Russia


Vladimir Biriulin of Gorodissky & Partners reveals how intellectual property rights owners can, and are, fighting copycats online in Russia

The internet is gaining popularity in vast strides. In Moscow alone, more than 80 percent of inhabitants use it daily. Public polls conducted in October 2014 showed that 66 percent of Russians are using the internet, and almost 50 percent of them use it daily. Almost 90 percent of young people, from the ages of 12 to 17, also use it daily. These figures not only show use but underline buying capability, too. The internet is one of the main sources of consumer goods.

The volume of internet trade in Russia in 2014 grew 31 percent in comparison with 2013. Given the popularity of the internet trade, its economic efficiency and convenience for buyers, it is not surprising that this channel may be hijacked by counterfeiters or their agents to sell fake goods to consumers. The nature of the internet makes it easier for counterfeiters to trade in fake goods, when compared to selling over the counter.

As a result, it is of paramount importance to work out procedures for fighting intellectual property rights infringement on the internet. To do so, it is necessary to understand who the infringers are, what kind of goods they offer, where they are located, and more.

Copyright capers

Copyright is particularly susceptible to infringement, and Torrent trackers are among the main channels of distribution of protected content. To deal with this kind of infringement, copyright friendly amendments were made to Russian law in 2013. They allowed copyright owners of movies, through an injunction, to block access to sites that distribute unauthorised copies of movies.

Late in 2014, President Vladimir Putin signed a law that extended the scope of those amendments to sites distributing music, books and computer software. That law comes into effect on 1 May 2015, and it will greatly enhance copyright protection in Russia.

Indeed, the improved law has already shown its efficiency. Aside from closing down many sites allowing illegal downloading of protected content, there has already been a criminal case involving a Russian infringer. He created a Torrent tracker and offered movies owned by Russian and foreign companies. Any person could download movies using that tracker. The activities of the infringer culminated in a criminal sentence.

Cybersquatters suffer

Another kind of infringing activity that has been widely used in Russia was the registration of domain names that reproduced trademarks owned by others. These were mostly Russian infringers who often engaged in this activity for the purpose of selling a domain name to the trademark owner. That business developed with mixed success—some trademark owners preferred to buy the domains, while others chose to fight. Another version of this type of infringement sees cybersquatters registering a domain name that reproduces a known trademark. When the user enters the site, he or she is automatically diverted to another site offering the cybersquatter’s goods. Unsuspecting users believe that the products offered for sale belong to the owner of the trademark and fall for the trap.

As courts gained more experience in dealing with pirate registrations, this unlawful activity tapered off to a large extent. Judicial practice also shifted towards better protection of trademark rights when a similar or identical domain name was registered. Pirate registrations have not stopped since, but they have decreased in scope.

Pirate domain name registrations in international zones such as .com and .org can be dealt with through the Uniform Dispute Resolution Policy (UDRP) procedure, while those in the national .ru and .su zones may be cancelled through a regular court procedure.

Trademark abuse

Cases involving trademarks on the internet are not infrequent. A curious case of this kind was a suit filed in court by a Russian company, Elite, against another Russian company, Home Products, and service providers Yandex and Google. The plaintiff accused the respondent of the unauthorised use of the trademark ‘Madam Moo’. The respondent bought and used the ‘Moo’ part of the trademark as a sponsored search engine keyword.

The court, however, did not recognise infringement in using the trademark as a keyword. It stated that the respondent did not use the word to identify the goods, and the use of a trademark for a purpose other than the indication of goods and services does not constitute infringement. Though formally correct, the judgement of the court raises questions. The words ‘Madam Moo’ are used by the trademark owner on the internet to help consumers find its goods.

The same keywords are used by the respondent for the same purpose, and even though the words used by the respondent do not identify the goods proper, the use of those words side by side causes confusion among the consumers.

Another case with a more positive outcome concerned the use of a trademark by another person as a meta tag, which are employed in HTML code to provide information about websites. Electric Communications Engineers (ECE), owner of the trademark ‘Expro’ for electrical equipment, sued STP, a US automotive performance company, seeking to recognise STP as an infringer of the trademark ‘Expro’. The court looked into the core of the problem and asked whether the use of the designation as HTML code causes confusion among consumers.

