Clarification of the Supreme Court
19 August 2019On Resolution of the Supreme Court
On April 23, 2019, the Plenum of the Supreme Court of the Russian Federation rendered Resolution No. 10 ‘On Application of Part Four of the Civil Code of the Russian Federation’ (hereinafter referred to as the “Resolution”). The previous similar broadscale document was adopted 10 years ago. It was a joint resolution of the Plenum of the Supreme Court and the Plenum of the Supreme Commercial Court No. 5/29 dated March 26, 2009 ‘On Certain Issues Arisen Due to Implementation of Part Four of the Civil Code of the Russian Federation’, many provisions of which have been reproduced or developed in the new Resolution.
Over the past ten years since the adoption of the previous resolution, a large number of amendments have been made to the law on intellectual rights, of which the most far-reaching ones were introduced in 2014. For the same period, the courts have considered enormous number of cases and specifi c practice of applying the legal norms in this area has been tried and tested.
The adoption of such documents is of harmonizing nature, since they, on the one hand, are adopted based on the existing court practice and, on the other hand, they serve as a guide for courts and interested parties, when applying the relevant provisions of the law.
In the Resolution No. 10 dated April 23, 2019 the Court’s positions on many provisions of the intellectual property law are collected, which indeed often raise disputes and require developing of their correct and uniform application.
The Resolution explains application of both general provisions of Part Four of the Civil Code and of its individual chapters dealing with particular types of intellectual property. We will highlight only some of them.
Procedural Matters
1. The Plenum noted that the following disputes, inter alia, are under the jurisdiction of the Intellectual Property Rights Court as a court of first instance:
- disputes on inventorship (inventions, utility models, industrial designs, plant varieties and animal breeds, know how - clause 3 of the Resolution);
- disputes on recognition of the right holder’s actions related to granting legal protection to a trade mark as an act of unfair competition (clause 8 of the Resolution);
- disputes on reimbursement of the damage caused by unlawful decisions and actions (or omissions) of Rospatent as well as by its non-regulatory legal acts recognized as invalid (clause 9 of the Resolution).
2. If a bankruptcy case is initiated against the trademark holder, then, a non-use cancellation action against the trademark shall not be considered by the Intellectual Property Rights Court, which usually considers such actions, but by the court considering the bankruptcy case (clause 12 of the Resolution).
Issues Concerning Disposal of the Exclusive Right
1. In case of a license agreement, which determines the license fee as a royalty depending on the scope of use, the licensor may demand compensation for losses caused by the non-use of the result of intellectual activity or means of individualization, and may terminate the license agreement as well (clause 40 of the Resolution).
2. The subject matter of an assignment, a license, or a pledge agreement may be the rights to intellectual property that will be created (arise) in the future (in clause 47 of the Resolution). At the same time, the Resolution explains in detail what requirements such agreements shall meet.
3. In the Resolution, the Supreme Court clarified the application of law when implementing fiduciary management of an exclusive right and emphasised distinction between this agreement and a license agreement or an agreement for delegation of authority in collective rights management (in clauses 48 and 49 of the Resolution).
General Issues of Intellectual Property Rights Protection
1. Any use of the results of intellectual activity and means of individualization as instructed or ordered by the right holder (for example, publication of copies of works by the printing offi ce as assigned by the publishing company, production of goods applying a trademark under an agreement with the right holder) does not require entering into a license agreement (clause 73 of the Resolution).
2. As to registration of a copyright-protected item without the author’s consent as an industrial design, the position of the Supreme Court consists in that the author of a work may protect his/her/its copyright regardless of whether a claim for invalidation of a patent for the industrial design has been fi led. However, satisfaction of the relevant claims of the author of the work does not result itself in cancellation of the patent.
A similar approach is also applied if a copyright-protected item is registered as a trademark (clause 74 of the Resolution).
3. The Supreme Court clarified the issues of liability of the domain name administrator and the website’s owner.
Since the website’s owner independently determines the procedure for using his website, it is he, who bears the burden of proving that the material comprising the results of intellectual activity or means of individualization is posted on the website by third parties and that the website’s owner is only an information intermediary. If there is no such proof, it is presumed that the website’s owner is the person directly using the relevant results of intellectual activity or means of individualization.
Resolving of the issue whether to classify the website’s owner as an information intermediary or not depends on how active he has been in shaping the material being posted and (or) whether he has received any income from illegal posting of the material.
Considerable modifi cation of the material and (or) receipt of income by the website’s owner may evidence that he is not the information intermediary, but the person who directly uses the relevant results of intellectual activity or means of individualization.
It is also presumed that the website’s owner is the administrator of the relevant domain name, unless otherwise follows from the facts of the case and the evidence submitted, in particular, from the information posted on the website (clause 78 of the Resolution).
