Certain Remedies in IP Litigation in Russia
In Russian civil proceedings related to IPRs, thre are general remedies available to all right holders, and specific remedies designed for holders of certain types of rights.
The purpose of this article is to cursorily outline the key remedies available to intellectual property right proprietors in the Russian Federation, with an emphasis on provisional measures and seeking compensation instead of damages in infringement cases. The key legislation setting out the remedies for civil litigation is codified in the Civil Code of Russia and two procedural codes, namely the Code of Civil Procedure and the Code of Arbitration (“arbitrazhny”) Procedure.
In Russian civil proceedings related to intellectual property rights, there are general remedies available to all right holders, and specific remedies designed for holders of certain types of rights. General remedies include, inter alia, provisional measures, injunctions, damages, as well as declaration, annulment, restoration of rights or transfer of rights to the claimant. Remedies specific to certain types of intellectual property include mandatory publication of a court decision, destruction of goods, award of compensation instead of damages, mandatory license agreements, etc.
Courts reluctant to grant injunctions
Under Russian law, courts award provisional measures only if claimants prove that a refusal to award the measures may either cause substantial harm to the claimant, or render the enforcement of the future court decision difficult or impossible.
Provisional measures in intellectual property disputes are usually granted for the purpose of seizing counterfeit goods or temporarily prohibiting the defendant or a third party of disposing the object of the dispute (e.g., register a trademark assignment, transfer a domain name, dispose of particular goods, etc.). As a general rule, an application for provisional measures must be filed with the same court that will consider the dispute to which the measures relate.
Although an application may be filed at any stage of the proceedings, and even before the proceedings have actually started, the main suit must be filed together with, or immediately after, filing of the application for provisional measures. Courts are obligated to consider applications for provisional measures within one working day.
So far, courts have been somewhat reluctant to grant injunctions at early stages of civil proceedings in intellectual property cases. Most often, applications are refused on the basis of the lack of evidence either showing the required substantial harm or the threat to the enforceability of the future decision.
One important practice note – that has sometimes been overlooked in Russia whilst drafting the applications for provisional measures – is that the requested measures must overlap and follow from the actual claims in the suit. For instance, if one seeks an injunction prohibiting registrations of transactions with a particular trademark then one of the main claims of the suit must be the transfer of this trademark to the claimant. If the claimant has sought and obtained a preliminary injunction for wider protection than is then actually sought in the main case, the respondent will have the possibility to seek damages from the claimant.
Award of compensation instead of damages
In Russia, some intellectual property rights have been treated more generously by the legislator. Thus, copyright, trademarks and geographical indications of origin currently have a wider arsenal of legal remedies available than, for instance, patent rights.
As an alternative to claiming damages (which usually comes along with a heavy burden of proof), holders of trademarks, geographical indications of origin, copyright and neighboring rights are entitled to claim compensation for each case of infringement. In order to get a compensation award, one only has to prove the fact of infringement and, formally, does not need to provide any evidence on actual damages or calculation of damages.
A right holder may choose how to define the amount of compensation:
a) claiming a fixed amount ranging from RUB 10,000 to 5,000,000 (i.e., approx. from EUR 230 to EUR 120,000). As the court is allowed to, and as a matter of practice seeks to, cut the sought amount, it is often advisable to provide evidence on the scope and character of infringement although the law does not require this (e.g., whether the infringement was deliberate, how many counterfeit copies were made, whether the infringement caused any damages or otherwise injured the interests of the right holder, etc.); or
b) claim i) a double price of goods in suit, or ii) double fees for legitimate use of the rights infringed that could be paid in comparable circumstances (e.g., a license fee). With solid evidence, this option may generally lead to higher awards than option (a) because courts may not decrease the amount claimed under option (b) on any equitable grounds.
Claimants use option (b)(i) where there is evidence, for example, of illegitimate importation, or manufacture, of a particular amount of goods, and where the price of goods can be shown easily. Option (b)(ii) is more tricky because Russian courts are not used to accepting statements based on information from international databases of standard royalty rates, and there are no analogous publicly available information services in Russia. As a result, claimants often fail to prove the desired license fees and go for options (a) or (b)(i) instead of option (b)(ii).
Destruction of infringing goods also possible
Not only can trademark holders claim compensation in the amount of double price of infringing goods, but they can also demand that the infringing goods be destroyed. Although awarding both remedies at the same time seems a bit excessive, in some cases and in some regions of Russia courts pass such decisions.
Russian law is not precedent based, and as a result, there may be certain deviations in court practice in different regions until the higher courts issue recommendations unifying the practice. To remedy this, a new specialized central court for intellectual property rights was established and has started operations on July 3rd 2013, hopefully leading to a more coherent practice in intellectual property cases.
Compensation for patent holders
Russian Patent Office grants patents to inventions along with patents to utility models, industrial designs and breeding achievements. As compared to other intellectual property rights, patent rights have not been subject to any significant litigation activity yet (hardly more than several hundred individual cases in all courts countrywide for the last five years).
The key specific patent related remedies are a court order obligating the defendant to sign a mandatory license agreement and publication of a court decision on patent infringement.
In addition to general remedies, such as damages, injunctions and the like are available to patent holders.
It is likely that the number of specific remedies available to patent holders will increase. State Duma (i.e., the lower chamber of the Parliament of Russia) is currently considering a draft bill amending the Civil Code of Russia in many respects, including regulation of intellectual property rights. After it passed the first hearing in the Parliament in April 2012, it was divided into several parts due to the size and scope of the Act. Now the Parliament is discussing and approving it step by step. It is not yet clear when the Parliament gets down to the part relating to intellectual property.
One of the much anticipated amendments includes amending the Civil Code, allowing the right holders claim compensation instead of damages in infringement actions. Another long anticipated amendment is a reform of the right to industrial design. The reform is expected to bring the scope of the Russian industrial design patent right closer to the registered Community design right, which has proved to be so useful for fashion and other areas of business.
Trademark Attorney, LLM
Counsel at Attorneys at law Borenius (Russia)