Introduction
The main types of intellectual property that are recognized and protected by Russian law include:
· trademarks
· copyright (including computer programs) and neighbouring rights
· patents
Trademarks
Principal Legislation: Laws and Normative Acts
Trademarks are subject to the following principal legal acts:
· The Civil Code;
· The Law On Trademarks; and
· Regulations of the Patent Office.
Concept of a Trademark
According to the Law On Trademarks, a trademark is a designation that distinguishes the goods and services of one economic entity from those of another. A trademark may take the form of a design, a symbol or a three-dimensional object, or a combination of these, and may be any colour or combination of colours.
The Law On Trademarks provides a list of designations that may not be registered as trademarks. These include state flags and emblems, the names of state and international organizations, official marks such as hallmarks or stamps of approval, generally used designations of particular kinds of goods, and generally accepted symbols and terms.
The owner of a trademark has an exclusive right to use and dispose of the trademark and to prohibit its use by others. Any manufacture, use, import, offer for sale, sale or other putting into commercial turnover or storage with a purpose to put into commercial turnover of a trademark, goods marked with the trademark or a designation confusingly similar to the trademark in respect of similar goods without the owner's consent is a violation of the exclusive right of the trademark owner. Goods bearing trademarks, which violate the exclusive right of a trademark owner, will be considered counterfeit and may be seized and destroyed pursuant to a court decision.
Trademark Criteria
To be registered as a trademark, a designation should not lead to confusion on the part of the public or be contrary to the public interest or principles of humanism or morality.
Designations that are identical to or confusingly similar to registered trademarks, well-known trademarks, names of characters or quotations from literature, science or art, names, pseudonyms or portraits of famous people may not be registered as trademarks.
Protection of Trademarks
Registration of Trademarks
According to the Law On Trademarks, protection is granted on the basis of registration. A trademark may be registered only by a legal entity or an individual entrepreneur registered as such with the tax authorities.
Trademarks are registered with the Patent Office, which issues a trademark certificate. The legislation sets out the procedure, fees and requisite documents for registration. Applications by foreign entities/foreign individuals must be submitted only through trademark attorneys registered with the Patent Office.
Priority is given from the date an application for registration is made, or an earlier date if the application was first made under the Paris Convention in another member state or the goods were first exhibited in a member state. The priority date may also be established according to the date of international registration under an international treaty of the Russian Federation.
Registration is a time-consuming process, which may take from 18 to 24 months to complete. The Patent Office will make an entry in the State Register of Trademarks and issue a certificate of registration. Information concerning the trademark is also published in the official bulletin of the Patent Office.
Time Period and Conditions of Protection
A trademark certificate is valid for ten years from the date of application. This term may be extended for another ten years upon application by the trademark owner in the last year of the ten-year period. Extension is subject to a fee and is reflected in the State Register and the certificate.
The registered trademark must be used. The use of the trademark is its application on goods or packaging either by the owner or a licensee. Protection may be revoked if the trademark was registered in the name of a person who is not an individual entrepreneur or in breach of trademark criteria or was not used in the Russian Federation during the previous three years.
Troubleshooting
If the rights of a trademark owner are infringed, he may apply to the Chamber for Patent Disputes of the Patent Office or to an arbitrazhniy (commercial)court.
The registration of a trademark may be challenged by application to the Chamber for Patent Disputes of the Patent Office. If the trademark was registered, for example, in the name of an individual who is not an entrepreneur or the trademark is not used, the Chamber for Patent Disputes may consider the registration void.
Disputes regarding violation of rights of a trademark owner or relating to licensing or assignment agreements fall within the jurisdiction of state arbitrazhniy (commercial) courts.
Remedies available to the owner of a trademark include suing for damages and/or obtaining injunctions against the infringer requiring the infringer to delete the trademark from goods or to destroy a designation, or goods bearing a designation which is confusingly similar to the trademark. Alternatively, instead of claiming for damages the owner of a trademark may claim for a fixed amount of compensation ranging from US $3,400 to US $170,000 (being correspondingly 1,000 times and 50,000 times the statutory minimum monthly wage, which on 1 January 2004 was 100 Rubles or US $3.4).
