An extract from The Intellectual Property Review, 9th Edition
Enforcement of rightsi Possible venues for enforcement
There are various mechanisms in law for enforcing intellectual property rights, including administrative, civil and criminal enforcement. The best approach to defending rights would depend upon the type of the infringement, as well as upon the scope of the damage.
A civil court, either of common jurisdiction or a commercial court would be the primary venue for the civil route of enforcement.
The administrative procedure provides for the possibility of the owner of intellectual property rights to submit a complaint to the Federal Anti-Monopoly Service, law-enforcement agencies or customs depending on the type of infringement.
Criminal case may be initiated by filing an application to law-enforcement agencies, if certain thresholds of damage are met.ii Requirements for jurisdiction and venue
There are two systems of civil courts in Russia: the courts of general jurisdiction and state commercial courts (arbitrazh courts).
Depending on the category of a dispute, the proceedings may take place in the commercial courts or in the courts of general jurisdiction. The general principle is that the commercial courts hear disputes in the economic sphere (normally involving legal entities or individual entrepreneurs), and all other disputes are handled by the courts of general jurisdiction (normally involving individuals). In particular, the courts of general jurisdiction hear disputes on the authorship or the protection of the rights of authors, and the commercial courts hear the majority of disputes on the protection of exclusive rights, if the IP owners are legal entities.
The Russian Intellectual Property Court (the IP Court), the only specialised commercial civil court in Russia, has been operating since 2013. As expected, this has led to an increase in professionalism and a sound legal approach with regard to judgments in this field, not only from the newly established court but also across the Russian court system as a whole.
The IP Court is part of the Russian commercial court system. It is located in Moscow. The IP Court reviews:
- as a court of first instance – challenges to regulatory and legal acts of Rospatent;
- as a court of first instance – claims for the invalidation of the registration of intellectual property rights for non-use and disputes over the ownership of intellectual property rights; and
- as a court of third instance (i.e., a second appeal or a cassation) – cases concerning the infringement of intellectual property rights between legal entities or individual entrepreneurs (or both).
The cassation rulings of the IP Court can be further appealed to the Supreme Court of Russia. Other rulings are appealed against at the IP Court.iii Pre-trial procedure
In June 2016, a mandatory pre-trial procedure for resolving most commercial disputes was introduced through the adoption of amendments to the Russian Commercial Procedure Code.
Many court disputes have, since 11 July 2017, been excluded from the scope of the mandatory pre-trial dispute-settlement procedure. Certain types of IP disputes were not initially excluded from the procedure, but special regulatory arrangements were later adopted to address such cases.
In respect of claims for damages or compensation for exclusive rights infringements, the compulsory requirement to send a pre-trial demand letter has been preserved in cases where the parties to the dispute are legal entities or individual entrepreneurs.
Despite the fact that sending a pre-trial demand is compulsory, filing a statement of claim is possible in the event of:
- a total or partial denial of the claims; or
- no response to the demand letter within a period of 30 days from the date of sending such letter.
Moreover, in cases where an interested party intends to terminate the trademark of another party for non-use, it must follow a special pre-trial settlement procedure. Under this procedure, the interested party must send a proposal to the trademark owner to:
- apply for a waiver of the trademark rights; or
- enter into a contract for the alienation of such rights.
If no action is taken within two months following the date of the proposal, the interested party has a right to start legal proceedings. The time limit set for launching such legal proceedings is 30 days from the end of the two-month period.
The pre-trial procedure requirement is not applicable if 'intangible demands for the protection of exclusive rights' are made. These cover, for example, claims for the seizure and destruction of counterfeit goods, and claims to suppress actions violating the rights of the right owner or threatening the violation of such rights.
Pre-trial procedure may be beneficial for the IP owner, allowing them to decrease litigation costs, for example state fees, legal expenses and expert costs.iv Obtaining relevant evidence of infringement and discovery
In a case involving the infringement of exclusive rights to intellectual property, in order to increase a chance of success, collecting relevant evidence ahead of time is vital, since in Russia there is no such procedure as disclosure or discovery as in some other jurisdictions.
The above-mentioned Resolution No. 10 has clarified that the law does not establish a list of admissible evidence, on the basis of which the court decides whether there was a violation or not. Therefore, the court has the right to accept any evidence provided for by the procedural laws, including that obtained on the internet. For example, the right holder may also produce to the court evidence of counterfeit goods being offered for sale or any other purpose found on the infringer's website. Such evidence may be issued in the form of a protocol of website inspection prepared by a notary public. Evidence consisting of printed screenshots of websites clearly showing (1) the addresses of the websites in question; (2) the time at which the screenshots were taken; and (3) whether they have been verified by the parties to the proceedings, is also admissible.
