the beginning of the search page.

In the majority of the cases, these first links have nothing to do with the right holders. Among them, there are also the links to the websites, which lack both the products and the services of the right holder, but on the contrary, only the products of the competitors are placed, therefore, the consumer, who is initially aimed at the particular product, can buy a different product. The highest probability of such choice of the consumers refers to short-term products or cheap products, as the degree of the buyers’ attentiveness decreases, and the probability of confusing increases accordingly.

However, it should be noted that currently, in connection with the adoption of Resolution of the Plenum of the Supreme Court of the Russian Federation of 23.04.2019 No. 10 “On the Application of Part Four of the Civil Code of the Russian Federation” (hereinafter referred to as Resolution No. 10), in my opinion, a positive trend in this issue has emerged.

Thus, it is stated in Paragraph 172 of Resolution No. 10 that the use by the advertiser, while placing contextual advertising on the Internet as a criterion for displaying the advertisement, of the keywords (the combinations of words) that are identical or confusingly similar to the means of individualization belonging to another person, taken into account the purpose of such use, may be deemed an unfair competition act (Article 14.6 of the Federal Law “On Defense of Competition,” Article 10.bisof the Paris Convention).

At the same time, as it is known, the Federal Antimonopoly Service of Russia prepared Letter of the FAS Russia of 21.10.2019 No. AK/91352/19 “On the Use of the Means of Individualization as the Keywords,” in which the Antimonopoly Body published its recommendations and sent for the use in the work for the purposes of the uniformity of the consideration by the territorial Antimonopoly Bodies of the statements on the unfair competition connected with the use as the keywords of the word designations being identical or confusingly similar to the means of individualization belonging to another economic entity, while placing the Internet advertising by the persons, who are not the right holders of those means of individualization, and of the possibility of qualifying those actions according to Part 1 of Article 14.6 of the Law on Defense of Competition.

In my opinion, the criteria established by the Antimonopoly Body in this Letter establish the unachievable standards for proving in this category of the disputes.

However, by the time of the preparation of this article, the practice of the application of these positions has not been developed. As they say, time will tell.


The participation of a detective in the cases on the defense of the rights to the subject matters of intellectual property

It seems that when we hear the word “detective,” we immediately imagine Hercule Poirot – a character from the novels of Agatha Christie or a mysterious man hiding himself under a raincoat and a wide-brimmed hat, hiding his eyes behind the dark glasses, tracking down an oligarch’s wife, who has started an affair with another man.

At the same time, it is quite difficult to imagine at first glance what role a detective can play in the judicial proceedings, and particularly in the cases regarding the defense of the rights to the subject matters of intellectual property.

In addition, the question arises whether the evidences and the information collected by the detective are recognized by the courts as the admissible evidences? And indeed, what is a procedural status of the detective in the judicial proceedings?

First of all, it is worth noting that the detective can play a fairly important role in the formation of an evidentiary basis.

For example, using the help of the detective, it is possible to carry out a test purchase of the product that is allegedly counterfeit, to collect other evidences confirming the fact of an illegal use of the subject matters of intellectual property or the means of individualization equated to them, to carry out an inspection of the material evidences in the presence of a notary, to collect the information about the persons and organizations directly or indirectly exercising control over an organization-violator, to identity and to detect the contacts of an administrator of the domain name and many other things.

The practicing lawyers will say that the above list of the tasks that can be solved with the help of the detective, is quite possible to be implemented independently, without resorting to his help.

Of course, one is capable of doing a lot himself and one can carry out the test purchase and a search in the Internet for the information about the persons, who are the beneficiaries of the illegal business, as well as one can send an advocate’s letter of enquiry to the domain registrar in order to identify an owner of the domain name.

But there are good reasons why the humanity came to the division of labour at one of the steps of its evolutionary development. Some people became good hunters, another people – farmers, still others – merchants, and the different ones became, for example, builders.

After all, when a printer or a computer breaks down in the office, we call a specialist. Many people will say most certainly that the collection of evidences is our job, our clients pay us for it, it is related directly to running the judicial case.

Meanwhile, I would dare not to agree with such point of view, because I believe that the efficient office equipment is also an important aspect of a successful case. After all, when the computer is “running slow” or the printer refuses printing, one has to think about how to fix the problem instead of thinking about a strategy of the case.

In this regard, I believe that it is the specially trained people, who have the necessary knowledge, techniques, equipment for collecting the information and forming the evidentiary basis, who should be engaged in collecting the evidences for judicial disputes.

Of course, this process should take place under the control of the lawyer, who is directly running the case, and the case will be prepared much better for filing to the court, if the lawyer does not deal with the trips to a notary or to trading establishments in order to identify the counterfeit products, but devotes his time to writing a statement of claim or to an analysis of the judicial practice.

Moreover, it is quite difficult to prove in some categories of the disputes that in the course of carrying out the test purchase the right holder has purchased exactly the product that is represented in the judicial case materials as a material evidence, since the name or the article of the product that has been purchased from the defendant may be not indicated on a cashier’s check.

In such a situation, the evidence of the purchase of the counterfeit products along with the cashier’s check will be a video recording of the purchase process. But, you know, it will be quite strange, when you come to a store and start shooting openly the process of purchasing a product, the seller will most likely have doubts in this regard and he will refuse to sell you the product.

It is obvious that hidden shooting requires certain skills in order to capture not a ceiling or your shoes, but exactly the counterfeit product and the process of its transfer from the seller to the buyer, this is the case, when you will need the detective.

You will probably say that making hidden shooting without obtaining a permission of the person in respect of whom shooting is being made or the owner of the premises, in which shooting is made, is inadmissible.

However, I suggest that we should refer to the Arbitration Procedural Code of the Russian Federation, which Part 2 of Article 64 and Part 2 of Article 89 allow the audio and video recordings as an evidence in the case.

However,the Arbitration Procedural Code of the Russian Federation does not contain a requirement for the consent of the person in respect of whom shooting is being made. Making the video recording (including by a hidden camera) in the places, which are apparently and explicitly open for public visits and which are not excluded due to the law or the legal custom from being used for video recording is a self-defense element of the civil law, what corresponds to Article 14 of the Civil Code of the Russian Federation and Part 2 of Article 45 of the Constitution of the Russian Federation, according to which everyone shall be entitled to defend their rights and freedoms by all methods that are not prohibited by the law (the Resolution of the Intellectual Property Court of 03.06.2015 in case No. A56-27546/2014).

Thus, involving the detective to collecting the evidences of the distribution of the counterfeit products, one should not worry that in the future his hidden shooting of carrying out the test purchase will be rejected by the court as made in a violation of the law.

However, according to the explanations set out in Paragraph 2 of the Review of the Practice of the Consideration by the Arbitration Courts of the Cases Connected with the Application of the Legislation on Intellectual Property, approved by Information Letter of the Presidium of the Supreme Arbitration Court of the Russian Federation of 13.12.2007 No. 122, taking into account the provisions of Article 494 of the Civil Code of the Russian Federation, offering for sale a copy of the phonogram made by the person engaged in the business activity for selling the products at retail shall be the use of the exclusive rights in the form of a distribution. The evidences of the illegal distribution of the counterfeit products by the way of retail sale may be a cashier’s check, a private detective’s report, witness statements, a counterfeit disc with a record and which is different from a license disc in the appearance of the cover and in the availability of the stickers on the disc, in that it lacks the means of individualization and the information on the right holder and the manufacturer.

Although the said Information Letter of the Presidium of the Supreme Arbitration Court of the Russian Federation mentions also the CDs that already sunk into oblivion ten years ago, however, the principles relating to the evidences of the illegal distribution of the counterfeit products by the way of retail sale formed by the supreme judicial instance back in 2007 have been applied by the courts up to the present time.

Among other things, we see that the private detective’s report is among the evidences. The detective’s report is a document that is prepared by the detective according to the results of the investigation made, which displays the tasks set by the customer, the circumstances established by the detective, the evidences collected in the course of carrying out the investigation, as well as the conclusions reached by the detective.

In addition, it should be noted that the private detective’s report provided that the detective has a license and a certificate confirming a status and the powers of this person, shall be recognized by the courts as the admissible evidences by virtue of Articles 64, 65, 67 and 68 of the Arbitration Procedural Code of the Russian Federation and Paragraph 6 of Information Letter No. 122.

Meanwhile, in the case of any doubts regarding the authenticity of the content of these documents, the court is entitled to satisfy the petition to call to the court the private detective as a witness and to warn him about the criminal liability for making false statements intentionally by virtue of Article 56 of the Arbitration Procedural Code of the Russian Federation.

Thus, by virtue of Part 1 of Article 56 of the Arbitration Procedural Code of the Russian Federation, The witness shall be a person having the information on the actual circumstances of importance for the consideration of the case.

It is obvious that the detective can be a person having the information on the actual circumstances of importance for the consideration of the case, that is, he may be a witness in the case.

At the same time, in accordance with Part 5 of Article 56 of the Arbitration Procedural Code of the Russian Federation, The following shall not be subject to be interrogated as the witnesses: the judges and other persons involved in the administration of justice – about the circumstances that have become known to them in connection with the participation in the consideration of the case, the representatives in the civil and other case – about the circumstances that have become known to them in connection with the performance of the obligations of the representatives, as well as the persons who, because of mental deficiency are not capable to understand correctly the facts and to give the statements about them.

In this connection, if the representative collects the evidences independently, he will not be able to speak in the court as a witness, that is, the party in the case will be deprived of an opportunity to represent to the court one of the evidences in support of its legal position.

Summing up my article, I believe that it is worth considering the issue of the involvement of the detective to collect the evidences in the case due to the following factors:

- the detective has special skills, techniques, equipment to collect the evidences in the case;

- the release of the lawyer running the case from uncharacteristic tasks;

- the use of the detective’s report and his statements given to the court as an evidence.

Recusation to an expert

Recently, in everyday usage, the foreign word “life hack”[1] has started to be used very often, with the help of which we characterize various cunning things, tricks, the knowledge and skills in various fields of our life, through which we realize the tasks set, simplify the achievement of goals or we simply facilitate the implementation of the household needs.

The legal field is not an exception, and the lawyers use various “life hacks” in it as well.

For example, creditors file statements of claims on collecting debts shortly before the end of the statute of limitations to recover maximum interest for the use of other people's money or a penalty from the debtor. The defendants, who are the domain name administrators, take advantage of the inexperience of the plaintiffs being the trademark holders, who have not filed a statement to the court for undertaking the interim measures against the domain name, and transfer the domain to the offshore company, which is registered on the territory of the Caribbean countries, after which the court has to notify the new defendant during years.

Of course, there are also the “life hacks,” which are sometimes on the edge of the allowable, and some of them fall in fact under the norms of the criminal legislation.

But in this article, we are not going to instruct on the illegal tricks encountered in the profession of lawyers, firstly, due to the fact that we are against the “dirty” techniques, and we are accustomed to play honestly and openly at a “judicial tilting-yard,” and secondly, so as to be not accused of promoting the criminal acts.

It would seem, what “life hack” can be hidden in the declaration for recusation to an expert? After all, this is just one of the tools of procedural behavior of the persons involved in the case, which are stipulated by the procedural codes.

Indeed, this is so, but, it is exactly the knowledge of the proceedings and the ability to apply it in the practice, to file this or that petition in due time are a key to a successful outcome of the case, and, consequently, to an achievement of the goal.

So, before proceeding to the practice, I suggest that we should briefly dwell on the theory.

Since the legal approaches regarding the declaration on recusation to the expert are alike, both in the Arbitration Procedural Code of the Russian Federation and in the Civil Procedural Code of the Russian Federation, I would suggest that we should dwell on the first of the aforementioned ones, and using it as an example to consider the grounds for declaring and satisfying recusation to the expert.

In accordance with Part 3 of Article 82 of the Arbitration Procedural Code of the Russian Federation, the persons involved in the case are entitled to file a petition for attracting the persons indicated by them as the experts or for carrying out an examination in a concrete expert institution, to declare recusation to the expert; to file a petition for entering the additional matters put before the expert into the decision on the appointment of the examination; to give explanations to the expert; to get acquainted with the expert's opinion or with the notification on the impossibility of providing the opinion; to file a petition for carrying out an additional or repeated examination.

As it follows from Part 1 of Article 23 of the Arbitration Procedural Code of the Russian Federation, the expert cannot be involved in the consideration of the case and he/she is subject to be recused on the grounds stipulated by Article 21 of this Code.

Article 21 of the Arbitration Procedural Code of the Russian Federation stipulates that the relevant person may be recused, if:

1) in the previous consideration of this case, he/she has been involved in it as a judge and his repeated involvement in the consideration of the case in accordance with the requirements of this Code is inadmissible;

2) in the previous consideration of this case, he/she has been involved in it as a prosecutor, a judge assistant, a secretary of the judicial session, a representative, an expert, a specialist, a translator or a witness;

3) in the previous consideration of this case, he/she has been involved in it as a judge of the foreign court, the arbitral tribunal or the arbitration court;

4) he/she is a relative of the person involved in the case, or of his representative;

5) he/she is personally, directly or indirectly, interested in an outcome of the case or there are other circumstances that may cause doubt in his impartiality;

6) he/she is or has been previously in official or other dependence on the person involved in the case, or his representative;

7) he/she has made public statements or has given an assessment of the considered case on the merits.

Besides, in accordance with unnumbered paragraph 2 of Part 1 of Article 23 of the Arbitration Procedural Code of the Russian Federation, one of the grounds for recusation to the expert in the arbitration process is carrying out an audit or a check by him/her, which materials have become a reason for appealing to the arbitration court or which are used at the consideration of the case.

According to the legal position of the Constitutional Court of the Russian Federation of 17.07.2012 No. 1409-O, Article 24 of the Arbitration Procedural Code of the Russian Federation and Article 18 of the Federal Law “On the State Judicial and Examination Activities in the Russian Federation,” which establish the expert’s obligation to declare self-recusation, as well as mandatory recusation to the expert from being involved in carrying out a judicial examination and the need for an immediate cessation of carrying out it, if it has been entrusted to him/her, subject to the fact that there are the grounds stipulated by the procedural law, including if he/she is interested in the outcome of the case, are aimed at expanding the guarantees of the judicial defense of the rights and the legitimate interests of the participants in the civil proceedings. The provisions of Article 24 of the Arbitration Procedural Code of the Russian Federation do not stipulate an arbitrary application: if there are the grounds established by Articles 21 and 23 of the indicated Code, the consideration of the matter for recusation to the expert is not a right, but an obligation of the arbitration court, which is considering some specific case.

You may ask, where is the “life hack” here? Here is a list of the grounds for declaring recusation to the expert. As soon as one of them is found - just declare recusation.

But, as the famous character of Arthur Conan Doyle – Sherlock Holmes said:“The most serious conclusions are sometimes based on mere trifles.”

Therefore, I suggest that we should refer to the Article of the Code, which states on the stage, when recusation to the expert can be declared.

By virtue of Part 2 of Article 24 of the Arbitration Procedural Code of the Russian Federation, recusation shall be motivated and declared before the beginning of the consideration of the case on the merits. In the course of the consideration of the case, declaring self-recusation or recusation is allowed only in the case, if the ground for self-recusation or recusation has become known to the person declaring self-recusation or recusation, after the beginning of the consideration of the case on the merits.

The similar legal position is set out in Resolution of the Eighth Arbitration Court of Appeal of 24.09.2018 in case No. A75-294/2017.

However, it is stated in Paragraph 18 of Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation of 04.04.2014 No. 23 “On Some Matters of the Practice of the Application by the Arbitration Courts of the Examination Legislation” that after suspension of the proceedings in connection with the appointment of the examination, the court resolves the matters for the change of the expert, for involving another expert to carry out the examination, for recusation to the expert, for providing the expert with additional materials, for setting additional matters before the expert, for cancelling a permission to the person involved in the case to be present at carrying out the examination, for extending the period of carrying out the examination without resuming the proceedings. At the same time, the court shall appoint a court session, and it notifies the persons involved in the case and the expert about the time and the place.

Thus, the matter for recusation to the expert shall be subject to the consideration after the adoption by the court of a decision on the appointment of the examination of the case, but before the beginning of the consideration of the case on the merits and, in the exceptional cases, it is allowed, if the ground for recusation has become known to the person declaring recusation after the beginning of the consideration of the case on the merits.

At the same time, it often happens that the opponents disclose the candidacies of the experts before the court and the persons involved in the case, only directly in the court session, in which the application for the appointment of the examination is considered.

The judges, overloaded with cases, do not want to postpone the court session to familiarize the persons involved in the case with the represented candidates of the experts, in order to provide an opportunity to declare their objections, in connection with which in these cases, if there are the grounds, which are sufficient for that, one can use his/her right to declare recusation to the expert after the appointment of the examination by the court.

The same has happened in the case[2], which our company is dealing with. The defendants represented the candidacies of the experts directly in the court session, we declared the oral objections to those candidates, the candidates on the part of the plaintiff were declared, whom the defendants were familiar with beforehand and the written objections to them were submitted.

In addition, the fact is interesting that the representative of the defendants, who obviously was not familiar with the provisions of the Arbitration Procedural Code of the Russian Federation and the positions of the higher courts, tried to declare recusation to the experts proposed by us before satisfying the petition for the appointment of the examination by the court. And the court pointed out to him that to declare recusation was possible only after the appointment of the expert by the court. 

The court, having heard the arguments of the persons involved in the case, chose as an expert one of the candidates proposed by the defendants and instructed him to carry out the examination.

However, the lawyers of our company carried out promptly an analysis for the presence of the grounds for recusation to the expert, and it turned out that the expert was in official dependence on the representative of the defendant, who had proposed that expert’s candidacy.

The said arguments supported by the proofs were declared in the court as recusation to the expert, on what basis the court came to an opinion that the declaration on recusation to the expert should subject to be satisfied as the circumstances indicated in the declaration might raise doubts regarding the expert’s impartiality.

Thus, the knowledge of the stages of the court proceedings, as well as the ability to apply them in the practice, supported by diligence of our lawyers’ team led to the fact that the expert, who could prepare a prejudiced opinion, was suspend from carrying out the examination.


The change in the position of the courts as applicable to jurisdiction of the cases related to the disputes on the means of individualization

For a long time, the lawyers practicing in the field of intellectual property have lacked a clear understanding as to which court they needed applying with a statement of claim on the defense of the rights to the means of individualization, when the defendants were the individuals, who did not have a status of an individual entrepreneur.

Such issues used to arise mainly regarding the domain disputes, where the administrators of the domain names were, as a rule, individuals, as well as in the cases on the defense of the trademark rights, when the violation was committed by an individual entrepreneur, for example, he bought a counterfeit product, but at the date of applying for the judicial defense, the defendant had lost a status of an individual entrepreneur, in connection with which the right holder was forced to apply to the court of general jurisdiction.

Of course, there should be no difference for the participants to the dispute, in which court the dispute is considered, whether it is in the arbitration court or in the court of general jurisdiction.

After all, if we are guided by the general principles enshrined in the Constitution of the Russian Federation, then according to Article 118 (Parts 1 and 2), justice in the Russian Federation is exercised only by the court through the constitutional, civil, administrative and criminal judicial proceedings.

By implication of this Article in conjunction with Article 10 of the Constitution of the Russian Federation, it is the court that has the exclusive authority to make the final decisions regarding the disputes, including in the cases arising from the legal relations related to the subject matters of intellectual property and the means of individualization equated to them.

At the same time, the judicial proceedings in all courts of the Russian Federation are exercised on the basis of the principles of competitiveness and equality of the parties, by the independent judges, who are governed only by the Constitution of the Russian Federation and the Federal Law.

However, everything is not as simple as it seems at the first glance, because everyone, who applies for the judicial defense, wants to get a judicial act, which, in addition to the fact that it will allow restoring the violated rights, will also be adopted quickly enough, and it is based on the norms, which are applicable in this field of the law, in compliance with the principles of uniformity of the judicial practice.

And for a reason there is a division into boards in all courts, for example, there are a civil board, an administrative board and a criminal board in the courts of general jurisdiction, in arbitration courts, there are all the above boards except for the criminal one.

The boards, in turn, are divided into judicial compositions, which consider the cases of certain categories, for example, the administrative board of the arbitration court considers the cases related to disputing the decision and the order of the antimonopoly body, or the materials of the administrative case collected by the customs regarding the issue of bringing the person to an administrative responsibility for the illegal use of the trademark, while the judicial composition in the civil board in the court of general jurisdiction specializes in considering the disputes related to the defense of the rights of consumers or labor disputes.

Such division allows the judges to focus on the study and improvement of the law enforcement practice, to be the professionals in the field of the law, in which they administer justice.

At the same time, coming back to the topic of the article, we cannot but touch upon the provisions of the Arbitration Procedural Code of the Russian Federation and the Civil Procedural Code of the Russian Federation related to the determination of jurisdiction of disputes.

The arbitration courts resolve economic disputes and consider other cases involving the organizations being legal entities, the citizens having the status of an individual entrepreneur, and in the cases stipulated by the Arbitration Procedural Code of the Russian Federation and other Federal Laws, and involving the citizens, who do not have the status of an individual entrepreneur (Part 2 of Article 27 of the Arbitration Procedural Code of the Russian Federation).

At the same time, the cases related to the disputes on the means of individualization, which involve the citizens, who do not have the status of an individual entrepreneur, are not stipulated separately in the Arbitration Procedural Code of the Russian Federation, whereupon the issue of considering such cases by the arbitration court has been left at the discretion of the court.

Thus, in accordance with Paragraph 1 of Part 1 of Article 22 of the Civil Procedure Code of the Russian Federation, the courts of general jurisdiction consider and resolve the claim cases involving citizens, organizations, public authorities, local self-government authorities regarding the defense of the violated or disputed rights, freedoms and legitimate interests, regarding the disputes arising from the civil, family, labor, housing, land, ecological and other legal relations.

It is easy to guess that, based on the aggregate of the criteria: a subjective composition of the parties to the dispute, a nature of the dispute and the lack of exclusive jurisdiction of the dispute to the arbitration courts, the cases regarding the defense of the trademark rights involving individuals are subject to the courts of general jurisdiction.

However, everything is not as simple as it seems at the first glance, as the professional representatives in the field of intellectual property have been at a loss about the positions of both the arbitration courts and the courts of general jurisdiction regarding the issues of jurisdiction of such cases.

For example, the statement of claim is filed pursuant to the rules of jurisdiction to the court of general jurisdiction, due to the fact that the defendant is an individual.

In turn, the court of general jurisdiction rejects to accept the statement of claim or, having accepted the statement of claim for the proceedings, terminates the proceedings in the case due to the lack of jurisdiction of the dispute to the court.

As an example, I cite below from the Decision of the Moscow City Court of 23.11.2015 No. 4g/8-12382/2015, 2-3036/2015 On rejecting to transfer the cassation petition against the judicial acts in the case on the cancellation of the registration of the disputed domain name and the registration of the disputed domain name in the plaintiff's name for the consideration in the judicial session of the Court of Cassation, in which the Court of Cassation confirmed the legality of the decision adopted by the first-instance court on the termination of the proceedings in the case specifying the following: “In this case, the dispute regarding the use of the plaintiff's trademark by the defendant – the citizen, who is not the entrepreneur, has arisen. The fact of the availability or lack of the profit from the activities involving the use of this trademark by the defendant is not relevant for the consideration of the issue on jurisdiction of the case to the arbitration court. The issue is about defending the rights to the trademark, which is possibly used by the defendant. Therefore, the legal relations arisen relate to the field of the economic activities, and the dispute is connected with carrying out such activities, thus the dispute is subject to jurisdiction of the arbitration court. Involving the individual, who is an administrator of the domain on the Internet to the case as a defendant are not the grounds to conclude that the dispute lacks jurisdiction to the arbitration court.”

Thus, a qualifying feature in determining jurisdiction for the courts of general jurisdiction was the availability in the case of such grounds as the defense of the rights to the trademark.

The arbitration courts, while terminating the proceedings in the cases on the defense of the rights to the trademarks involving individuals, were also not behind in the desire to show off the pungency of the theses in interpreting the norms of the procedural law.

As an example, I shall refer to Resolution of the Intellectual Property Court of 12.07.2017 in case No. A40-253219/2016, in which the court upheld the decision of the first-instance court, which had terminated the proceedings in the case due to the fact that the defendant was an individual and he did not have the status of an individual entrepreneur.

Thus, the Court of Cassation states the following in its Resolution: The arbitration courts shall resolve economic disputes and consider other cases involving the organizations being legal entities, the citizens having the status of an individual entrepreneur, and in the cases stipulated by the Arbitration Procedural Code of the Russian Federation and other Federal Laws, and involving the citizens, who do not have the status of an individual entrepreneur (Part 2 of Article 27 of the Arbitration Procedural Code of the Russian Federation).

According to the explanations contained in Paragraph 1 of Resolution of the Plenum of the Supreme Court of the Russian Federation and the Plenum of the Supreme Arbitration Court of the Russian Federation of 18.08.1992 No. 12/12 “On some issues of jurisdiction of cases to the courts and arbitration courts,” the civil cases shall be considered in the court, if at least one of the parties is a citizen without the status of an entrepreneur, or in the case, when a citizen has such status, but the case has arisen not in connection with carrying out the business activities by him.

Review of the Judicial Practice of the Supreme Court of the Russian Federation No. 1 (2014), approved by the Presidium of the Supreme Court of the Russian Federation of 24.12.2014, contains an explanation on the issue of jurisdiction to the arbitration courts of the economic disputes involving individuals (Section VI), from which it follows that a citizen can be a person involved in the arbitration process as a party, solely in the cases, if at the date of applying for the arbitration court he has the state registration as an individual entrepreneur, or if the involvement of the citizen without the status of an individual entrepreneur in the arbitration process is stipulated by the Federal Law (for example, Articles 33 and 225.1 of the Arbitration Procedural Code of the Russian Federation).

As it was established correctly by the courts of the lower instances, defendant Nikitaev F.I. acts in the legal relations regarding the present case as the individual, who does not possess the status of an individual entrepreneur.

At the same time, the current legislation in a general matter does not contain the norms according to which the dispute on a violation of the rights to the trademark can be considered by the arbitration court involving an individual as a defendant.”

To be fair, but without reproach to the courts of general jurisdiction, it is worth saying that the plaintiffs in this category of disputes have always sought the arbitration courts. We can only guess, whether this is due to the fact that these courts have more practice regarding such cases and predictability of the upcoming judicial act is higher, or with the fact that the amount of the damages recoverable from the violators is larger, but the reality is that the representatives wishing to have the proceedings in arbitration have developed a strategy, with the help of which the dispute could be transferred highly likely from general jurisdiction to arbitration.

The statement of claim was initially filed with the court of general jurisdiction, where the court as a rule was a success to reject accepting it for the proceedings or terminated the proceedings in the case, then, upon the expiration of the period to appeal, the plaintiff as a rule having attached, beside the payment order, the proofs in support of the claims lodged to the statement of claim and other required attributes specified in Article 126 of the Arbitration Procedural Code of the Russian Federation attached the relevant decision of the court of general jurisdiction.

At the same time, in the statement of claim, the court's attention was separately paid to the fact that, based on a systemic interpretation of Paragraph 1 of Article 46 of the Constitution of the Russian Federation, Paragraph 4 of Article 39 of the Arbitration Procedural Code of the Russian Federation, subject to the provisions of Part 5 of Article 3 of the same Code and the unity of the right to the judicial defense, the costs of jurisdictional uncertainty should not be laid on the interested parties, the disputes between the courts regarding jurisdiction were inadmissible, in this connection the arbitration court was forced to consider the dispute, which, in the opinion of some judges, was not of its jurisdiction.

At the same time, it is worth noting that the arbitration courts did not always consider the disputes on the defense of the rights to the means of individualization involving individuals being “under pressure” of inadmissibility of the disputes on jurisdiction of the case between the courts.

Thus, the Intellectual Property Court, in its Resolution of 17.04.2018 in case № A56-31629/2016, while rejecting the argument of the defendant about the violation by the first-instance court and the Court of Appeal the rules of jurisdiction in considering the dispute, leaving the disputed judicial acts in force, indicated that, despite the fact that the defendant lacked the status of an individual entrepreneur, the information posted on his website was presented in the interests of a legal person and related to carrying out the economic activities.

Moreover, the Intellectual Property Court also took into account the legal position stated in Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation of 18.05.2011 No. 18012/10, Decision of the Supreme Arbitration Court of the Russian Federation of 16.05.2014 No. VAS-5672/14, according to which the involvement in the case as the defendants of the individuals, who were the administrators of the domains on the Internet, was not in itself the grounds for concluding on the lack of jurisdiction of the dispute to the arbitration court, in this connection it did not see the grounds for the cancellation of the judicial acts in view of the availability of the arguments on the violation of the rules of jurisdiction of the dispute in the cassation petition.

