Intellectual property: latest changes to the legislation

A conference organized by The Moscow Times newspaper was held in Moscow on October 18. Denis Shumskiy, Advocate of the Law Firm "YUST", moderated the session dedicated to the amendments to Part IV of the CCRF.

The intellectual property market grows each year, and consequently the issues of regulation of intellectual property have been gaining importance. Russia’s effort for dynamic development in this direction is purposeful. The last year was indicative of the State’s attention to the problem, especially considering the integration of Russia into the WTO and the amendments to the CCRF.

Representatives of the public authorities as well as corporate lawyers, who apply the norms of intellectual property use in practice, were among the speakers at the Conference. Within the framework of the event, they were able to jointly assess the state of the current legislation and the perspectives of its changes in the light of the new initiatives.

Anatoly Semenov, Public Adviser of the FAS of Russia, reminded the assembled experts of the history of regulation of intellectual property and trademarks of the last twenty years. Having dealt with the provisions of the Agreement of Rome and other international agreements in that sphere, he discussed the practice of the SCA of Russia and indicative examples related to the cases of parallel importation. The Public Adviser pointed out the damages, which, in his opinion, are done to the state budget (inter alia) as a result of the parallel importation ban. A.Semenov allowed for the possibility that many questions are resolved by lobbying at the level of the judges of supervision.

Vitaly Kalyatin, Head of Intellectual Property Department of “Rosnano”, told, how the provisions of the draft law on the Civil Code amendments regarding the use of intellectual activity results in the Internet had changed.

For example, as a result of the group of experts’ work, the provisions of the draft law regarding the website status were redone. Websites were classified as composite works, and the comprehensive definition of a website was removed from the draft.

Afterwards, V.Kalyatin considered the problem of “free” licenses, the introduction of which is suggested. Said terms will be governed by Articles 1233 and 1286 of the CCRF.

For example, the rightholder will be entitled to make a public pronouncement on granting to any persons the right to freely use the work owned by him or the object of neighboring rights on certain conditions and during a fixed period of time. Such pronouncement may be placed at the official website of a federal public authority. The expert suggested Rospatent or the Ministry of Culture of the Russian Federation. It will be allowed to publish such “free licenses” only if the object is not subject to a valid onerous use license.

V.Kalyatin went on: “Regarding limitations and responsibility – Article 1253 of the Civil Code is complemented with the provision on the provider’s responsibility”. The provider will be responsible in the event of guilt and in case he was or should have been aware of the offence, when he transferred the work. The expert said that the list of necessary and sufficient measures to be taken by the provider will be fixed by a separate law: it was decided to refrain from going into too much detail in the CCRF.

Besides, a number of amendments will deal with copyright regulation in the Internet. For example, Article 1275 of the CCRF was expanded by inclusion of norms on digitization of works of literature done by libraries despite the opposition of certain editorial houses. V.Kalyatin foretells that the Civil Code may “level up to the European legislation”.

In his turn, Ivan Bliznets, Rector of the Russian State Academy of Intellectual Property (ESAIP), pointed out that the amendments to part IV of the CCRF are being adopted “with relative calm”, unlike the amendments to Parts I and II of the CCRF. The probable cause for that is that “the main problems were discussed back in 2006”.

He agreed that the confrontation of the positions of the editors and the libraries on the issue of the digitization norms was an indicative example of a serious conflict: “Those ones say “We are being put out of business”, and the others – “we are not allowed to give the information to the society””. The expert pointed out that compromise is the only thing the lawmaker can do.

I.Bliznets called the attention of the Conference members to the fact that there are tendencies of strengthening the protection of copyright of owners of works of music and literature and the need to regulate the conduct of information intermediaries, who are responsible for the transfer and storage of data. The speaker concluded: “Special laws should be adopted”.

Irina Klishina, Deputy Chief of Rospatent’s Department of Organization of Rendering Public Services, joined the discussion of amendments to Part IV of the CCRF and called the participants’ attention to what amendments were planned for introduction to the Civil Code in the part of registration of exclusive rights disposal agreements by Rospatent. She pointed out that Rospatent is starting to follow the international trends of registration by notice, “without checking the agreement itself”. The draft of the amendments to the CCRF suggests only the registration of the fact of the rights transfer under the agreement, which may be done on the parties’ request without submitting the text of the agreement itself.