The owner of the trademark may also apply to the Ministry of Anti-Monopoly Policy with a request to delete a particular designation that is so confusingly similar to a registered trademark that competition would be affected and consumers confused.
Trademark owners may also apply to the police with a request to open a criminal case against an infringer. According to the Criminal Code of the Russian Federation, an individual who intentionally repeatedly and illegally uses a registered trademark may be fined up to US$ 6,800, fined an amount equal to his income for a period of up to eighteen months, or subjected to mandatory works for a period from 180 to 240 hours, or be sentenced to up to two years of hard labour.
Foreign companies may also request to the customs authorities to prevent the import of goods having a designation infringing the rights of a trademark owner.
Assignment, Licences, Need to Register
Trademarks may be assigned and the right to use the trademark may be licensed to a third party. Both an assignment agreement and a licence agreement must be made in writing and must be registered with the Patent Office. Failure to register renders these agreements void.
Copyright and Neighbouring Rights
Principal Legislation: Laws and Normative Acts
The principal laws governing copyright and neighbouring rights are:
· The Civil Code
· The Fundamentals of the Civil Legislation (Part IV of the Civil Code of the RF governing the IP rights is expected to be submitted to the Russian Parliament for consideration this year, replacing the Fundamentals of the Civil Legislation)
· The Law On Copyright and Neighbouring Rights
· The Law On the Legal Protection of Computer Programs and Databases
Concept of Copyright
Copyright protection is granted to a work which is the product of creative activity and which is expressed in any material form. Such works include literary, dramatic, musical, choreographic and audio-visual works, sculptures, designs, photography and computer programs. Copyright protection does not apply to ideas, methods, concepts, principles, discoveries, facts, official documents, state symbols and information on events.
Rights of the Author Which May and May Not Be Assigned
The author is entitled to:
· be recognized as the author of the work
· protect his name as the author
· preserve the integrity of the work
· publish and use the work
· access the work
These rights are not transferable and rest with the author even if other exclusive rights, such as, for example, the right to reproduce, distribute, import, demonstrate, communicate, translate and redraft the work, are assigned to other people.
The author is entitled to receive remuneration from the use of his work by other people. There are very limited circumstances where the protected work may be used without permission of the copyright owner and without remuneration.
Concept of Neighbouring Rights
Neighbouring rights belong to performers. According to the Law On Copyright, a performer is an actor, singer, musician, dancer or other person who performs the work in any way including a director of a film and a conductor.
No Registration, By Act of Creation
Copyright protection is granted by virtue of creation. No registration or other special procedure is required.
Time Period for Protection
As a general rule, copyright is valid during the lifetime of the author and for 50 years after his death. Some rights of the author, such as a right to be recognized as the author, are protected with no time limit.
Troubleshooting
According to reservations made by Russia on joining international conventions, protection under international treaties is granted for works first published after Russia joined those conventions.
With regard to copyright, the earliest date for granting protection is 27 May 1973, when the Universal Convention on Copyright became effective for the Soviet Union. Any work first published before this date in any other member state of the convention was not protected in the Soviet Union and is not protected in Russia. In addition, works first published later but in a country that is not a member of the Universal Convention are not protected either.
In order to protect their rights, payment of copyright owners may apply to the courts, to arbitration and to the police. Remedies available to the owners include the recognition of their rights and compensation for damage. Counterfeit goods and equipment for the manufacture of counterfeit goods may be seized and destroyed in accordance with a court decision.
Upon filing an application to the court, copyright owners are also entitled to obtain an injunction to prevent counterfeiting activities of an infringer and to seize counterfeit goods and equipment for their manufacture.
An infringement of copyright also constitutes a criminal offence, which may be investigated by the police. Under the Russian Criminal Code (Criminal Code) an individual who intentionally infringes an author's intellectual property rights and purchases, stores and/or transports counterfeit works may be fined up to US $6,800, fined an amount equal to his income for a period of eighteen months, be subjected to mandatory works for a period from 180 to 240 hours, or be imprisoned for a period of up to two years. Plagiarism is also considered a criminal offence under the Criminal Code which stipulates that an individual who intentionally uses someone else's works may be fined up to US $6,800, fined an amount equal to his income for a period of eighteen months, be subjected to mandatory works for a period from 180 to 240 hours, or be sentenced to hard labour for a period from three to six months.
