IP Law in Russia

Intellectual Property:

1 Intellectual Property Law;
Under what legislation are intellectual property rights granted? Are there restrictions on how IP rights may be exercised, licensed or transferred? Dothe rights exceed the minimum required by the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs)?

The Fourth Part of the Civil Code has formed the framework IP actin the Russian Federation since 1 January 2008. All the fundamental IP rights are set forth in this Federal Law. Additionally, IP rights are regulated by the following: the Civil Code (parts I, II, III), the Code of Administrative Offences, the Customs Code, the Criminal Code and the Competition Protection Act. The TRIPs minimum protection is generally maintained in the Russian Federation. However some discrepancies still exist and these should be modified where there is any conflict of laws.

2 Responsible authorities
Which authorities are responsible for administering IP legislation?

The authority responsible for administering IP legislation is the Federal Service for Intellectual Property, Patents and Trademarks (Rospatent), according to Government Regulation No. 299 of 16 June 2004. It provides expert advice regarding an application for state registration of IP, and also handles the registration itself, and the accreditation and the registration of patents advisers. The main authorities responsible for information technologies are the Ministry of Communications, the Federal Service for Supervision in the Area of Mass Communications and the Federal Agency of Information Technologies. Copyright and related rights are overseen by the Ministry of Culture and the Federal Service for Supervision over Legality in the Domain of Cultural Heritage. The main authority responsible for competition law is the Federal Antimonopoly Service.

3 Proceedings to enforce I P rights
What types of legal or administrative proceedings are available for enforcing IP rights?

There is a wide range of means for the protection of IP rights, including customs control, investigative work by law enforcement agencies, the judicial procedure in civil proceedings, administrative measures, criminal law sanctions, etc.

4 Remedies
What remedies are available to a party whose IP rights have been infringed?

The ways of protecting of IP rights are the following:

• recognition of the right: to a person that denies or otherwise does not recognise the right and by doing so violates the interests of the right holder;
• stopping acts that infringe or threaten to infringe IP rights;
• payment of damages by a person that has illegally used IP rights without concluding an agreement with the right holder (use without a contract) or otherwise has violated the right holder’s exclusive right and inflicted a damage thereto;
• seizure of infringing material in accordance with article 1252(5) of the Russian Civil Code: from its manufacturer, importer, keeper, carrier, seller, another distributor or non-bona fide acquirer;
• publication of a court’s decision against a violator of the exclusive right on the infringement committed with reference to the actual right holder.

5 IP legislation and competition
Does IP legislation make any specific mention of competition or contain provisions on the anti-competitive or similar abuse of IP rights?

IP legislation contains several references to the legislation regulating competition, relating to those situations when the infringements of IP rights are at the same time recognised as the acts of unfair competition. For example, under article 1512, part 2 of the Civil Code, the grant of legal protection of the IP right may be recognised as invalid completely or partly during the total period of such protection if the actions of the right holder are qualified as an abuse of that right or an act of unfair
competition.

6 Remedies for deceptive practices
With respect to trademarks, do competition or consumer protection laws provide remedies for deceptive practices in addition to traditional ‘passing off’ or trademark infringement cases?

The Federal Law on protection of competition No. 135-FZ (26 July 2006, last amended 17 July 2009) (the Competition Law) provides remedies for deceptive practices concerning trademarks. The Administrative Offences Code and the Criminal Code of the Russian Federation outline the sanctions available for a breach of unfair competition: imposing fines on office holders and legal entities, disqualification from office for up to three years, compulsory community service, correctional labour and incarceration.

7 Technological protection measures and digital rights management
With respect to copyright protection, is WIPO protection of technological protection measures and digital rights management enforced in your jurisdiction? Does legislation or case law limit the ability of manufacturers to incorporate TPM or DRM protection limiting the platforms on which content can be played? Could TPM or DRM protection be challenged under the competition laws?