It was the Supreme Court of the Russian Federation that was forced to put an end in this long-running match with overthrowing the ball from one end of the field to another one, and it pointed out in unnumbered paragraph 3 of Paragraph 4 of Resolution of the Plenum of the Supreme Court of the Russian Federation of 23.04.2019 No. 10 “On the Application of Part Four of the Civil Code of the Russian Federation,” that regardless of the subjective composition of the persons involved in the case, the disputes on the means of individualization (except for the disputes on the names of the places of origin of the products) were subject to the consideration in the arbitration courts.

Thus, we can say that legal certainty regarding jurisdiction of the disputes on the means of individualization, which involve the citizens, who do not have the status of an individual entrepreneur, is finally established.

The antimonopoly authority as a tool to defend the rights to a trademark

More recently, we often hear from the clients, who turn to our company that they would like to defend the violated right to a trademark by way of applying to the antimonopoly authority in order to recognize the competitor’s actions as an act of the unfair competition.

Of course, our company renders a full range of the services related to the defense of the intellectual rights, namely: representing before Rospatent and police, conducting the cases in the arbitration courts and the courts of general jurisdiction. Representing the principals’ interests before the antimonopoly authority is not an exception.

In this article, I would like to consider an issue of the effectiveness of the application of the antimonopoly authority as a tool to defend the rights to a trademark, to try to identify strengths and weaknesses, to compare this way of the defense of the violated right with the one that is more common – the legal proceedings.

According to Paragraph 7 of Article 4 of the Federal Law of 26.07.2006 No. 135-FZ “On Defense of Competition” (hereinafter referred to as the Law on Defense of Competition), a competition is a rivalry of economic entities, at which the independent actions of each of them exclude or limit an opportunity of each of them to influence unilaterally on the general conditions of the circulation of the products at a corresponding commodity market.

The unfair competition is any actions of economic entities (groups of persons) aimed at obtaining advantages, while carrying out the entrepreneurial activity, which contradict the legislation of the Russian Federation, the customs of the business practices, the requirements for respectability, rationality and fairness, and which have caused or which are capable of causing losses to other economic entities-competitors, or which have done or capable of doing harm to their business reputation (Paragraph 9 of Article 4 of the Law on Defense of Competition).

As it follows from the title of this article, we consider the antimonopoly authority as a tool to defend the rights to a trademark, and equally, the way how this issue is regulated in the Law on Defense of Competition.

Thus, Paragraph 1 of Article 14.6 of the Law on Defense of Competition indicates the actions referring to the unfair competition, which are related to the illegal use of the means of individualization of an economic entity-competitor, such as the illegal use of the designation that is identical to the trademark, the company name, the commercial designation, the name of the place of origin of the product of the economic entity-competitor or confusingly similar to them, by placing it on the products, labels, packages or otherwise using it in respect of the products that are sold or otherwise introduced into the civil circulation on the territory of the Russian Federation, as well as by using it in the information and telecommunication network Internet, including placing in the domain name and by other ways of addressing.

In fact, this norm, with a small but significant exception, copies Article 1484 of the Civil Code of the Russian Federation (hereinafter referred to as the C.C.R.F.), Paragraph 2 of which states that the exclusive right to a trademark can be implemented for the individualization of the products, works or services, in respect of which the trademark is registered, in particular by placing the trademark: on the products, including on the labels, the packages of the products that are manufactured, offered for sale, sold, demonstrated at exhibitions and fairs or otherwise introduced into the civil circulation on the territory of the Russian Federation, or stored, or transported with this purpose, or imported into the territory of the Russian Federation; at performing works, rendering services; on the documentation related to the introduction of the products into the civil circulation; in the offers for sale of the products, for performing works, for rendering services, as well as in advertisements, on outdoor signs and in advertising; in the network Internet, including in the domain name, and by other ways of addressing.

By virtue of Paragraph 3 of the same Article, no one has the right to use without the right holder’s permission the designations that are similar to his trademark in respect of the products for the individualization of which the trademark has been registered, or the similar products, if as a result of such use the probability of confusion appears.

Thus, as we can see, Paragraph 1 of Article 14.6 of the Law on Defense of Competition differs from Article 1484 of the C.C.R.F. in the presence of a qualifying feature – the economic entity-competitor. That is, in the case if the antimonopoly authority in the course of the consideration of the statement on the presence in the actions of the economic entity establishes that the economic entity is not a competitor of the applicant and it does not carrying out its activity at the same commodity market as the applicant (right holder), the proceedings regarding the case will be terminated.

Moreover, in addition to establishing the competitive relations within the framework of the consideration of the case in the antimonopoly authority, it must be established that such actions of the competitor are aimed at obtaining advantages in the entrepreneurial activity, that they contradict the legislation, the customs of the business practices, the requirements for respectability, rationality and fairness, and they are causing (have a possibility of causing) losses to another economic entity-competitor, or they are doing (have a possibility of doing) harm to its business reputation (are doing harm).

It should be noted that only a totality of these actions is an act of the unfair competition, since if at least one of its elements is not proven, the person’s actions cannot be recognized as an act of the unfair competition.

Moreover, the list of the mandatory conditions, which evidence that the competitor is unfair, is added with the “classic” ones to defend the rights to the trademarks in the courts – the conditions of being confusingly similar and homogeneous, which must be established in the aggregate with the violator's actions regarding the introduction of the product into the civil circulation.

I believe that if we compare the defense of the rights to the trademark pursuant to the legal proceedings, it seems to me the way through the antimonopoly authority is more thorny.

At the same time, unlike the court, by virtue of Part 6 of Article 44 of the Law on Defense of Competition, the right of the antimonopoly authority to direct inquiries to the commercial/nonprofit organizations, the government authorities of the Russian Federation, and also to the state off-budgetary funds, the individuals, including the individual entrepreneurs, on submitting the documents and the information is enshrined at the stage of the consideration of the statement or the materials.

That is, the antimonopoly authority has powers to collect evidence, which, in its opinion, will allow the antimonopoly authority making a conclusion on the presence or absence of the features for the violation of the antimonopoly legislation.

Of course, many people may say that by virtue of Paragraph 2 of Article 66 of the Arbitration Procedural Code of the Russian Federation (hereinafter referred to as the APC RF), the Arbitration Court has the right to suggest that the persons participating in the case should submit the additional evidence necessary to clarify the circumstances relevant to the proper consideration of the case and the adoption of a legal and reasonable judicial act before the beginning of a court session or within the period established by the court.

In addition, by virtue of the same Article 66 of the APC RF, the court may require evidence from the person, who has it.

But in fact, everything is not as good as it seems, because by virtue of Paragraph 1 of Article 65 of the APC RF, each person participating in the case must prove the circumstances, to which he refers as to a basis of his claims and objections.

We hear very often from the judges in the legal proceedings that the court is not an authority for a criminal prosecution and it is not empowered to collect the additional evidence establishing the facts of the illegal use.

And, such state of affairs sometimes plays into the hands of cunning and evasive violators, and sometimes, it is quite difficult to collect evidence in respect of them.

Thus, in terms of proving, the advantages regarding the defense of the rights to the trademarks are on the party of the defense through the antimonopoly authority.

As to the periods of the consideration, I would like to compare, in the form of a table, the periods and the stages of the consideration of the case in the antimonopoly authority and in the court, including the appeal stages.


Thus, we see that the period of the consideration of the case on the defense of the exclusive right to a trademark in the court is about twice as shorter than the consideration of the case in the antimonopoly authority.

Further, I suggest that we should compare, again in the form of a table, the results that can be obtained by the right holder, if he uses a particular way of the defense.


As we can see, the adoption by the antimonopoly authority of the decision on the recognition of the actions as an act of the unfair competition does not entail any payments of damages in favor of the right holder, but it may make the violator think seriously, because the fine being from one hundredth to fifteen hundredths of the amount of the revenue taking into account the volume of the illegal use can be a very large sum.

At the same time, the Law on Defense of Competition also states that the antimonopoly authority exercises control over the fulfillment of the issued orders, what is also an important argument, when choosing such way of the defense.

Summing up, we can conclude that there are different ways to defend the violated right, but each of them should be considered in relation to some particular situation with its peculiarities. There are no bad ways of the defense, there is an ill-considered strategy of the defense, which can lead to the negative results, therefore before starting the fight against the violators, and the most correct thing would be to turn to the professionals, who will pick up a relevant complex of the measures and tools.

The recognition of the actions of the competitor associated with acquiring and using the exclusive right to the trademark as an act of bad faith competition

As I have repeatedly written in my articles related to the topic of an illegal use of the means of individualization, some dishonest companies, in order to increase a demand for their products and services, trying to minimize the cost of their efforts and tangible assets, use in their commercial activities someone else's trademarks, commercial designations, company names, thereby parasitizing on someone else's business reputation, fame and the brand attractiveness.

Certainly, such behavior leads to slowing down the business development, decreasing the quality of the products being sold in the commodity markets, has a negative impact on the reputation and income of the rights holders.

At the same time, with due eagerness and prudence of the right holders in such a situation, it is possible to fight actively against violators, bringing them to civil, administrative or criminal liability, creating a large number of precedents, what in turn will make the violators think about the appropriateness of such method of enrichment.

But there are the situations, in my opinion, which are much more negative for business than just the illegal use of the means of individualization without a permission of the right holders, which include the following example[1].

There are five companies that manufacture soap under the conventional designation “Chistyulya,” none of these companies do not register this designation as a trademark, and they feel themselves free in the commodity market, the products are in demand among the buyers and bring profit to these manufacturers.

Eventually, one of the manufacturers comes to a conclusion that being in the same boat is tightly for them five, and decides to get rid of the unnecessary competitors by registering the trademark “Chistyulya” to itself, thus obtaining a legal monopoly on this designation. After that, it begins to lodge statements of claim aimed at the defense of the exclusive right to this trademark against its former “fellow tradesmen.”

The remaining four manufacturers are biting their elbows in panic, and they do not know what to do, because the business built up during years is under threat, since the courts, when considering the statements of claim regarding the defense of the exclusive rights, point out to the fact that the plaintiff is a legal right holder until the registration of the trademark is recognized by Rospatent as invalid, and the very fact of filing a statement of claim to defend one’s rights is not an abuse of the right.

In this regard, the question arises: “What should they do?”

In my opinion, an adequate mechanism for suppressing such abuses is filing a statement with the Antimonopoly Authority or a statement of claim with the Intellectual Property Court to recognize the actions of the competitor associated with acquiring and using the exclusive right to the trademark as an act of a bad faith competition. 

The concept of a bad faith competition is set forth in Paragraph 9 of Article 4 of Federal law of 26.07.2006 No. 135-FZ “On Defense of Competition" (hereinafter referred to as the Law on Defense of Competition), according to which a bad faith competition is understood as any actions of economic entities (groups of persons) aimed at obtaining advantages, while exercising the business activity, that contradict the legislation of the Russian Federation, the customs of the business practices, the requirements of respectability, rationality and fairness, and have caused or capable of causing losses to other economic entities – the competitors, or have done or capable of doing harm to their business reputation.

Article 144 of the Law on Defense of Competition sets a prohibition to the bad faith competition related to acquiring and using the exclusive right to the means of individualization of a legal entity, the means of individualization of products, works or services.

According to Paragraph 1 of this Article, the bad faith competition associated with acquiring and using the exclusive right to the means of individualization of a legal entity, the means of individualization of products, works or services (hereinafter referred to as the means of individualization) shall not be allowed.

To recognize the actions of the right holder associated with acquiring and using the exclusive right to the trademark (the service mark) as an act of a bad faith competition, the following circumstances shall be established:

  • the fact of the use of the disputed designation by other persons before the date of filing an application for the registration of this designation as a trademark;
  • the right holder's awareness of the fact of using such designation by other persons before the date of filing the application for its registration as a trademark;
  • the existence of the competitive relations between the right holder and other economic entities at the date of filing the application for the registration of this designation as a trademark;
  • the fact that the defendant has an intention (a purpose) to obtain by acquiring the exclusive right to such designation (an acquisition of a monopoly on it) illegitimate advantages due to the sole use of the well-known designation, to do harm to the economic entities – the competitors or to displace them from the commodity market by lodging the claims aimed at suppressing the use of the disputed designation;
  • the fact of doing or a probability of doing harm to the economic entities – the competitors by lodging the claims for the termination of the use of the disputed designation.

At the same time, it is important to note that, while considering the cases of this category, the whole set of the above circumstances shall be established, since if at least one of the elements of the actions is not proved, the actions of the person regarding acquiring and using the exclusive right to the trademark cannot be recognized as an act of a bad faith competition.

When establishing the issue of a good faith acquisition of the exclusive right to the trademark, both the circumstances associated with the very acquisition of the exclusive right and the subsequent behavior of the right holder that indicates to the purpose of such acquisition shall be studied.

One of the circumstances that may indicate to the bad faith behavior of the person, who has registered the trademark, may be the fact that this person has known or should have known that the third persons (the third person), at the date of filing the application for the registration of the designation as a trademark, have been using legally the appropriate designation for the individualization of the products manufactured by them or the services rendered by them without the registration as a trademark, as well as the fact that such designation has become well-known among the consumers.

In this case, the right holder’s bad faith should be established first of all at the stage of filing the application for the registration of the designation as a trademark, since it is at that point, when the intention (the intent) of the bad faith competition regarding other market participants is implemented through the use of the exclusive right to the trademark that stipulates prohibiting other persons to use the identical or similar designations for the individualization of the products or services.

The right holder‘s subsequent behavior can only confirm or refute the fact that he has behaved in bad faith, when acquiring the exclusive right to the trademark.

Thus, if we come back to the situation described at the beginning of the article, through the prism of the legislation and the legal approaches of courts, we can come to a conclusion that there are the grounds for the recognition of the actions of the person, who has obtained the exclusive right to the trademark “Chistyulya” and has used that right to displace the competitors as an act of a bad faith competition.

Receiving the decision of the Antimonopoly Authority or the decision of the Intellectual Property Court is followed by a relatively simple procedure that is described in Paragraph 2 of Article 144 of the Law on Defense of Competition, which states that the decision of the Antimonopoly Authority on a violation of the provisions of Part 1 of this Article in relation to the acquisition and the use of the exclusive right to the trademark shall be sent by the person concerned to the Federal Executive Authority on Intellectual Property for the recognition of granting the legal protection to the trademark as invalid.

Rospatent, having received the corresponding objection with the decision of the Court or the Antimonopoly Authority attached to it, must recognize granting the legal protection to the trademark pursuant to Subparagraph 6 of Paragraph 2 of Article 1512 of the Civil Code of the Russian Federation as invalid.


Why one should not state in the statement of claim a requirement for the recognition of the acts for the use of the subject matter of intellectual property as illegal

Very often, in our practice related to the participation in the judicial disputes in the field of intellectual property, we are faced with the situation, when plaintiffs, after getting familiar with the provisions of Article 1252 of the Civil Code of the Russian Federation (hereinafter referred to as the C.C.R.F., the Code), in fact write down literally this norm into a petitionary part of the statement of claim. The most common requirements of the statements of claims are as follows:

  • to withdraw from the circulation and to destroy the counterfeit products at the expense of the violator, on which the trademark is placed illegally (though, it is not quite clear, where these products are being stored, in what quantity, and how the bailiff and executor of justice should identify them? – The author's comment);
  • to prohibit to use the trademark, the utility model, the topographies of the integrated circuits from now on and forever;
  • to recognize the defendant’s act regarding the introduction into the civil circulation of the products marked with the disputable designation as a violation of the plaintiff’s exclusive right.

I already touched upon the analysis of the first two requirements in my article, which is called “The fight against counterfeit by bringing the violator to civil responsibility”

So, regarding the requirement for the prohibition, the courts point out that the abstract requirements for a general prohibition to a particular person to use at any time in the future the result of the intellectual activity or the means of individualization are not subject to satisfaction by virtue of the law, because the satisfaction of such requirements entails a violation of the executability principle of a judicial act, because bringing the defendant to responsibility for each subsequent offense is possible only by filing a new statement of claim, but not by filing for execution the enforcement order that contains the abstract prohibition.

In this case, it should be noted that the prohibition, which the plaintiff requests for, is established directly by the law (Unnumbered Paragraph 3 of Paragraph 1 of Article 1229 of the C.C.R.F.).

The requirements for the withdrawal from the circulation and the destruction without any recovery for damages the tangible media, in which the result of the intellectual activity or the means of individualization is expressed, are also often dismissed by the courts, since the plaintiffs can not provide evidence indicating that the defendant has the counterfeit tangible media.

Now I suggest that we should consider an issue, why after all one should not claim the requirement for the recognition of the defendant’s acts for the use of the subject matter of intellectual property as illegal. To answer this question, I suggest that we should refer to the Code.

In accordance with of the C.C.R.F., the intellectual rights are defended in the ways stipulated by the Code, taking into account the essence of the violated right and the consequences of the violation of this right.

According to of the C.C.R.F., the defence of the civil rights is carried out by: the recognition of the right; the restoration of the state of affairs existing before the violation of the right, and the suppression of the acts violating the right or creating a threat of its violation; the recognition of the disputable transaction as invalid and the application of the consequences of its invalidity, the application of the consequences of the void transaction being invalid; the recognition of the meeting decision as invalid; the recognition of the act of the state authority or the local self-government authority as invalid; the self-defence of the right; the award of the execution of the obligation in kind; the recovery of damages; the award of a penalty; the compensation for moral harm; the termination or the change of the legal relationship; the non-application by the court of the act of the state authority or the local self-government authority that is contrary to the law; by other ways stipulated by the law.

In accordance with Paragraph 1 of Article 1252 of the C.C.R.F., the defence of the exclusive rights to the results of the intellectual activity and to the means of individualization shall be carried out, in particular, by imposing the requirements: 1) on the recognition of the right – upon the person, who denies or does not otherwise recognize the right, thereby violating the interests of the right holder; 2) on the suppression of the acts that violate the right or create a threat of its violation, – upon the person, who commits such acts, or who carries out the necessary preparations for them; 3) on the recovery of damages – upon the person, who has used illegally a result of the intellectual activity or the means of individualization without concluding an agreement with the right holder (a non-contractual use), or who has otherwise violated his exclusive right and caused him damage; 4) on the withdrawal of the tangible medium in accordance with Paragraph 5 of the said Article – upon its manufacturer, importer, keeper, shipping carrier, seller, other distributor, unfair purchaser; 5) on the publication of the court decision on the violation committed with the indication of the actual right holder – upon the violator of the exclusive right.

By implication of Article 12 of the C.C.R.F. and Part 1 of Article 4 of the Arbitration Procedural Code of the Russian Federation, the interested person being a person, whose rights or legitimate interests are violated or disputed, must choose such way of the defence of the violated right, which is stipulated by the law for a particular kind of the legal relationships, and which will allow in fact to restore the violated right.

The ways of the defence of the civil rights are aimed at ensuring the defence of the rights and freedoms and the restoration of the violated right, what follows, inter alia, from the decisions of the Constitutional Court of the Russian Federation of 27.05.2010 No. 732-O-O, of 15.07.2010 No. 948-O-O, of 23.09.2010 No.1179-O-O, of 25.09.2014 No. 2258-O.

The civil legislation does not limit the subject in the choice of the way of the defence of the violated right, in the meanwhile the person whose right is violated, by virtue of Article 9 of the C.C.R.F. shall be entitled to make this choice at his discretion, but the way of the defence chosen by the person should correspond to the content of the violated right and the disputable legal relationship and lead directly to the restoration of the violated right.

I believe that the above said Unnumbered Paragraph reveals the whole essence of the meaning laid down by the legislator, and should be analyzed by the person seeking the judicial defence, before formulating the petitionary part of the statement of claim.

If to express this idea in simple words, one should analyze the circumstances of the upcoming case and answer 2 questions:

  • Will the requirement, which the court will satisfy, help me to restore the violated right?
  • Is the claimed requirement abstract? That is, will the bailiff and executor of justice, having studied an operative part of the court decision, be able to execute this decision?

Continuing the consideration of the issue raised in the topic of the article, I think it is necessary to note that neither Article 12 of the C.C.R.F., nor Articles 1250, 1252, 1253, 1474,1515 of Chapter Four of the C.C.R.F. stipulate such way of the defence of the right as the recognition of the acts of the legal entities and the individuals, who are not the authorities exercising the public powers, or of the officials of such authorities as illegal.

In the case under consideration, the circumstances of the use of the particular subject matter of intellectual property without a permission of the right holder are not the legal facts that can be established in the manner stipulated by Chapter 27 of the Arbitration Procedural Code of the Russian Federation, and they relate to a basis, and not to a subject of the statement of claim.

Moreover, in this case it is not seen how the chosen way of the defence will lead to the actual restoration of the rights and the legitimate interests of the plaintiff in case of their violation by the defendant.

It is worth noting that the similar legal position is set out in Resolution of the Intellectual Property Court of 29.07.2016 in case No. A11-729/2015 (according to decision of the Supreme Court of the Russian Federation of 17.11.2016 No. 301-AS16-15604, the transfer of the cassation petition against this judicial act for the consideration in the judicial session of the Chamber for Commercial Disputes of the Supreme Court of Russian Federation was refused); Resolution of the Supreme Court of the Russian Federation of 04.02.2015 in case No. A40-9597/2014.

Thus, summarizing the above said, I would like to draw attention of all those, who, for one reason or another, is stepping a thorny path of the judicial defence of the rights of intellectual and otherwise property, to the fact that it is worth paying more attention to the choice of the ways of the defence of the violated right, to formulating the statements of claim in such way that they can be executed subsequently.

I believe that it is better to claim one clearly formulated requirement than perhaps to enumerate in the petitionary part of the statement of claim the whole Article 1252 of the C.C.R.F. in the hope that the court will satisfy at least one of these requirements.

How to prove the rights to a commercial designation, if you carry out an online shop business

We live in the age of high technology, when in order to buy products, whether they are: sneakers, a phone or food, there is no need to go to a shopping mall or to go a shop, but it is enough simply to follow the link that will lead to an online shop, to select the desired product on the website and to order it.

The different designations (word, combined, figurative), with the help of which sellers seek to attract the attention of buyers and to distinguish themselves among competitors can be used both for the individualization of conventional shops, and for the individualization of online shops. These designations are placed directly on websites in the form of so-called logos or, if there is a word element in the designation, such element may be a part of a domain name.

However, not all economic entities register these designations as trademarks; therefore the issue regarding how the person using the so-called logo can defend his rights arises, if the competitors begin using an identical or confusingly similar designation with respect to the homogeneous activities.

The legislator has introduced a concept – a commercial designation regarding the designations, which are not registered as a trademark or which are not the company names of a legal entity, and which are used by the persons carrying out the commercial activities.

By virtue of Subparagraph 16 of Paragraph 1 of Article 1225 of the Civil Code of the Russian Federation (hereinafter referred to as the C.C.R.F., the Code), the commercial designations on the territory of the Russian Federation shall be granted legal protection.

In accordance with Paragraph 1 of Article 1538 of the C.C.R.F., the legal entities, which carry out their business activities (including the non-commercial organizations, which right to carry out such activities is granted in accordance with the law based on their constituent documents), as well as individual entrepreneurs may use the commercial designations, which are not the company names and which are not subject to be included obligatory in the constituent documents and the Unified State Register of Legal Entities for the individualization of the trading, industrial and other enterprises owned by them (Article 132).

According to Paragraph 1 of Article 1539 of the C.C.R.F., the right holder owns an exclusive right to use the commercial designation as a means of individualization of the enterprise owned by him in any manner, which is not contrary to the law (the exclusive right to a commercial designation), including by indicating the commercial designation on billboards, letterheads, bills and other documentation, in announcements and advertisements, on the products or the packaging thereof, in the Internet, if such designation possesses sufficient distinctive features and its use by the right holder for the individualization of his enterprise is known within a particular territory.

Moreover, Paragraph 177 of Resolution of the Plenum of the Supreme Court of the Russian Federation of 23.04.2019 No. 10 “On the Application of Part Four of the Civil Code of the Russian Federation” (hereinafter referred to as Resolution No. 10) states that the right to a commercial designation arises not earlier the moment of the beginning of the actual use of such designation for the individualization of the enterprise (for example, a shop, a restaurant and so on).

The right to a commercial designation is protected provided that the use of the designation by the right holder for the individualization of his enterprise is known within a particular territory after December 31, 2007 (regardless of when the use of the designations has begun).

Thus, the rights to a commercial designation arise from the person, who carries out the business activities, and they are subject to be protected under the following conditions:

– the designation has sufficient distinctive features;

– its use is known within a particular territory;

– the use of such designation for the individualization of the enterprise.

In this case, Paragraph 178 of Resolution No. 10 states that by implication of Paragraph 2 of Article 1540 of the C.C.R.F., the exclusive right to a commercial designation shall stop automatically, if the right holder is not using this designation continuously during a year.

It is worth noting that prior to the introduction into effect of Part Four of the C.C.R.F. in 2008, the commercial designation was mentioned only in Chapter 54 of the C.C.R.F. devoted to regulating a franchise agreement.

Thus, Article 1027 of the C.C.R.F. (in the version of 26.01.1996) states that under a franchise agreement, one party (a right holder) is obliged to grant to the other party (a user) for remuneration, for a period or without indicating a period, the right to use in the user's business activities a complex of the exclusive rights owned by the right holder, including the right to the company name and (or) the commercial designation of the right holder, to the protected commercial information, as well as to other subject matters of the exclusive rights that are stipulated by the agreement – a trademark, a service mark, etc.

In this case, prior to the introduction the Part of the Code into effect, which regulates the relations arising in the field of intellectual property, the legislator did not give a definition of what the commercial designation was, and how it was protected.

After a short excursion into the history of the emergence in the Russian legislation of the commercial designation as an independent means of individualization, I would like to come back to the topic of the article.

For example, an individual entrepreneur carries out his business activities by selling clothes via an online shop.

A combined designation possessing sufficient distinctive features, which is not registered as a trademark, is used for the individualization of the online shop. Moreover, a word element of the combined designation is used as a domain name, which directs to the online shop.

At the same time, the entrepreneur does not have a property complex as such in the form of an office or warehouse, since he carries out his activities from home accepting orders, purchasing the products ordered from suppliers and sending them to customers by means of a courier service.

At some point, the entrepreneur finds out about the appearance of the competitor, who has copied this designation and which he uses, while carrying out the homogeneous activities at his Internet resource.

In this regard, the question arises how the entrepreneur can defend his right to the designation used by him, provided that it is not registered as a trademark.

As it follows from the general rule that is connected with the consideration of the cases regarding the defence of the intellectual property rights, the burden of proving the availability of the exclusive right to the intellectual property subject matter or the means of individualization, as well as the fact of its illegal use by the defendant, lies with the plaintiff.

If we talk about the evidence of the fact of the illegal use, then everything is quite clear with them, and such evidence as a lawyer’s request, a notarial examination protocol of the website, a test purchase and others can be applied to the situation described by me. Then the plaintiff will have to prove that the designation has been used by the defendant with respect to the activities, which are homogeneous with the plaintiff’s ones, as well as that it is confusingly similar to the designation, for the defence of the rights to which the plaintiff has applied.

However, as to the commercial designation, it is not such an easy task to prove that the plaintiff has an exclusive right to it, and here is why.

In order to prove the fact of the availability of the exclusive right of the plaintiff to the commercial designation, the plaintiff should submit the evidence that the commercial designation have sufficient distinctive features and that the fact of the plaintiff’s use of this commercial designation on a particular territory is known, as well as the fact of the plaintiff’s use of this designation for the individualization of the enterprise owned by him (in the sense of Article 132 of the C.C.R.F.).

The fact of the above conditions is established by the court on the basis of the documents confirming the actual use of the designations for the individualization of the enterprise. At the same time, the person who has applied for the defence of the exclusive right to the commercial designation, must prove the totality of the above conditions, in the event he fails to prove at least one of these conditions, the exclusive right to the commercial designation can not be deemed to arise.

As we can see, the list of the circumstances that the plaintiff has to prove with regard to the fact that he has the exclusive right in this category of disputes is quite extensive, unlike the defence of the right to a trademark, where in order to prove the availability of the right, it is enough to submit to the court a certificate on the registration of the rights to the trademark.