Infringers of an author's intellectual property rights, the intentional and illegal purchase, storage and transportation of counterfeit products with a value exceeding US $8,500 or infringement by a group of people or by an official are punishable with imprisonment ofup to five years and a fine of up to US $17,000 or an amount equal to the infringer's income for a period of up to three years.
Patents
Principal Legislation: Laws and Normative Acts
The principal laws regulating patents are:
· The Civil Code
· The Patent Law
· The Regulations of the Patent Office
Concept of a Patent
A patent may be granted for:
· an invention
· a utility model
· an industrial design
A patent holder has exclusive rights to use an invention, utility model or industrial design, and to prohibit their use by others.
A patent holder may assign their rights or licence the patent by way of a licence agreement to third parties. Such assignment and licence agreements must be registered with the Patent Office and failure to register will render a licence agreement and assignment agreement invalid.
Patent Criteria
In order to qualify for protection by patent, an invention must be new, have an element of invention and be capable of industrial application. A utility model to qualify for the same must be new and be ready for an industrial use. An industrial design, to be registered must be new and original.
Registration
Patents must be registered with the Patent Office. The registration and issuing of patents involves application, expert examination and publication of information about the patent. The Patent Office sets out the rules for application.
The priority date is the date of application for registration or an earlier date if the application was first made under the Paris Convention.
Time Period of Protection
Protection is granted for a period of 20 years for an invention, five years for a utility model and ten years for an industrial design. The protection period can be extended by the Patent Office upon application of a patent holder for up to five years for an invention industrial design and up to three years for a utility model.
Troubleshooting
If the rights of the patent holder are infringed he may apply to the Chamber for Patent Disputes of the Patent Office, to courts, or to arbitration.
The registration of a patent may be challenged by application to the Chamber for Patent Disputes of the Patent Office.
Disputes regarding violation of exclusive rights of the patent holder or relating to licensing and assignment agreements as well as the illegal use of the patent fall within the jurisdiction of courts of common jurisdiction if one of the parties is an individual, or the state arbitrazhniy courts if all parties are legal entities, or individual entrepreneur.
The Patent holder is entitled to injunctive relief, compensation for damages caused by illegal use of the patent. Infringement of a patent also constitutes a criminal offence within the jurisdiction of the police. Under the Russian Criminal Code an individual who intentionally and illegally uses or discloses (prior to official publication) a patented invention, a utility model or an industrial design may either have to pay a fine of up to US $6,800, a fine of an amount equal to his income for a period of up to eighteen months, or be subjected to mandatory works for a period from 180 to 240 hours, or be imprisoned for a period of up to two years.
Infringement by a group of people is punishable either by a fine of between US $3,400 and US $10,200, a fine of an amount equal to the infringer's income for a period of between one and two years, or be arrested for a period from four to six months, or with imprisonment for up to five years.
International Treaties: Russia as Legal Successor to the Soviet Union
Russia is a member of the World Organisation of Intellectual Property. As legal successor to the Soviet Union, Russia is also party to a number of international treaties including the Paris Convention for the Protection of Intellectual Property (1883), the Geneva Convention for the Protection of Phonograms (1971), the Madrid Agreement for the International Registration of Marks (1891), the Universal Copyright Convention (1952), and the Treaty on Patent Cooperation (1970). On 3 March 1995 Russia became a full member of the Berne Convention.
Russia is also party to a number of bilateral agreements on the protection of intellectual property – for example, with Austria, Bulgaria, Sweden and Slovakia. Bilateral agreements extend protection to works published both before and after the signature date. Finally, in 1993 Russia and other CIS countries signed the Agreement on Measures for Protection of Intellectual Property and the Agreement on Cooperation in the Sphere of Copyright Protection.
E-Commerce
Lack of Regulation
The legal regulation and enforcement of the Internet in Russia is an area that is only now starting to be developed and thus court practice remains undeveloped and somewhat contradictory. For example, registration of domain names is not regulated by any legal act of government or parliament, nor has the legal status of domain names been clearly defined by the courts.
