Intellectual Property Litigation - Chapter Russia8 August 2017
REFLECTING ON THE LAST 12 MONTHS OR SO, ARE YOU SEEING AN INCREASE IN INTELLECTUAL PROPERTY LITIGATION IN THE RUSSIAN FEDERATION? WHAT ARE SOME OF THE COMMON CAUSES OF THESE CONFLICTS?
IP litigation in Russia has been rather stable in terms of numbers. If we take litigation cases to include cases with the involvement of companies and people on both sides, and administrative cases, where one of the parties is a government body, be it customs, police or antimonopoly organisations, where the IP owner can be classed as a third-party, there has been a slight increase in the number of cases over the last few years. As such, there are currently around 20,000 civil and administrative cases per year. Administrative and civil cases account for approximately 50 percent of all cases each. Of that number, most cases are concerned with copyrights and trademarks. Patents are more complicated and account for a considerably smaller number of cases. Infringement cases account for the majority of cases. There are several hundred cases which govern the non-use of trademarks and appeals to the patent office and antimonopoly body.
ARE THERE ANY PARTICULAR SECTORS WHICH SEEM TO BE MORE SUSCEPTIBLE TO IP LITIGATION IN THE RUSSIAN FEDERATION?
The most susceptible sectors in terms of litigation are copyrights and trademarks. Patent cases are much less common. The peak for copyright litigation cases was between 2000 and 2010 where there were 13,000 recorded cases; there has been a dramatic drop in the number of these cases between 2000 and 2016. This can be explained by the fact that a so-called 'antipiracy law' has been implemented in Russia which has crippled internet infringement. Currently there around 2000 cases per year. Instead, trademark litigation has come to the fore, rising steadily to around 7000 to 8000 cases per year for the past few years. In patents, litigation cases, for the most part, concern pharmaceuticals.
WHY IS IT SO IMPORTANT FOR TODAY'S COMPANIES TO DEVELOP A STRATEGY FOR IP LITIGATION? IN YOUR OPINION, ARE COMPANIES PAYING ENOUGH ATTENTION TO THIS ISSUE?
It is important to dedicate attention to IP litigation because not only does unrestrained infringement cause damage to the manufacturers of the original products, the reputation of the original manufacturer also suffers. Furthermore, sales of counterfeit goods negatively affect competition and hamper innovation processes. Equally, since manufacturers of counterfeit goods often shirk taxation, the government also suffers damage. Counterfeit goods are, for the most part, of inferior quality; as such, consumers also suffer because of inadequate performance of counterfeit goods or possibly even damage to their health. Some companies do not pay enough attention to combat counterfeiting, especially when the number of counterfeit goods is small. Other companies do not register their IP which gives rise to unfair registration of their IP by pirates.
WHAT ADVICE WOULD YOU GIVE TO COMPANIES ON EFFECTIVELY PROTECTING THEIR IP THROUGH MONITORING POTENTIAL INFRINGEMENTS AND ENFORCING THEIR IP RIGHTS?
Every occurrence of counterfeiting should be dealt with by the IP owner. When infringers see that the IP owner does not tolerate a single case of infringement they stop infringing the owners' rights. Only moderate monitoring of the market situation may be required after that.
WHAT GENERAL PREPARATIONS AND PROCEDURES SHOULD COMPANIES UNDERTAKE WHEN PURSUING THE BEST POSSIBLE OUTCOME FROM LITIGATION?
Success of litigation hinges on the correct preparation of the case. Every case of infringement should be carefully documented. The collected documents, such as, for example, invoices received during a test purchase, should be executed in such a way that they should be acceptable for the court. In some cases, notarial certification of the infringement may be required. Enlisting the services of detective agencies should not be excluded either. Damage suffered by the IP owner should be properly confirmed. For that purpose, even in the absence of the threat of infringement, the IP owner should carefully archive the documents, which may help in future court proceedings.
COULD YOU OUTLINE ANY RECENT LEGALAND REGULATORY DEVELOPMENTS THAT MAY HAVE IMPORTANT IMPLICATIONS FOR THE TREATMENT OF IP IN THE RUSSIAN FEDERATION?
The last significant changes to Russian IP laws, and other laws relevant to the enforcement of IP, were made in 2014. Since then no significant changes have been made. The only important point to be mentioned is that previously, a warning letter should have been sent to the infringer in all cases before initiating a civil action. Now, if the claims are not material, for example, if no damage is claimed, sending a warning letter is no longer obligatory.
WHAT ADVICE WOULD YOU GIVE TO COMPANIES ON CONTRACTUAL ISSUES SURROUNDING IP RIGHTS? WHAT KEY CLAUSES SHOULD BE INCLUDED IN CONTRACTS TO ACCOUNT FOR THE POSSIBILITY OF FUTURE DISPUTES ARISING FROM AN AGREEMENT?
When concluding any contract relevant to intellectual property the parties should carefully draft the provisions. The provisions should be equally understood by both parties. They should also comply with the requirements of the law to be understood correctly by both parties in the contract. For example, if an assignment contract is drafted, a simple omission of the wording that the rights are assigned in full scope will automatically lead to the understanding of the contract as being a licence contract and not an assignment. There are other similar 'traps' into which the parties to the contract may fall. Contracts without payment are not allowed between commercial entities.