Let us start finding out step by step what we need to prove our rights to the commercial designation:

  1. the availability of the sufficient distinctive features of the commercial designation. Let us assume that the plaintiff has a rather original logo developed by a designer, which is a combined designation containing both a word element and a figurative one, the word elements being made in an original font with special stylistic elements, in connection with which we conclude that such designation has the distinctive features;
  2. the known fact of the plaintiff's use of this commercial designation on a particular territory. The circumstances of a long-term and (or) intensive use of the designation on a particular territory, the advertising costs made, the significant volumes of the products sold and the services provided, which have this designation, the results of a survey of the consumers of the products regarding the issue of the designation being known on a particular territory, and other similar information can serve as a confirmation of the fact that the designation used for the individualization of the enterprise is known.
  3. the date of the beginning of the plaintiff’s use of the commercial designation. It can be confirmed, for example, by the dated documents, which the commercial designation is placed on;
  4. the fact of the plaintiff’s use of the commercial designation for the individualization of the enterprise owned by him (in the sense of Article 132 of the C.C.R.F.).

It would seem that all is well, but what enterprise does the plaintiff own? After all, the plaintiff does not manufacture cars, he does not build airplanes, he is not engaged in woodworking, and he even does not have a small candle factory near Samara, which the character of the novel “The Twelve Chairs” by Ilf and Petrov, Father Fyodor, dreamed of. In the eyes of everyman, an enterprise is usually understood as something grandiose, colossal, at least Chelyabinsk Tube Rolling Plant or Uralvagonzavod.

What about the plaintiff? No more than an ordinary online shop, where he is his own head, accountant, seller and courier, and the case is not about something large-scale at all.

So, now he can not be an owner of the right to a commercial designation, can he?

For some reason, I have recalled immediately the phrase from the iconic television movie “The Meeting Place Can Not Be Changed,” where the main character, Gleb Zheglov, performed by Vladimir Vysotsky, says the following phrase: “Well, what do you think, Comrade Taraskin. If he is not a locksmith, but a minister of religion, then the defence of the rights is not guaranteed to him, is it?”

In order to find out, whether an individual entrepreneur has any enterprise, for the individualization of which he uses his designation, it is necessary to refer to the norm of the Code, which gives a definition of an enterprise.

In accordance with Paragraph 1 of Article 132 of the C.C.R.F., an enterprise as a subject matter of the rights shall be recognized as a property complex used for carrying out the business activities.

The enterprise as a property complex includes all types of property intended for its activities, including the land plots, the buildings, the structures, the equipment, the implements, the raw materials, the products, the rights of claim, the debts, as well as the rights to the designations that individualize the enterprise, its products, works and services (the commercial designation, the trademarks, the service marks), and other exclusive rights, unless otherwise is stipulated by the law or by the agreement (Unnumbered Paragraph 2 of Paragraph 2 of Article 132 of the C.C.R.F.).

The law does not set any requirements for the composition of the elements of the property complex for the purpose of attributing it to an enterprise.

The similar legal position was reflected in the decision of the Intellectual Property Court of 13.07.2018 in case No. SIP-297/2018.

In accordance with the provisions of Article 128 of the C.C.R.F., the subject matters of the civil rights include things, including money and securities, other property, including the property rights; works and services; the protected results of the intellectual activities and the equated to them means of individualization (intellectual property); intangible benefits.

Taking into account the fact that the information technology has a certain value and can be a subject of a transaction, a domain name, the right to administer it, should be qualified as the property right, which essence is in the ability of the person, who has registered the domain name, to place on the Internet the information resource that is accessed by a user of the Internet by typing certain characters that make up the domain name. (Resolution of the Ninth Arbitration Court of Appeal of 05.03.2019 No. A40-173311/18).

Based on the above, taking into account the nature of the activities carried out by the entrepreneur, it can be concluded that the plaintiff uses the designation to individualize his enterprise, since he has the property right to the domain name, he obtains the right to the products, which he sells in the course of the transactions for a purchase/sale of the product, he uses the equipment, for example, a computer.

Thus, summing up this article, we conclude that the right to a commercial designation may arise from any person carrying out the commercial activities, regardless of the field of his activities and the size of the organization. However, as to the issues connected with the defence of this right and collecting evidence, it is advisable to turn to professionals.

The fight against counterfeit by bringing the violator to civil responsibility

Following up upon a series of the articles narrating on the ways to fight against counterfeit, I would like to tell about the fight against counterfeit by bringing a violator to civil responsibility.

I shall consider the civil responsibility measures stipulated by the Civil Code of the Russian Federation (hereinafter referred to as the C.C.R.F.), we shall analyze how courts apply these measures, and I shall also tell what claims should be raised and what ones you should refrain from.

Although I gave a definition of counterfeit in the article on the topic of “The methods of identifying the counterfeited products and the fight against them,” I would like to begin this article with the definition of counterfeit, which did not appear in the previous article.

Thus, in accordance with Paragraph 3.16 “GOST R 58223-2018. The National Standard of the Russian Federation. Intellectual Property. The Antimonopoly Regulation and the Defence form Unfair Competition,” counterfeit is The products containing any protected results of the intellectual activity or the equated to them means of individualization, actions, which (including manufacturing, distributing or other using, as well as importing, transporting or storing) lead to a violation of the exclusive rights of their right holders (for example, the original products imported into the EAEU without their right holders’ consent, and the faked products with an illegal use of the protected means of individualization of these products including the confusingly similar designations).

According to Paragraph 1 of Article 1248 of the C.C.R.F., the disputes related to the defence of the violated or disputed intellectual rights shall be considered and resolved by the court.

Thus, in order to bring a violator to civil responsibility, it is necessary to apply to the court with a statement of claim.

At the same time, in this category of disputes, the vast majority of cases are considered by arbitration courts, since the parties to such disputes are legal entities and/or individual entrepreneurs.

It should be noted that according to Paragraph 53 of Resolution of the Plenum of the Supreme Court of the Russian Federation of 23.04.2019 No. 10 “On the Application of the Fourth Part of the Civil Code of the Russian Federation” (hereinafter referred to as Resolution No. 10), the application to the person, who has violated the intellectual rights to the results of the intellectual activity or the means of individualization, of the measures of administrative or criminal responsibility does not exclude a possibility of the application to the same person of the measures of defence of the intellectual rights under a civil law procedure. It should be borne in mind that the very refusal to bring a person to administrative or criminal responsibility does not mean that it is impossible to apply the civil law defence measures.

This means that even if the violator has already been brought, for example, to administrative responsibility on the basis of the materials collected by the customs authority or the police, then the circumstances established in the court decision, according to which the violator has been brought to administrative responsibility, can be used as collateral estoppel, when applying to the court with a statement of claim on bringing to civil law responsibility.

In the case of the violation of the exclusive right, the right holder shall be entitled to defend the violated right by any of the methods listed in Article 12 and Paragraph 1 of Article 1252 of the C.C.R.F.

Paragraph 1 of Article 1252 of the C.C.R.F. states, that the defence of the exclusive rights to the results of the intellectual activity and to the means of individualization shall be carried out, in particular, by raising a claim pursuant to the procedure stipulated by the this Code:

1) on the recognition of the right – against the person, who denies or does not otherwise recognize the right, thereby violating the interests of the rights holder;

2) on suppressing the actions that violate the right or create a threat of its violation, – against the person, who is committing such actions or carrying out the necessary preparations for them, as well as against other persons, who can suppress such actions;

3) on recovering damages – against the person, who has used illegally a result of the intellectual activity or the means of individualization without concluding an agreement with the right holder (a non-contractual use) or who has otherwise violated his exclusive right and caused him damage, including who has violated his right to remuneration stipulated by Article 1245, Paragraph 3 of Article 1263 and Article 1326 of this Code;

4) on the seizure of a tangible medium in accordance with Paragraph 4 of this Article – against its manufacturer, importer, keeper, shipping carrier, seller, other distributor, unfair purchaser;

5) on the court decision publication on the violation committed with an indication of the actual right holder – against the violator of the exclusive right.

The claim on the recognition of the right, which is raised against the person, who denies or who does not otherwise recognize the right, thereby violating the interests of the right holder (Subparagraph 1 of Paragraph 1 of Article 1252 of the C.C.R.F.) is extremely rare, because, in my opinion, it is not based on a practical sense, the satisfaction of such claim does not actually entail negative consequences for the violator and it influence on a restriction of the receipt of the counterfeit products to the market. In addition, it is quite difficult to prove the circumstances in support of this claim, because it follows from the interpretation of this norm, that the person, who has applied to the court with a claim on the recognition of the right to a particular subject matter of the intellectual activity, has to prove that he has an exclusive right to the disputed subject matter and the fact of denying this right by another person entailing a subsequent violation of this right of the right holder. The cases, when the violators deny openly the existence of the right, are rare, on the contrary, they are trying in every way to take advantage of the reputation of a well-known right holder and pass off their products as the products originating from the right holder.

The claim on the court decision publication on the violation committed with the indication of the actual right holder – against the violator of the exclusive right (Subparagraph 5 of Paragraph 1 of Article 1252 of the C.C.R.F.) is also quite rare, because, in my opinion, this is not a real tool to fight against counterfeit.

As judicial practice shows, the following claims are usually raised against the persons engaged in introducing the counterfeit products into civil circulation:

  • on prohibiting the defendant to use the disputed subject matters of intellectual property or the means of individualization (Subparagraph 2 of Paragraph 1 of Article 1252 of the C.C.R.F.);
  • on recovering damages (Paragraph 3 of Article 1252 of the C.C.R.F.);
  • on compelling the defendant to destruct the counterfeit products and/or tools, equipment or other means mainly used or intended for committing a violation of the exclusive rights to the results of intellectual activity and to the means of individualization (Subparagraph 4 of Paragraph 1 of Article 1252 of the C.C.R.F.).

The claim on prohibiting the use of the disputed subject matters of intellectual property is rather ambiguous, since a few years ago, it appeared in 90% of the statements of claim related to the illegal use of intellectual property, and in the majority of cases it was satisfied by the courts.

About 6 years ago, a trend started to manifest itself, according to which the courts began to refuse to satisfy such claims.

As an example, case No. A41-42379/2012 according to the statement of claim from the company Nissan Jidosha Kabushiki Kaisha to Limited Liability Company “AVTOlogistika” on defence of the exclusive rights to the trademarks. Among other things, the plaintiff raised a claim on prohibiting the defendant to carry out without the consent of the company Nissan Jidosha Kabushiki Kaisha the use of the trademarks with a word element “NISSAN” (according to certificates of the Russian Federation No. 86143, No. 319248), including to carry out importing into the territory of the Russian Federation the products marked with the above trademarks.

By the decision of the Arbitration Court of the Moscow Region of 13.03.2013, the statement of claim was satisfied partially, the First-Instance Court refused to satisfy the claims on prohibiting the use of the trademarks. The Court of Appeal cancelled the decision of the First-Instance Court as regards to the refusal to satisfy the statement of claim on prohibiting the company “AVTOlogistika” to carry out without the consent of the company Nissan Jidosha Kabushiki Kaisha the use of the trademarks “NISSAN” (according to certificates of the Russian Federation No. 86143, No. 319248). The Court of Cassation upheld the decision of the Court of Appeal.

At the same time, the courts currently have unambiguously changed their position regarding the claim on prohibiting and they refuse to satisfy this claim pointing out that the abstract claims on a general prohibition to a particular person to use the result of the intellectual activity or the means of individualization at any time in future shall not be satisfied by virtue of the law (for example, the decision of the Intellectual Property Court of 15.09.2016 in case No. A40-195776/2015).

In addition, the similar legal approach was supported by the Highest Court in Unnumbered Paragraph 3 of Paragraph 57 of Resolution No. 10, where it was stated that the claim on prohibiting the offer to sell or on prohibiting the sale of the counterfeit product, if such product belonging to the defendant had already been sold by him should not be satisfied. The claims on the general prohibition to the particular person to use the result of the intellectual activity or the means of individualization in future (for example, on prohibiting the placement of the information in information and telecommunication networks, including in the Internet) also shall not be satisfied. Such prohibition is established directly by the law (Unnumbered Paragraph 3 of Paragraph 1 of Article 1229 of the C.C.R.F.).

Thus, it can be concluded that currently it is inadvisable to raise the claim on prohibiting the defendant to use the subject matters of intellectual property, because the claim will be refused in 99% of the cases.

We proceed further to the claim on seizing from the circulation and destructing, without paying any damages, the tangible media, in which the result of the intellectual activity or the means of individualization are expressed, as well as the tools, equipment or other means mainly used or intended for committing the violation of the exclusive rights to the results of the intellectual activity and to the means of individualization.

I believe that this claim is one of the most effective methods to fight against counterfeit, but at the same time it is necessary to collect a large volume of evidence to satisfy it, what is sometimes impossible without the involvement of the law enforcement authorities.

The representative of the right holder, who does not possess the state-imperious authorities to safeguard law enforcement, it is difficult to penetrate the warehouse, where the counterfeit is being stored, to establish the information that identifies the product, its quantity and location. The said leads to the fact that the judicial act containing the claim on seizing and destructing the counterfeit product without the indication of the identifying features is impossible to be executed, and the further execution of the claim bearing a general reference to the fact that the product is counterfeit may lead to the violation of the rights of other persons, who are not the parties to these legal relations.

However, if the right holder has managed to collect all the necessary information and he is aware of the above circumstances, he shall be entitled to clam on undertaking by the court of the interim measures in respect of the disputed product in the form of arresting the product, which has the features of being counterfeit.

The judicial authority is entitled to undertake the interim measures inaudita altera parte, where appropriate, in particular in the cases, if there is a possibility that any delay will cause irreparable harm to the right holder, or if there is an arguable risk that the evidence will be destructed, in connection with which the interim measures may be applied by the court to ensure the execution of the court's decision according to the claim on seizing and destructing the product marked with the disputed means of individualization, what will allow ensuring the execution of the decision in the case of the satisfaction of the claims on seizing and destructing the counterfeit product.

At the same time, it should be taken into account that the products, on which the trademark is placed by the right holder himself or with his consent, that have been imported into the territory of the Russian Federation without the right holder’s consent (parallel imports), can be seized from the circulation and destructed pursuant to the application of the consequences of the violation of the exclusive right to the trademark only in the case of their inadequate quality and (or) in order to ensure security, defend the life and health of people, protect the nature and the cultural valuables. Essentially, this norm is a novel and it follows from the legal position of the Constitutional Court of the Russian Federation set out in Resolution of 13.02.2018 No. 8-P “In the Case on Checking the Constitutionality of the Provisions of Paragraph 4 of Article 1252, Article 1487 and Paragraphs 1, 2 and 4 of Article 1515 of the Civil Code of the Russian Federation in connection with the complaint of Limited Liability Company “PAG.”

In the last part of my article I shall describe briefly about perhaps the most common claim raised by the right holders – recovering damages.

By virtue of Paragraph 3 of Article 1252 of the C.C.R.F., in the cases stipulated by the C.C.R.F., the right holder shall be entitled to choose a method of defence at the violation of the exclusive right: he may claim paying damages from the violator for the violation of this right instead of recovering damages. Simultaneous recovering damages or paying damages shall not be allowed.

The damages shall be paid, if the fact of the violation is proved, and at the same time, the right holder shall not be obliged to prove the fact of the damages and their quantum.

When filing the claims on recovering damages, the right holder shall be entitled to choose one of the methods of calculating the quantum of the damages, which are specified in Subparagraphs 1, 2 and 3 of Article 1301, Subparagraphs 1, 2 and 3 of Article 1311, Subparagraphs 1 and 2 of Article 1406.1, Subparagraphs 1 and 2 of Paragraph 4 of Article 1515, Subparagraphs 1 and 2 of Paragraph 2 of Article 1537 of the C.C.R.F., as well as to change the method of calculating the quantum of the damages, which he has chosen, before the court makes a decision, because the subject and the grounds of the statement of claim filed shall be unchangeable.

The above norms stipulate several methods of calculating the quantum of damages, which can be divided nominally into three groups:

  • recovering damages in the quantum from ten thousand roubles to five million roubles determined at the discretion of the court;
  • recovering damages in double the quantum of the value of the right of the use of the result of the intellectual activity or the means of individualization;
  • recovering damages in double the quantum of the value of the counterfeit copies (of the products).

Paragraph 61 of Resolution No. 10 describes in sufficient detail how the quantum of damages should be calculated and what evidence can support such calculation.

At the same time, when raising a claim on recovering damages, it is important to remember that, if the right holder and the violator of the exclusive right are legal entities and (or) individual entrepreneurs and the dispute is under the arbitration court jurisdiction, the right holder must raise the claim, before filing the statement of claim on recovering damages or on paying damages. The statement of claim on recovering damages or on paying damages may be filed in the case of a full or partial refusal to satisfy the claim or in the case of failure to receive a response to it within a thirty-day period from the date of sending the claim, unless a different period is stipulated by an agreement (Paragraph 5.1 of Article 1252 of the C.C.R.F.).

Bringing to administrative responsibility for the illegal use of means of individualization on the basis of Article 14.10 of the Code of the Russian Federation on Administrative Offences

In my previous article, I have considered the methods of identifying counterfeit products and the fight against them, and I have raised indirectly the issue regarding responsibility, which the offender, who introduces the counterfeit products into the civil circulation, can be brought to.

Thus, one of the measures of responsibility for the illegal use of the means of individualization of the products (works, services), which the offender can be brought to, is administrative responsibility established by Article 14.10 of the Code of the Russian Federation on Administrative Offences (hereinafter referred to as the CoAO RF, the Code).

Part one of Article 14.10 of the CoAO RF states that the illegal use of someone’s trade mark, service mark, appellation of origin of the product or the designations similar to them for the homogeneous products, except for the cases stipulated by Part 2 of this Article, shall entail imposing an administrative fine:

  • on citizens – from 5,000 to 10,000 roubles;
  • on officials – from 10,000 to 50,000 roubles;
  • on legal entities – from 50,000 to 200,000 roubles.

 

Part two of the Article under consideration narrows the concept “use” by determining it as a manufacture for the purposes of sale or realization of the product containing an illegal reproduction of someone else's trademark, service mark, appellation of origin of the product or the designations similar to them for the homogeneous products, if these actions do not contain a criminal offense. The sanction under Part 2 of Article 14.10 of the CoAO RF stipulates imposing an administrative fine:

  • on citizens – in double the amount of the value of the product, which has become a subject of the administrative offense, but not less than 10,000 roubles;
  • on officials – in triple the amount of the value of the product, which has become a subject of the administrative offense, but not less than 50,000 roubles;
  • on legal entities – in fivefold the amount of the value of the product, which has become a subject of the administrative offense, but not less than 100,000 roubles.

 

In this case, both parts of the commented Article stipulate responsibility in the form of confiscation of the items containing an illegal reproduction of the trademark, service mark, appellation of origin of the product, as well as the materials and equipment used for their manufacture, and other tools of committing the administrative offense.

In my opinion, currently, the issues related to the peculiarities of the application of Article 14.10 of the CoAO RF are considered in the most detailed wayin Paragraphs 8-15 of Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation No. 11 of February 17, 2011 “On Some Issues of the Application of the Special Part of the Code of the Russian Federation on Administrative Offences” (hereinafter referred to as Resolution No. 11 of February 17, 2011).

I would like to dwell separately on the most interesting, in my opinion, aspects considered in the said Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation.

Thus, in Unnumbered Paragraph 4 of Resolution No. 11 of February 17, 2011, it is noted that Article 14.10 of the CoAO RF covers, among others, such offences as the introduction of the product, which (as well as of the labels, packaging, documentation) contain an illegal reproduction of the means of individualization into the civil circulation on the territory of the Russian Federation, as well as the importation into the territory of the Russian Federation of such product with a purpose of the introduction of it into the civil circulation on the territory of the Russian Federation.

In this Paragraph of the Resolution, the reference to Articles 1474, 1484, 1519, 1539 of the Civil Code of the Russian Federation, which determine the methods of exercising the exclusive right to the means of individualization, is obviously traced.

It should be noted that this Resolution states separately that any person may be brought to administrative responsibility stipulated by Article 14.10 of the CoAO RF for the offence consisting in the realization of the products containing an illegal reproduction of the trademark, if he is engaged in such realization, and not only the first seller of the correspondent product.

At the same time, as the numerous practices related to the consideration of the cases of bringing to administrative responsibility under Article 14.10 of the CoAO RF demonstrate, in the majority of cases, the importers, who submit to the Customs the goods declarations with a purpose to place the products under the Customs procedure of “release for domestic consumption,” and the Customs authority, in the course of exercising control, discovers that the designations that are confusingly similar to the trademarks are placed on the products indicated in the declarations, while the importer can not provide evidence that he has the right holder’s permission, are brought to responsibility on the basis of the applications from the Customs authorities.

However, the facts of bringing subsequent sellers as well to responsibility are not rare. As a rule, in such cases, the police, the prosecutor's office and Rospotrebnadzor, who identify offenders in the course of conducting inspections of the sales outlets’ activities act as the applicants in the court on behalf of the state authority.

By the way, an interesting fact is that only Unnumbered Paragraph 4 of Paragraph 17 of the same Resolution No. 11 of February 17, 2011 indicates that only the person, who has first introduced into circulation the product with the illegal use of the results of intellectual activity and equated to them means of individualization of a legal entity, means of individualization of products, works, services, can be a subject of administrative responsibility for the administrative offenses stipulated by Part 2 of Article 14.33 of the CoAO RF (Unfair competition that has been expressed in the introduction into circulation of the product with the illegal use of the results of intellectual activity and equated to them means of individualization of a legal entity, means of individualization of products, works, services), but subsequent sellers can not be brought to responsibility under this Article.

I believe that a separate scientific article can be devoted to the subtleties and peculiarities according to which the legislator divided thus way the persons, who may be brought to responsibility on the basis of the above Articles of the Code, and we shall not rest on this issue within the framework of this article.

I believe that further it is worth noting what role, when considering the issue on bringing to administrative responsibility on the basis of Article 14.10 of the CoAO RF, the right holder' opinion on whether the subject of the administrative offense contains an illegal reproduction of the trademark, service mark, appellation of origin of the product or the designations similar to them plays.

It follows from Paragraph 13 of Resolution No. 11 of February 17, 2011 that, when solving the issue on whether the subject of the administrative offense contains an illegal reproduction of the trademark, service mark, appellation of origin of the product or the designations similar to them, the courts should take into account the fact that the right holder’s opinion regarding this issue is not an expert’s opinion in the sense of Article 86 of the Arbitration Procedural Code of the Russian Federation or Article 26.4of the CoAO RF. However, such opinion shall be evidence that shall be assessed by the court along with other evidence.

It follows from the above that the letters (opinions) of the representatives of the right holders are admissible evidence in the case and, along with other evidence, are subject to be assessed by the court. The similar legal position was reflected in Resolution of the Intellectual Property Court of July 17, 2018 in caseNo. 32-30023/2017.

It is impossible not to draw attention to Paragraph 15 of Resolution No. 11 of February 17, 2011, which states that the actions to import products into the territory of the Russian Federation shall be considered completed from the moment of moving the disputed products across the Customs border of the Russian Federation and submitting the Customs declaration to the Customs authority and (or) the documents required for placing these products under the Customs procedure, the conditions of which imply a possibility of the introduction of these products into circulation on the territory of the Russian Federation (for example, “release for domestic consumption”).

Now I would like to consider the main differences and peculiarities of bringing to administrative responsibility from bringing to more habitual civil law responsibility, which consist in the following:

  • the availability of the application of the right holder of the trademark is not a necessary condition for initiating a case of an administrative offense stipulated by Part 1 of Article 14.10 of the CoAO RF;
  • the fact that the first-instance court has not involved the right holder to the participation in the case shall not be a basis for cancelling the decision of the Arbitration Court (Paragraph 11 of Judicial Practice Review “On Some Issues Arising at the Consideration by the Arbitration Courts of the Cases of Administrative Offences Stipulated by Chapter 14 of the Code of the Russian Federation on Administrative Offences” approved by the Presidium of the Supreme Court of the Russian Federation of December 6, 2017);
  • the Customs officials (along with the officials of the law enforcement authorities and the authorities carrying out the functions for control and supervision in the field of defence of the consumer rights and the consumer market) collect evidence of the illegal use of the trademarks independently;
  • evidence collected within the framework of the case of the administrative offense and/or the circumstances established by the court regarding this case may be used in the future by the right holder, if he files a statement of claim for defence of his rights to the trademark, including the claim for recovery of compensation.

 

It may seem at first glance from the above peculiarities that the tool to protect one's right to a means of individualization in the form of bringing the offender to administrative responsibility on the basis of Article 14.10 of the CoAO RF is very convenient for the right holder and it does not have disadvantages. However, if you have a closer look, it is not quite so, and that is why:

  • within the framework of the consideration of the case of bringing to administrative responsibility, the fine imposed by the court is subject to be recovered in favor of the federal budget, and not in favor of the right holder;
  • as a rule, the Customs authorities, the law enforcement authorities and the authorities carrying out the functions for control and supervision in the field of defence of the consumer rights and the consumer market do not initiate conducting inspections independently, within the framework of which the facts of the illegal use of the means of individualization can be identified, and the right holder’s application is often a necessary tool to start this process.

In addition, one should not forget about the cases of parallel imports, when the products are imported into the territory of the Russian Federation without the right holder’s consent, on which the trademark is placed by the right holder himself or with his consent.

In this case, the legal mechanisms shall be applied, which were developed within the framework of the consideration of case No. A40-9281/08-145-128, and which were reflected in Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation No. 10458/08 of February 3, 2009, according to which the offender can not be brought to administrative responsibility.

In that Resolution, the Highest Court concluded that the application for administrative responsibility under Article 14.10 of the CoAO RF for importing the products marked with the trademark without the permission of the right holder into the territory of the Russian Federation should be dismissed, as the car that is a subject of the offense, has been released by the right holder of the trademarks with the same names and, therefore, it does not contain the features of an illegal reproduction of the trademarks.

In addition, it should be borne in mind that, according to the legal position set forth in Unnumbered Paragraph six of Paragraph 8 of Resolution No. 11 of February 17, 2011, it is indicated that, taking into account Article 1484 of the Civil Code of the Russian Federation, the purchase of the product containing an illegal reproduction of the trademark, as well as storing or transporting such product without a purpose of the introduction into the civil circulation on the territory of the Russian Federation, shall not constitute an administrative offense under Article 14.10 of the CoAO RF.

At the same time, establishing the purpose for which the disputed product has been stored is essential for determining, whether there is an administrative offense, the responsibility for which is stipulated by Article 14.10 of the CoAO RF, in the actions of the person.

Thus, storing is recognized as an independent offence of the exclusive right to the trademark only in the case, if such storing is carried out for the purposes of the introduction of the product into circulation.

The similar legal position was reflected in Resolution of the Intellectual Property Court of August 1, 2018 in case No. А40-198194/2017.

I think this conclusion of the Highest Court is quite interesting, but it seems to me that it will be quite difficult for the person, against whom the inspection is being conducted, to prove that the product is being stored not for the purposes of the introduction of the product into circulation.

The methods of identifying the counterfeited products and the fight against them.

It already makes no sense to buy a real

branded thing, because in a stuffy subway car,

the faked Breguet looks better

than the real Longines.

(Shen Bekasov. A Bank Secret)

The introductory quotation in my article has been chosen not by chance, since many people, in pursuit of clothes, watches, and fashionable devices, strive to obtain the products of well-known brands, which are often not available to a person with average earnings due to their high cost.

But one would like so much to have in the own wardrobe the clothes from a famous Italian designer, the telephone manufactured by one American fruit company or the watch with the words “made in Switzerland.”

However, it is the faked product that is, as a rule, behind a low or relatively low price of the product under a well-known brand.

The topic of this article has been chosen by me in order to tell briefly about the methods of identifying the counterfeited products and the methods of the fight against the counterfeit used by the right holders.

Most likely the term “counterfeit” is a word borrowed from English (from “counterfeit” – a fake, a forgery), however, it is thought that the roots of this term lead to the French language and that it is derived from “contrefaçon,” what also means a fake.

So it is, initially, it have been just the faked products that have been called the counterfeit, but gradually this term has acquired currently an inherent peculiarity that such fake must be necessarily accompanied by an offence of the intellectual rights.

In Paragraph 16 of Resolution of the Plenum of the Supreme Court of the Russian Federation No. 15 of June 19, 2006 “On the Issues Arose at the Courts in the Civil Proceedings Connected with the Application of the Copyright Law and Related Rights,” it was stated that: the copies of the works and the phonograms, the manufacture and distribution of which entails an offence of the copyright and the related rights shall be the counterfeited ones.