In the majority of patent infringement cases, the main evidence is the examination statement of a forensic examiner appointed by the court.v Trial decision-maker
As discussed, many disputes in the area of intellectual property are subject to the jurisdiction of the Russian Intellectual Property Court, where the judges are lawyers specialising in IP matters. They can also use the assistance of external technical specialists.
The court shall properly consider all evidence submitted by the parties. In patent disputes, where technical issues are crucial, a great deal of emphasis is put on the patent technical forensic examination.vi Structure of the trial
Usually a trial will begin with the acceptance of the statements of claim and the commencement of the case, resolved by a judge alone. This is sometimes preceded by a preliminary injunction procedure. Once the statements of claim have been accepted, the judge rules out that proceeding is instituted. This ruling states that the case is at the preparation for trial stage and also sets out the steps to be taken by parties participating in the case, and when they must be completed.
The defendant must normally submit a defence brief to the court and to other parties in reasonable time so that it can be reviewed before the start of the trial.
The preparation of the case for trial should be completed within two month from the date of filing the statements of claim with the court. As a general rule, preparation of the case for trial is completed at a preliminary hearing that is normally scheduled by the judge within about a month from the submission of the statements of claim.
The preliminary hearing is heard by a judge alone to consider the results of the preparatory work by the court and persons involved in the procedure, as well as to decide if the case is ready for a court hearing and if a court hearing in first instance can be appointed.
In accordance with the law, any written or other physical evidence, expert and professional advice or testimonies, audio and video records, and other documents and materials can be submitted as evidence. The parties are entitled to request and submit additional evidence, as well as to present motions to call witnesses in the trial or motions to conduct examinations at all stages of court proceedings. This allows the parties to bring additional evidence. A court hearing may be postponed in order to require additional evidence or to conduct an examination and hear the testimony of witnesses or third parties.
After all evidence has been provided in the court procedure, the parties hold a debate, summarising and presenting their position to the court. The court makes a decision, which can then be appealed to a court of second instance. In an ideal situation, the court procedure takes no more than four months from the date when the statement of claim is filed, until a decision is made, but in practice, the process is likely to be much longer.vii Infringement
The statement of claim should be filed with the court in writing or electronically and be signed by the plaintiff or his representative.
The plaintiff's position and claims against the defendant should be clearly set out and the statement should refer to the relevant laws and other regulatory legal acts. The plaintiff should set out the circumstances on which his or her claim is based and support these circumstances with evidence. As well as the value of the claim, the statement should also set out the calculation of the sum payable, information on compliance with the pre-trial procedure (if any), and information on the measures taken by the court to ensure property interests prior to the commencement of the action.
The statement of claim may include any other information, if it is necessary for the proper and timely examination of the case. For example, a motion requesting discovery of evidence from the defendant or other persons may be included.
The plaintiff can also provide the results of non-forensic examination as evidence. Despite the fact that the findings of this examination would reflect only the opinion of one of the parties, the court hearing these cases can take into account all evidence in case. In some situations, for example, if a forensic examination is conducted by two expert organisations and their views are different, the opinion of the non-judicial examination could play a decisive role.
The plaintiff is obliged to provide other persons participating in the case with a copy of the statement of claim and the documents annexed to it. These requirements must be complied with; otherwise the court may not take action and leave the case at a standstill until the requirements of the law are satisfied.viii Defences
As mentioned above, the defendant is obliged to submit a statement of defence to the court and other parties in the case, stating its objections to the claims of plaintiff. The structure of the statement of defence is similar to the plaintiff's statement, namely, it must specify clearly the defendant's position and refer to relevant evidence.
Building a successful defence is typically based on certain tactics, including defensive invalidation of a patent or cancellation of a trademark for non-use. A patent could be deemed invalid for various reasons throughout the period of its validity. Proceedings on patent infringement are normally suspended until the validity of a patent is determined, subject to some procedural exclusions.
Patent protection can generally be cancelled on the following grounds: incompliance of a patent with the patentability criteria; omission of data from the original application to register the invention or utility model, or from the list of essential features relating to it; grant of a patent in case of several identical applications with the same priority date; issue of a patent with the names of person or persons as the authors who are not the real authors, or not specifying the persons who are the real authors.
This tactics may be unfairly used on a pre-trial stage, if an infringer, intentionally violating intellectual property rights, after receipt of the pre-trial cease-and-desist, will use the 30-day period allowed to file an objection via administrative proceedings to have the intellectual property rights of the plaintiff in question deemed invalid, and then will use this argument to suspend a prosecution. Such examples show that the obligatory pre-trial procedure may be not useful in each case of IP infringement, and it can even undermine the position of the rightholders.
In case of a defendant having used an identical product even before the disputed patent was granted, the defendant can argue that he is entitled to continue to use it based upon the right of prior use.
