Successful representation of client (defendant) in a dispute concerning the recovery of compensation in the amount of over 1 000 000 USD and in an unfair competition case initiated against the client
Client Savushkin Product OJSC (Republic of Belarus)
Having considered that its exclusive rights (copyright) to the design of ‘Activia’ yoghurt product were infringed, Danone Russia, JSC (the Claimant) had filed a claim with the Commercial Court of Moscow (the Court) for copyright protection against Savushkin Product, OJSC (the Defendant/Client).
The claim was brought in connection with the illegal, in the Claimant’s opinion, redesign of the product of its ‘Optimal’ yoghurt by the Defendant as well as marketing of these products in the Russian Federation. The claim amount, which was calculated by the Claimant as double-cost of counterfeit products, exceeded 1 000 000 USD.
Simultaneously, the Claimant filed an application for administrative action with the Federal Antimonopoly Service (FAS) for Saint Petersburg for violation of related competition legislation in terms of unfair competition associated with creation of confusion.
Having received a copy of the statement of claim filed with the Court and the application for administrative action filed with FAS, the Client turned to us as experts in resolving copyright disputes for representation of its interests before Court and FAS of Saint Petersburg.
Having examined all facts and evidence submitted to the case files, the lawyers and IP attorneys from Gorodissky & Partners (the Firm) developed certain protection strategy for the Client. In particular, the Firm’s experts built up a legal position according to which the Claimant’s rights to the litigious copyrighted subject matter (design) had not been infringed in the Russian Federation.
Having filed a motion with the Court for termination of proceedings on the case and having provided the relevant documents, we had proved that:
- The Defendant had no branches or representative offices in the Russian Federation;
- The property (namely, corporate ownership of shares in the Russian subsidiaries engaged as third parties in action) in the Russian Federation had no legal effect for this dispute;
- The Claimant did not prove the ‘close nexus’ of litigious relations of the parties with the Russian Federation;
- The harm was not caused by the Defendant in the Russian Federation.
The Court agreed that the alleged offence (redesign), being the basis for the claim filed against the Defendant, had not been committed in the Russian Federation, therefore, this dispute over possible redesign should have been considered by the competent court of the relevant foreign state, where the Defendant was incorporated and operates (i.e., in the Republic of Belarus).
In parallel, having presented our arguments to the FAS for Saint Petersburg, we managed to obtain a refusal to initiate an administrative case on violation of the competition legislation. The Claimant further attempted to challenge this refusal in the Commercial Court of Saint Petersburg and Leningrad Region, however, when representing our Client involved in this dispute as a third party, we also managed to get the Claimant’s subsequent claims dismissed. In this case, the court in Saint Petersburg had taken into account the position of the previously made by the commercial court of Moscow on non-jurisdiction of this dispute in the Russian Federation and the conclusion made by FAS of Saint Petersburg, which was based on our main argument that the product designs at issue were not similar and that there was no infringement of the Claimant’s rights.
As a result of consideration of the dispute over copyright protection in the court of first instance (Commercial Court of Moscow), the court proceedings were terminated. The court of appeals and the court of cassation upheld the ruling of the court of first instance, therefore, reconfirming that, in this particular dispute, the application of the law of a foreign state, namely, the law of the Republic of Belarus, should be applied. In the unfair completion case, the decision of the court of first instance (Commercial Court for Saint Petersburg and Leningrad Region) was not been challenged by the Claimant.
Considering the outcome on both cases, the compensation claimed within the dispute over copyright protection for the amount of more than 1 000 000 USD was not been recovered from the Client and its actions were not recognized as unfair due to the lack of confusion.