With the adoption of the Fourth Part of the Civil Code of the Russian Federation(hereinafter referred to as the C.C.R.F.) the tangible media, in which the result of intellectual activity or the means of individualization is expressed, which lead to an offence of the exclusive right to such result or to such means shall be recognized as the counterfeited ones (Paragraph 4 of Article 1252 of the C.C.R.F.).

In addition, the products, labels, packaging of the products on which the trademark or the designation confusingly similar thereto is placed illegally shall be the counterfeited ones (Paragraph 1 of Article 1515 of the C.C.R.F.).

It is worth noting that if we talk about the counterfeit product on which the trademark is placed illegally, then, in conjunction with Articles 1252, 1484 and 1487 of the C.C.R.F., the said legal provisions allow referring both the faked products and the product with a legal trademark, but imported to the territory of the Russian Federation without the right holder’ consent (parallel imports) to the counterfeited ones.

I will not dwell upon separately on parallel imports in this article, because this issue, in my opinion, refers rather to a political plane than to a legal one. I would like to put the main emphasis on identifying the faked products in the market, which have not and have never had any relation to the right holder.

Currently, the problem of the counterfeit is very acute, because it has an impact not only on the interests of the right holders, but it also has a negative impact on the consumers.

The manufacturers and sellers of the original product suffer losses, due to the fact that the businessmen appear in the market, who sell the faked products using the fame and reputation of the promoted brand or they manufacture and sell the product, in which someone else's patent or subject matter of the copyright is used, but they do not invest in scientific and research, design and experimental, and technological works.

For the consumers who strive to save money by buying a cheap, knowingly faked product, the most insignificant disappointment is a quick breakdown of such purchase, getting out of order of the product due to its poor quality, but there are the cases with a sadder outcome, when the point is about the counterfeited alcoholic products.

Large holdings, international corporations that are well-known in the world, strive to fight against the sellers and manufacturers of the counterfeit, since the figures that accompany carrying out the activity on selling the counterfeit are striking.

Thus, in 2017, the Federal Customs Service prevented the damage caused by the importation of the counterfeited products intended for the 2018 FIFA World Cup by 4.5 billion roubles.

In 2018, in the European Union, the proportion of the counterfeit increased from 6% to 8%. The losses from the counterfeit in the countries have amounted to: France – 6.8 billion euros, the United Kingdom – 9.2 billion euros, Germany – 8.3 billion euros.

The majority of all counterfeited products in the world, according to the experts of the Organization for Economic Cooperation and Development, are manufactured in China, Turkey, Singapore, Thailand and India.

If we move from a theoretical plane to a practical one, while considering the topic of this article, I would like to give some advices to the consumers, or rather to offer to pay attention before buying to several criteria that afford distinguishing an original product from a counterfeited one, namely:

– the price of the original products is always much higher than the price of the counterfeited ones, at times significantly. The Swiss watches will not cost 100 USD, no matter what promotions and discounts have been announced by the seller;

– the poor quality of the products (traces of glue, uneven seams, the different length of the pant legs, and the mismatch of the clothing sizes to the international standards);

– the use of the well-known trademarks or the designations that are confusingly similar to them (iFON, D&B, HIKE, etc.). In this case, the non-compliance of the designations’ proportions, which are placed on the product, in comparison with the original designations, occurs quite often. There are the cases, when several trademarks belonging to different right holders are placed on one product at once;

– the buyers should be on alert about that fact that the “branded” products are in kiosks and markets, at unknown sites or in the social networks groups that have nothing to do with the right holder.

The above criteria are also applied by the right holders, while identifying the counterfeited products. At the same time, the right holders, trying to protect themselves from the possible fakes, undertake the preventive measures to defend their products from fakes, use other tools and methods, which are subsequently used to separate out their products from fakes among a huge product mass and to bring the offender to account.

In order to protect themselves from faking their products or to try to minimize the volumes of these fakes, the right holders are trying to bring something that is difficult to reproduce in the product design.

As a rule, this is expressed in the fact that the defence elements, which include defensive holograms, watermarks, micro-records that are not subject to optical copying, latent images that are visible only with the help of special devices are introduced into the packaging of the product, printing the labels, the manufacture technology; the use of the individual numbers by which it is possible to track the lot of the product, the country of its destination, and others.

These tools allow the right holders dividing the product into “their own” / “alien” and they facilitate proving the fact of the offence in the court.

However, before one starts to divide and to go to the court, at first, it is necessary to identify the location of the counterfeited product; this can be done using the following tools:

At the same time, having included their subject matters of intellectual property in the CIPR, the right holder acquires a number of tools to fight against the offenders; he may:

 

 

The following methods may be called as the main, well-studied and fairly predictable effective methods of the fight against the counterfeit:

The Customs Authority. The result is bringing to the administrative responsibility under Part 1 of Article 14.10 of the Code of the Russian Federation on Administrative Offences, the imposition of an administrative fine:

It is possible to apply the penalties in the form of confiscation of the items containing an illegal reproduction of the trademark, the service mark, the name of the place of origin of the product, as well as the materials and equipment used for their manufacture, and other tools of committing the administrative offense.

            The Police. The result is bringing to the administrative responsibility under Part 2 of Article 14.10 of the Code of the Russian Federation on Administrative Offences, the imposition of an administrative fine:

It is possible to bring to the criminal responsibility under Article 180 of the Criminal Code of the Russian Federation, provided that this act is committed repeatedly or it has caused major damage (over 250,000 roubles).

The Antimonopoly Authority. The result is obtaining the Antimonopoly Authority decision, which prescribes to stop the offence. Bringing to the administrative responsibility under Part 2 of Article 14.33 of the Code of the Russian Federation on Administrative Offences, the imposition of an administrative fine:

The Court. Bringing to civil responsibility. In accordance with Paragraph 1 of Article 1252 of the C.C.R.F., the defence of the exclusive rights to the results of intellectual activity and to the means of individualization shall be carried out, in particular, by imposing the requirements pursuant to the procedure stipulated by the present Code: The result of the consideration of the statement of claim by the court, including, but not limited to, can be a decision that instructs:

– to pay compensation for the exclusive right offence. At the same time, the methods for calculating compensation may vary depending on the subject matter of intellectual property for which defense the right holder has applied.

– to stop the acts offending the right or creating a threat of offending it. Such decision shall be made regarding the person, who commits such acts or makes the necessary preparations for them, as well as regarding other persons, who can prevent such acts.

– to seize from the circulation and to destruct, without any compensation, the tangible media, in which the result of intellectual activity or the means of individualization is expressed, in the event that the manufacture, distribution or other use, as well as the import, transportation or storage of such tangible media lead to the exclusive right offence to such result or to such means.

As you can see, the methods of identifying and the methods of the fight against the counterfeited products are quite different. The choice of one or another tool in the fight against the offenders depends on various factors such as the kind and characteristics of the product, the method it is put into the civil circulation, the tricks and contrivances of the offenders and other factors.

At the same time, the skillful use of all of the recited methods, the list of which, of course, is not exhaustive in view of the development of the means of defence, will afford fighting effectively against the counterfeit and its distributors.

Is it possible to conclude a gratuitous license agreement or should the payment of remuneration be exercised in kind?

In this article, I am deliberately not going to touch on directly the issue related to the payment of remuneration in a monetary form, because I believe that the payment of remuneration under a license agreement in the form of fixed lump sums or periodic payments, percentage deductions from an income (revenue) occurs in 99% of cases and it is a well-studied and widely used method of the payment under the license agreement.

However, in my opinion, the issue on a possibility of concluding a gratuitous license agreement with a holder of the exclusive rights to a subject matter of intellectual property or a license agreement under the conditions of the payment of remuneration in kind (a non-monetary form) has not been highlighted sufficiently, in connection with which I would like to devote my article to the consideration of these issues.

While working, I often encounter the clients' questions, like: Is it possible to conclude a gratuitous license agreement? Is it possible to stipulate a condition in the agreement that the payment of remuneration will be made in kind, in the form of a product, works, services? Can it lead to the fact that the license agreement will be considered as not concluded?

In order to answer these questions, I suggest that we should refer to the Civil Code of the Russian Federation (hereinafter referred to as the C.C.R.F., the Code) and to Resolution of the Plenum of the Supreme Court of the Russian Federation No. 5, Plenum of the Supreme Arbitration Court of the Russian Federation No. 29 of March 26, 2009 “On Some Issues Arose in Connection with the Entry into Force of Part Four of the Civil Code of the Russian Federation” (hereinafter referred to as Resolution No. 5/29).

Paragraph 3 of Article 1228 of the C.C.R.F. stipulates that the exclusive right to the result of the intellectual activity created by creative labour arises initially for its author. This right may be transferred by the author to another person under an agreement, and it also may be transferred to other persons according to other bases established by the law.

In accordance with Paragraph 1 of Article 1229 of the C.C.R.F., “a citizen or a legal entity possessing an exclusive right to the result of the intellectual activity or the means of individualization (a right holder) shall be entitled to use such result or such means at his own discretion by any method that does not contradict the law.

The right holder may dispose of the exclusive right to the result of the intellectual activity or to the means of individualization, unless otherwise is stipulated by the C.C.R.F.

In accordance with Article 1233 of the C.C.R.F., the right holder may dispose of the exclusive right owned by him to the result of the intellectual activity or to the means of individualization by any method that does not contradict the law and the essence of such exclusive right, including by alienating it under an agreement to another person (an agreement on the alienation of the exclusive right), or by granting to another person the right to use the relevant result of the intellectual activity or the means of individualization within the scope established by the agreement (a license agreement).

The analysis of the legal norms is indicative of the fact that the author or another right holder may dispose of the exclusive right owned by him to the result of the intellectual activity or the means of individualization by any method that does not contradict the law. The conclusion of the license agreement is one of the methods stipulated by the law for registering a will, when disposing of one’s exclusive right.

Thus, according to Paragraph 1 of Article 1235 of the C.C.R.F. one party under the license agreement, which is a holder of the exclusive right to the result of the intellectual activity or the means of individualization (a licensor) shall grant or shall undertake to grant the right to use such result or such means within the scope stipulated by the agreement to another party (a licensee).

Paragraph 5 of Article 1235 of the C.C.R.F. establishes that under the license agreement the licensee shall undertake to pay the remuneration stipulated by the agreement to the licensor, unless otherwise is stipulated by the agreement.

In the absence of a condition on the amount of remuneration or a procedure for determining it in a non-gratuitous license agreement, the agreement shall be considered as not concluded. In this case, the rules for determining a price stipulated by Paragraph 3 of Article 424 of this Code shall not be applied.

Thus, on the basis of Paragraph 5 of Article 1235 of the Code, the license agreement is assumed to be non-gratuitous, unless otherwise is expressly stipulated by the very agreement.

In addition, Paragraph 13.6 of Resolution No. 5/29 states that, if the license agreement does not stipulate expressly its gratuitousness, but at the same time, it does not stipulate the amount of remuneration or a procedure for determining it, such agreement shall be considered as not concluded by virtue of the second Unnumbered Paragraph of Paragraph 5 of Article 1235 of the Code.

It follows from the above norms that the conclusion of the gratuitous license agreement is allowed.

However, it should be noted that there are some restrictions relating the possibility of concluding the gratuitous license agreement.

So, by virtue of Paragraph 5.1. of Article 1235 of the C.C.R.F. the gratuitous provision of the right to use the result of the intellectual activity or the means of individualization in the relations between the commercial organizations on the whole world territory and during the entire period of the exclusive right validity under the conditions of the exclusive license shall not be allowed, unless otherwise is stipulated by this Code.

On the one hand, this norm confirms the principle of the civil legislation that the obligations legal relationships between the commercial organizations are based on the principles of a non-gratuitous nature and equivalence of the exchangeable material objects and the inadmissibility of unjust enrichment, on the other hand, it implies a possibility of concluding the gratuitous license agreements between the commercial organizations under the conditions of the non-exclusive license, and also under the conditions of the exclusive license, if they are restricted by a particular territory and (or) a period of validity.

A vivid example of the possibility of concluding the gratuitous license agreement, including between the commercial organizations, is Paragraph 5 of Article 1286 of the C.C.R.F., according to which the license agreement with the user on granting him a simple (non-exclusive) license to the use of a program for an electronic computing machine or a database can be concluded by a simplified procedure. The license agreement concluded by the simplified procedure is an accession agreement, the conditions of which, in particular, may be set forth in the purchasable copy of the program for the electronic computing machine or the database or on the packaging of such copy, as well as in an electronic form (Paragraph 2 of Article 434). The commencement of the use of the program for the electronic computing machine or the database by the user, as it is determined by the said conditions, shall mean his consent to the conclusion of the agreement. In this case, the written form of the agreement is considered to be observed. The license agreement concluded by the simplified procedure shall be gratuitous, unless otherwise is stipulated by the agreement.

Thus, we can conclude that the conclusion of the gratuitous license agreement is allowed under certain conditions.

Further, I would like to consider the issue regarding a possibility of determining the payment of remuneration in kind in the license agreement.

As it has been indicated above, Unnumbered Paragraph 3 of Paragraph 5 of Article 1235 of the C.C.R.F. stipulates that the payment of remuneration under the license agreement may be stipulated in the form of fixed lump sums or periodic payments, percentage deductions from an income (revenue) or in some other form.

Thus, it can be concluded that the legislator does not exclude, and by virtue of the principle of freedom of an agreement, it allows for a possibility of stipulating the payment of remuneration in a non-monetary form in the license agreement, for example, in the form of a product, works, services.

As an interesting example, it is possible to cite the circumstances established by the courts within the framework of the consideration of case A40-125821/2017.

As it follows from the Decision of the Intellectual Property Court of July 12, 2018 regarding the said case, a partnership agreement was concluded between the ANO “ORGANIZING COMMITTEE “SOCHI 2014” and the insurance company.

Subsequently, a license agreement was concluded between the Autonomous Non-Commercial Organization “Organizing Committee of the XXII Olympic Winter Games and the XI Paralympic Winter Games of 2014 in the city of Sochi” and the insurance company, according to which the organization granted the insurance company for remuneration the right to use (a simple non-exclusive license) the trademark according to certificate of the Russian Federation No. 139795 of March 29, 1996 on the territory of the Russian Federation.

In accordance with the partnership agreement and the license agreement conditions, the insurance company was granted for remuneration the rights, privileges and opportunities, including the right to use the organization’s trademark and the status of the Partner of the Russian Olympic Team, and the insurance company, in turn, undertook an obligation to pay remuneration in an aggregate amount of 36,250,000 US dollars, including 100,000 US dollars as a contribution to organize and hold the XXII Olympic Winter Games of 2014 in the city of Sochi; 12,652,500 US dollars as a license remuneration for the right to use the trademark according to certificate of the Russian Federation No. 139795; 12,652,500 US dollars as a license remuneration for the right to use the trademark under certificate of the Russian Federation No. 394544 and 10,845,000 US dollars as a license remuneration for the right to use other subject matters of the intellectual activity (talismans, pictograms, etc.).

In this case, based on the provisions of Paragraph 5.1 of the partnership agreement, the parties agreed a procedure for the payment of remuneration, namely, directly in a monetary form in the amount of 11,250,000 US dollars and in kind by providing insurance services by the defendant according to the organization's applications in the amount of 25,000,000 US dollars.

The court case cited as an example and the circumstances established in the course of the examination confirm the possibility of stipulating remuneration in the non-monetary form in the license agreement, for example, in the form of a product, works, services.

Summarizing the above, the answers to the issues set forth at the beginning of the article are as follows.

Is it possible to conclude a gratuitous license agreement with the holder of the exclusive rights to the subject matters of intellectual property and the means of individualization equated to them? Yes, it is possible.

Is it possible to stipulate remuneration in kind in the license agreement (in the form of a product, works, services)? Yes, it is possible.

However, when concluding the gratuitous license agreement, it is important to remember about the need to specify a condition that it is gratuitous, and when concluding the non-gratuitous license agreement, to agree a condition on the amount of remuneration or a procedure for determining it, otherwise the corresponding agreement by virtue of the second Unnumbered Paragraph of Paragraph 5 of Article 1235 of the C.C.R.F. will be considered as not concluded.

Is the distribution of the programme for an electronic computing machine the disposal of the right or a way of the use?

 

I would like to begin my article with the definition of the programme for an electronic computing machine specified in the Civil Code of the Russian Federation.

In accordance with Article 1261 of the Civil Code of the Russian Federation (hereinafter referred to as the C.C.R.F., the Code), The programme for an electronic computing machine is a set of the data and commands, represented in an objective form, which are designated to ensure the operation of electronic computing machines and other computer devices in order to obtain a certain result, including the preparatory materials obtained in the course of the development of the programme for an electronic computing machine and the audiovisual images generated by it.

According to Paragraph 1 of Article 1259 of the C.C.R.F., the programmes for electronic computing machines shall relate to the subject matters of the copyright. At the same time, the copyrights to all kinds of the programmes for electronic computing machines (including to operating systems and software solutions), which can be expressed in any language and in any form, including a source text and an object code, shall be protected in the same way as the copyrights to literary works (Article 1261 of the C.C.R.F.).

Similarly, the programmes for electronic computing machines are protected in international treaties.

Thus, in accordance with Article 10 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (Marrakesh, April 15, 1994) computer programmes, both a source text and an object code shall be protected as literary works in accordance with the Berne Convention (1971).

According to Article 4 of the Treaty of the World Intellectual Property Organization on the Copyright, adopted by the Diplomatic Conference on Certain Issues of the Copyright and Related Rights in Geneva on December 20, 1996, computer programmes shall be protected as literary works in the sense of Article 2 of the Berne Convention. Such protection shall be extended to the computer programmes, regardless of the way or form of their expression.

In accordance with Paragraph 1 of Article 1229 of the C.C.R.F., “a citizen or a legal entity possessing an exclusive right to the result of intellectual activity or the means of individualization (a right holder) shall be entitled to use such result or such means at his own discretion in any way that does not contradict to the law. The right holder may dispose of the exclusive right to the result of intellectual activity or to the means of individualization (Article 1233), unless otherwise is stipulated by this Code.

Since this article deals with the issue of whether the distribution of the programme for an electronic computing machine is the disposal of the right or a way of the use of the work, I would offer to define what the legislator refers to the ways of the disposal of the exclusive right to the programme for an electronic computing machine and what the use of the programme for an electronic computing machine is.

Paragraph 1 of Article 1270 of the C.C.R.F stipulates that the author of the work or other right holder has an exclusive right to use the work in accordance with Article 1229 of this Code in any form and in any way that does not contradict to the law (an exclusive right to the work), including in the ways specified in Paragraph 2 of this Article.

The most frequent ways of the use of the programmes for electronic computing machines defined in Paragraph 2 of Article 1270 of the C.C.R.F. shall be:

– reproducing the work, that is, the production of one or more copies of the work or its part in any material form, including in the form of sound recording or video recording, the production in three dimensions of one or more copies of a two-dimensional work and in two dimensions of one or more copies of a three-dimensional work. In this case, recording the work to an electronic media, including recording to the memory of an electronic computing machine is also considered to be a reproduction (Subparagraph 1);

– distributing the work by way of selling or otherwise alienating its original or copies (Subparagraph 2);

– translating or other reprocessing the work. Reprocessing (a modification) of the programme for an electronic computing machine or the database shall mean any changes made to them, including the translation of such programme or such database from one language to another language, with the exception of adaptation, that is, the changes made solely for the purpose of the operation of the programme for an electronic computing machine or the database on the user specific technical means or under the control of the user specific programmes (Subparagraph 9).

– making the work available to the public in such a way that any person can get access to the work from any place and at any time by his own choice (making available to the public (Subparagraph 11).

However, the norm of Article 1270 of the C.C.R.F. does not contain an exhaustive list of the ways of the use of the work and it indicates that the use of the work, including the one that entails the violation of the rights of the right holder, can be exercised not only in the forms listed in this norm, but also in other ways.

At this stage, I would like to state that it is defined by the legislator that the distribution of the work by way of selling or otherwise alienating its original or copies shall relate to the ways of the use.

In principle, it would be possible to finish at that, believing that the answer to the issue raised in the article has been found, however, before finishing, I would offer to consider the issue on what the disposal of the exclusive right is.

Article 1233 of the C.C.R.F. speaks of the disposal of the exclusive right. Thus, in accordance with Paragraph 1 of the said Article, the right holder may dispose of his exclusive right to the result of intellectual activity or to the means of individualization in any way that does not contradict to the law and essence of such exclusive right, including by alienating it under an agreement to another person (an agreement on the alienation of an exclusive right) or by granting to another person the right to use the relevant result of intellectual activity or the means of individualization within the scope established by the agreement (a license agreement). The conclusion of the license agreement does not entail the transfer of the exclusive right to the licensee.

Thus, it follows from the said norm that the Code recognizes that any agreement on granting the right of the use of the results of intellectual activity or the means of individualization shall be the disposal of the exclusive right.

However, in addition to the agreement on the alienation of an exclusive right (Article 1234 of the C.C.R.F.) and a license agreement (Articles 1235-1239 of the C.C.R.F.), which are indicated directly in Part Four of the Code, the disposal of an exclusive right may be exercised, in particular, within a pledge agreement (Paragraph 3 of Chapter 23 of the C.C.R.F.), the agreements on the sale of an enterprise (Paragraph 8 of Chapter 30 of the C.C.R.F.), the agreement on the lease of enterprises (Paragraph 5 of Chapter 34 of the C.C.R.F.), an agency agreement (Chapter 52 of the C.C.R.F.), property trust agreements (Chapter 53 of the C.C.R.F.) and commercial concession agreements (Chapter 54 of the C.C.R.F.), which are settled in Parts 1 and 2 of the C.C.R.F.

The sophisticated reader, having read the article up to this point, will probably think that the author has raised the issue in the title of the article in vain, since the article could have been called simply: “The ways of the disposal of the right to the programme for an electronic computing machine. The ways of the use of the programme for an electronic computing machine.”

However, it is not all that simple as it seems at the first glance, and here is why.

In accordance with Paragraph 5 of Article 1286 of the C.C.R.F., a license agreement with a user on granting him a simple (non-exclusive) license to the use of the programme for an electronic computing machine can be concluded by a simplified procedure as an adhesion agreement, the conditions of which can be set out electronically (for example at the web-site of the information and telecommunications network “Internet”). The commencement of the user’s use of the programme for an electronic computing machine, as it is stipulated by the specified conditions, means his consent to conclude the agreement. In this case, the written form of the agreement is considered to be complied with.

The license agreement concluded by a simplified procedure shall be gratuitous, unless otherwise is stipulated by the agreement.

In the everyday life, such kind of the license agreement is called a “shrink wrap license.”

It is just in the above norm that there is a thing, which consists in the following.

As we have managed to sort it out that the distribution of the copies of the programme for an electronic computing machine in accordance with Subparagraph 2 of Paragraph 2 of Article 1270 of the C.C.R.F. is a way of the use of this subject matter of the copyright.

Meanwhile, in accordance with Article 1233 of the C.C.R.F., granting to another person the right of the use of the relevant result of intellectual activity or the means of individualization within the scope established by the agreement (a license agreement) shall be a way of the disposal of the exclusive right.

As we see, Paragraph 5 of Article 1286 of the C.C.R.F. speaks just of a license agreement between the right holder and the user of the programme for an electronic computing machine on granting the latter a simple (non-exclusive) license to use the programme for an electronic computing machine, and the license agreement, in turn, is a way of the disposal of the exclusive right.

Thus, in my opinion, the legal collision arises here due to the fact that, on the one hand, by virtue of a direct indication of the law, the distribution of the copies of the work, which also include the copies of the programme for an electronic computing machine by way of selling or otherwise alienating, relates to the ways of the use, on the other hand, the distribution of the copies of the programme for an electronic computing machine is, in fact, accompanied by the conclusion of the license agreement, which relates to one of the ways of the disposal of the exclusive right.

At the same time, the legal approach that the distribution of the copies of the programme for an electronic computing machine is a way of the use of the work was reflected in Resolution of the Intellectual Property Court in case No. A53-938/2016 of August 21, 2017, in which the court indicated: “In addition, the distribution of the work by way of selling or otherwise alienating its original or copies shall relate to the ways of the use.”

At the same time, I shall respectfully disagree with the conclusion of the Intellectual Property Court set out in its Resolution of August 21, 2017 in case No. A53-938/2016, due to the following.

According to Paragraph 1 of Article 209 of the C.C.R.F., the owner shall possess the rights of ownership, use and disposal of his property.

By virtue of Article 1226 of the C.C.R.F., the intellectual rights, which include the exclusive right being a proprietary right, and, in the cases stipulated by the this Code, also personal non-proprietary rights and other rights (droit de suite, a right of access and others) shall be recognized as the rights to the results of intellectual activity and the means of individualization equated to them (the results of intellectual activity and the means of individualization).

The use is utilization, an application, the use of the things in accordance with their designation. The right to use means that the user has received from the owner or administrator of the thing, the subject matter the right to use them during a certain period and under the conditions established by the owner-administrator or the owner-proprietor. (Raizberg B.A., Lozovsky L.S., Starodubtseva Y.B. “Contemporary Economic Dictionary. – 6th ed., rev. and enlarged. - M.” (INFRA-M, 2011).

The disposal of property – the authority of the owner, which consists in the possibility of a transfer, a sale, a lease, an independent use of property. (Raizberg B.A., Lozovsky L.S., Starodubtseva Y.B. “Contemporary Economic Dictionary. – 6th ed., rev. and enlarged. - M.” (INFRA-M, 2011).

I believe that the license agreement is similar to the traditional property lease agreement; concluding the license agreement, the right holder does not deprive himself of possessing the right, he transfers to another person only the authority to use the result of intellectual activity.

In my opinion, the analysis of the norms of the law set out in Articles 209, 1226, 1233, 1286 of the C.C.R.F. allows to conclude that the distribution of the copies of the programme for an electronic computing machine is a way of the disposal of the right, and not a way of the use of the work.

At the same time, I do not exclude the fact that not all readers will share my opinion, in connection with which it would be interesting to hear the arguments in defense of the opinion that the distribution of the copies of the programme for an electronic computing machine is a way of the use of the work.

The participation of the third party, who does not assert the independent claims regarding the subject of the dispute at entering into a settlement agreement
The institution of the settlement of disputes by carrying out conciliation procedures is actively used by the Russian courts. Since the institution of conciliation is inter-branch, a settlement agreement has both common features and peculiarities, depending on a particular kind of the court proceedings.

The arbitration and civil proceedings, as well as the administrative proceedings refer to a unified type of the civilized proceedings.

Thus, in accordance with Paragraph 2 of Article 138 of the Arbitration Procedural Code of the Russian Federation (hereinafter referred to as the APC RF), the Parties may settle a dispute by entering into a settlement agreement or using other conciliation procedures, including a mediation procedure, unless this is contrary to the Federal Law.

In the Civil Procedural Code of the Russian Federation (hereinafter referred to as the CPC RF), the independent norm, which expressly states that the parties can settle a dispute by entering into a settlement agreement, is absent; the legislator obviously thought that the parties participating in the case should have learned about such right from Article 173 of the CPC RF, which is called “The Plaintiff’s Refusal from the Statement of Claim, the Recognition of the Statement of Claim by the Defendant and a Settlement Agreement of the Parties.” This article is most likely written not for the participants to the dispute, but for the Court, since it describes the actions of the Court after the plaintiff’s statement on the refusal from the statement of claim, the recognition of the statement of claim by the defendant or the petition of the parties on entering into a settlement agreement.

It is also worth noting that the Code of Administrative Court Procedure of the Russian Federation (hereinafter referred to as the CACP RF) stipulates a possibility of a peaceful settlement of a dispute. Thus, in accordance with Paragraph 3 of Article 137 of the CACP RF, the Parties may settle a dispute by entering into an agreement on the conciliation of the parties.

It is rather interesting that there is also a possibility of the conciliation of the parties to the criminal proceedings. Thus, in accordance with Paragraph 2 of Article 20 of the Criminal Procedural Code of the Russian Federation (hereinafter referred to as CPC RF), the criminal cases on the crimes stipulated by Articles 115, 116.1 and 128.1 of Part One of the Criminal Code of the Russian Federation shall be considered to be the criminal cases of private prosecution, they shall be initiated not otherwise than upon the statement of the victim, his legal representative, except for the cases stipulated by the Fourth Part of this Article, and they shall be subject to be dismissed in connection with the conciliation of the victim with the accused person. Conciliation shall be allowed prior to the moment the Court retires to a consultation room for sentencing, and in the Court of Appeal – prior to the moment the Court retires to a consultation room for sentencing in the case. It is worth noting that, according to Paragraph 3 of Article 20 of the CPC RF, The criminal cases of private and public prosecution shall be initiated not otherwise, but only by a statement of the victim or his legal representative, but they shall not be dismissed due to the conciliation of the victim with the accused person.