The defendant can also provide the results of non-forensic examination. As mentioned above, patent infringement cases are rarely heard without forensic examination in Russia. As the forensic examination is normally conducted by examiners suggested by the parties and appointed by court, it is always important to persuade the judge that your candidate is most appropriate to prepare this.
The defences to trade-mark infringement actions may include such arguments as exhaustion of the right, use of an earlier company name or trade name and abuse of right on the owner's part. As for copyright, the defences may include non-infringement or an argument that the work has entered the public domain.
In general, the strategy and the tactics of defence in patent litigation depend upon the particular aspects of each case.ix Time to first-level decision
Ideally, the court procedure takes no more than four months from the date when the statement of claim is filed, until a decision is made; however, in practice the process is likely to be much longer, from six months to one year.x Remedies
Russian legislation provides for civil, administrative and criminal liability for the infringement of intellectual property rights. The sanctions depend on the quantity of the counterfeit goods involved and on whether the individuals or legal entities involved are repeat offenders.
The civil law route entitles the trademark owner to file a claim in court for:
- termination of the infringement;
- seizure or destruction of the counterfeit goods (or removal of counterfeit signs or labels);
- publication of the infringement judgment; and
- payment of compensatory damages or statutory liquidated damages (in an amount of 10,000 to 5 million rubles (i.e., from €142 to €71,428), or double the value of the infringing goods or of the right to use the infringed trademark under regular market conditions).
When claiming compensation, a right holder has to substantiate the amount of the requested compensation by submitting relevant evidence and calculations in court. In case of subsequent infringements of an exclusive right by several infringers, each of them bears a separate responsibility. If the infringement has been done jointly, the infringers are jointly liable.
In the case of subsequent infringements of an exclusive right by several infringers, each of them bears a separate responsibility. If the infringement has been done jointly, the infringers are jointly liable.
The trademark infringer is administratively liable if the damage caused by the infringement is less than 250,000 rubles (€3,571).
The most serious sanctions apply to legal entities that produce or sell counterfeit goods. The fine that may be imposed in this case would be five times the value of the counterfeit goods seized, and in any event not less than 100,000 rubles (€1,428). The counterfeit goods will also be confiscated.
If the damage caused by the infringement reaches or exceeds 250,000 rubles (€3,571) or if the offender repeats the offence, he or she may be held criminally liable.
The unlawful use, disclosure or appropriation of an invention or patent that has caused significant damage to the author will result in a fine of up to 200,000 rubles (€2,857) or equal to the offender's income for 18 months, or imprisonment for up to two years. Similar sanctions apply to infringement of copyright and to the sale of counterfeit goods.
When the offender is a legal entity, criminal sanctions will be applied against the entity's officials, as legal entities cannot be held criminally liable under Russian law.
Russian law also allows the parties to apply for the injunction, including preliminary one. Injunction may be applied at any stage of the court proceeding, including up to 15 days before filing the statements of claim if otherwise the enforcement of the judgment may become problematic or impossible.
Injunction may be ordered in the form of the prohibition of certain acts, seizure of counterfeit products or equipment used for producing illegal products.
Practically, Russian courts are often reluctant to impose preliminary injunction measures in intellectual property disputes, other than seizing fake products, blocking transfer of infringing domain names or blocking of infringing websites. In these three types of intellectual property cases, the plaintiff can reasonably rely upon a Russian court to impose interim or preliminary injunctions.xi Appellate review
As mentioned above, the proper venue for the appellate proceeding depends on the nature of a dispute.
For instance, decisions of the Chambers for Patent Disputes related to the patentability of inventions, utility models or industrial designs are appealed with the Russian Intellectual Property Court within three months
Decisions made by the Russian Intellectual Property Court in the first instance may be reviewed in cassation (appeal order) by the presidium of the Russian Intellectual Property Court.
Decisions made by state commercial courts and by the courts of general jurisdiction are reviewed in appeal order by the superior court. Appellate decisions can further be appealed under cassation (second appeal) and supervisory procedure.
Appellate instance considers the case on the basis of evidence submitted during the first instance. New evidence may be accepted, if a party is able to prove that it was unable to disclose them in the first instance proceeding. Appellate court reviews whether the law has been correctly applied and evidence is properly assessed.xii Alternatives to litigation
Alternative dispute resolution procedures are admissible for IP disputes. For example, IP owners can settle a dispute through the mediation procedure. In accordance with the law, the mediation procedure is applicable on the basis of an agreement between the parties, including a reference in the contract to a document containing conditions for the settlement of the dispute with the assistance of a mediator.
In addition to mediation, IP disputes can be transferred by parties on the basis of an arbitration agreement to arbitration. Despite the fact that the alternative methods of resolving disputes have some advantages, for example, confidentiality of the information involved, in practice these methods are not frequently used by IP owners in Russia.