New Russian Court for IPRs

(IPRinfo 2/2012)

Stanislav Rumyantsev

Heidi Paalanen-Koev
Castrén & Snellman

The Russian judicial system is notorious for exhausting litigation. The new intellectual property court is expected to facilitate the hearing of intellectual property rights protection cases.

This brief addresses the new Russian legislation for establishing the intellectual property court, and how it is expected to affect IP rights holders and high-tech businesses.

The State Intellectual Property Court (the ”IP Court”), which is being established on 1st of February 2013 at the latest, was introduced into the Russian legal system in December 2011 by the Federal Constitutional Law no. 4-FKZ and the Federal Law no.422-FZ.

As a specialised court, the IP Court is expected to increase the efficiency of the intellectual property rights protection system in the Russian Federation, taking into account international standards.

Possible litigants in the IP Court
Depending on the parties involved, IP disputes have been (and still are) settled either in the courts ofgeneral jurisdiction or in state arbitration courts, which should not be confused with non-state arbitration, where cases are settled by agreement of the parties concerned.

Generally, private individuals who are not individual entrepreneurs, do not have the right to litigate in state arbitration courts. Companies and individual entrepreneurs cannot file civil lawsuits with the courts of general jurisdiction, unless the opposing party is also other than a private individual.

The IP Court is intended to function as a state arbitration court with jurisdiction to decide IP cases as the court of first instance, irrespective of whether private individuals or legal entities (individual entrepreneurs) are involved in the litigation. Some experts believe that the IP Court is in conflict with Russian legislation, as art. 126 and 127 of the RF Constitution strictly prescribe the separation of courts of general jurisdiction from arbitration courts.

First instance cases for the IP Court
The IP Court is authorised as the court of first instance to decide cases:
1. On contesting the legislative acts of federal executive officials (i.e. by-laws) dealing with a claimant’s IP rights and legal interests; and

2. on granting and withdrawing legal protection of intellectual property, (except for copyrights, allied rights and topographies of integral circuits as these items are protected without regard to state registration or any other activities of public officials) in particular, the cases aimed at

a. Contesting the non-legislative acts, resolutions and decisions of the Federal Intellectual Property Service (the Rospatent), the Ministry for Agriculture and state officials granting patents for secret inventions (e.g. resolutions on issuing patents);

b. Contesting the resolutions of the Federal Antimonopoly Service on unfair competition through acquiring rights to means of individualisation (e.g. trademarks);

c. Ascertaining patent owners;

d. Nullifying patents and agricultural patents, Rospatent’s decisions on trademarks and appellations of origin protection; and

e. Anticipatory termination of trademark protection due to disuse of trademark (removing it from the jurisdiction of Rospatent’s Chamber for Patents Disputes).

All other cases involving IP related disputes (IP rights violations by third parties, IP agreements, ascertaining authorship, copyrights and so on) shall be litigated and resolved by other Russian courts with jurisdiction as courts of first instance in such matters.

For instance, a conflict between companies in respect of a software license agreement should be settled only by regional state arbitration courts. In case the plaintiff and/or defendant are private persons, the litigation must be brought to a court of general jurisdiction.

Also a court of cassation in IPRs
Apart from being a court of first instance in IP protection cases, the IP Court will serve as a court of cassation in all IP rights protection cases adjudicated by other state arbitration courts: a cassation claim may be filed there only after it has been heard in a regional arbitration court as the court of first instance and in an arbitration court of appeal.

IP rights protection cases involving private individuals shall generally be heard in courts of general jurisdiction, except when they fall within the jurisdiction of the IP Court as the court of first instance.

Perhaps surprisingly, the IP Court will review cassation claims concerning its own decisions as court of first instance. Such claims will be filed with the IP Court’s presidium, composed of the IP Court’s chair, his/her deputies, the chairs of the judicial panels and divisions, as well as judges appointed by the Higher Arbitration Court.

To preserve the impartiality of its judicial decisions, the members of the presidium who heard the same case as judges in the court of first instance shall be removed from the panel of judges for those cassation hearings (art.43.7(5) of the Federal Constitution Law on Commercial Courts). The Higher Arbitration Court is the final instance for contesting all cassation decisions of the IP Court.

IP Court will consider options of IPT specialists
A panel of three professional judges shall settle both first instance and cassation claims according to the standard procedure of state arbitration litigations, taking into account the principles of publicity and adversarial nature of the trial.

It is worth noting that art.17(3) of the Arbitration Procedural Code (the APC) expressly prohibits commercial court assessors from participating. With extremely complex disputes, regional arbitration (commercial) courts sometimes call assessors who are experts in specific fields (finance, economics and/or management) to join panels.

On the other hand, the APC permits the calling of a ”specialist” to court hearings. Under art.87.1 of the APC, specialists with theoretical knowledge and practical experience relevant to that particular case may be called to give spoken advice and clarifications (without any preliminary expert studies of the case) to the judges. The parties are also allowed to ask questions.

The specialists should be distinguished from experts, who are persons with specific qualifications, and scientists who provide expert opinions and draft expert statements on certain matters. The specialists’ advice is expected to reflect their expertise, and to be concise, swift and economically efficient.

Only one IP Court
The judges shall be professional lawyers 30 years or older with at least 7 years of legal experience, and who meet certain other requirements. The IP Court shall be composed of no more than 30 judges.

There will apparently be only one IP Court in Russia deciding IP rights protection cases from all over the country. However, its location has not yet been determined. Justice Anton Ivanov, Chair of the Higher Arbitration Court, proposed that the IP Court be placed in the Skolkovo Innovation Centre in the suburbs of Moscow.

Existing commercial courts and courts of general jurisdiction shall continue hearing cases falling within the jurisdiction of the IP Court until it is officially established not later than on 1st of February 2013 and announced by the Higher Arbitration Court’s Plenum. An arbitration court or a court of general jurisdiction, which has IP cases pending that were brought to it before the establishment of the IP Court, shall finish hearing these cases even after the IP Court is established.

The establishment of the IP Court is undoubtedly a step forward in the reform of the Russian judicial system, and a forerunner of future changes which may require other judicial institutions with specific competencies. It might be that the new financial courts will soon be introduced to Russian Themis.