In the Code of Administrative Offences of the Russian Federation, the institution of conciliation is absent at all.

In this article, I shall consider the conciliation of the parties by entering into a settlement agreement in the arbitration proceedings, and more specifically, this issue will be analyzed as to a possibility of the participation of the third parties, who do not assert the independent claims regarding the subject of the dispute, at entering into a settlement agreement.

I would like to start my article with a definition of what a settlement agreement is.

According to the definition given in the Wikipedia Internet Encyclopedia. A settlement agreement (amicable transaction) is a bilateral or multilateral transaction, by which the parties (or their representatives) finish a civil dispute. In the Roman Law, the settlement agreement was called “transactio.”

In accordance with Paragraph 9 of Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation No. 50 of July 18, 2014 “On the Conciliation of the Parties to the Arbitration Proceedings” (hereinafter referred to as Resolution No. 50), A settlement agreement is an agreement of the parties, that is, a transaction, and therefore, in addition to the norms of the Procedural Law, the norms of the Civil Law on agreements, including the rules on the freedom of agreements (Article 421 of the Civil Code of the Russian Federation) shall be applicable to this agreement being one of the means of protection of subjective rights. The parties shall dismiss the dispute (in whole or in part) by such agreement, if it is approved by the Arbitration Court, on the basis of a voluntary settlement of the mutual claims and the approval of the mutual concessions ... .”

So, we have gained an insight into the definition of a settlement agreement concept. Now it is necessary to find out, who is entitled to enter into a settlement agreement in the arbitration proceedings and to be a participant to them.

In accordance with Part 4 of Article 49 of the APC RF, the parties may dismiss the case by a settlement agreement.

The parties to the arbitration proceedings shall be a plaintiff and a defendant (Part 1 of Article 44 of the APC RF).

In this regard, it turns out that no one except for a plaintiff and a defendant can be a participant to the settlement agreement, can they?

The answer to this question we get in Paragraph 2 of Article 50 of the APC RF, which states that the third parties, who assert the independent claims regarding the subject of the dispute, shall enjoy the rights and bear the obligations of a plaintiff, except for the obligation to comply with a claim or other pre-court procedure for the settlement of the dispute, if it is stipulated by Federal Law for this category of disputes or by an agreement.

As it can be seen from the above norm, the right of the third parties, who assert the independent claims regarding the subject of the dispute, to conclude a settlement agreement is not excluded, in connection with which we make a conclusion that they have the right to participate in entering into a settlement agreement.

Indeed, our assumption is confirmed by the position set forth in Paragraph 11 of Resolution No. 50, which states that the third parties, who assert the independent claims regarding the subject of the dispute, taking into account the provisions of Paragraph 2 of Article 50 of the APC RF, shall be entitled to participate in entering into a settlement agreement as a party, to refuse from the statement of claim, as well as to recognize the circumstances, which are the grounds for the claims or objections by one or another party, to enter into an agreement according to the circumstances of the case.

Now, I suggest that we should analyze Paragraph 2 of Article 51 of the APC RF, which states that the third parties, who do not assert the independent claims regarding the subject of the dispute, shall enjoy the procedural rights and bear the procedural obligations of a party, except for the right to change the grounds or a subject of the statement of claim, to increase or decrease the amount of the claims, to refuse from the statement of claim, to recognize the statement of claim or to enter into a settlement agreement, to file a counter-claim, a claim for compulsory execution of a judicial act.

Furthermore, it is stated in Decision of the Constitutional Court of the Russian Federation No. 1436-O of June 23, 2015  “On the Refusal to Consider the Complaints of the Limited Liability Company “Orlovsky District Heating Company” regarding the violation of the constitutional rights and freedoms by Part 2 of Article 51 of the Arbitration Procedural Code of the Russian Federation,” that Article 46 (Part 1) of the Constitution of the Russian Federation, while guaranteeing to everyone the right to judicial protection of his rights and freedoms, does not establish directly any particular procedure for the implementation of this right and does not imply a possibility for a citizen, an organization to choose a method and a procedure of the judicial challenge at the own discretion. In accordance with Article 71 (Paragraph “o”) of the Constitution of the Russian Federation, they are determined by the Federal Laws, which include the Arbitration Procedural Code of the Russian Federation, Part 2 of Article 51 of which provides to the third parties, who do not assert the independent claims regarding the subject of the dispute, all procedural rights of a party, except for, in particular, the right to enter into a settlement agreement. Since entering into a settlement agreement shall be a disposal of the rights and obligations arising from the alleged disputable substantive relationship being a subject of the judicial proceedings, only the subjects of this relationship being the parties to the judicial proceedings shall be entitled to implement this legal relationship.

Having reviewed Paragraph 2 of Article 51 of the APC RF and the position of the Constitutional Court of the Russian Federation, in principle, it would be possible to end this article with the words that since the legislator has restricted the rights of the third parties, who did not assert the independent claims regarding the subject of the dispute, to enter into the settlement agreements, it is obvious that they can not take part at their being entered into ...

... However, that is very much not the case what it seems at the first glance, and here is why.

Paragraph 12 of previously said Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation No. 50 of July 18, 2014 “On the Conciliation of the Parties to the Arbitration Proceedings” states that, in accordance with Part 2 of Article 51 of the APC RF, the third parties, who do not assert the independent claims regarding the subject of the dispute, shall not be entitled to refuse from the statement of claim, to recognize it or to enter into a settlement agreement. Moreover, such parties shall be entitled to act as the participants to the settlement agreement, for example, in the cases, when they bear the execution of the obligations or they are the persons authorized to accept the execution.

If the said persons are not the participants to the settlement agreement, they shall be entitled to submit the arguments on the violation of their rights and legitimate interests by a settlement agreement, what shall not prevent the Arbitration Court from approving the settlement agreement, if such arguments are not confirmed in the course of the consideration of this issue by the Court.

By implication of Paragraph 1 of Article 313 of the C.C.R.F., the execution of the obligation may be imposed by a debtor on a third party, if it follows from the law, other legal acts, the terms of the obligation or its essence that the debtor is obliged to execute the obligation personally. In this case, the creditor shall be obliged to accept the execution offered by the third party instead of the debtor. Thus, the parties to the dispute may agree that the third party will transfer the funds to the plaintiff, what will, for example, remove the defendant’s further recourse claims to the third party.

It is obvious that such possibility of the third party, who does not assert the independent claims regarding the subject of the dispute, to act as a party to the settlement agreement is aimed at observing the principle of the procedural economy.

It is worth noting that the legal position set forth in Paragraph 12 of Resolution No. 50 has not become a new law regarding the possibility of the third parties to participate in the settlement agreement.

Thus, even in the first edition of Federal Law No. 127-FZ of October 26, 2002 “On Insolvency (Bankruptcy)” (hereinafter referred to as the Law on Bankruptcy), it was stipulated that the participation in the settlement agreement of the third parties, who assumed the rights and obligations stipulated by the settlement agreement, should be allowed (Part 3 of Article 150 of the Law on Bankruptcy).

The participation in the settlement agreement of the third parties shall be allowed, if their participation does not violate the rights and legitimate interests of the creditors, whose claims are included in the register of creditors' claims, as well as the creditors, whose claims have arisen after the date of accepting an application for declaring the debtor a bankrupt and the period of execution of which has become due before entering into the settlement agreement (Part 1 of Article 157 of the Law on Bankruptcy).

By implication of the explanation contained in Paragraph 8 of Information Letter of the Presidium of the Supreme Arbitration Court of the Russian Federation No. 97 of December 20, 2005 “The Review of the Practice of Consideration by the Arbitration Courts of the Disputes Related to Entering into, Approving and Terminating the Settlement Agreements in the Cases on Insolvency (Bankruptcy)” the conditions on a debt transfer and imposing the execution on a third person shall be allowed to be included in the settlement agreement.

Thus, the possibility of the participation of the third parties, who do not assert the independent claims regarding the subject of the dispute, in the cases on insolvency (bankruptcy) exists and the courts have been using it for already long enough.

In addition, in this article I can not ignore the method of conciliation stipulated in Paragraph 33 of Resolution No. 50, which is quite often used by the Intellectual Property Court in the cases on challenging the decisions of the Federal Executive Authority on Intellectual Property to satisfy the objections to granting legal protection to a trademark on the grounds that the legal protection of the trademark has been granted in violation of the requirements of the civil legislation due to the lack of a consent of the Authority or the person, whose consent is required in the cases stipulated by Paragraphs 2, 4 and 6, Subparagraphs 1 and 2 of Paragraph 9 of Article 1483 of the C.C.R.F., as well as in course of the consideration of the cases on challenging the decisions of the Federal Executive Authority on Intellectual Property to refuse to satisfy the objections to the refusal of the state registration of the trademark.

As it is indicated in Paragraph 33 of Resolution No. 50, taking into account the principles of disposition and voluntariness of conciliation in the course of the consideration the case by the Arbitration Court, other agreements between the individual persons may also be a result of conciliation, if such agreements actually lead to a settlement of the dispute.

If the said consent of the relevant person (including the one brought to the participation in the case as a third party without the independent claims regarding the subject of the dispute) is obtained in the course of the consideration of the dispute by the Court, including by entering into an agreement between the party to the dispute and this person, then such consent (agreement) can not be qualified by the Court as a settlement agreement as it has been entered into not between the parties to the court dispute.

However, in the context of the provisions of Article 138 of the APC RF, this consent (agreement) is a result of the conciliation of the party to the case and the person, whose consent to granting legal protection to the trademark in necessary in accordance with the requirements of the civil legislation.

This consent (agreement) shall be a ground for reversal of the decision of the Federal Executive Authority on Intellectual Property and compelling it to reconsider the objection that has served a ground for making by this Authority a decision challenged in the Court.

In this Paragraph, the highest court specifically makes a clause that such consent (agreement) can not be qualified by the Court since the settlement agreement has been entered into not between the parties to the court dispute.

At the same time, I believe that in this case it is not very important what the name of this document is, but sooner what it implies.

Obviously, such agreement is primarily aimed at the elimination of a disputable situation that has arisen between the applicant and the third party, while the Federal Executive Authority on Intellectual Property becomes a participant to this dispute only because its decision does not satisfy one of the disputing parties.

Thus, at the end of the article it can be concluded that the participation of the third party, who does not assert the independent claims regarding the subject of the dispute, at entering into a settlement agreement is possible.

The legal aspects of a multiplicity of right holders to one subject matter of the copyright
In our life, we often meet the cases when several people, who are united by one goal, one passion, create in the course of their activities certain subject matters of intellectual property to which, in accordance with Article 1259 of the Civil Code of the Russian Federation (hereinafter referred to as C.C.R.F.), the works of science, literature and art, regardless of the merits and purpose of the work being the subject matters of the copyright shall be referred.

Speaking about literary works, which are created in co-authorship, the Russian readers first think of the works of great satirists Ilya Ilf and Yevgeny Petrov, or the works of equally great science fiction writers Arkady and Boris Strugatsky.

The examples of co-authorship are also known in painting – Ivan Aivazovsky’s painting ”A. S. Pushkin's Farewell to the Sea,” painted by him in co-authorship with Ilya Repin, or one of the most famous works of Ivan Shishkin – “The Morning in a Pine Forest,” which the artist created in 1889 in co-authorship with his friend, artist Konstantin Savitsky, who painted the family of bears on Shishkin’s canvas.

The works of science in this list of the subject matters of the copyright have set a record for the number of the authors involved in their creation. For example, the article on physics, published on May 14, 2015 in the pages of journal Physical Review Letters, broke the world record for the number of the authors – there are as many as 5,154 persons.

For the latter example, the term “Hyperauthorship” applied by Blaise Cronin of Indiana University, Bloomington, has been used lately, which denotes a modern phenomenon in science (usually experimental one), which implies that the number of the authors of one scientific article reaches thousands, and the full list of the authors turns out to be comparable in size to a contextual part of the article (source: The Wikipedia Internet Encyclopedia).

The list of the examples could be continued for long enough, but the purpose of this article is not to enumerate the examples of co-authorship in the world science, literature or art, but to analyze the legal aspects that take place with the multiplicity of the right holders to one subject matters of the copyright.

So, in accordance with Paragraph 1 of Article 1258 of the C.C.R.F., the citizens who have created a work by joint creative labor shall be recognized to be co-authors regardless of whether such work forms an inseparable whole or consists of the parts each of which has independent significance.

It follows from this norm that the co-authorship regime means a multiplicity of right holders in relation to the same work. At the same time, the exclusive right is unified (unitary), without splitting into separate exclusive rights by the number of co-authors. The multiplicity of authors does not mean a corresponding increase in the number of exclusive rights, and each of the co-authors is not considered to have the exclusive right, which does not depend on other authors, that would belong only to this co-author.

The similar legal position was reflected in Resolution of the Intellectual Property Court of September 26, 2013 No. А39-3670/2012.

According to Article 1226 of the C.C.R.F., the intellectual rights, which include the exclusive right being a proprietary right, and, in the cases stipulated by the said Code, also personal non-proprietary rights and other rights (droit de suite, a right of access and others) shall be recognized as the rights to the results of intellectual activity and the means of individualization equated to them (the results of intellectual activity and the means of individualization).

As it follows from the content of Articles 128 and 129 of the C.C.R.F., the protected results of intellectual activity and the means of individualization (the intellectual property) equated to them shall be referred to the subject matters of the civil rights.

The subject matters of the civil rights may be freely alienated or transferred from one person to another under a universal succession procedure (inheritance, the reorganization of a legal entity) or in any other way, if they are not limited in the circulation.

The restrictions to circulability of the subject matters of the civil rights may be imposed by the law or in the manner prescribed by the law, in particular, the following may be stipulated: the kinds of the subject matters of the civil rights that may belong only to certain participants of the circulation or the ones that making transactions with which shall be allowed according to a special permit.

It is stipulated by Paragraph 3 of Article 1229 of the C.C.R.F. that in the case when the exclusive right to the result of intellectual activity or the means of individualization belongs to several persons jointly, each of the right holders may use such result or such means at his discretion, unless otherwise is stipulated by this Code or the agreement concluded between the right holders. The relationship of the persons who own the exclusive right jointly shall be determined by the agreement concluded between them. The disposal of the exclusive right to the result of intellectual activity or the means of individualization shall be exercised by the right holders jointly, unless otherwise is stipulated by this Code or the agreement concluded between the right holders.

According to the said norm, the disposal of the exclusive right belonging to two or more persons, shall be exercised by the right holders jointly, unless otherwise is stipulated by the law or the agreement concluded between them.

Based on the foregoing, it follows that the authors' proprietary rights are indivisible, therefore, it is impossible to take way one of the co-authors/co-right holders from settling an issue on concluding an agreement on the transfer of the exclusive rights to the work to a third party.

In this case, in accordance with Paragraph 2 of Article 1258 of the C.C.R.F., the work created in co-authorship shall be used by the co-authors jointly, unless otherwise is stipulated by the agreement concluded between them.

Thus, it follows from the above legal norms that the legislator has established some restrictions to circulability of the works created in co-authorship; such works should be used by the co-authors jointly and the disposal of the rights to the work should also be exercised by the co-authors jointly.

However, it should be noted that the part of the work, the use of which is possible independently of other parts, that is, the part having independent significance, can be used by its author at his discretion, unless otherwise is stipulated by the agreement concluded between the co-authors (the second Unnumbered Paragraph of Paragraph 2 of Article 1258 of the C.C.R.F.).

Thus, it follows from this norm that co-authorship can be separate or non-separate. It is assumed that in both cases it is necessary to have joint creative labour, but with the separate co-authorship, the parts are created that have their own significance, and with the non-separate co-authorship, the work forms an inseparable whole.

The most frequent example of separate co-authorship are the collective textbooks, the chapters of which are written by individual co-authors, they are clearly differentiated and can be used by their authors independently, while the textbook consisting of these chapters is a literary work.

The programme for an electronic computing machine, which is represented in an objective form by a set of the data and commands designated to ensure the operation of electronic computing machines and other computer devices in order to obtain a certain result, including the preparatory materials obtained in the course of the development of the programme for an electronic computing machine and the audiovisual images generated by it (Article 1261 of the C.C.R.F.) may be an example of a non-separate creative activity.

At the same time, both Paragraph 2 of Article 1258 of the C.C.R.F. and Paragraph 3 of Article 1229 of the C.C.R.F. stipulate the disposition principle of the legal relations arising between the co-authors, in terms of the wording “unless otherwise is stipulated by the agreement concluded between the co-authors.”

In the above norms, the legislator has not given direct instructions to the content of this agreement, what is consistent with the principle of freedom of agreements established by Article 421 of the C.C.R.F.

At the same time, it becomes definitely difficult both to dispose of the right and to use of the work created in co-authorship in the absence of an agreement between the co-authors on how to settle the procedure for the use and disposal of the rights to a jointly created subject matter, whether the right to dispose of the exclusive right to the jointly created subject matter can be transferred to one of the co-authors by the agreement.

For example, in the event of disagreements between the co-authors, the situation may arise in which one of them will prevent the other authors from using the work and disposing of the rights to it.

Meanwhile, the legislation stipulates a clause, from which it follows that in the case when the work forms an inseparable whole, none of the co-authors shall be entitled to prohibit the use of such work without sufficient grounds (Part 2 of Article 1258 of the C.C.R.F.).

In my opinion, it is important that none of the co-authors is entitled to prohibit the use of such work without sufficient grounds, since the absence of this norm would have allowed one of the co-authors to infringe groundlessly upon the rights of other authors.

However, the legislator, leaving the possibility of a prohibition if there are sufficient grounds, does not define the criteria of the grounds that are sufficient to prohibit the use of such work. In the judicial practice, a broader interpretation of this provision is also not available.

The norms of the civil law restricting the co-authors in their rights to use and dispose of the rights to a work establish a balance at which the risks of infringing upon the rights of one of the co-authors by another one are minimized.

At the same time, in the case if the actions of one of the co-authors lead to the violation of the rights of the others, for example, one of the co-authors of the programme for an electronic computing machine sells the copies of the programme in the absence of a permission of other co-authors, then, for the purposes of protection of the violated right the provisions of Paragraph 3 of Article 1258 of the C.C.R.F. may be applied, according to which the principles of Paragraph 3 of Article 1229 of the C.C.R.F. shall be accordingly applied to the relations of the co-authors connected with the distribution of the income gained from the use of the work and with the disposal of the exclusive right to the work.

As it follows from Unnumbered Paragraph 2 of Paragraph 3 of Article 1229 of the Civil Code of the Russian Federation, the income gained from the joint use of the result of intellectual activity or the means of individualization shall be distributed among all right holders in equal portions, unless otherwise is stipulated by the agreement concluded between them.

As the exclusive right is not an analogue of the liability civil right, but it is a kind of an absolute right[1], and the relations between the co-owners must be settled applying the norms of Chapter 16 of the C.C.R.F. “The Common Property.”

Thus, if there are the facts of the use by one of the authors of the work created in co-authorship and gaining income from such use, the other co-authors shall be entitled to file a statement of claim on the recovery of the income gained from it, proportionally divided between the co-authors in accordance with the creative contribution made by each of the co-authors to the creation of this subject matter.

In addition, by virtue of express reference by the law (Paragraph 4 of Article 1258 of the C.C.R.F.), each of the co-authors shall be entitled to undertake measures by himself to protect his rights, including in the case when the work created by the co-authors forms an inseparable whole, that is, one of the co-authors shall be entitled to protect his rights regardless of the will and position of the others.

It is worth noting that, in terms of the protection of the proprietary rights, the co-authors are a kind of “joint creditors.” If one of the rights stipulated by Article 1270 of the C.C.R.F. is violated, one of the co-authors shall be entitled to claim to stop such violation regardless of the will of other co-authors.

At the same time, the provisions of Paragraph 4 of Article 1258 of the C.C.R.F. in this case shall be applied taking into account the principle of individualization of guilt and preventing multiple bringing the person to responsibility for committing the same offense. That is, the co-author may seek the recovery of compensation for the illegal use of the same work in the case if earlier the offender has still not been prosecuted for the analogous, in terms of time and place, illegal use of the same work.

The similar legal position was reflected in Resolution of the Intellectual Property Court of April 15, 2014 No. 19440/13 in case No. А39-3670/2012.

 

 

Periods of the limitation of actions for the cases on the protection of the honor, dignity or the business reputation

I have been moved to write this article by the client's appeal to our company. At appealing, he has pointed out that a few years ago one of the mass media published with respect to him an article, in which he was accused of committing a crime.

Indeed, according to his explanations, the law enforcement authorities were carrying out a check with respect to him with a view to his involvement in the committing a crime, but finally the investigation did not reveal in his actions the elements of a crime, the criminal case against him was terminated, in connection with which he wanted to make the mass media, which had published the article, publish a refutation, as the circumstances set forth in the article discredited his business reputation and were not true to the fact.

However, the client has heard that the special period of the limitation of actions, which is one year, was applied to that category of disputes, and therefore he doubted whether he had the right to file a claim on the protection of the business reputation several years after the publication of the article.

Having analyzed the circumstances set forth by the client, we came to a conclusion that he has not missed a period of the limitation of actions, and he can protect his violated rights.

The above conclusion has been made by the specialists of our company on the grounds of a system analysis of the norms of the Civil Code of the Russian Federation and the position of the Supreme Court of the Russian Federation and has been founded on the following provisions.

At first I offer to consider the merits of the disputes of this category.

Paragraph 9 of Resolution of the Plenum of the Supreme Court of the Russian Federation of 24.02.2005 No. 3 “On judicial practice in cases on the protection of the honor and dignity of citizens and also the business reputation of citizens and legal entities” (hereinafter referred to as Resolution No. 3) states that“In accordance with Article 10 of the Convention for the Protection of Human Rights and Fundamental Freedoms and Article 29 of the Constitution of the Russian Federation, which guarantee everyone the right to freedom of thought and speech, as well as to freedom of the mass media, it is necessary to distinguish between the existing statements on the facts, which can be verified as to whether they are true to fact, and value judgments, opinions, beliefs, which are not a subject of the judicial protection under Article 152 of the Civil Code of the Russian Federation, as, being an expression of a subjective opinion and the views of the defendant, it is impossible to verify whether they are true to fact.”

By virtue of Part 1 of Article 23 of the Constitution of the Russian Federation, everyone has the right to inviolability of a private life, personal and family secrets, the protection of the honour and a good name.

In accordance with Paragraph 1 of Article 152 of the Civil Code of the Russian Federation (hereinafter referred to as the C.C.R.F.), the citizen is entitled to demand in court the refutation of the information discrediting his honour, dignity or the business reputation, unless the person who has disseminated such information proves that it is true to fact. The refutation shall be made in the same manner as the one that has been used to disseminate the information about the citizen or in another similar manner.

The information discrediting the honour, dignity or the business reputation of a citizen and which has been disseminated in the mass media shall be refuted in the same mass media. The citizen in respect of whom such information has been disseminated in the mass media is entitled to demand, along with a refutation, a publication of his answer in the same mass media as well (Paragraph 2 of the above Article).

According to the explanations given in Paragraphs 7, 9 of Resolution No. 3, in cases of this category it is necessary to take into account the fact that the circumstances which, by virtue of Article 152 of the C.C.R.F., are of value to the case, which must be determined by the judge at accepting a statement of claim and preparing a case for a judicial trial, as well as during the judicial trial, are:

– the fact that the defendant has disseminated the information about the plaintiff,

– a discrediting character of this information;

– the fact they are not true to fact.

If at least one of the above circumstances is absent, the claim can not be satisfied by the court.

The dissemination of the information discrediting the honor and dignity of citizens or the business reputation of citizens and legal entities, shall be understood as the publication of such information in press, radio and television broadcasting, the demonstration in newsreel programmes and other mass media, the dissemination in the Internet and by using other means of telecommunication, the presentation in the service characteristics, the public statements, the declarations addressed to the officials, or a communication in one or another form, including in an oral one, at least to one person.

The information, which is not true to fact, shall be the statements about the facts or events, which have not taken place in reality during the time which the challenging information relates to.

The discrediting information, in particular, shall be the information, which includes the statements on the violation by a citizen or legal person of the existing legislation, committing a dishonest act, an improper, unethical behavior in a personal, public or political life, dishonesty in performing industrial, economic and entrepreneurial activities, the violation of the business ethics or good business practices, which diminish the honor and dignity of a citizen or the business reputation of a citizen or legal entity.

Thus, taking into account the fact, that our client has presented an evidence of the publication of an article in the mass media, by the resolution on the termination of the criminal case initiated against him he has confirmed that the information stated in the article was not true to fact, and the information stated in the article, according to which he has been accused by the journalists of committing a crime evidently derogates his business reputation, all this demonstrates that he has observed three criteria, the existence of which provides the ground for satisfying the claims.

At the same time, the client had a reasonable question, taking into account the fact that several years have passed since the publication of the article, whether the court would dismiss the claim due to the fact that he had missed a period of the limitation of actions.

In accordance with Paragraph 2 of Article 199 of the C.C.R.F., the limitation of actions shall be used by the court only upon the application of the party to the dispute, filed before the court passes a decision. The expiry of a period of the limitation of actions, about the use of which the party to the dispute has applied, shall be the ground for the court to make a decision to dismiss the claim.

According to Paragraph 1 of Article 196 of the C.C.R.F. The general period of the limitation of actions shall be established as three years as from the date determined in compliance with Article 200 of this Code.

Article 197 of the C.C.R.F. states that for the individual kinds of claims, the law may establish special periods of the limitation of actions, reduced or extended as compared to the general period.

Thus, Paragraph 10 of Article 152 of the C.C.R.F. determines a special period of the limitation of actions, according to which, The period of the limitation for the claims filed in connection with the dissemination of the above information in the mass media shall be one year after the date of the publication of such information in the relevant mass media.

Apparently, the client having read the provisions of the Civil Code of the Russian Federation considered that he had missed a period of the limitation of actions.

However, this conclusion can not be accepted under the following grounds.

From the analysis of the norms of Paragraph 1 and Paragraph 10 of Article 152 of the C.C.R.F., it follows that the subject of the legal regulation in these norms is the relations related to the dissemination of the various information.

Thus, Paragraph 1 of Article 152 of the C.C.R.F. regulates the relations related to the dissemination of the information discrediting the honor, dignity or the business reputation of a citizen.

As mentioned above, when challenging such information, the person who has applied for the protection of his violated rights must prove only the fact of its dissemination and a discrediting nature of that information. In this case, the plaintiff shall not prove the fact that the challenging information is not true to fact. On the contrary, by virtue of the direct instruction of the law, the obligation to prove the fact that the disseminated information is true to fact shall rest with the person who has disseminated the information.

At the same time, Paragraph 10 of Article 152 of the C.C.R.F. regulates the relations related to the dissemination of any information that is not true to fact, regardless of whether it is discrediting or not. When challenging such information, the obligation to prove the fact that the challenging information is not true to fact shall rest with the person who is challenging the information disseminated. At the same time, in this case, the plaintiff shall not prove a discrediting nature of the challenging information.

Thus, under the grounds specified in Paragraph 1 of Article 152 of the C.C.R.F., the person shall be entitled to challenge the information that discredits him, and under the grounds specified in Paragraph 10 of Article 152 of the C.C.R.F. – the information that is not true to fact.

However, in accordance with Article 150 of the C.C.R.F., the honour, a good name and the business reputation are non-material values of a citizen.

According to Article 208 of the C.C.R.F., the limitation of actions shall not be applicable to the claims for the protection of personal non-property rights and other non-material values, except in cases stipulated by the law.

The law stipulates the period of the limitation of actions for the protection of the honor, dignity and the business reputation exclusively for the cases of challenging the information specified in Paragraph 10 of Article 152 of the C.C.R.F., i.e. the information, which is disseminated in the mass media and challenged only on the ground that it is not true to fact.

While the law does not stipulate the period of the limitation of actions for challenging the information discrediting the honor, dignity or the business reputation of a citizen, regardless of the manner of its dissemination, and therefore by virtue of the provisions of Article 208 of the C.C.R.F. the limitation of actions shall not be applicable to such claims.

The same legal position has been reflected in the appellate decision of the Supreme Court of the Republic of Mari El of 21.08.2014 in case No. 33-1405/2014 and the appellate decision of the Moscow City Court of 14.03.2017 in caseNo. 33-8851/2017.

On the possibility of a public display of the matches of the 2018 FIFA World Cup

The 2018 FIFA World Cup will take place in Russia from June 14, to July 15, 2018. Russia for the first time in its history will host the World Cup.

In terms of awareness in the world of the FIFA World Cup is the most popular sporting event.

