Intellectual property-2013. Experts suggest defending your rights in a more active manner

The free seminar “Intellectual property and information technologies – 2013: Russia, Europe, USA” organized by the Law Firm "YUST" was held on February 14. Associated Partners Evgeny Zhilin and Anna Kotova-Smolenskaya delivered a welcoming speech and said that the number of projects connected to the involvement of intellectual activity results and IT technologies in the civil turnover has grown significantly over the recent years. Changes to the civil legislation, judicial practice issues, wide use of technological advances etc., as well as the wish to share experience and discuss useful information – all this was the incentive to hold the seminar for corporate lawyers and the media.

Nick Holland, Partner of Field Fisher Waterhouse LLP, Denis Shumskiy, Advocate of the Law Firm "YUST", Galina Razumova, Head of Section of Court Representation of the Federal Institute of Industrial Property (Rospatent), and her deputy, Doctor at Law Alexey Sychev, spoke at the event.

Trial in detail

Even though the changes to Part IV of the Civil Code have been postponed indefinitely, the experts recommend preparing for the novelties and for the beginning of the work of the Court for Intellectual Rights. The Court is seamlessly integrated into the system of the courts of arbitration and its competence includes the cases on intellectual rights protection-related cases. Those include, first and foremost, contestation of normative legal acts in the sphere of legal protection of intellectual activity results and means of individualization equated to them. For example, the court is competent to consider the cases of contestation of actions, decisions and non-normative acts by Rospatent, decisions by the FAS of Russia acknowledging dishonest competition, actions related to acquiring exclusive rights to means of individualization, establishing the rightholder, as well as the cases ruling invalid the decisions to early terminate the legal protection of a trademark due to its disuse.

The expert said that the court is obliged to settle said disputes with the participation of any parties to the dispute, which may include organizations, individual entrepreneurs and individuals. If a single demand in the claim should fall within the competence of the Court for Intellectual Rights, all demands, if they can be joined pursuant to the Arbitration Procedural Code, must be considered by the Court for Intellectual Rights. Moreover, when, for example, normative and non-normative acts are contested, compensation of the harm caused by those may be claimed, and all this will be considered within one trial.

Denis Shumskiy paid special attention to the participant of the arbitration process – the specialists. They used to take part only in civil proceedings. Now the courts of arbitration also may bring them in. The specialists’ duty is to give oral advice in the course of the court session, which does not require long-term experts’ studies. It is planned to create a special staff of advisers within the personnel of the Court for Intellectual Rights, from which the Court would also draw said specialists.

Denis Shumskiy noted: “Unfortunately, the Court’s members have not yet been appointed, and there is no precise information, when the Court will start operating. We await the official communication by the Plenum of the HCA”. The advocate informed that, according to unofficial information, this is not scheduled to occur before late April – early May. So all claims are filed with the courts of arbitration as before.

Incomparable speeds of development of technologies and laws

Nick Holland told about the problems faced by the rightholders in the sphere of legal regulation. The general conclusion is similar to the experts’ evaluations of legal gaps in the Russian laws – “the law falls behind the technological progress”. The rate of adoption of new technologies in the market relations is extremely high: retail technologies, mobile purses, multifunctional devices and much else. Ensuring the security of personal data and non-violation of the users’ right to privacy is becoming one of the biggest risks faced by the companies in the IT sphere. It is planned to make the European legislation stricter by 2015, which includes significant increases of the fines. The presentation of the speech is available here.

Actively fighting for one’s rights

The subject of domain disputes was also discussed at the seminar. Denis Shumskiy shared his observations: “This practice is very active, it is forming, and there are more and more disputes”. When trademarks are used in a domain without consent by the rightholder, it becomes clear that the rightholder, as a minimum, is prevented from developing his activity in the Web space. The advocate pointed out: “Surely you understand that a business without a website can hardly be thought of”.

When the Court for Intellectual Rights is created, the domain disputes will be considered by “common” courts of arbitration as the first instance, but the specialized court will serve as the instance of appeal and cassation.