The Russian Federation is not a party to the WIPO Performances and Phonograms Treaty (WPPT) or the WIPO Copyright Treaty (WCT). Nevertheless, Russian legislation grants protection measures and DRM is highly enforced in Russia. According to article 1261 of the Civil Code, copyrights for any types of computer program (including operational systems and software suites) that may be expressed in any language and in any form, including the initial text and compiled
code are protected in the same way as copyrights in literary works.

The following is prohibited in respect of a work:
• the commission of acts without the permission of the author or other right holder aimed at circumventing TPMs intended for copyright protection; and
• manufacturing, distributing, hiring out, granting for temporary free-of-charge use, importing and advertising any technology, any technical apparatus or components thereof, using such technical facilities for profit-making or providing related services, if such actions make it impossible to use the TPMs intended for copyright protection or to disable them.
In the event of a breach of the provisions regarding TPMs intended for copyright protection the author or other right holder may claim a payment of damages or compensation at his or her discretion from the infringer. Besides that, the infringement of the TPM or DRM, may incur civil or administrative liability or even criminal prosecution.

8 Industry standards
What consideration has been given in legislation or case law to the impact of the adoption of proprietary technologies in industry standards?

The law is silent in this regard.

Competition

9 Competition legislation
What legislation sets out competition law?

The basic legal act regulating competition is the Competition Law. It contains all the antitrust provisions relating to entities operating on the market, provides different forms of liability for violating them and sets out the procedure of investigation of cases by the Federal Antitrust Service (FAS). Additionally, the Federal Law on Natural Monopolies, No. 147- FZ of 17 August 1995, last amended 25 December 2008 contains an exhaustive list of markets regarded as naturally monopolised (eg, oil and gas transportation, communications, rail transportation). The law contains additions to the general restrictions found in the Competition Law (such as price fixing).

10 IP rights in competition legislation
Does the competition legislation make specific mention of IP rights?

Yes, the Competition Law provides special provisions regarding IP rights. In particular article 14(4) prescribes the following acts of unfair competition: sale, exchange or other circulation of goods that involve the illegal use of the results of intellectual activity and equalised to them by means of individualisation of a legal person, means of individualisation of production, works, and services. Also the law prescribes that the unfair competition is equally illegal if related to the acquisition or use of IP rights.

11 Review and investigation of competitive effect
Which authorities may review or investigate the competitive effect of conduct related to IP rights?

The main authority responsible for investigating the competitive effect of conduct in Russia is the Federal Antimonopoly Service. This body has responsibility for:
• controlling compliance with the antimonopoly legislation;
• initiating and examining violations of anti-monopoly law;
• issuing binding determinations on economic entities;
• bringing commercial organisations to account for violation of the anti-monopoly legislation;
• applying to the arbitration court with claims and applications concerning violations of the anti-monopoly legislation; etc.

12 Competition-related remedies for private parties
Do private parties have competition-related remedies if they suffer harm from the exercise, licensing or transfer of IP rights?

Private parties can apply to the governmental authorities in such cases provided that they can prove harm.

13 Competition guidelines
Has the competition authority issued guidelines or other statements regarding the overlap of competition law and IP?

In special cases, the FAS can enact guidelines together with the responsible authority. One recent order that was adopted by the FAS, together with the Ministry of Justice, the Ministry of Public Health and Social Development, the Ministry of Culture, the Ministry of Education and Science, the Ministry of Finance and the Ministry of Economic Development and Trade, was the statute regarding the interagency commission on issues relating to the name ‘Russia’, ‘Russian Federation’ in the name of organisations.

14 Exemptions from competition law
Are there aspects or uses of IP rights that are specifically exempt from the application of competition law?

Yes, article 10 of the Competition Law (prohibition of abuse of dominant position by an economic entity) provides exemption from the general requirements. According to this exemption, actions on the implementation of exclusive rights for the results of intellectual activity and equalised to them by means of individualisation of a legal person, means of individualisation of production, executed
works or rendered services are not subject to the requirements of article 10. These rights constitute so-called private-law monopoly of the individuals or legal entities and thereby circumscribe economic competition in the sphere of these rights.