The surveys conducted showed that 83% of respondents in Russia plan to watch the matches of the 2018 FIFA World Cup. Among them, the majority of the audience interviewed plans to watch matches on TV at home.

At the same time, the percentage (37% of Russians) wishing to immerse themselves in viewing the matches of the World Cup in public places (at specially organized venues, bars, pubs, etc.) is quite high.

Meanwhile, the organizations which plan to make a public display of the matches of the World Cup face a pressing question, whether they have a claim from the right holders, if the organization has not concluded an appropriate agreement for a public display of the matches.

In this article I offer to consider the following question: Is the public display of the channels that broadcast the matches of the World Cup without concluding an agreement with a TV channel a violation?

First of all it is necessary to note, that on the territory of the Russian Federation the rights to broadcast the matches of the 2018 FIFA World Cup are provided to the consortium, which is a joint project of the VGTRK and the First Channel. The very broadcast of the matches will be performed by the First Channel, the VGTRK and “Match TV.”

In accordance with Unnumbered Paragraph 2 of Article 2 of Law of the Russian Federation of 27.12.1991 No. 2124-1 “On Mass Media” (hereinafter – Law “On Mass Media”) the mass media shall be understood to mean printed, audio and audiovisual, and other communications and materials intended for an unlimited range of persons.

In accordance with Unnumbered Paragraph 3 of Article 2 of Law “On Mass Media” the mass media shall be understood to mean a periodical printed publication, the Internet publication, a TV channel, a radio channel, a TV programme, a radio programme, a video programme, a newsreel programme and other form of a periodical dissemination of the mass information under a constant title (name).

On the basis of Unnumbered Paragraph 14 of Article 2 of Law “On Mass Media” the TV channel, the radio channel shall be understood to mean a complex of TV programmes, radio programmes and (or) accordingly other audiovisual, audio communications and materials created under a broadcast schedule (a programme schedule) and published (broadcasted) under a permanent title (name) and with an established periodicity. The rules established by this Law and other legislative acts of the Russian Federation for a TV programme, a radio programme shall be applicable to a TV channel, a radio channel, unless otherwise is stipulated by this Law.

In accordance with Subparagraph 3 of Paragraph 1 of Article 1304 of the Civil Code of the Russian Federation (hereinafter referred to as the C.C.R.F.) the communications of transmissions of broadcasting and cablecasting organizations, including the transmissions created by a broadcasting or cablecasting organization itself or by its order and at its expense by another organization, refer to the subject-matters of the related rights.

Under Article 1329 of the C.C.R.F. the broadcasting or cablecasting organization shall be deemed a legal entity independently determining the content of radio and TV transmissions (the totality of sounds and (or) images or of their display) and performing their broadcasting or cablecasting with its own efforts or with the help of third persons.

According to Paragraph 1 of Article 1330 of the C.C.R.F. the broadcasting or cablecasting organization shall possess the exclusive right to use communicating the transmissions lawfully performed or performed by it by broadcasting or cablecasting in accordance with Article 1229 of this Code by any means not contrary to the law (the exclusive right to communicate a radio or TV transmission), including by the means stipulated in Paragraph 2 of the this Article. The broadcasting or cablecasting organization may dispose of the exclusive right to communicate a radio transmission or a TV transmission.

In accordance with Paragraph 2 of Article 1330 of the C.C.R.F. the exclusive right to broadcasting or cablecasting includes the following methods of the use: a recording of the communication of a radio or TV transmission; a reproduction of the recording of the communication of a radio or TV transmission; a distribution of the communication of a radio or TV transmission by selling or otherwise alienating the original or copies of the recording of the communication of a radio or TV transmission; a retransmission; bringing the communication of a radio or TV transmission to the public; a public performance; hiring the original and copies of the recording of the communication of a radio or TV transmission.

Paragraph 1 of Article 1229 of the C.C.R.F. stipulates that the right holder may at his discretion permit or prohibit other persons to use the result of intellectual activity or means of individualization. The absence of a prohibition shall not be considered as a consent (permission).

Other persons shall not use the respective result of intellectual activity or means of individualization without the consent of the right holder, except the cases stipulated by this Code. The use of a result of intellectual activity or means of individualization, if this use is exercised without the consent of the right holder, shall be illegal and shall entail the liability stipulated by the above Code and other laws, except the cases when the use of a result of intellectual activity or means of individualization by the persons other than the right holder without the consent of the latter is allowed by the above Code.

With regard to the issue under consideration, the actions of the persons who will perform a public display of the channels that broadcast the matches of the World Cup can be qualified as a public performance.

That is, if to evaluate superficially the actions of the persons performing a public display of the matches of the World Cup, then we can say that the rights of TV channels are violated.

However, if to analyze in detail Subparagraph 6 of Paragraph 2 of Article 1330 of the C.C.R.F., it states that the use of the communication of a radio or TV transmission (broadcast) shall be considered a public performance, that is, any communication of a radio or TV transmission with the help of technical means at places with paid entering, regardless of whether it is perceived at the place of the communication or at another place simultaneously with communication.

In addition, the analysis of the judicial practice shows that, if the TV transmissions by way of a public performance were available, for example, at the premises of the bar, the right holder must prove that the bar charges a fee exactly for entering the bar or includes viewing the satellite TV in the cost of drinks or food, and thereby it gains profit.

At the same time, the Intellectual Property Court in its resolution of 26.01.2015 in case No. A32-3863/2014 noted that the mere fact that of the availability of a TV set that is broadcasting and cablecasting in a premises, where the defendant carries out his entrepreneurial activity, can not be considered a violation of the exclusive related rights to the communication of radio and TV transmissions by the broadcasting and cablecasting organization.

In addition, definition of the Supreme Court of the Russian Federation of 19.10.2015 No. 310-ES15-13119 states that “The courts in resolving the dispute have proceeded from the provisions of Subparagraph 6 of Paragraph 2 of Article 1330 of the Civil Code of the Russian Federation, from which it follows that the public performance of a radio or TV transmission means their use only in case of their communication at the places with paid entering. Consequently, the public performance of TV transmissions at the places with an entrance, which is free of charge, that is, free for visiting, does not violate the exclusive rights of the right holder.

The courts, guided by the above rule of law, having applied the provisions of Paragraph 1 of Article 1330, Articles 1225, 1229, 1233, 1304, 1329 of the Civil Code of the Russian Federation as well, having recognized as unproved the fact, that the defendant had charged a fee exactly for entering the hotel or had included in the cost of a hotel room the satellite TV services and thereby had gained profit, came to a conclusion that there was no legal basis for satisfying the claim on recovery of compensation for the violation of the plaintiff’s related rights by the defendant."

This legal approach was reflected in Paragraph 5 of the Judicial Practice Review on Cases Related to the Settlement of Disputes on the Intellectual Rights Protection approved by the Presidium of the Supreme Court of the Russian Federation of 23.09.2015.

Thus, the answer to the question: “Is the public display of the channels that broadcast the matches of the World Cup without concluding an agreement with a TV channel a violation?” – will be as follows: If entering the cafe, bar or other premises in which the public performance of the TV transmissions including the matches of the World Cup is free of charge, then such actions of the person who has organized the public display should not be considered as a violation, because, on the basis of the judicial practice, such actions do not violate the exclusive rights of the right holder.

Is the Price Guide for license software the relevant proof of the value of software products in considering the cases involving the recovery of compensation for the illegal use of computer software?
I was urged to write this article by the analysis of the judicial practice, related to the protection of the exclusive right to computer software.

As a rule, the plaintiffs in this category of disputes are prominent Russian and foreign companies operating on the software market. The list of companies that are constantly active in the protection of their violated rights to computer programs in the courts is rather narrow, the main players in this field are about 5 companies, in connection with which these cases can be classified as serial.

Usually, the right holders’ claims are reduced to filing claims to the violators for the recovery of compensation, the calculation of which is made on the basis of double the amount of the value of the right to use, which is determined on the basis of the price, which in comparable circumstances is usually charged for the lawful use of a work on the basis of Paragraph 3 of Article 1301 of the Civil Code of the Russian Federation (hereinafter referred to as the C.C.R.F.).

Article 1301 of the C.C.R.F states, that in cases of the violation of the exclusive right to a work the author or other right holder, along with the use of other applicable methods of protection and measures of responsibility established by the C.C.R.F. (Articles 1250, 1252 and 1253) shall have the right in accordance with Paragraph 3 of Article 1252 of the Code to demand at his choice from the violator the payment of compensation instead of the remuneration for damages:

  1. in the amount from ten thousand rubles to five million rubles determined at the discretion of the court;
  2. in double the amount of the value of the copies of the work
  3. in double the amount of the value of the right to use determined on the basis of the price, which in comparable circumstances is usually charged for the lawful use of the work.

In which, each of these methods stipulates its own order of proving.

In Paragraph 43.2 of joint resolution of the Plenum of the Supreme Court of the Russian Federation and the Supreme Arbitration Court of the Russian Federation of 26.03.2009 No. 5/29 “On Some Issues Arising in Connection with the Entry into Force of Part Four of the Civil Code of the Russian Federation” (hereinafter referred to as Resolution No. 5/29) the compensation shall be subject to be recovered, if the fact of the violation is proved, in which, the right holder shall not be obliged to prove the amount of the damage incurred.

As it comes from the explanations contained in Paragraph 14 of resolution of the Plenum of the Supreme Court of the Russian Federation of 19.06.2006 No. 15 “On the Issues Arose at the Courts in Considering Civil Cases Connected with the Application of the Copyright Law and Related Rights” (hereinafter referred to as Resolution No. 15), in settling the issue, which party must prove the circumstances relevant to the case for the protection of the copyright or related rights, the court must take into account that the plaintiff must confirm the fact that he has the copyright and (or) related rights or the rights to their protection, as well as the fact of the use of these rights by the defendant.

Thus, in the suits for the recovery of compensation for the violation of the exclusive right to computer software the fact in proof includes the fact, that the plaintiff has exclusive rights to the relevant intellectual property subject-matter, the fact of the use by the defendant of these rights, and the legality of the use of such subject-matter by the defendant, as well as the proof of the scope of such violation, that is, the actual number of counterfeit copies and their value.

Concerning the method used by the right holders of computer software for calculating compensation on the basis of Paragraph 3 of Article 1301 of the C.C.R.F., the Highest Courts in Paragraph 43.4 of Resolution No. 5/29 gave the following explanations, if the rights holder has filed a claim for compensation in double the amount of the value of the right to use the works, which is determined on the basis of the price, which in comparable circumstances is usually charged for their lawful use, then in determining the amount of compensation the basis shall be the remuneration subject to the license agreement, which stipulates a simple (non-exclusive) license, at the time of the violation.

In this case, it is assumed that such remuneration corresponds to the price, which is usually charged in comparable circumstances. In which, if the calculation of compensation is based on the value of the right to use the work, it is not the total value of the exclusive right that shall  be taken into account, but only the value applicable to the method of the use of the work covered by the violation.

At the same time, many plaintiffs in this category of disputes, in order to facilitate their own proof procedures, submit to the court not license agreements with the confirmation of their performance, but the Price Guide for license software issued by the Nonprofit Partnership of Software Vendors.

So, the official website of the indicated organization (http://www.appp.ru/) has the following information in the section “The Information on the Partnership”: “In November 2000, the Nonprofit Partnership of Software Vendors (NP SV) was established to coordinate the efforts to combat piracy. Today, NP SV is the largest officially registered association in the software and information products industry, and it includes 281 companies from more than 50 regions of Russia, as well as from Belarus, the Ukraine, Kazakhstan, Moldova and Estonia.

The Partnership aims to contribute to the formation of a civilized market of software products on the territory of Russia, to its development and protection of the interests of vendors and manufacturers of the license software products and information services.”

As it follows from the information indicated on the Partnership’s website, its objectives do really have good intentions in the field of the intellectual property protection, in particular, in the field of the protection of the rights of developers and right holders of software.

Indeed, the Russian Federation has just recently started to combat pirates actively, which, like the plague, have appeared with the advent of computer technologies.

At the first stages, the anti-piracy was directed against the sellers of the illegal copies of computer software and operating systems who sold discs with the collections of computer software on the markets and in the subways and caused serious financial damage to the right holders.

With the advent of the Internet to the homes of ordinary people, the sellers of counterfeit disks have fallen into oblivion and the piracy took root within the expands of the World Wide Web, where “good” pirates began to host hacked versions of software products, and dishonest users began to use them actively, preferring free hacked computer software, rather than a license version of software products.

Naturally, this situation seriously affected the demand for license products and the profits of the right holder companies, and therefore they were forced to start this “war” with pirates and the persons who use counterfeit computer software.

Having united in this struggle under a single flag of the Nonprofit Partnership of Software Vendors, the right holders, in order to facilitate the tasks of the courts and law enforcement agencies to establish the value of computer software, started to publish a Price Guide for license software, in which each of the members of this partnership published the value of his computer software.

It would seem that nothing may be better and more convenient when the prices for all computer software and their versions are in one and the same Guide, and the judge, determining the amount of compensation, does not waste time by investigating all economic activity of the plaintiff, does not waste time by investigating his license agreements, payment orders and other documents, but he simply looks into the Guide, finds the value of computer software he needs, multiplies it by the number of the counterfeited copies detected from the defendant, and he also applies the double coefficient and gets the amount of compensation subject to be recovered.

The same situation is with the majority of the cases considered by the courts, and if to bother to conduct an analysis of the judicial practice in this category of disputes, it will be established, that the courts in considering such category of cases are often guided by the above mentioned Guide.

All this would be good and convenient for all, but there is a slight problem.

Some organizations started to appear in this partnership, which do not consider anti-piracy and the fight against the illegal use of software products as their main objectives. The main aim of these organizations is the enrichment by dealing with numerous claims for compensation for the violation of the exclusive rights to computer software.

In which, these “dealers” also use this Guide as the proof of computer software value.

You may ask, “And what is the catch?” The catch is in the following.

This right holder has some software product which was developed more than 10 years ago, and in its best years its price was, for example, 1,000 rubles. However hard the right holder tried to promote this computer software, nobody bought it even for 1,000 rubles, and maybe somebody bought it, only the right holder keeps silent about it, and why he does so will be clear further.

And then computer software becomes quite “adult,” it can be said that it has become simply old and nobody needs it at all, and the right holder invents a daring plan to compensate himself for all his moral sufferings he experienced during the years of hardship and deprivation, in connection with a non-liquid commodity (computer software), which has not brought him the golden mountains and an affluent old age.

Our right holder decides to enter the partnership, knowing that the Nonprofit Partnership of Software Vendors takes under its wing all those who have been offended by “pirates” and provides them with a place on the pages of its guide.

In which, it seems that the right holder was aware that “The value of software products provided by the right holder to be indicated in the Guide is not checked by the Partnership and is indicated as it is.”

Thus, the value reflected in the Guide is indicated on the basis of the information provided by the right holder in a free form, and this value is not confirmed by the license agreements performed and the payment documents.

The rights holder thought for a long time what value he should indicate for his old computer software which nobody needed, and it occurred to him to indicate five hundred thousand rubles, he really liked that number. So, that was his decision, and he even issued a certificate to himself confirming, that the value of his computer software then was as many as five hundred thousand rubles. Oh, and he did not forget to send a copy of his certificate to the Partnership.

As to the Partnership, it does not forget “its guys,” and it, of course, both published computer software – an “old lady” in its guide and indicated its value.

And now the right holder began to seek out those who have once used computer software without paying him a thousand rubles, and found luckily, and he claimed to recover compensation, which he had calculated on the basis of Paragraph 3 of Article 1301 of the C.C.R.F., that is, in double the amount of the value of the right to use, determined on the basis of the price, which in comparable circumstances is usually charged for the lawful use of the work. And as the proof of the value of the right to use, the right holder, as usual, submits to the court the guide and says that the it contains the determined value, and the fact that he has not sold a single copy of computer software at that price is not a problem, the most important thing is that he has determined this value to himself.

As a result, such a teeming activity of the right holder has brought to dozens of sentences according to which the persons who were caught in the course of operational-investigative activities in the installation of counterfeit versions of that “old” computer software the price of which was 1,000 rubles and were prosecuted under Article 146 of the Criminal Code of the Russian Federation only because that right holder has considered that he himself could determine the value of computer software at his own discretion, regardless of whether that computer software would be sold at that price.

The Partnership does not check the reality of such value and indicates in the guide exactly what the right holder has indicated, and the courts and investigators are guided by what is indicated in the guide.

But in fact the situation could be quite different, if the real price had been applied, then the above mentioned persons would have been brought to administrative responsibility, and not to criminal responsibility, because in this case no heavy damage is caused to the right holder.

Judge for yourself, bringing to criminal responsibility leaves in one or another way a “stigma” on the person's life, even if the person brought to responsibility is not serving a real term.

Let us return from this lyrical and sad retreat to our topic about the relevant proof, which can be submitted when filing a suit where the claims for compensation are calculated on the basis of Paragraph 3 of Article 1301 of the C.C.R.F.

In my personal opinion, the courts should be critical about the proof of such kind as the Price Guide for software, when in the suit for compensation the plaintiff applies the calculation of compensation, based on double the amount of the value of the right to use, determined on the basis of the price, which in comparable circumstances is usually charged for the lawful use of a work, in connection with the following.

The Chamber of Commerce and Industry of the Russian Federation in response to one of the applications concerning the Price Guide for license software has indicated the following: According to the opinion of the Chamber of Commerce and Industry of the Russian Federation, the above mentioned Price Guide should be considered only as a reference and statistical publication, which is not intended for the evaluation or expert activity.

Moreover, the Eighteenth Arbitration Appeal Court, in its resolution of 16.01.2014 on case No. A76-13105/2013, set forth an absolutely justified and fair position, according to which the Price Guides for license software developed by the Nonprofit Partnership of Software Vendors shall not be the proof of the circumstance under investigation, since they do not contain the information about the value of disputable software products at the time of the violation in accordance with the provisions set forth in Paragraph 43.4 of Resolution of the Plenum of the Supreme Court of the Russian Federation No. 5, the Plenum of the Supreme Arbitration Court of the Russian Federation No. 29 of 26.03.2009 “On Some Issues Arising in Connection with the Entry into Force of Part Four of the Civil Code The Russian Federation.”

In addition, in analyzing the contents of the above mentioned documents, the appellate court can not conclude that the information contained therein is the result of monitoring the average prices for software products, which are actual in the relevant period, since the Guide offers the recommended prices for software products, whereas the determination of the value for the concrete commodity under the sale and purchase agreement shall be carried out by the parties according to Articles 421, 424 of the C.C.R.F. at the discretion of the parties, and taken into account the objective availability of the competition in the market, the value may be lower than the value recommended in the guides.

The appellant's references to the fact that these guides are evaluated by the courts in the extensive judicial practice as the proof of the value of the software product are rejected as contradicting to the norms of Articles 65, 71 of the Arbitration Procedure Code of the Russian Federation, according to the context of which the evaluation of the proof shall be carried out by the court taking into account the concrete circumstances of the case, including on the basis of the evaluation of the proof submitted to justify the objections of the opposing party, it evaluates their relevance and admissibility, and neither proof has a predetermined force.

At the same time, I think it is also necessary to give as an example of the case on the protection of trademark rights, since this area is essentially adjacent to copyright and is aligned with it in the methods of the calculation of compensation.

In the example given below, the Plaintiff also calculated the amount of compensation using the similar method, based on the value of the right to use the disputed trademark, which is determined based on the price of the license agreements, which he usually concludes, which stipulate a simple (non-exclusive) license, at the time of the violation.

Thus, the Intellectual Property Court in the resolution of 11.07.2017 in caseNo. A40-215407/2014 came to the following conclusions: “However, the plaintiff has determined the amount of compensation to be paid for the violation of the exclusive rights to the disputed trademark, in accordance with the provisions of Subparagraph 2 of Paragraph 4 of Article 1515 of the C.C.R.F., not based on the value of the right to use the disputed trademark, which is determined  based on the price of the license agreements, which he usually concludes, which stipulate a simple (non-exclusive) license at the time of the violation, but based on the information indicated by the evaluator in the above mentioned report and conclusion submitted by the plaintiff to the court.

Therefore, the Judicial Division of the Appeal Court thinks that such proof can not be considered as the relative proof of the amount of the value of the right to use the trademark for the purposes of Subparagraph 2 of Paragraph 4 of Article 1515 of the C.C.R.F. and can not serve as the appropriate proof in the case under consideration.

Thus, the conclusion can be made that the courts, if there are reasonable doubts in the reality of the value of the right to use a disputed subject-matter of intellectual property, in the absence of license agreements in the court papers, which stipulate a simple (non-exclusive) license at the time of the violation, are critical of such proof as evaluators’ reports and the Price Guide for license software.

These conclusions are confirmed by extensive judicial practice in similar disputes (the Resolution of the Eighteenth Arbitration Appeal Court of 16.01.2014 in case No. A76-13105/2013, the decision of the Armavir City Court of Krasnodar Krai of 29.03.2011 in case No. 2-707/11, the resolution of Temryuk District Court of Krasnodar Krai of 26.10.2010 in case No. 1-369/2010, the cassational ruling of the Orenburg Regional Court of 16.10.2012 in case No. 22-4736/2012, etc.).

Исчерпание права на изобретение
На мысль о написании данной статьи меня натолкнуло одно судебное дело. Я не буду вдаваться в детали дела, указывать лиц, участвующих в деле, и прочее, опишу лишь суть. При этом, как любят указывать авторы детективного жанра, все события, описанные в данной статье и персонажи вымышлены, любые совпадения с реальными событиями случайны…

Я хотел бы остановиться на основании иска, в котором патентообладатель заявляет требования к организации, которая в своей деятельности использует продукцию, в которой реализовано его (патентообладателя) изобретение, при том, что данная продукция введена в гражданский оборот с его (патентообладателя) разрешения.

В данной статье я хотел бы провести анализ того, насколько иски такой категории, соотносятся с нормами действующего законодательства, отвечают принципам разумности, справедливости, направлены на восстановление нарушенного права и нет ли в действиях истцов, подающих такого рода иски, злоупотребления правом.

 

Краткое описание обстоятельств дела.

Истец обратился в суд с иском о взыскании убытков за незаконное использование изобретения, охраняемого патентом Российской Федерации, свои требования основывает на том, что он является автором и патентообладателем изобретения «Способ и устройство для его осуществления».

В соответствии с первым независимым пунктом формулы изобретения запатентован способ, в соответствии со вторым независимым пунктом формулы изобретения запатентовано устройство для осуществления указанного способа.

Истцу стало известно, что Ответчиком в своей деятельности применяется способ, который удостоверен указанным выше патентом, при этом Истец своего разрешения на использование изобретения ответчику не давал.

В качестве доказательства использования способа, охраняемого патентом, Истец представляет заключение эксперта, в котором указано, что установлен факт использования всех признаков изобретения по первому независимому пункту формулы патента (Способ) при помощи продукта, изготовленного Третьим лицом с использованием всех признаков изобретения по второму независимому пункту формулы по этому же патенту (Устройство).

Истец указывает, что, являясь патентообладателем изобретения по патенту Российской Федерации «Способ и устройство для его осуществления», не давал разрешения Ответчику на использование его изобретения, в связи с чем Истец полагает, что действия Ответчика по эксплуатации продукта в своей деятельности способом, указанным в патенте, привели к незаконному использованию изобретения.

При этом стоит отметить, что Истец заявляет свои требования исключительно в отношении использования способа, к действиям же по использованию Ответчиком продукта, в котором реализовано устройство, охраняемое патентом, у Истца нет. Более того, Истец не возражает если продукт будет использоваться в деятельности Ответчика, но отличным от запатентованного способа.

Свои требования материального характера Истец обосновывает, исходя из возможного вознаграждения, которое он мог бы получить в случае заключения между ним и Ответчиком лицензионного договора на предоставления права использования способа, охраняемого патентом.

При этом, по мнению Истца, размер заявленных требований должен определяться в процентном соотношении от стоимости продукции, выпущенной с использованием изобретения.

Казалось бы, что в данном споре все очевидно и понятно, Истец правомерно обратился в суд за взысканием убытков за незаконное использование его изобретения. Ответчик является нарушителем, поскольку доказан факт использования изобретения без разрешения правообладателя. На этом можно было бы заканчивать статью, если бы не одно «но»…

…Ответчик приобрел продукт, в котором реализовано устройство, охраняемое патентом Истца, у Третьего лица, которое, в свою очередь, данное продукт изготовило на основании лицензионного договора, заключенного между патентообладателем (Истец) и Третьим лицом.

Согласно условиям данного лицензионного договора, Истец передал Третьему лицу право использования Изобретения без сохранения за Лицензиаром права выдачи лицензий другим лицам (исключительная лицензия). Третье лицо по данному договору перечислило Истцу вознаграждение.

Из договора также следует, что Лицензиат может использовать Изобретение только следующими способами: выполнение проектно-сметной документации на продукцию, изготовленную с использованием изобретения; изготовление и комплектация продукции с использованием изобретения; предложение к продаже и продажа продукции, изготовленной с использованием изобретения.

При этом под продукцией, изготовленной с использованием изобретения, понимается продукт с применением, как способа, так и устройство для его осуществления.

Таким образом, после анализа условий лицензионного договора, возникают вопросы:

Во-первых, на каком основании Ответчик мог обратиться к Истцу с предложением о заключении лицензионного договора, если по условиям уже заключенного между Истцом и Третьим лицом лицензионного договора, Истец предоставил Третьему лицу исключительную лицензию?

Во-вторых, не являются ли такие действия Истца по подаче данного иска злоупотреблением правом?

Ответ на первый вопрос не заставит себя ждать, поскольку он лежит на поверхности, в подпункте 2 пункта 1 статьи 1236 ГК РФ указано, что «предоставление лицензиату права использования результата интеллектуальной деятельности или средства индивидуализации без сохранения за лицензиаром права выдачи лицензий другим лицам (исключительная лицензия)». Таким образом, Истец, предоставив Третьему лицу исключительную лицензию, самостоятельно ограничил себя в праве заключения лицензионных договоров с иными лицами на период действия указанного договора, в связи с чем даже при большом желании Ответчик не мог бы заключить с Истцом лицензионный договор.

Ответ на второй вопрос, являются ли действия Истца злоупотреблением правом, я хотел бы озвучить в конце данной статьи.

Учитывая изложенные обстоятельства, Ответчик, полагал, что Третье лицо на основании лицензионного договора обладает всеми необходимыми правами по использованию изобретения, приобрел у Третьего лица продукт и начал использовать его в своей деятельности предназначенным для того способом, охраняемым патентом, до момента возникновения требований со стороны Истца.

Как было указано ранее, обращаясь с настоящим иском, Истец разделяет изобретение, за защитой права на которое он обратился, на два самостоятельных изобретения, а именно «Способ» и «Устройство для осуществления способа», и основывает свои требования на том, что нарушены его права на изобретение «Способ».

В пункте 2 Требований к документам заявки на выдачу патента на изобретение, утвержденных приказом Минэкономразвития России от 25.05.2016 № 316, установлено что Заявка должна содержать документы, указанные в пункте 2 статьи 1375 Кодекса, и относиться к одному изобретению или к группе изобретений, связанных между собой настолько, что они образуют единый изобретательский замысел (требование единства изобретения).

Требование единства изобретения в отношении заявленной группы изобретений признается соблюденным, если в формуле изобретения охарактеризована группа изобретений:

- одно из которых предназначено для получения (изготовления) другого (например, устройство или вещество и способ получения (изготовления) устройства или вещества в целом или их части);

- одно из которых предназначено для осуществления другого (например, способ и устройство для осуществления способа в целом или одного из его действий);

- одно из которых предназначено для использования другого (в другом) (например, способ и вещество, предназначенное для использования в способе; способ или устройство и его часть);

- относящихся к объектам одного вида (например, несколько устройств, несколько веществ), одинакового назначения, обеспечивающим получение одного и того же технического результата (варианты).

Таким образом, устройство, которое приобрел Ответчик, охраняемое патентом Истца может выдать требуемый технический результат, только при его использовании предназначенным для этого способом, охраняемым тем же патентом.

Многоуважаемые читатели, особенно те которые не понаслышке знакомы с четвертой частью Гражданского кодекса Российской Федерации, несомненно скажут: «что в соответствии с пунктом 3 статьи 1358 Гражданского кодекса Изобретение признается использованным в продукте или способе, если продукт содержит, а в способе использован каждый признак изобретения, приведенный в независимом пункте содержащейся в патенте формулы изобретения, либо признак, эквивалентный ему и ставший известным в качестве такового в данной области техники до даты приоритета изобретения, в связи с чем Истец вправе обращаться за защитой прав на патент на изобретение, имеющий несколько независимых пунктов, даже в том случае, если он считает, что нарушение допущено в отношении одного из нескольких независимых пунктов формулы изобретения».

