In December 2010 a substantial number of proposed amendments to Part 4 of the Russian Civil Code were introduced by the Council on enhancement and codification of civil legislation under Russia’s President. The idea was to implement the concept of enhancing Part 4 of the Civil Code that was published by the same institution in May 2009.
Among other things, the project implicitly addressed to the issue of parallel imports. Many still recall that after the notorious Porsche Cayenne case resolved in February 2009 (when the issue of administrative liability of parallel importers was under consideration) a number of controversial cases with regard to civil liability of parallel importers followed. Recent cases on parallel imports are still contradictive: in some cases parallel importers were found civilly liable (for example – in the case Heineken vs. Elitvoda ru, resolved on March 16, 2011 by the Federal Arbitrazh court of Moscow region), in some cases – they were not (cases Diageo vs. DA-LINK, Diageo vs. Alion, etc.). In the latter cases the court decided that the importer had not breached any trademark rights because the imports were original goods; therefore, they were not deemed to be counterfeit under the terms of Russian IP law.
It seems that authors of the amendments tend to support official importers and to outlaw unofficial dealers. It is proposed to change the wording of the relevant article of the Russian Civil Code emphasizing that counterfeit may be not only faked goods unlawfully labeled with trademarks, but also original goods labeled with trademarks which are unlawfully used. It is presumed that the import of original goods not authorized by the right holder is unlawful due to the national principle of exhaustion of rights to trademarks. It should be noted that since the relevant agreement between Russia, Belarus and Kazakhstan as members of the Customs Union (signed by all parties on December 9, 2010) will be ratified by these countries, the regional principle of exhaustion of IP rights will be effective.
Another proposed amendment is aimed at solving the problem of Internet provider’s liability, including liability of hosting providers. A hosting provider is an entity which provides web space to individuals and organizations seeking to have their own website accessible via the World Wide Web. Thus, in the arena of IP rights, it raises the question of whether such an organization could be liable for IP infringements connected with a web-site it is hosting? In Russia, due to the lack of solutions on a legislative level, Russian courts have attempted to address the issue in their practice. Russian courts followed the approach under which exemptions from liability for hosting-providers is only applicable in cases where a provider doesn’t initiate the transmission of the relevant information, doesn’t choose a recipient of the relevant information and doesn’t affect the integrity of the transmitted information1. In addition to this, the newly proposed amendments introduce another criterion – if the Internet provider “was aware or supposed to be aware of an infringement”. In practice this means that providers may be liable only if they have been alerted on IP infringement, but have not done anything for disabling access to the relevant content.
The proposed amendments will also influence Patent law regulations in Russia. One of the most important changes – to make the substantive examination of utility models more complicated to ensure their novelty. The reason for this was a number of cases when so called “Patent trolls” registered in Russia in their own names utility models used by major international companies importing the relevant goods in Russia. These companies suffered from claims of these “Patent trolls” based on these registrations. Finally these registrations were challenged due to absence of novelty but these claims incurred huge sums of lost profits for producing companies and importers.
At this stage the proposed amendments to Part 4 of the Civil Code are still not introduced in the Russian parliament. Different institutions, associations and groups of right holders expressed their willingness to participate in the current round of discussions on the project. A number of alternative amendments have been already prepared and brought to the notice of the working group of authors of the amendments. Hopefully, these amendments will not be passed in a rush and interests of different groups will be taken into account.
Pavel Sadovsky
Senior Associate
Head of IP practice at Magisters