15 Copyright exhaustion
Does your jurisdiction have a doctrine of, or akin to, ‘copyright exhaustion’ (EU) or ‘first sale’ (US)? If so, how does that doctrine interact with competition laws, for example with regard to efforts to contract out of the doctrine, to control pricing of products sold downstream and to prevent ‘grey marketing’?

Yes, such a doctrine is used in Russian IP law. Accordingly, the owner may benefit from the first sale of an item of IP (eg, trademarks, copyrights (except for the resale royalty), the rights in phonograms, in industrial property, in achievements in breeding and in integrated circuit layouts). The exclusive pecuniary IP rights related to this item are considered to be exhausted after the IP items are put into circulation by or with the consent of the owner. Russian legislation contains no legal definition of ‘grey marketing’. However, it should be mentioned that according to the Competition Law, any agreement providing for the territorial division of markets shall be considered anti-competitive.

16 Import control
To what extent can an IP rights holder prevent ‘grey-market’ or unauthorised importation or distribution of its products?

The holder of exclusive or shared IP rights to the products protected by copyright or of the rights to the brand names or trademarks, as well as the holder of a franchise to import the goods subject to a protected designation of origin can file an application with the custom authorities. The customs authorities will undertake requisite measures for suspending the release of such goods Besides that, the rights holder can also rely on the measures mentioned in question 4 to protect IP rights.

17 Competent authority jurisdiction
Are there circumstances in which the competition authority may have its jurisdiction ousted by, or will defer to, an IP-related authority, or vice versa?

Yes, in certain cases the competition authority may assert jurisdiction in matters normally handled by the intellectual property authorities. For example the FAS may order Rospatent to find a certificate for a trademark invalid in case if such trademark contravenes the Competition Law.

Merger review
18 Powers of competition authority
Does the competition authority have the same powers with respect to reviewing mergers involving IP rights as it does with respect to any other merger?

Yes, the FAS may review all mergers caught by the Competition Law. The fact that IP rights are relevant in one or all of the merging companies does not influence the situation.

19 Analysis of the competitive impact of a merger involving I P rights
Does the competition authority’s analysis of the competitive impact of a merger involving IP rights differ from a traditional analysis in which IP rights are not involved? If so, how?

No, the rules are the same.

20 Challenge of a merger
In what circumstances might the competition authority challenge a merger involving the transfer or concentration of IP rights?

The FAS may file a lawsuit to the court regarding liquidation or reorganisation by way of separation or divestment if the merger of the companies was not preliminarily approved by the anti-monopoly body and led or could lead to restriction of competition, including those that result in the emergence or strengthening of a dominant position.

21 Remedies to alleviate anti-competitive effect
What remedies are available to alleviate the anti-competitive effect of a merger involving IP rights?

As it was mentioned in question 20, the FAS may apply for the division of a newly established entity into several entities or its liquidation to the court in such circumstances. Such remedies are available where the subsequent notification or preliminary application for approval of a merger has not been effected by the interested persons, thus violating the Competition Law . Also, the FAS can instruct parties to conclude agreements and share industrial property rights or alter or restrict the use of the firm name. It should be noted that these instructions are mandatory and are backed up by the threat of fines and disqualification.