Это действительно так, если не принять во внимание очередное «но», которое периодически возникает в ходе повествования. Таким «но» в этом случае является принцип исчерпания права на изобретение.

Так, согласно пункту 6 статьи 1359 ГК РФ, не являются нарушением исключительного права на изобретение, полезную модель или промышленный образец ввоз на территорию Российской Федерации, применение,предложение о продаже, продажа, иное введение в гражданский оборот или хранение для этих целей продукта, в котором использованы изобретение или полезная модель, либо изделия, в котором использован промышленный образец, если этот продукт или это изделие ранее были введены в гражданский оборот на территории Российской Федерации патентообладателем или иным лицом с разрешения патентообладателя.

Вместе с тем, как следует из приведенного выше пункта 6 статьи 1359 ГК РФ, существуют некоторые условия, при которых запатентованный способ при совместном использовании с устройством также исчерпывает себя, но только при осуществлении способа тем устройством, в отношении которого уже наступило исчерпание права.

Суд по интеллектуальным правам в своем постановление от 26.09.2014 по делу № А60-42273/2013 отмечает, что содержащееся в приведенной норме концептуальное положение, являющееся реализацией принципа исчерпания прав, правомерно принято во внимание судами с точки зрения оценки действий ответчика по соблюдению законодательства о патентных правах, поскольку после введения правообладателем в гражданский оборот продукта, в котором использована полезная модель, дальнейшее использование такого продукта осуществляется свободно. С этой точки зрения дальнейшая перепродажа ответчиком введенной самим правообладателем в гражданский оборот установки не может быть квалифицирована как использование патентных прав, а, следовательно, на нее не может распространяться действие лицензионного договора.

Аналогичный правовой подход применим в отношении изобретений.

Как неоднократно в своих судебных актах указывал Конституционный Суд Российской Федерации, законоположение, воспроизведенное в пункте 6 статьи 1359 ГК РФ о действиях, не являющихся нарушением исключительного права на изобретение, полезную модель или промышленный образец, направлено на обеспечение баланса между монопольными правами патентообладателя и правами и законными интересами других лиц.

Таким образом, законодатель предусмотрел, что со стороны недобросовестных патентообладателей могут возникать требования к конечным потребителям, которые используют в своей деятельности продукцию, в которой использованы охраняемые патентами изобретения.

При отсутствии нормы об исчерпании прав патентообладателя действие его прав фактически не было бы ничем ограниченно.

Так, по логике Истца, которая прослеживается в указанном мной споре, патентообладатель вправе предъявить требования таксисту, который в своей деятельности использует запатентованный мобильный телефон, способом для которого он предназначен, то есть созванивается с помощью данного мобильного телефона с клиентами.

Следуя этой логике, таксист, использующий в своей деятельности мобильный телефон, должен после приобретения указанного телефона в магазине найти правообладателя и заключить с ним лицензионный договор, в противном случае правообладатель вправе предъявлять требования таксисту о взыскании убытков за неправомерное использование мобильного телефона тем способом, для которого этот телефон предназначен, рассчитав размер данных убытков в процентном соотношении от дохода, полученного таксистом.

Более того, было бы достаточно странно если бы граждане или организации, приобретающие те или иные товары, в которых использовано огромное множество патентов, использовали бы данные товары не по назначению, дабы не оказаться обвиненными в нарушении чьих-то исключительных прав.

Только представьте себе, вы приобретаете электрический чайник, а используете его как лейку для полива цветов или представьте кондитера, который чтобы взбить тесто, приделывает к шуруповерту ложку и использует его в качестве миксера, причем список можно продолжать до бесконечности.

Самым важным является, что при отсутствии нормы об исчерпании прав действие исключительного права патентообладателя в отношении продуктов и изделий, уже введенных им в гражданский оборот, препятствовало бы свободе перемещения товаров на рынке, что противоречило бы основополагающему принципу свободы торговли.

По моему личному убеждению, в приведенном мной примере суд должен встать на сторону Ответчик, поскольку после введения продукта или изделия в гражданский оборот на территории Российской Федерации патентообладателем или с его разрешения любым другим лицом, в том числе лицензиатом, действует принцип исчерпания права, в связи с чем использование такого товара, тем способом, для которого он предусмотрен, не может быть признано нарушением прав патентообладателя.

Как я и обещал в конце статьи я выражу свое мнение со ссылками на закон и судебную практику относительно наличия в действиях Истца признаков злоупотребления правом.

Я полагаю, что предъявление такого иска преследует целью причинение вреда Ответчику путем обращения на него взыскания убытков при наличии доказательств правомерного приобретения продукции, в которой реализовано спорное изобретение у Третьего лица, которому на момент продажи продукции была предоставлена исключительная лицензия, в том числе на изготовление и комплектацию продукции с использованием изобретения; предложение к продаже и продажу продукции, изготовленной с использованием изобретения.

В соответствии с разъяснениями, изложенными в пунктах 1, 4 и 8 Обзора практики применения арбитражными судами статьи 10 Гражданского кодекса Российской Федерации, утвержденного информационным письмом Президиума Высшего Арбитражного Суда Российской Федерации от 25.11.2008 № 127 (далее – Обзор практики), суд может отказать в удовлетворении иска, если его предъявление вызвано недобросовестными действиями самого истца или с намерением причинить вред ответчику.

В силу пункта 1 статьи 10 ГК РФ не допускаются действия граждан и юридических лиц осуществляемые исключительно с намерением причинить вред другому лицу, а также злоупотребление правом в иных формах.

Исходя из системного толкования указанной нормы, принимая во внимание судебную практику по рассматриваемому вопросу (в том числе Обзор практики), следует, что под злоупотреблением правом понимается умышленное поведение управомоченного лица по осуществлению принадлежащего ему гражданского права, сопряженное с нарушением установленных в статье 10 ГК РФ пределов осуществления гражданских прав, причиняющее вред третьим лицам или создающее условия для наступления вреда.

Конституционный Суд Российской Федерации неоднократно указывал, что установленный статьей 10 ГК РФ запрет злоупотребления правом в любых формах прямо направлен на реализацию принципа, закрепленного в статье 17 (часть 3) Конституции Российской Федерации, и не может рассматриваться как нарушающий какие-либо конституционные права и свободы (определения от 20.11.2008 № 832-О-О, от 25.12.2008 № 982-О-О, от 19.03.2009 № 166-О-О, от 18.01.2011 № 8-О-П).

Аналогичная правовая позиция нашла свое отражение в постановлении Суда по интеллектуальным правам от 09.02.2016 № С01-1081/2015 по делу № А65-7778/2015.

В силу изложенных обстоятельств и с учетом позиции Высших судебных инстанций, я полагаю, что в защите права Истцу, обратившемуся с иском со схожими обстоятельствами лицу, следует отказать, как лицу злоупотребляющему своим правом.

Protection of rights to a computer program
This article will be devoted to the topic of protection of rights to a computer program. In this article we will consider the main problems and acute moments that arise when courts consider the cases involving the protection of exclusive rights to a computer program, with references to court cases.

 

A bit of theory.

As follows from paragraph 1 of Article 1229 of the Civil Code of the Russian Federation (hereinafter referred to as the “RF CC”), a citizen or a legal entity possessing an exclusive right to the result of intellectual activity or to a means of individualization (the rightholder) is entitled to use such a result or such a means at his/her/its discretion using any method that is not in conflict with the law.

The rightholder may, at his/her/its discretion, authorize other persons or prohibit them to use the result of intellectual activity. The absence of a prohibition is not considered to be a consent (permit).

Other persons cannot use the respective result of intellectual activity or means of individualization without the consent of the rightholder, except for the cases provided for by the said Code. The use of the result of intellectual activity or means of individualization (including their use applying the methods provided for by the Civil Code of the Russian Federation), if such use is carried out without the consent of the rightholder, is illegal and involves liability established by the Civil Code of the Russian Federation, other laws, except the cases when the use of the result of intellectual activity or means of individualization by any persons other than the rightholder, without his/her/its consent, is allowed by the Civil Code of the Russian Federation.

It is mentioned in paragraph 1 of Article 1259 of the RF CC that the copyright items also include computer programs, which are protected as literary works. The copyright to all kinds of computer programs (including operating systems and software packages) that can be expressed in any language and in any form, including the source text and object code, are protected in the same way as the copyrights to literary works (Article 1261 of the RF CC).

In accordance with paragraph 1 of Article 1270 of the RF CC, the author of the work or another rightholder has the exclusive right to use the work in accordance with Article 1229 of the RF CC in any form and using any method which is not in conflict with the laws (the exclusive right to the work), including using the methods indicated in paragraph 2 of Article 1270 of the RF CC. The rightholder may dispose of the exclusive right to the work.

On the basis of subparagraph 9 of paragraph 2 of the said article, the legislator includes the following in the methods of use, inter alia: translation or another processing of the work. In this case, the processing of a work means creation of a derivative work (processing, creation of a film version, acoustic backing, staging, and the like). The processing (modification) of a computer program or database is understood as any of their changes, including the translation of such a program or such a database from one language into another language, with the exception of the adaptation, that is, making changes that are implemented solely for the purposes of the functioning of the computer program or database using specific technical tools of the user or controlled by specific programs of the user. At the same time, the recording of a work on an electronic medium, including recording into the computer memory, is also considered to be reproduction (subparagraph 1 of paragraph 2 of the said article).

Article 1301 of the RF CC stipulates that in cases of violation of the exclusive right to a work, the author or another rightholder, along with the use of other applicable methods of protection and liability measures established by the RF CC (Articles 1250, 1252 and 1253), may, in accordance with paragraph 3 of Article 1252 of the Code demand at its/her/his choice payment of compensation from the offender instead of recovery of losses: in the amount equaling from ten thousand rubles to five million rubles, which is determined at the discretion of the court; in the twofold amount of the value of the copies of the work or in the twofold amount of the value of the right to use determined on the basis of the price, which under comparable circumstances is usually charged for the lawful use of the work.

As follows from the clarifications contained in paragraph 14 of Resolution No. 15 of the Plenum of the Supreme Court of the Russian Federation of 19.06.2006 "On the issues that arose in courts when considering the civil cases involving the application of the copyright and related rights law", when clarifying which party is required to prove the circumstances relevant to the case of protection of copyright or related rights, the court must take into account that the claimant must confirm the fact that it/he/she owns copyright and (or) related rights or the right to their protection, as well as the fact of the use of these rights by the defendant.

Consequently, in respect of the lawsuits regarding the protection of the exclusive right to computer programs, the circumstance in proof includes the presence of the claimant’s exclusive rights to the relevant intellectual property item, the fact of the use of these rights by the defendant and the legality of the use of such an item by the defendant. The first is included in the claimant’s burden of proving, the latter is included in that of the defendant.

The main purpose of my article is the desire to draw the reader’s attention to the most crucial moments that are important to understand and take into account when applying to the court for the protection of the exclusive right to a computer program. Moreover, these points will be examined through the perspective of the judicial practice, using the examples of particular court cases.

 

The issue of proving the right.

It often happens that a person who considers itself/himself/herself to be the rightholder of exclusive rights to a computer program, as a rule, a legal entity, applies to court for the protection of the violated right, and the first question the court asks is: “Who are you and on what authority has you applied to the court?”

The claimant, being at a loss, begins to explain that he is the rightholder, since his staff - the most qualified programmers in the world – have written such a wonderful and top-requested program, and a bad defendant downloaded his program illegally from the forbidden website, bypassing all locks and paying nothing, uses it in its economic activities and receives multimillion profits.

And the judge asks to provide documents confirming the transfer of the exclusive right from the authors (programmers) to the claimant, which is due to the following.

By virtue of Part 3 of Article 1228 of the RF CC, "the exclusive right to the result of intellectual activity created by creative labor, isinitially acquired by its author. This right may be transferred by the author to another person under the contract, and may also pass to other persons on other grounds established by the laws."

As explained in paragraph 13 of the Review of the Judicial Practice in respect of the Cases Involving the Resolution of Disputes on the Protection of Intellectual Property, approved by the Presidium of the Supreme Court of the Russian Federation on September 23, 2015, when considering the demands for the copyright protection, it is necessary to establish who is the author of the result of intellectual activity and whether this result is considered as such (that is, whether it was created by the creative labor of the author).

At the same time, when determining the pertaining of exclusive rights to the work, the court should establish the pertaining of the copyright to the items that are part of a complex work, to the individual whose creative labor created these items, and establish the legitimacy of the alienation of the exclusive rights to it with the help of the forms prescribed by the applicable civil law: the exclusive right alienation contract (Article 1285 of the RF CC), the custom work contract (Article 1288 of the RF CC), the license contract (Article 1235 of the RF CC), the works made for hire (Article 1295 of the RF CC), etc.

At the same time it should be noted that the essential terms are represented by the subject matter of the contract, that is, the computer program (indicating the number and date of issue of the certificate, if it was registered, or indicating a detailed description of the program (purpose, functions, programming language, etc.) if it was not registered), and the methods of its application.

Besides, in accordance with paragraph 3 of Article 1234 of the RF CC "Under the exclusive right alienation contract, the acquirer undertakes to pay to the rightholder the remuneration provided for by the contract, unless otherwise stipulated by the contract.

In the absence of a condition on the amount of the remuneration or the procedure for its determining in the non-gratuitous exclusive right alienation contract, the contract is considered not concluded. At the same time, the price determination rules provided for in paragraph 3 of Article 424 of this Code do not apply.

Payment of remuneration under the exclusive right alienation contract can be envisaged in the form of fixed one-time or periodic payments, interest deductions from income (revenue) or in another form.

It should also be noted that paragraph 3.1. of Article 1234 of the RF CC states that "Gratuitous alienation of the exclusive right in relations between commercial organizations is not allowed unless otherwise provided for by this Code".

It follows from the above rules of law that the claimant must present the evidence of payment of the remuneration to the previous rightholder which is provided for by the contract (payment orders) as proof of creation of the exclusive right in his respect to the computer program in the materials of the case, in addition to the alienation contract.

Otherwise, if the contract is considered not concluded, this does not entail any legal consequences, including does not give rise to the right to the computer program for the new rightholder.

This position is confirmed by the position stated in the ruling of the Intellectual Property Rights Court of 11.12.2014 under case No. A40-184777/2013.

Thus, it is important to take a responsible approach to the issue of proving the right to a computer program.

 

The issue of proving the fact of use.

Let us assume that everything is all right with the documents of title, because the courts have repeatedly assessed them in other processes, these documents have stood fire from opponents, and the court has appointed an expert examination to verify the application on fraud, and in all instances you have been recognized as the rightholder of the computer program. In fact, you have a little left to do - to prove the fact of the use by the defendant. At first glance it seems that everything has been settled. But is that so? Let's look at it.

As I pointed out above, paragraph 14 of Resolution No. 15 says that the claimant, in addition to confirming the fact of the copyright and/or related rights or the right to their protection pertaining to it, must also confirm the use of these rights by the defendant.

Thus, the defendant's duty to prove that he complies with the requirements of the laws on the protection of copyright and (or) related rights arises in case only if the claimant proves that it was that very defendant that used the item of intellectual property.

 

Proving the fact of the right violation by way of comparing the two computer programs by means of conducting a computer forensic expert examination

It may happen that one day you will learn that your computer program is being distributed by another legal entity under a different name. You go to court, and opponents object in every way in the court and say that they are not violators, they have created the program on their own and has nothing to do with your program.

The judge is unlikely to be an expert in the field of computer technologies and the protection of computer programs, his deepest knowledge in this field ends with a call to the information support department with a cry: "The computer does not respond!!!". What should you do in this situation?

In this case, in order to establish the fact of violation in the defendant’s actions, it is necessary to resolve the question of the correlation of the opposing computer programs in terms of the field of application, principle of operation, as well as presence of borrowings in their source codes, in connection with which, according to this category of disputes, the courts appoint a computer forensic expert examination.

As indicated above, the violation of the exclusive rights of the rightholder (illegal use), by virtue of subparagraph 9 of paragraph 2 of Article 1270 of the RF CC includes, inter alia: translation or another processing of the work. In this case, the processing of a work means creation of a derivative work (processing, creation of a film version, acoustic backing, staging, and the like). The processing (modification) of a computer program or database is understood as any of their changes, including the translation of such a program or such a database from one language into another language, with the exception of the adaptation, that is, making changes that are implemented solely for the purposes of the functioning of the computer program or database using specific technical tools of the user or controlled by specific programs of the user. At the same time, the recording of a work on an electronic medium, including recording into the computer memory, is also considered to be reproduction (subparagraph 1 of paragraph 2 of the said article).

Consequently, if during the research the expert comes to a conclusion that the computer program of the defendant is a processing of the computer program of the claimant, the court will have to recognize that you are right.

This legal position is shown in the judicial acts of the Intellectual Property Rights Court, including in the order of 21.11.2016 under case A56-21040/2015.

Next, I propose to examine a number of mistakes made by the claimants in collecting evidence of the illegal use of computer programs by the defendants, which resulted in refusal to satisfy the claims.

The claimant did not prove to the court that the system blocks, where the disputed computer program had been found with the signs of its illegal use bypassing the defense system belonged to the defendant.

Article 1270 of the RF CC does not contain the provisions that the use of a computer program means its practical application, including by a person who is not the rightholder of the personal computer, in the memory of which the program was recorded.

In addition, according to paragraph 3 of Article 1270 of the RF CC, the practical application of the provisions constituting the content of a work, including the provisions representing a technical, economic, organizational or another decision, is not the use of the work in relation to the rules of this Article, except for the use provided for in subparagraph 10 of paragraph 2 of this article (the implementation of an architectural project).

In such a manner, the practical application of computer programs by a person who did not record these programs in computer memory and is not the owner of a computer (personal computer) does not fall within the concept of using the work, which is set forth in Article 1270 of the RF CC.

At the same time, finding of files in the memory of personal computers (created with the help of computer programs), in which the name of the defendant is mentioned, cannot indicate that the latter used the computer programs in its business activities, without related proper evidence (computer hardware hire or lease contract, etc.).

This legal position is set out in the judgments of the Intellectual Property Rights Court of 01.07.2015 under case No. A53-37035/2012 and of 19.08.2015 under case No. A60-36433/2014.

 

Be careful when collecting evidence through an application to the police.

 

The epopee on most cases on the protection of rights to a computer program, as a rule, begins with the rightholder's turning to the law enforcement agencies with a statement.

Police officers, on the basis of the rightholder’s statement, conduct special investigation operations in the premises belonging to the alleged infringer, during which they seize the system blocks, with software products recorded on their hard disks that have the signs of counterfeiting. The police make out procedural documents, such as the inspection protocol, protocols for the seizure of documents, items, decision on the appointment of an expert in the performance of the computer forensic expert examination on the materials of the verification, and others.

At this stage, it is important that these documents are drafted as thoroughly, clearly and correctly as possible, since they materially influence the fact whether the court acknowledges the violation.

Thus, in the course consideration of case No. A76-26067/2014, the judgment of the Eighteenth Arbitration Appeal Court of August 4, 2015, which was left unchanged by the judgment of the Intellectual Property Rights Court of October 30, 2015, canceled the ruling of the Arbitration Court of the Chelyabinsk Region of May 25, 2015, the claims of the Closed Joint-Stock Company "ASCON" were dismissed, because the court of the appeal instance, during the consideration of this case, found defects in the procedural documents drawn up by police officers, which were expressed in the inaccuracies and inconsistencies in respect of the content of the procedural documents with each other, while the on-site inspection report presented in the case files was 50% non-readable.

In addition, the court found noteworthy the valid arguments of the defendant's appeal to the effect that the examination of the scene of the incident where the system blocks of the computers described in study No. 29/14 of 18-20.03.2014 were seized, on which the court of the first instance is based, was held with the illegal participation of the expert A.A. Polyanko, who is currently the representative of the claimant, i.e. who is a person interested in the outcome of the case.

Thus, since negative was not proved by the claimant, the totality of the above circumstances were recognized by the courts of the appeal and cassation instances, indicating that the court of the first instance had no legal grounds to satisfy the claimant’s claims to recover compensation from the defendant for violating the exclusive right to the software computer product in view of the lack of evidence of such a violation.

Besides, the candidacy of an expert is very important: he will be appointed by the police to investigate the system blocks seized from the alleged infringer containing counterfeit copies of the program.

During the consideration of case No. A56-28786/2014, the court of the first instance decided to dismiss the claims because of the impossibility, based on the evidence provided by the claimant, to reliably determine the fact of the assumption of the violations the defendant is accused of. The courts of the appeal and cassation instances upheld the findings of the court of the first instance.

Refusing to satisfy the claim, the court of the first instance recognized opinion No. 60LS-2013 of the expert M.L. Ivanov of 28.11.2013 as inadmissible evidence under the case, in view of holding the expert examination in a manner different from that stipulated by Article 82 of the Arbitration Procedure Code of the Russian Federation, as well as due to the fact the it was not proved that the expert M.L. Ivanov had respective diplomas, certificates and licenses confirming his competence and the right to participate in conducting such examinations.  

 

Having considered the issues outlined in this article, we can summarize that you can and should apply for the protection of the violated right to a computer program, but it is important to remember the following before submitting a statement of claim to a court.

In accordance with Part 1 of Article 65 of the Arbitration Procedure Code of the Russian Federation, each person participating in the case must prove the circumstances to which he/she/it refers as the basis for his/her/its demands and objections.

Under the rule of Part 1 of Article 66 of the Arbitration Procedure Code of the Russian Federation, evidence is submitted by the persons participating in the case.

The persons participating in the case bear the risk of ensuing of the consequences resulted from implementation of procedural actions by them or failure to implement them (Part 2 of Article 9 of the Arbitration Procedure Code of the Russian Federation).

Thus, the person who decided to apply for the judicial protection must very carefully approach the process of gathering evidence and only then file a statement of claim.

I will complete my article with the folk wisdom "You must measure seven times before you start cutting."

Use in the search advertising on net "Internet" of word designations that are confusingly similar to the registered trademarks
In this article I would like to dwell upon the problem of the legal uncertainty in relation to the issue touching upon the use in the search advertising on net "Internet" of word designations that are confusingly similar to the registered trademarks, in relation to the homogeneous goods or services for which this trademark provides for the legal protection.

Besides that, I suggest to consider the variants of the word designations use in which an advertising provider can be recognized a breaker of the exclusive right for a trademark, premised on the settled judicial practice. Thereby, it is worth pointing out that the courts' conclusions on this category of the disputes are rather controversial and no uniform vector has been still worked out.

 

In the epoch of the digital technologies an issue of activity on net "Internet" is especially acute, and increasingly frequently the persons' actions in the world wide web are becoming a ground for an emersion of disputes and legal lawsuits. One of such actions is placement of search advertising in the search systems such as Yandex or Google, by means of the services "Yandex-direct" Google AdWords.

First and foremost it is necessary to look into the matter of what the search advertising is, let us try to do it through an example of the service "Yandex-Direct".

Yandex. Direct – is the system of placement of the search and topic-based contextual advertising, therefrom it appears that the service "Yandex. Direct" is created and used to distribute advertisement.

The appropriation of the system "Yandex. Direct" – is holding of advertisement campaigns. The work of the system "Yandex. Direct" is based on the key words use that address a consumer to an advertisement.

Besides that, premised on the data on the service "Yandex. Direct", in particular, in section 'the website support' placed in a common access at address yandex.ru/support/direct/index.html, it appears that the essence of the legal relations that arose between an advertising provider and Yandex LLC, has no doubt the advertising nature appearing between an advertising provider and advertising distributor.

According to the glossary, search advertising – is the principle of an advertisement show at advertising places, according to which an Advertisement show is made provided that there is a word/word combination in a respective Search request of a user, specified by an Advertising provider as a criterion (key word/word combination) for this advertisement show. Thereby other (additional) criteria of the Advertisement show (geotargeting and others) can be also taken into account.

According to the legal position outlined in decree of the Office of the Federal Antimonopoly Service for city of Moscow dd. 13.04.2016 on case No. 4-14.3-381/77-16, "An advertisement (a banner) placed on net Internet represents a graphic presentation or text message of a small size which function is addressing of a user to a person's website who has placed a banner. A banner itself can't be considered separately from a website to which is gives a link, and is not in itself a ground for a decision taking by a person who has seen it, on making use of a service or on acquiring goods. Actually a banner that is inextricably connected with a website is a part of that website that is opened after a "click" to a banner and can't be considered in isolation from the very website".

Thereby it is worth pointing out that the service "Yandex. Direct" does not draft advertisements. Direct drafting of the texts of advertisements, including the specification of means of individualization in an advertisement text is made directly by the advertising providers, and the objective of Yandex LLC is to provide a respective opportunity to use a resource.

So in clause 1 of Decree of the Plenary Assembly of the Supreme Arbitration Court of the Russian Federation dd. 08.10.2012 No. 58 "Concerning certain issues of practice of use by the arbitration courts of Federal law "Concerning advertisement" it is explained that "according to clause 1 of article 3 of the Advertising Law,  the information distributed by any way, in any form and using any means addressed to an uncertain set of people and aimed at attracting attention to an advertised object, forming or supporting an interest to it and its promotion at the market is an advertisement and in connection therewith shall comply with the requirements lodged by the Advertising Law".

Article 5 of the Advertising Law specifies the general requirements to an advertisement, inter alia clause 2 of the article which is commented on, specifies that the following advertisement is unfair: such that represents an advertisement of the goods which advertisement is prohibited by this metgod, in this time or in this place, if it is made under the veil of an advertisement of other goods, which trademark or service mark is identical or confusingly similar to a trademark or service mark of the goods, in relation to advertisement of which the respective requirements and limitations are set, and also under the veil of an advertisement of a manufacturer or seller of such goods;

Thereby according to subclause 7 of clause 3 of this article, that advertisement is recognized unauthentic that contains the data, divorced from reality, on the exclusive rights for the results of the intellectual activity and the means of individualization of a legal entity, the means of individualization of the goods equivalent to them.

In case of the advertisement legislation breach, an advertising provider, an advertising producer or an advertising distributor can be brought to responsibility according to article 14.3. of the Code of Administrative Offences.

Together with it, in my article I place my emphasis not on breaches of the advertisement legislation, but rather on the exclusive rights breaches for the trademarks allowed in the search advertising on net "Internet", and their subsumption by courts when the right holders apply for the infringed right protection.

So, let us resort to the Civil Code according to clause 1 of article 1484 of the Civil Code of the Russian Federation (hereinafter – CC RF) "a person in whose name a trademark is registered (right holder) owns the exclusive right to use a trademark according to article 1229 of  CC RF by any method not contradicting to the law (the exclusive right for a trademark). A right holder can dispose of the exclusive right for a trademark".

According to clause 2 of article 1484 of CC RF "the exclusive right for a trademark can  be exercised for individualization of the goods, works or services in relation to which a trademark is registered, in particular, through a trademark placement: on the goods including on the labels, packages of the goods that are manufactured, offered for sale, sold, demonstrated on the exhibitions and trade fairs or otherwise brought into the civil commerce in the territory of the Russian Federation or stored or transported with this goal, or imported to the territory of the Russian Federation; when performing works, rendering services; on the documents associated with bringing of the goods to the civil commerce; in the offers on the goods sale, on the works performance, on the services rendering, as well as in the advertisements, on plate signs and in the advertisement; on the net "Internet", including in a domain name and in other means of addressing".

"Nobody is entitled to use, without a permit of a right holder, the designations similar to his/her trademark in relation to the goods, for which individualization a trademark is registered, or homogeneous goods, if as a result of such use there appears a probability of confusion" (clause 3 of article 1484 of the Code).

According to article 1250 of CC RF "the intellectual rights are protected by the methods stipulated by the Code, with due regard to the essence of an infringed right and consequences of this right infringement".

Article 1252 of CC RF provides for "the exclusive rights protection for the intellectual activity results and for individualization means is made, in particular, by lodging a claim on the actions suppression that infringe a right or create a threat of its infringement, - to a person committing such actions or implementing the necessary preparations to them; on compensation for losses - to a person who has used unlawfully the result of the intellectual activity or the individualization means without an agreement conclusion with a right holder (non-contractual use) or to a person who has otherwise infringed his/her exclusive right and inflicted him/her harm".

Besides that, according to subclause 1 of clause 4 of article 1515 of CC RF, a right holder is entitled to claim, at his/her option, a compensation payout from a breaker instead of compensation for losses: in the amount ranging from ten thousand to five million rubles, determined at a court's discretion premised on the nature of a breach.

