From Russia, with consequences

How is IP theft treated in Russia?

As time has gone by, the number of cases initiated by law enforcement bodies has grown substantially. In 2014 alone, two years after the inclusion of relevant provisions into the Criminal Code, police initiated 11,000 criminal cases over cyber-related infringement.

The Russian government attaches great importance to protecting intellectual property against various violations. But theft ranges from patent and trademark infringement to trade secrets and copyright theft. IP theft has been analysed in detail by The Commission on the Theft of American Intellectual Property, which published an extensive report on the subject in May 2013.

Patent infringement is regarded as a serious crime. The Russian Criminal Code contains Article 147 specifically dedicated to the infringement of rights of inventors and patent owners. According to this article, unlawful use of an invention, utility model or industrial design entails a fine up to RUB 200,000 ($2,900), a period of forced labour of up to two years, or imprisonment for the same term if those deeds cause severe damage.

If the infringement is committed by an organised group or in collusion, the fine is raised to RUB 300,000 ($4,300), or forced labour/imprisonment for up to five years.

The key words used to define the deed as a crime are «severe damage». The law does not explain what «severe damage» might mean, so the evaluation is left to the court that considers the case. Perhaps because of this vague definition, the number of criminal cases involving patents is small. However, these cases are considered by courts from time to time and do end up with criminal sentences.

For the most part, patent infringement is examined in civil proceedings. One of the novelties in this respect is that the plaintiff may demand compensation instead of damages.

It is not easy to prove the amount of damage, so the law allows the plaintiff to claim compensation up to RUB 5 million ($71,600), which might not be proved but should be claimed. The court may moderate the amount.

What is the situation with trade secrets?

Trade secrets are regulated by relevant provisions of the Civil Code and by a special law on commercial secrets. Conflict may arise when an employee leaves his or her employer, and will implement his or her knowledge of trade secrets at the new place of employment.

The law requires that certain measures be put in place to protect confidential information. But the owners of the information do not always observe those requirements, which allows infringers to get away with the acquired knowledge.

These conflicts are mostly examined within the framework of civil proceedings where the remedies claimed are cessation of infringement and payment of damages, but there is also criminal liability.

Article 183 of the Criminal Code concerns the unlawful obtainment and disclosure of information constituting commercial information. Gathering such information through theft, bribery or otherwise shall be punished by fine of up to RUB 500,000 ($7,200) or forced labour/imprisonment for up to two years.

If the same act has been committed by a person to whom the information was entrusted, the punishment is much more severe, with a fine up to RUB 1 million ($14,300) or forced labour/imprisonment for up to three years.

If the act caused severe damage or was committed with gainful intent, or resulted in heavy consequences, the defendant shall be punished by a fine of up to RUB 1.5 million ($21,500) or forced labour/imprisonment for five to seven years. The law does not explain what these «heavy consequences» might be, so this evaluation is left to the court.

Fraud or embezzlement in the field of computer technologies is also regarded as a crime. Article 159.6 of the Criminal Code provides that computer fraud shall entail a fine up to RUB 120,000 ($1,700) or imprisonment for up to two years. Theft causing severe damage or carried out in collusion shall be punishable by fine up to RUB 300,000 ($4,300) or imprisonment for up to four years, and in the most severe cases, the punishment may be up to 10 years in prison.

How is trademark infringement treated?

Trademark infringement accounts for a major share of IP infringements. It is a crime according to the Criminal Code. Article 180 of the Criminal Code concerns unlawful use of all types of individualisation of goods.

Unlawful use of a trademark, if repeated or the cause of severe damage, shall be punishable by fine up to RUB 300,000 ($4,300) or imprisonment for up to two years. The worst cases can result in a fine of up to RUB 1 million ($14,300), or imprisonment for up to six years accompanied by fine of up to RUB 500,000 ($7,200).

Unlike patents, severe damage is defined by law and is in excess of RUB 250,000 ($3,500). In a civil court action, the plaintiff may claim damages as well as compensation of up to RUB 5 million ($71,600). The amount of compensation need not be proved and is established by the court.

Copyright infringement is a crime and plagiarism shall be punishable by fine of up to RUB 200,000 ($2,900), or in the most severe cases, up to six years in prison accompanied by a fine of up to RUB 500,000 ($7,200). Severe damage is defined by the Criminal Code as RUB 100,000 ($1,400).

What about online copyright infringement in Russia?

A large number of copyright infringement cases take place on the internet. This problem is under the specific attention of the law. Even though this is not always the subject of criminal prosecution, it is a powerful tool to curtail infringement on the internet.

Two years ago, a special anti-piracy law was adopted that made the punishment for infringement more harsh. According to the law, the Federal Service Supervising Communications, Information Technologies and Mass Communications (Roscomnadzor, for short) is empowered to permanently revoke access to websites with illegal content in cases of repeated infringement. Roscomnadzor also created a register, a so-called ‘black list’, of the sites infringing copyright. The anti-piracy law covers music, books and software. It allows blocking of internet sites before a court decision. These disputes are considered by the Moscow court only. The copyright owner files a complaint and the court applies an injunction while the copyright owner has to file a suit within 15 working days from filing the complaint.

The application of the law has been very effective. Sales of video content doubled after the introduction of the anti-piracy law. Warner Bros was among the copyright owners that protected its rights on the basis of that law.