Specific competition law violations

22 Conspiracy
Describe how the exercise, licensing, or transfer of IP rights can relate to cartel or conspiracy conduct.

Vertical agreements restraining competition and concerted actions for the same purpose, including those related to IP rights, are also prohibited as anti-competitive agreements (for participants with more than a 20 per cent market share). Vertical franchise agreements are excluded from the legislation. With regard to horizontal agreements, special regulations exist in relation to organisations for management of copyright and related rights. The management of such IP rights may be transferred to these organisations under special agreements wherein they acquire the right to grant licences and to collect royalties; collected payments are then transferred to the right owners after the organisation has deducted its remuneration. Such organisations are only immune from antitrust regulations when they obtain state accreditation. Patent pools and standard-setting bodies are subject to general competition restrictions. Thus, the patent pools shall not, for example, consolidate exclusive competing IP rights, and private standardsetting bodies shall not, by establishing standards, infringe on the freedom to enter the market. Even those associations that prima facie comply with the antitrust regulations could be challenged by the FAS and must show that their activities do not harm competition.

23 (Resale) price maintenance
Describe how the exercise, licensing, or transfer of IP rights can relate to (resale) price maintenance.

According to the Competition Law, agreements containing provisions regarding resale price recommendations are null and void.

24 Exclusive dealing, tying and leveraging
Describe how the exercise, licensing, or transfer of IP rights can relate to exclusive dealing, tying and leveraging.

Under the Competition Law, tying and leveraging are prohibited only if they amount to an abuse of a dominant position. As has been mentioned before, such restrictions are not applicable to the IP rights themselves. At the same time, the Consumer Protection Act prohibits tying (in particular related to IP rights) in relation to consumers.

25 Abuse of dominance
Describe how the exercise, licensing, or transfer of IP rights can relate to abuse of dominance.

The Competition Law’s prohibition on the abuse of dominance does
not apply to IP rights.

26 Refusal to deal and essential facilities
Describe how the exercise, licensing, or transfer of IP rights can relate to refusal to deal and refusal to grant access to essential facilities.

Mandatory licensing is provided as a possible remedy in case of refusal to deal and refusal to grant access to essential facilities.

Remedies
27 Remedies for violations of competition law involving I P
What sanctions or remedies can the competition authority or courts impose for violations of competition law involving IP?

Fines, damages awards, compulsory licensing and divestiture of IP rights and even the break up of business entities can be imposed for violation of the Competition Law. If a legal entity infringes several times or blatantly the exclusive rights that result from an intellectual activity or a means of individualisation, the court may take a decision on liquidating the legal entity on the demand of FAS. If such infringements are committed by a citizen, his or her activity as an individual entrepreneur may be terminated by a court’s decision or judgment in the procedure established by law.

28 Competition law remedies specific to I P
Do special remedies exist under your competition laws that are specific to IP matters?

Yes, Rospatent can annul the registration of the trademark on the demand of the FAS where such trademark breaches the competition legislation.

29 Remedies and sanctions
What competition remedies or sanctions have been imposed in the IP context?

For breach of the anti-monopoly rules, the FAS can instruct:
• the firm not to use the trademark of any third parties and impose an administrative fine;
• the annulment (by Rospatent) of the trademark registration; or
• the firm to change the firm name.

30 Scrutiny of settlement agreements
How will a settlement agreement terminating an IP infringement dispute be scrutinised from a competition perspective?

The Competition Law proscribes agreements restraining competition. Where such agreements are concluded, the FAS can file a suit to the court declaring such agreements as limiting competition and thus void.

Economics and application of competition law
31 Economics
What role has economics played in the application of competition law to cases involving IP rights?

Economics plays a key role in competition law. The FAS thoroughly analyses the market while examining cases of economic concentration.

32 Recent cases
Have there been any recent high-profile cases dealing with the intersection of competition law and IP rights?

There are lots of cases involving unlawful use of competitor’s trade names. For example, one of the most recent cases was connected with unauthorised use of a company’s trade name in the promotion activities of its competitor. The Russian subsidiary of the well-known company Danone has used the following slogan: ‘Don’t trust Chudo [the Russian word for ‘magic’], drink Danone!’ The word ‘Chudo’ is a registered trade name of a competitor company Wimm Bill Dann (WBD), therefore, WBD filed a claim with the FAS for breach of antimonopoly law by its competitor and was successful.