Denis Shumskiy shared his experience of certain secrets, which make it easier for the rightholder to win the dispute, and explained in detail the judges’ discretion on the issue of similarity (identity) of the trademark and domain name and the way the HCA of Russia understands dishonesty in the sphere of domain names’ registration. Of course, cannot register all similar domain names in his own name. According to the advocate, if the rightholder actively opposes and contests the registrations of one, two, three etc. domains, and is possibly successful at exacting compensations, the potential offender will think twice before engaging him. Denis Shumskiy tried to persuade the listeners that it was that the rightholders should actively defend their interests, which would probably result in gradual decrease of the offences. The presentation of the speech is available here.

The speeches by Nick Holland and Denis Shumskiy are available in more detail at Zakon.Ru and the portal of New Advocates’ Newspaper.

Guarding the interests of the society

The representatives of the Federal Institute of Industrial Property under Rospatent went on with the subject of court practice. Galina Razumova analyzed the topical decisions adopted last year and earlier this year. As an example, the expert said that the HCA of Russia expressed its position of principle regarding the registration of trademarks derived from international non-patented names. Galina Razumova explained: “Such trademarks may not be registered. The HCA of Russia recommended employing our common rules of ascertaining similarity to the point of confusion in the cases of ascertaining the derivative of an international non-patented name”. The expert said that the higher instance recommended refusing registration in connection with the fact that such registration does not conform to the interests of the society, goes against them, because it does not allow the manufacturers to use those names and leads to the illegal monopolization of the name.

She also shared an example connected with the establishing of the criteria of interestedness of the person, who requests to terminate legal protection of a trademark due to its disuse. Galina Razumova noted: “It was not the manufacturer who filed the request but a shareholder”. The Board of the HCA of Russia considered the case in detail and pointed out that the respective issues affected the shareholders’ interests as they decreased the share capital of the venture. This, in turn, affects the amount of dividends received by the shareholder. Thus, the HCA of Russia acknowledged the shareholders’ right to file similar requests aimed at protection of interests of the joint stock company as a whole.

Galina Razumova concluded by informing of two recent resolutions by the HCA of Russia. The key moment of the fist case: a company designed a trademark and registered it in its name, but the trademark got popular due to the actions of another organization. Rospatent decided that, in such case, the registration in the name of the first legal entity would be misleading, as the fact that the products are made by another entity is of general knowledge. However, the HCA of Russia ruled the products made by the non-rightholder “counterfeit”. Another interesting solution was the resolution by the Board of the HCA of Russia “by justice, not by law”, according to which registration of exclusive licenses is possible not only for inventions but also for products. Galina Razumova explained: “We do not give the exclusive license to the product but to the invention”, but the higher court instance did not agree with Rospatent’s position and alleged violation of the freedom of agreement and the impossibility to impede market activities.

Alexey Sychev briefly described the issues related to contestation of Rospatent’s refusals of state registration of agreements on industrial property objects. The court practice on such category of cases permits to draw a number of crucial conclusions, namely:

1. Legal grounds for ruling the agreement invalid is no grounds for ruling its state registration by Rospatent illegal;
2. When performing state registration of unilateral termination of a license agreement, Rospatent is not obliged to check the execution of the termination conditions by the parties;
3. A license agreement executed for a fixed period cannot be automatically prorogated, without the legally fixed procedure, even if the agreement itself contains a provision to that regard;
4. Expiry of the license agreement as of the moment of filing with Rospatent of the request to prorogate or early terminate it prevents state registration of such prorogation or early termination;
5. Rospatent may refuse state registration of an agreement, if the address of the rightholder indicated in the agreement does not match the address indicated in the state register;
6. Existence of security measures over an object of industrial property, which is the object of the agreement, disallows Rospatent to perform the state registration of such agreement;
7. The impossibility to ascertain the intentions of the parties at executing the agreement is a motive for Rospatent to refuse state registration of such agreement.

At the end of the seminar, the experts answered the questions of the participants, which was followed by an informal communication, during which those present expressed their thanks for interesting speeches and for the opportunity to discuss topical matters of practice.

© Photo by Ekaterina Gorbunova/New Advocate’s Newspaper