Clause 43.2 of the joint decree of the Plenum of Supreme Court of the Russian Federation and the Plenary Assembly of the Supreme Arbitration Court of the Russian Federation dd. 26.03.2009 No. 5/29 "On certain issues appeared in connection with introduction into effect of the forth part of the Civil Code of the Russian Federation" explains that a compensation is subjected to collection if the fact of a breach is proved.

Premised on the specified legal norms, a conclusion can be made that the fact to be proved under a claim on the right protection for a trademark comprises the following circumstances: the fact of this right belonging to a plaintiff and the fact of its infringement by a respondent through using an identical designation or that designation which is similar to a trademark in relation to the goods or services, for which individualization a trademark is registered, or homogeneous goods or services, if as a result of such use there appears a probability of confusion.

If in relation to the fact proof of the exceptional right belonging to a plaintiff for a trademark a situation is rather comprehensive (it is sufficient to present to the court a certificate for a trademark), then in relation to the fact proof of a breach and the fact what will be a breach in this case, it is not quire clear, it remains a puzzle in what case the claims of a right holder will be satisfied.  

So, let us at first provide an insight into the stages of a breach proof that are the most comprehensive in this category of the cases.

  1. Establishment of identity or confusing similarity of a word designation used in an advertisement and trademark.
  2. Establishment of homogeneity of the goods and/or services that were advertised by means of search advertising and goods and/or services that are provided with the legal protection to a right holder's trademark.

As far as is known to the majority of the legal professionals practicing in the field of the intellectual property protection, the courts when assessing the confusing similarity are guided by the explanations contained in clause 13 of the Review of the practice of the cases consideration by the arbitration courts relating to use of the intellectual property legislation approved by information letter of the Presidium of the Supreme Arbitration Court of the Russian Federation dd. 13.12.2007 No. 122, according to which an issue on the designations similarity is an issue of the fact and can be resolved by court without commissioning of expert evidence. The issue on confusing similarity of two word designations used on the goods of a plaintiff and respondent can be resolved by the court from a position of an ordinary consumer and does not require any special knowledge.

As stated in clause 37 of the Judicial review on the cases relating to settlement of disputes on the intellectual rights protection, approved by the Presidium of the Supreme Court of the Russian Federation dd. 23.09.2015, upon detection of confusing similarity of the designations, a general impression is taken into account that they create on the whole on an average consumer  of the respective goods or services.

So, the main objective of a right holder when proving the confusing similarity, is to convince the court in it having proved, as far as possible, the availability of sound, graphic and semantic criteria of similarity.

When proving homogeneity one should be guided by clause 45 of the Rules of drafting, filing and consideration of the documents that are a ground for the legally significant actions commission for state registration of the trademarks, service marks, collective trademarks approved by the Order of the Ministry of Economic Development of the Russian Federation dd. 20.07.2015 No. 482, according to which "When establishing homogeneity of the goods, a possibility in principle is determined of a concept emersion in a consumer of these goods belonging to one of the manufacturers.

Thereby the following things are taken into account: type, kind of the goods, their consumer properties, functional purpose, type of material they are manufactured of, complementarity or interchangeability of the goods, conditions and channels of their implementation (a common place of sale, resale through a retail or wholesale network), a range of consumers and other characteristics.

A conclusion on homogeneity of the goods is made based on the results of an analysis of the enumerated features in their totality in case the goods or services, due to their nature or appropriation, can be referred by the consumers to one and the same source of origin (manufacturer)".

 

Let us assume that you have managed to provide an evidence to the court that you are a right holder, that a word designation used in search advertising is confusingly similar to your trademark, and, inter alia, is used in relation to the homogeneous goods or services.

And now you are sure of your victory and approaching triumph of justice, you think only of the fact if the court will satisfy claims on a compensation collection to the full extent or will decrease a compensation premised on the necessity to restore the material position of a right holder.

The zero hour is in store, a judge comes out of a consultation room, you are prone to anxiety, he/she starts announcing the substantive provisions of a decision: "… in the name of the Russian Federation … the court has DECIDED: In satisfaction of the asserted claims – to abjudicate" – like a bolt out of the blue, and at the same minute all hopes break down, dreams of restoration of justice collapse, the brain starts, in a fussy and disorderly manner, bringing back to memory the legal position fragments set out in a statement of claim, the evidence taken as basis of a lawsuit, the quotations from the Code swarm as a crowd of bees, you start bringing back to memory your speech and your opponent's speech trying to find out an answer to a question: "Why abjudication?"…

You will get a reply to this question not later than in five business days after the substantive provisions announcement, together with a substantiated court decision.

Now I suggest to come back down to earth with a bump/bang, to abstract your mind from this lyrical digression which a reader has sinked into, imaging oneself in a courtroom, and to proceed with the main question of this article regarding the fact what is unlawful use in search advertising on net "Internet" of a word designation that is identical or confusingly similar to a trademark, in relation to the homogeneous goods or services.

Unlawful use of a word designation that is confusingly similar to a trademark will be recognized, if a right holder proves that this designation has been used directly in the text of an advertisement (of an advertising banner) containing the promotional information and a reference addressing to a advertising provider's website (a would-be breaker).

If a confusingly similar designation is used as a key word in a user's search request specified by an Advertising provider as a criterion (of a key word/word combination) to show this Advertisement, then the asserted claims satisfaction will be more likely abjudicated by the court on the grounds that the "Key words used on net Internet, being a technical parameter, are needed for the users to search information and can't be the individualization means of the goods and services, in connection therewith the exclusive rights infringement of a plaintiff for the trademarks is absent, because the key words are used on net Internet to search information on part of the users and represent a technical parameter defined by an advertising provider that is specified by this parameter by means of the respective configuration tools in the systems of online-advertisement, that's why the key words can't be attributed to the methods of a trademark use".

Is a court abjudication legally valid on these grounds? It is you to decide.

This question has not been properly examined and described both by the legislator and by the courts, in connection therewith both the participants of the business intercourse and judges still don't have an unambiguous answer what is to be regarded as a breach in this situation.

At the end of my article I gave the third opinion that has been arisen in the community of judges, which actually consists in the following: "Use by a respondent of disputable designations namely as the key words makes it possible for a respondent to attract the consumers' attention to the goods being sold by a respondent, because they create the necessary technical conditions for an advertisement show (advertising banner) of a respondent to an interested consumer, in which the goods advertised by a respondent can be perceived by a consumer as those having a name of a "TRADEMARK", as well as it creates the conditions for an easy link immediately to a respondent's website, where a respondent advertises legally his/her goods that are similar to the goods for which individualization the disputable trademarks are registered".

When recognizing the fact of breach in this case, the court stated that these words choice by a respondent (that are similar to the trademarks of a right holder) as the key words to be used in a search request, is the deliberate use of them in their advertising activities. A consumer that initially manifests an interest in the goods labeled with the disputable trademarks, adds to a search box a name of trademarks and comes across a respondent's advertisement offering the goods for sale similar to those offered by a plaintiff, thereby the key words, they also are – the trademarks of a plaintiff, they neighbor with a name of the goods having the consumer functions, in which acquisition a consumer is interested, and with a reference to a respondent's website, which single use (click) readdresses a consumer to a respondent's website in which the latter places legally advertisement of the goods manufactured and sold by it.

In my opinion, in this case the court has made the correct conclusions witnessing that not only use in an advertisement text of a word designation that is confusingly similar to a trademark can be recognized as a breach, but also these designations use without a right holder's permit as the key words for use in a search request is their deliberate use in one's advertising activity.

Together with it, it should be noted that not any use of the word designations that are confusingly similar to the trademarks as the key words in the search systems, shall be recognized a breach but only a deliberate action aimed at technical conditions creating to show an advertisement (advertising banner) to an interested consumer, aimed at an interest attracting in one's goods or services, what gives an advantage in the entrepreneurial activity due to a reputation use of another person's trademark.

So, when adopting this judicial act the court has made a step in the direction of establishment of more precise "game rules" on net "Internet", because the World Wide Web although has penetrated deeply enough into our life, but still there are no unambiguous rules in relation to many criteria of the network users' behavior. Summing up the total of my article I would like to end it with a famous quotation of Ancient Greek philosopher Socrate: "Truth is sprout in discussion".

Know-How
Know-how (from English know how — “to know how”) or a manufacturing secret is the information of any nature(inventions, original technologies, knowledge, skills, etc.) that is protected by a commercial secret regime and can be asubject of purchase and sale or used to achieve a competitive advantage over other business entities.The phrase “know-how” has been first introduced into common practice by the English judicial practice and initially ithas been an expression “to know how to do it.” We fist learned this term, which is familiar to us in the form “know-how,”when it was used in the American judicial system (case “Dizend vs D.Brown,” 1916).On June 14, 1962, pursuant to Resolution of the Council of Ministers of the USSR No. 607 “On Improving Protection ofthe State Interests in the Field of Inventions and on Further Improving the Arrangement of Invention Activities in theUSSR,” the All-Union Association Licensintorg was established, which was focused on the international technologicalexchange with the foreign countries on a commercial basis, which was delegated by the state an exclusive right to selllicenses for technologies abroad.Thus, since 1962, the term know-how has begun to be used in the USSR as well. The conditions of the licenseagreements for the sale of rights to know-how have been formed taking into account international practice and based onthe legislation of the licensee countries. And this was justified, because the know-how concept in domestic legislationhas been absent.In addition, during the Soviet Union this term was used in the license agreements, drawn up by the Council for MutualEconomic Assistance (an intergovernmental economic organization, which operated in 1949-1991. It was established bya decision made by the Economic Meeting of the representatives of Bulgaria, Hungary, Poland, Romania, the SovietUnion and Czechoslovakia. The CMEA headquarters were in Moscow).However, at the domestic level everything was the opposite. During the Soviet period, the legal nature of know-howcontradicted the ideology of the ruling communist system, because, there were no commercial relationships as such, andthere were the rules prescribing to disseminate the achievements in the production field between enterprises, it was atradition to share experience, up to the extent that the achievements of the military industry, which could be used incivilian products, were disseminated widely.So, the following was stated in Resolution of the Central Committee of the CPSU and the Council of Ministers of theUSSR of September 3, 1970 “On a mutual use of scientific and technological achievements by the ministries andinstitutions of the USSR and by the enterprises and organizations subordinated to them”: “To oblige industrial andconstruction ministries and institutions of the USSR to take measures aimed at a radical improvement of the use of scientificand technological achievements of other sectors of the national economy and at a transfer of their own achievements to thesesectors, as well as to increase the responsibility of subordinate enterprises and organizations for the timely and full use of theseachievements.”Subsequently, the term know-how was used in the Soviet legislation and the Russian legislation with the followinginterpretations:a “trade secret” is in the Law of the RSFSR “On Property in the RSFSR” of December 24,1990; a “commercial secret” is inthe Law of the Russian Federation “On Competition and Restriction of Monopolistic Activities on Commodity Markets” ofMarch 22, 1991.In fact, before the collapse of the USSR, there had been no legal protection of manufacturing secrets. For the first time inthe domestic legislation the “manufacturing secret (know-how)” is enshrined in Article 151 of the Fundamental Principlesof the Civil Legislation of the USSR and the Republics, the Supreme Soviet of the USSR of May 31, 1991 No. 2211-1,which established granting the legal protection to the holder of the particular information from the illegal use of it bythird parties and the reimbursement by them for the damages in case of the illegal use of it.Granting the legal protection to the “manufacturing secret” (know-how) as a result of intellectual activities wasintroduced into the legislation of the Russian Federation on January 1, 2008 by the introduction of Part Four of the CivilCode of the Russian Federation.In the Civil Code of the Russian Federation (hereinafter referred to as the C.C.R.F.), Chapter 75 is devoted to the topicrelated to the right to a manufacturing secret (know-how).Article 1465 gives the following definition to the term know-how: A manufacturing secret (know-how) shall be deemed theinformation of any nature (production, technological, economic, organizational and others) about the results of intellectualactivities in the scientific and technological field and about the methods of carrying out the professional activities that has areal or potential commercial value due to the fact that it is unknown to the third parties, if this information is not freelyaccessible to the third parties on legal grounds, and the holder of such information takes reasonable measures aimed atkeeping it confidential, including by introducing a commercial secret regime.

In addition to the above, in accordance with Article 1466 of the C.C.R.F.: The holder of a manufacturing secret has anexclusive right to use it in accordance with Article 1229 of the this Code in any manner, which does not contradict to the law(an exclusive right to a manufacturing secret), including in case of manufacturing articles and implementing economic andorganizational solutions. The holder of a manufacturing secret may dispose of the said exclusive right.Issuing a document for the manufacturing secret (know-how) confirming the exclusive right of the holder of themanufacturing secret to use it is not stipulated in the current legislation.However, the rights to manufacturing secrets (know-how) in accordance with Order of the Ministry of Finance of theRussian Federation of December 27, 2007 No. 153n “On approval of the Regulations on Accounting “Accounting forIntangible Assets” PBU 14/2007” may be included in intangible assets of the organization on the equal basis with othersubject matters of intellectual rights.The validity period of the exclusive right to a manufacturing secret shall last as long as the confidentiality of theinformation constituting its content is kept. The exclusive right to a manufacturing secret shall be terminated for all rightholders (Article 1467 of the C.C.R.F.), since the moment the correspondent information ceases to be confidential.As mentioned above, the holder of a manufacturing secret may dispose of the exclusive right belonging to him. The rightholder may conclude an agreement for the alienation of the exclusive right, according to which he undertakes to transferthe exclusive right to a manufacturing secret belonging to him to another party – the acquirer of the exclusive right tothis manufacturing secret, or the right holder may conclude a license agreement, according to which the holder of theexclusive right to a manufacturing secret (licensor) grants or undertakes to grant to another party (licensee) the right touse the correspondent manufacturing secret within the limits established by the agreement (Articles 1468 and 1469 ofthe C.C.R.F.).It should be noted that the exclusive right to a manufacturing secret created by an employee in connection with theperformance of his job duties or a specific task of an employer (a business manufacturing secret) belongs to theemployer.In the event if the manufacturing secret is obtained during the execution of a contract agreement, an agreement for theexecution of research, development or technological work, or under a state or municipal contract for the state ormunicipal needs, the exclusive right to such manufacturing secret belongs to the contractor (performer), unlessotherwise is stipulated by the corresponding agreement (the state or municipal contract).It must be borne in mind that any person, who has disclosed the information constituting a manufacturing secret (or whohas committed other violations of the exclusive right), including the governmental units (the Russian Federation, asubject of the Russian Federation, a municipal unit) can be held liable for the violation of the exclusive right to amanufacturing secret (Article 1472 of the C.C.R.F.), if its body that had received access to the correspondent information,disclosed such information (Article 14 of the Federal Law “On a Commercial Secret”).The legal protection in the form of a manufacturing secret (know-how) is often used for such subject matters, which,provided there is a patent protection, can be reproduced relatively easily in accordance with the published patentdescription.In addition, a nonpatent form of protection compared to a patent form of protection provides a number of advantages:– the absence of requirements for a mandatory state registration and an official recognition of the protectability of thesubject matters constituting the content of a manufacturing secret (know-how);– an unlimited period of protection (as long as the confidentiality of the information constituting the content of amanufacturing secret (know-how) is kept);– greater freedom in choosing a subject matter of protection (the kinds of subject matters of the patent protection arestrictly defined by the legislation).At the same time, the nonpatent form of protection requires the confidentiality compliance and holding thearrangements to ensure a commercial secret regime in respect of the subject matters of protection.Thus, based on the above legal provisions, the information constituting a manufacturing secret must have a real orpotential commercial value. The real value shall include the costs incurred by the right holder in order to create theinformation constituting manufacturing secrets, as well as to maintain a commercial secret regime and a market value ofsuch information, and the potential value shall be the probable damages that the right holder may incur in the event ofdisclosure or an improper use of such information.It should be borne in mind that the exclusive right to a manufacturing secret shall last as long as the confidentiality ofthe information constituting its content is kept, and therefore there should not be a free access to the informationconstituting a manufacturing secret. The holder of a manufacturing secret (know-how) must take measures to protect theconfidentiality of this information by introducing a commercial secret regime.

The protection of a commercial secret shall be carried out by organizational and legal methods, namely:– the information protection system established by its holder should ensure its effective functioning and it shouldprevent unauthorized dissemination of the protected information;– the state shall guarantee the prevention from an unfair competition by way of the proceedings in respect of thepersons, who have assumed illegally, used or disclosed the information that was a confidential one, including acommercial secret of its holder.At the same time, those guilty must return to the holder of the information its value, determined at the moment of filinga claim for its return, as well as to return or reimburse all income that they have gained or should have gained from thisinformation, starting from the moment, when they have learned or should have learned about the illegal assignment anduse of the information.

Служебное произведение
Произведения науки, литературы или искусства в соответствии с положениями статьи 1225 Гражданского кодекса Российской Федерации (далее – ГК РФ) являются результатом интеллектуальной деятельности, а если они создаются в пределах, установленных для работника (автора) трудовых обязанностей, то в силу пункта 1 статьи 1295 ГК РФ признаются служебными произведениями.

Для более подробного анализа вопроса о том, что такое «Служебное произведение», предлагаю поэтапно рассмотреть существенные условия, предусмотренные законодателем, для признания произведения служебным, а также затронуть вопросы, связанные с возникновением у работодателя исключительного права на служебное произведение и указать условия, при которых такое право возвращается к автору.

Как следует из пункта 39.1. совместного постановления Пленума Верховного Суда Российской Федерации и Пленума Высшего Арбитражного Суда Российской Федерации от 26.03.2009 № 5/29 (далее – Постановление № 5/29), вопрос о том, является ли конкретное произведение служебным, решается исходя из положений законодательства, действовавшего на момент создания такого произведения.

В отличие от статьи 14 Закона Российской Федерации от 09.07.1993 № 5351-1 «Об авторском праве и смежных правах» (далее – Закон об авторском праве), действовавшего до 01.01.2008, относившей к служебным произведения, созданные в порядке выполнения служебных обязанностей или служебного задания работодателя, в статье 1295 ГК РФ под служебным произведением понимается произведение науки, литературы или искусства, созданное в пределах установленных для работника (автора) трудовых обязанностей.

Для определения того, является ли созданное работником после 31.12.2007 по конкретному заданию работодателя произведение служебным, необходимо исследовать вопрос о том, входило ли это задание в пределы трудовых обязанностей работника. Если такое задание работодателя в его трудовые обязанности не входило, то созданное произведение не может рассматриваться как служебное – исключительное право на него принадлежит работнику, его использование работодателем возможно лишь на основании отдельного соглашения с работником и при условии выплаты ему вознаграждения.

Как указано выше особенности регулирования отношений, связанных с созданием и использованием служебных произведений, в настоящее время установлены в статье 1295 ГК РФ, согласно которой

1. Авторские права на произведение науки, литературы или искусства, созданное в пределах установленных для работника (автора) трудовых обязанностей (служебное произведение), принадлежат автору.

2. Исключительное право на служебное произведение принадлежит работодателю, если трудовым или гражданско-правовым договором между работодателем и автором не предусмотрено иное.

Если работодатель в течение трех лет со дня, когда служебное произведение было предоставлено в его распоряжение, не начнет использование этого произведения, не передаст исключительное право на него другому лицу или не сообщит автору о сохранении произведения в тайне, исключительное право на служебное произведение возвращается автору.

Если работодатель в срок, предусмотренный в абзаце втором настоящего пункта, начнет использование служебного произведения или передаст исключительное право другому лицу, автор имеет право на вознаграждение. Автор приобретает указанное право на вознаграждение и в случае, когда работодатель принял решение о сохранении служебного произведения в тайне и по этой причине не начал использование этого произведения в указанный срок. Размер вознаграждения, условия и порядок его выплаты работодателем определяются договором между ним и работником, а в случае спора – судом.

Право на вознаграждение за служебное произведение неотчуждаемо и не переходит по наследству, однако права автора по договору, заключенному им с работодателем, и не полученные автором доходы переходят к наследникам.

3. В случае, если в соответствии с пунктом 2 настоящей статьи исключительное право на служебное произведение принадлежит автору, работодатель имеет право использования соответствующего служебного произведения на условиях простой (неисключительной) лицензии с выплатой правообладателю вознаграждения. Пределы использования служебного произведения, размер, условия и порядок выплаты вознаграждения определяются договором между работодателем и автором, а в случае спора – судом.

4. Работодатель может обнародовать служебное произведение, если договором между ним и автором не предусмотрено иное, а также указывать при использовании служебного произведения свое имя или наименование либо требовать такого указания.

Таким образом, проанализировав вышеуказанные законоположения и позиции высших судебных инстанций, можно сделать следующие выводы, для признания произведения служебным должны одновременно выполняться три условия:

- с автором заключен трудовой договор/имеются трудовые отношения;

- произведение создано в период действия трудового договора;

- в обязанности автора входит создание объектов интеллектуальной собственности.

Федеральный арбитражный суд Московского округа в своем постановлении от 09.06.2012 по делу № А40-81220/11 о признании произведений служебными, изложил следующую позицию: «Для подтверждения факта создания служебного произведения недостаточно проставления на произведении фамилии того или иного физического лица, работодатель должен представить документы, регламентирующие трудовые (служебные) отношения с работником, документы, касающиеся регламентации создания и закрепления прав на служебные произведения».

Если создание произведения не входило в трудовые обязанности сотрудника, а равно, если между работником и работодателем не было заключено трудового договора, оно не является служебным. Аналогичный правовой подход, изложен в пункте 39.1 Постановления № 5/29.

В пункте 2 статьи 1295 ГК РФ указано, что «Исключительное право на служебное произведение принадлежит работодателю, если трудовым или гражданско-правовым договором между работодателем и автором не предусмотрено иное».

В соответствии с пунктом 1 статьи 1270 ГК РФ «Автору произведения или иному правообладателю принадлежит исключительное право использовать произведение в соответствии со статьей 1229 настоящего Кодекса в любой форме и любым не противоречащим закону способом (исключительное право на произведение), в том числе способами, указанными в пункте 2 настоящей статьи. Правообладатель может распоряжаться исключительным правом на произведение».

В соответствии с правовой позицией, изложенной в пункте 9 Постановления № 5/29, исключительное право является имущественным.

В пункте 2 статьи 1255 ГК РФ указано, что исключительное право на произведения науки, литературы и искусства принадлежит автору. Однако на основании пункта 2 статьи 1295 ГК РФ исключительное право на служебное произведение принадлежит работодателю.

При этом трудовым или иным договором между работодателем и автором может быть предусмотрено иное. Например, что исключительные права на служебные произведения остаются у его автора или что автор предоставляет работодателю возможность ограниченного использования служебного произведения.

Высшие судебные инстанции в пункте 39.3 совместного Постановления № 5/29 следующим образом истолковали положения пункта 2 статьи 1295 ГК РФ «Если исключительное право на служебное произведение принадлежит работнику (автору) изначально по договору с работодателем или на основании абзаца второго пункта 2 статьи 1295 ГК РФ, работодатель имеет право использовать такое произведение способами, обусловленными целью служебного задания, и в пределах, вытекающих из задания, а также обнародовать такое произведение, если иное не определено договором между ним и работником. Работник при этом вправе по своему усмотрению использовать служебное произведение способами, не обусловленными целью служебного задания, а также способами, хотя и обусловленными целью задания, но за пределами этого задания».

Таким образом, работник и работодатель сами определяют, у кого возникает исключительное право на произведение, исходя из условий, которые предусмотрены в трудовом договоре или ином соглашении.

Между тем работодателю следует учитывать, что в отличие от действовавшего до 01.01.2008 законодательства пункт 2 статьи 1295 ГК РФ предусматривает, что от работодателя, которому принадлежит исключительное право на служебное произведение, это исключительное право переходит к работнику (автору), если в течение трех лет со дня, когда это произведение было предоставлено работником в распоряжение работодателя, последний не начнет использование произведения (например, воспроизведение, распространение, публичный показ, сообщение в эфир или по кабелю, осуществляемые как самим работодателем, так и на основании лицензионного договора третьим лицом), не передаст исключительное право на произведение другому лицу (на основании договора об отчуждении исключительного права) или не сообщит автору о сохранении произведения в тайне (например, в случае создания научной разработки, содержание которой предполагает ее охрану в качестве секрета производства) (пункт 39.2 Постановления 5/29).

Также следует отметить, если в установленный трехлетний срок работодатель совершит одно из названных действий, работник (автор) имеет право на получение вознаграждения, размеры, условия и порядок выплаты которого определяются договором между работодателем и работником, а в случае спора – судом. При этом судам необходимо иметь в виду: условия, относящиеся к такому вознаграждению, могут быть предусмотрены как в трудовом договоре, так и в иных дополнительных соглашениях, заключаемых между работником и работодателем. Во всех случаях вознаграждение выплачивается работодателем, даже если использование произведения осуществляется третьим лицом по лицензионному договору или исключительное право на произведение перешло к новому правообладателю.

Таким образом, право автора служебного произведения на вознаграждение установлено в силу закона. Отсутствие у работодателя с автором-работником договора, предусматривающего условия о размере и порядке выплаты вознаграждения, не лишает последнего права на получение вознаграждения за использование произведения. Отказ работодателя в реализации указанного права приводит к обращению работника в суд с требованием о защите нарушенных имущественных интересов, при разрешении которого суд должен определить размер подлежащего выплате автору вознаграждения.

Кроме того, в Гражданском кодексе Российской Федерации установлено, что при создании служебного произведения размер вознаграждения, условия и порядок его выплаты определяются договором между работодателем и работником, а в случае спора – судом, такое вознаграждение носит обязательный характер, договором определяются лишь его размер, условия и порядок выплаты

При рассмотрении вопроса о выплате вознаграждения автору служебного произведения важно учитывать, что Гражданский кодекс Российской Федерации определяет в качестве лица, осуществляющего соответствующую выплату, исключительно работодателя. Данное положение носит императивный характер, на что обращалось внимание в пункте 51 Постановления № 5/29: «Судам необходимо иметь в виду, что законодатель императивно определяет лицо, выплачивающее соответственно компенсацию или вознаграждение. Таковым лицом является работодатель (лицо, являвшееся работодателем на момент создания служебного произведения). Следовательно, даже в том случае, если принадлежащие работодателю права на результат интеллектуальной деятельности переданы (предоставлены) по договору об отчуждении права или по лицензионному договору, лицом, обязанным платить компенсацию или вознаграждение работнику, остается работодатель».

Таким образом, выплата работнику, являющемуся автором служебного произведения, авторского вознаграждения при реализации работодателем исключительного права на произведение предусмотрена нормами гражданского права. Правоотношения, возникающие между указанными лицами в связи с использованием результата интеллектуальной деятельности, являются гражданско-правовыми.

При этом суды, рассматривая споры между работниками и работодателями о выплате вознаграждения автору, придерживаются позиции, что заработная плата, подлежащая выплате работнику в рамках трудовых правоотношений за выполнение им трудовых обязанностей, не является авторским вознаграждением, получаемым работником как автором служебного произведения за его использование, в связи с чем работодателям следует учитывать данную позицию при определении порядка выплаты вознаграждений авторам служебных произведений.

 

Резюмируя вышеизложенное, хочется обратить внимание, как работодателей, так и работников (авторов) в чьи должностные обязанности входит создание объектов интеллектуальной собственности, что при возникновении трудовых взаимоотношений, предполагающих создание служебных произведений, необходимо тщательно подойти к подготовке документов, регламентирующих такие взаимоотношения.

По моему мнению, сторонам, указанных отношений при подготовке документов, предстоящих созданию служебного произведения, во избежание возможных будущих споров о праве необходимо обратить внимание на следующие моменты:

  1. Между работодателем и работником (автором) имеется действующий трудовой договор, предполагающий наличие в числе обязанностей работника создание служебных произведений. Причем, желательно конкретизировать, в чем будет выражаться служебное произведение (разработка дизайна, написание статей, разработка программного обеспечения, подготовка фотоснимков для журнала и т.д.). Конкретные условия можно более детально прописать в должностной инструкции либо указать в приказе на создание конкретного служебного произведения.
  2. Служебное произведение должно быть создано в период действия трудового договора.
  3. Подготовка приемо-сдаточной документации, в соответствии с которой работник передал служебное произведение работодателю, а работодатель его принял. Таким документом может являться акт приема-передачи.
  4. По результатам выполненных работ, которые будут переданы работодателю, работнику должно быть выплачено соответствующее вознаграждение.

Таким образом, в рамках настоящей статьи рассмотрены вопросы наиболее часто возникающие в сфере правоотношений, связанных с созданием служебных произведений.