ECE argued that when the trademark ‘Expro’ is entered into a search engine, the results of the search lead to the site of the respondent dealing in the same electrical equipment. STP in turn argued that it did not use the designation ‘Expro’ to identify the goods. STP also argued that the trademark ‘Expro’ did not cover computer programs, so any use of the designation as part of software code cannot be regarded as infringement.

The court found that STP used a designation confusingly similar to ECE’s trademark (the respondent used a capital ‘P’ in its adoption of the word, ‘ExPro’). As a result, the court ruled in favor of ECE and banned STP’s use of the trademark ‘Expro’ as a meta tag. While making this judgment, the court, among other arguments, invoked a provision of the Civil Code to the effect that “not allowed are actions of individuals and legal persons aimed at causing harm to other persons”.

One problem that can arise when dealing with domain name infringers is identifying who they are. Several years ago, a law on the protection of personal data was adopted in Russia.

According to the law, personal data includes any information relating to a person, including his or her name, surname, residential address, and more. That information may be disclosed on the basis of written consent. This limitation makes it difficult for a rights owner to find out information about an owner of a domain name. When any action is sought by the rights owner, an advocatory inquiry is needed.

If this inquiry is made in connection with the investigation of the alleged infringement, registrars will impart that information to the registered attorney at law.

Fake followers

There are many goods, original and counterfeit, sold through the internet. There are many internet shops that offer all kinds of goods. This flow of goods may be divided in two streams: goods manufactured in Russia and those manufactured outside of Russia and imported into the country. Accordingly, the ways of tackling counterfeit goods that are offered for sale online are different.

It should first be noted that there are internet shops in Russia that respect IP rights. If an owner discovers counterfeit goods and informs the internet shop, most will immediately remove the notice of sale for such goods. These shops in Russia include molotok.ru, avito.ru, ozon.ru and others.

If counterfeit goods offered on the internet are manufactured in Russia, the rights owner should organise a notarial attestation of the relevant site and send a warning letter. The online shop will likely remove the counterfeit goods from sale.

But if it doesn’t, the rights owner may initiate a court action against the owner of the shop. It may be wise to engage a detective to trace back the counterfeit goods to their source.

If and when the manufacturing facility is found, a complaint to the police may be lodged. The police will organise a raid and stop production. The production of fake goods is often clandestine and the people making the counterfeit goods are illegal immigrants. Such actions lead to closing the manufacturing facilities and to criminal cases against the employers of illegal workers.

Another issue worth mentioning in this context is the responsibility of ISPs. They are not directly involved in advertising or distributing counterfeit goods, however, they participate in the process circumstantially. There is no special regulation of this matter and Russian courts have not yet come to unified practice in this regard. There was a court case in which the court ruled that that the service provided ensured only technical support to subscribers.

There was another case, though, where the court of the first instance dismissed the claims against the ISP while the appeals court ruled that the ISP should remove or block access to the site. Given that there is a possibility that the ISP will be held liable for circumstantial infringement of this kind, it is advisable to send a warning letters wherever possible.

If the goods offered on the internet are imported and the rights owner finds that they are counterfeit, it would be well advised to enter a trademark or copyright subject matter into the customs register. Customs in Russia is a very efficient enforcement body. Barring outright smuggling, which may be overlooked, customs will detain any suspicious goods.

If a trademark or copyright is entered in the register, customs will detain counterfeit goods for 10 days, with the possibility of an extension, allowing the rights owner to initiate a civil court action, or customs to initiate an administrative court action.

If the IP is not included in the register, customs may all the same detain the counterfeit goods ex officio, although for seven days with a possible 10-day extension.

Patents cannot be included in the customs register, though customs do look at the requests of patent owners looking to block infringing goods from entering Russia.

In this case however, it is important for the patent owner to know and inform customs of the particular checkpoints where the entry of infringing goods are expected.

This is not an obligation but the good will of the customs officers who are ready to help in these sorts of situations.

It should be noted that together with the development of internet law, enforcement bodies are gradually improving their handling of internet trade and any resulting infringement.

At the same time, not all of the difficulties have been overcome, mainly because the internet does not recognise national borders, and so national regulations in one country cannot fully solve the problems due to the internet’s cross-border nature.

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