Irina Klishina also informed that the new CCRF would contain the term of shares of the patent co-owners, for the purposes of resolving the issue of inheritance of the rights. She noted: “One should understand that it is not about the 4% exclusive right to the intellectual activity result, but about the percentage of the income, which may be received from the exercise of the right. Each co-owner disposes of the right in full, and the co-owners should jointly dispose of the right”.

Irina Klishina and Denis Shumskiy, Advocate of the Law Firm "YUST", responded the listeners’ questions and frequently stressed that, as a general rule, the provisions of the CCRF regarding property rights and other proprietary interests are not applied to the intellectual rights. It is planned to directly fix that condition by amendments to Article 1227 of the CCRF.

Alexander Saveliev, Lawyer of IBM, spoke on the trends, which may affect the software market.

In particular, it is suggested that the amendments to the CCRF correct the definition of software by adding “the forms of upgrade of the program”. Alexander Saveliev explained that it was the updates, which eliminated errors or expanded the functions. He said: “Earlier, the rightholders resolved the matter of the legal status of such objects their own way: they either wrote that the updates were a part of the program or they offered a license to certain updates. Now, it is suggested that the updates should be considered a part of the original program”.

According to the expert, this results in the “erosion of the difference between the updates, which are parts of the original program, and a new program, which is a separate object of copyright. This can lead to not only civil law issues, but also tax questions”.

The lawyer was also confused: “If the provision on free licenses, which may be executed by commercial organizations, was introduced into the Civil Code, why the prohibition of gifting between businessmen suffered no changes?”

Alexander Saveliev concluded by saying that the term “free license”, which was suggested for inclusion into the CCRF, lacked clear definition. He also supposed that “free licenses” under the Civil Code and the “free licenses” practiced internationally would be parallel. The expert declared: “Free licenses are impracticable at this moment in time”.

Darya Kolchina, Lawyer of Microsoft, concentrated on the positive tendencies in the area of intellectual property protection. According to her, Russia has set a world record by decreasing the rate of software piracy. The decrease was of 22 percentual points (from 85% in 2005 to 63% in 2011, according to the IDC data). The expert pointed out that when Russia entered into the WTO, it became subject to the TRIPS Agreement provisions. She explained that the significance of said Agreement as well as of the unfair competition-limiting norms of the Paris Convention was in the establishing of a single legal regime for all members, of the general “game rules”.

Denis Shumskiy, Advocate of the Law Firm "YUST", brought the discussion back into the practical plane by reminding the members that the CCRF provides the companies with the possibilities to protect their rights to the intellectual activity results, which are undeservedly disregarded. In particular, he spoke of the practice of using know-how and its advantages as compared to patenting.

According to him, know-how is an alternative way of protection of technical decisions information. Its main advantage is that the information on the protected decision does not become publicly available, and the formalization of the exclusive right to know-how requires no state expertise, obtaining of patent, and other formalities.

The expert also noted that the current legislation of legal protection of know-how stipulates an obligatory introduction of commercial secret regime over said data, and should the suggested amendments to Part IV of the CCRF be adopted, the owner of such data will be able to take any reasonable actions in order to safeguard the confidentiality of the information. And the introduction of commercial secret regime will be only one of such measures.

From the expert’s point of view, the absence of clear requirements to the exact measures, which will be considered necessary and sufficient for safeguarding the confidentiality, may complicate the practical application of the know-how provision.

Besides, it is suggested that the amendments to Part IV of the CCRF, which are currently studied, should fix that the information, which must be disclosed or the access to which cannot be limited under a law or a regulation, cannot be considered industrial secret.

The other subjects discussed during the event included the problems of bringing offenders to responsibility and damage reimbursement, international experience of legal protection of intellectual property and regulation of “shrink-wrap” licenses (including electronic licenses).