The registration of domain names is carried out by the Russian Institute for Public Networks, a non-commercial partnership established by the Ministry of Science, the Ministry of University Education and the Scientific Research Institute named after Academic Kurchatov. It is responsible for the development of the Russian zone on the Internet. This authority was delegated to the Russian Institute for Public Networks by the International Network Information Centre (InterNIC).
Squatting, Piracy, Domain Names and IP Rights
Prior to 1 June 2000 the registration of domain names was a low cost procedure. Any person willing to register a domain name simply applied to the Russian Institute for Public Networks and had to pay a registration fee within three months of registration. Maintenance of the registration was also subject to a nominal annual fee. Failure to pay the fee did not prevent the person from applying for registration of the same domain name again. This led to a rush of cyber-squatting activity.
Of growing concern is copyright protection on the Internet. Russian law does not provide clear guidance as to what remedies may be available to a copyright owner when his rights are infringed by a site operator. The owner of the copyright might find limited comfort in the Copyright Law, which prohibits unauthorized communication of copyright-protected works by means of cable or wire transfer and other analogous means, or unauthorized distribution by means of copying and distribution of copies of the work by any means.
To register a domain name, an applicant must pay a registration fee of US $20 (VAT excluded) and an annual registration maintenance fee of US $15.
Domain names are divided into the categories of geographical and generic (for example, ac.ru, org.ru, net.ru), public (those that are not geographical or generic) and corporate (all other domain names).
The Rules for Resolving Disputes Over Domain Names were developed on the basis of the Uniform Domain Name Dispute Resolution Policy recommended by WIPO and accepted by ICANN. The Rules provide protection for trademark owners against owners of domain names that infringe the intellectual property rights of trademark owners.
According to the Rules, the registration of a domain name should be cancelled if it is proved that the domain name (i) is identical or confusingly similar to a trademark, and (ii) was registered or used in bad faith. A domain name is deemed to be registered or used in bad faith if it was registered or used (i) mainly with the purpose of a later assignment to the trademark owner for a remuneration considerably exceeding the cost of registration, (ii) to prevent the trademark owner from registering the domain name, (iii) to obstruct the activities of the trademark owner as a competitor of the domain name owner, or (iv) in commercial interest and with an intention to attract third parties to the Internet resources of the domain name owner thus creating a possibility that the trademark will be considered by third parties as having a connection with the domain name holder.
Although the Rules that apply to disputes considered by an arbitration forum at the Russian Institute for Public Networks do not provide for compensation for damages they do leave open the possibility to apply to state courts for an award of damages.
Contracts via the Internet: Legislation on Electronic Signatures
The regulatory framework for e-commerce is only now emerging in Russia only the Law on Electronic Signatures has been adopted so far. A number of other drafts exist and some of them are presently at committee stage in the Russian parliament.
There are drafts of the Law On Electronic Commerce, the Law On Electronic Documents and the Law on Electronic Financial Services. There is even a proposed draft of a federal programme on e-commerce.
The first step in developing e-commerce was the adoption of the Law on Electronic Signatures, which came into force on 12 January 2002.
The Law On Electronic Signatures defines an electronic digital signature as a cryptographic symbol that depends on public key cryptography technology to decode it. The cryptography is the exclusive public domain of the Federal Agency of Governmental Communication and Information (FAPSI), which allows additional state control over the electronic transactions.
A draft of the Law on Electronic Commerce was passed by the Russian State Duma (the lower chamber of the Russian Parliament) in its first hearing on 6 June 2001. The draft law is designed to establish procedures for electronic transactions. It has yet to be passed in a further two hearings, adopted by the Federation Council and signed into law by the President.
At present there is no sub-regulation applicable to electronic contracts, which would recognize electronic transactions.
Taxation of Purchases Made Through the Internet
Purchases of goods transferable through the Internet are not taxed as a means for tracking such purchases and assessing taxes does not presently exist. If goods are bought through the Internet and then delivered to customer in a material form, they would be subject to all existing Russian taxes and customs duties.
For further information please contact David Griston at: david.griston@cms-cmck.com