4. Elaborating the position on protection of the licensee’s rights as provided in clause 27 of the Joint Resolution No.5/29 (dated 2009), the Supreme Court pointed out in the new Resolution that the ground for fi ling a claim by the licensee for recovery of a compensation for infringement of the exclusive right shall be infringement of the rights of the licensee proper, obtained by him under a license agreement, but not of the exclusive right of the right holder. Taking this into account, licensees holding exclusive licenses may protect their rights by any means provided for by Articles 1250 and 1252 of the Civil Code and only if the infringement concerned their rights obtained for the use of the result of intellectual activity or means of individualization (clause 79 of the Resolution).
Copyright Law
Exhaustion of the exclusive right to a work represents a case of free use of the work — an exception to the general rule that any actions to use the work may be performed only by the right holder or with his consent.
Exhaustion of the right does not cover the cases of making the work available to the public using the Internet (clause 96 of the Resolution).
Patent Law
1. The person indicated as the inventor in the relevant patent application shall be deemed the inventor of an invention, utility model, or industrial design, until proven otherwise.
In this regard, the inventorship cases may be considered by a court before issuing the patent as well. The filing of such claim for inventorship with a court shall not suspend the procedure for issuing a patent (clause 121 of the Resolution). At the same time, the Resolution states that any disputes on determination of the patent holder (on recognition of the patent holder’s right) shall be considered by courts only after issuing the patent (clause 122 of the Resolution).
2. An unauthorized use of an invention, a utility model, or design directly in a product, method, or article shall be deemed an infringement of the patent.
The use of the invention, utility model, or design in the documents (including project documentation) for manufacturing a product or article, or in the documents for implementation of the method shall not be deemed an infringement of the exclusive right of the patent owner. The use of the description of an invention, utility model, or industrial design in a work of science, literature, and art shall not be deemed an infringement of the exclusive right of a patent owner either (clause 123 of the Resolution).
3. If the claimant has reasonable grounds to believe that the defendant uses an invention, utility model, or industrial design, the exclusive right to which is vested in the claimant, the evidence may be claimed from the defendant or the evidence may be inspected and examined at its location (clause 124 of the Resolution).
4. The approach stated as early as in 2007 by the Supreme Commercial Court is maintained in the Resolution, according to which if there are two patents with different priority dates issued for the identical items (inventions, utility models, and industrial designs), or for the inventions differing in the equivalent features only, the use of the patented subject matter by the holder of the patent having the later priority date cannot be considered as infringement of the earlier patent until the former is invalidated according to the set procedure.
At the same time, if there are other features in the independent claim of the second patent (the defendant’s patent), aside from those in the independent claim of the claimant’s patents, the defendant’s invention, utility model, or industrial design shall be a dependent one. In this case, the defendant’s use of the invention, utility model, or industrial design under his patent may be recognized as infringement of the claimant’s exclusive right, regardless of whether the defendant’s patent has been invalidated according to the prescribed procedure.
5. A remuneration to an employee-inventor for a service invention, utility model, or industrial design shall be paid during the validity term of the patent. In case of early termination of the patent, the payment of the remuneration shall be discontinued.
At the same time, it is noted in the Resolution that if the patent is early terminated on purpose in order not to pay the remuneration (while, for example, the invention is still being used by the employer), the employee-inventor may claim that the employer should reimburse losses (clause 133 of the Resolution).
6. The limitation periods provided for by chapter 12 of the Civil Code (namely, a three-year limitation period) shall not apply to the patent invalidation actions fi led within the lifetime of the patent (clause 140 of the Resolution).
Trademarks
1. The fi ling date of the trademark application serves only as a starting point for calculation of the validity term and determines the priority date for establishing whether there are third parties’ rights to similar designations.
Any use by third parties of the designation identical or similar to the trademark during the period between the fi ling date of the trademark application (priority date) and the registration date of this trademark cannot be deemed as infringement of the exclusive right to the trademark (clause 155 of the Resolution).
2. The proper use of a trademark is its use for individualization of goods or services. Any use of words (including common nouns) registered as word trademarks in a plain meaning, for example, in written publications or oral speech, i. e. not for individualization of particular goods or service, shall not be the use of a trademark (clause 157 of the Resolution).
3. A claim to suppress the actions infringing the right to a trademark and consisting in illegal use of a domain name may be fi led against the administrator of the domain name. Upon the claimant’s motion, a court may compel the domain name registrar to provide the data on the domain name administrator (clause 159 of the Resolution).
4. When deciding on early termination of the trademark registration due to its non-use, the evidence that the trademark has not been used due to the circumstances beyond the trademark owner’s control may be taken into account.
The bankruptcy of the trademark owner shall not be such circumstance (clause 170 of the Resolution).
5. When considering the appeal against granting of legal protection to a trademark, the law provision on necessity to take into account the circumstances existing on the fi ling date of the appeal shall apply to prevent revocation of the registration of the trademark that did not meet the protectability criteria at the moment of its registration, but which further has begun to meet such protectability criteria (clause 173 of the Resolution).
In general, the Resolution will certainly become a suitable and effective instrument for harmonization of the court practice related to intellectual property.
