Russia’s Supreme Court upholds protection for foreign IP owners

Stroysystem Ltd., a Russian company, sued a Russian individual entrepreneur and claimed RUB 2,948,500 in compensation for infringing International Trademark No. 1298164 (COSMO), registered in several classes, particularly for glues (Case No. А40-218859/24-110-1711). The trademark belongs to a German company, Weiss Chemie + Technik GmbH & Co. KG, which was involved as a third party. The respondent did not admit the suit.

Some time ago, Stroysystem and Weiss Chemie concluded an exclusive license agreement for trademark No. 1298164. Under the agreement, the licensee had the right to enforce the trademark rights and title to the receivables in the event of infringement.

Stroysystem found that the entrepreneur was selling glue that imitated the original product. The packages and the marketplace platform used the designation COSMA. The designation COSMA is confusingly similar to the trademark COSMO, which consumers perceive as coming from the trademark owner or an associated person. Stroysystem claimed compensation based on information posted online, amounting to RUB 2,948,500. Stroysystem claimed compensation instead of damages, which are harder to prove. The court calculated compensation at double the cost of the infringing products, as the law allows.

The court concluded that the goods are similar and that the designations COSMO and COSMA are similar. In fact, they differed by only one letter. The design of the infringing product reproduces that of the original product. The entrepreneur put forward some unconvincing arguments. In particular, he argued that Stroysystem acts in the interests of a foreign company, Weiss Chemie, registered and operating in Germany, which is considered unfriendly towards Russia.

Nevertheless, the court awarded compensation. It considered all circumstances associated with the infringement, including its duration, whether it was the main part of the infringer’s business, and whether it was repetitive.

The court found that the trademark rights were infringed for the first time, allowing it to reduce the compensation. Considering other circumstances, the court reduced compensation to a single amount of RUB 1,474,250 and issued a judgment accordingly in April 2025.

The entrepreneur appealed, seeking to have the first-instance judgment canceled. As expected, the court upheld the claims. The appeal court canceled the judgment. The entrepreneur argued that the court had not investigated the fact that the plaintiff acted in the interests of Weiss Chemie, from which it had obtained the right to the receivables. At the same time, it was a company from an unfriendly country.

The appeal court agreed with that and explained that the claim hinged upon enforcement of the rights of a foreign rights owner and that Stroysystem had taken on responsibility for remitting money as payment for assignment of claim and payment of royalty to Weiss Chemie connected with an unfriendly country, so payments should be made according to a special procedure.

The court stated that the parties in civil relations should exercise and enforce their rights in good faith. They should not benefit from their bad faith, which a party or the court may establish. If one party engages in unfair behavior, the court may refuse to protect the unfair party’s rights and take measures to protect the bona fide party’s interests.

According to Presidential Decree No. 322 of May 27, 2022, the government may impose retaliatory limitations on companies from countries that impose limitations on Russian companies. The Decree also provides temporary procedures for using and paying for intellectual property belonging to such foreign IP owners.

The court found that Stroyservice paid money directly to the trademark owner in the unfriendly country instead of to a special account, as Decree No. 322 directed. Accordingly, the appeal court held that Stroyservice’s claims should not be satisfied and canceled the first-instance court’s judgment on September 18, 2025.

Stroyservice appealed the judgment to the IP Court. The IP Court upheld the appeal court’s judgment on December 17, 2025.

Notwithstanding, Stroyservice appealed the IP Court’s judgment to the Supreme Court. It argued that the lower courts had not observed the law’s requirements and asked the court to remand the case to the court of appeal.

The Supreme Court examined the case and noted that Decree No. 322 requires special payment procedures. At the same time, the Decree sets out exceptions to the procedure if the IP owner’s products are on the Russian market. The lower courts simply ignored those circumstances and issued unlawful judgments. The Supreme Court explained that, in Russia, IP rights are guaranteed equally regardless of the IP owner’s citizenship or place of business.

On June 16, 2026, the Supreme Court canceled all previous judgments and sent the case back to the appeal court for reconsideration.

The appeal court reluctantly got down on itself, recapitulated both parties’ previous arguments, and noted that using IP without the IP owner’s permission is unlawful and entails liability. However, the Decree’s limitations apply only to IP owners who publicly expressed a hostile attitude towards Russia.

The infringer referred to the February 2022 publication by the German company, which read, “The war in the center of Europe. We are deeply distressed by the fact that this happened.” The Supreme Court held that the publication does not mention the Russian Federation; it simply expresses general concern about the military conflict in the heart of Europe. Special payment procedures are not required here, and compensation for infringement does not violate public order.

The appeal court upheld the first-instance court’s judgment and confirmed the compensation payment it ordered. The court handed down the judgment on August 28, 2026.