An in-depth look at Russian IP and domain name law
An IP specialist with Baker & McKenzie in Moscow, Andrei M. Mincov gives us a frank and fascinating insight into the way domain names problems are tackled in Russia.
Andrei M. Mincov
In the aftermath of the Soviet Union, how is the concept of intellectual property seen in today's Russia?
At first, the word combination "intellectual property" was used more like a slogan in itself rather than a legal term, meaning that if one dared to claim ownership of intellectual property, one was supposed to be considered an "advanced capitalist".
These times are long gone now, the concept of intellectual property is generally accepted, although IP rights are not enforced efficiently at the present time.
Does the media in Russia attempt to heighten the public's awareness of IP law and if so, is this done by warning against counterfeiting stimulating creativity?
The media cannot be said to be actively promoting the idea that counterfeiting is bad. The current message may be said to be effectively limited to news of the day reports from the courts when such and such counterfeit products were seized and destroyed, and such and such entity's management was sentenced to a suspended prison term, which effectively means that nobody went to jail for this and that the original manufacturers were not duly compensated for their lost profits.
Is Russian IP law effectively applied?
I have to admit that it is not. Although it has certain well-known flaws, isn't perfect and definitely needs revisions, it is much more powerful and potentially efficient than the results of its actual implementation. In other words, although the current state of the Russian IP legislation is not impeccable, the existing level of piracy in Russia may to the greater extent be attributed to the corrupted and inefficient enforcement and sluggish and IP-ignorant court system.
Enforcement officials and judges seem to ignore the strong points of the existing legislation to efficiently fight off piracy. For more than 10 years of Russia having its relatively modern Copyright Law, according to which statutory damages of up to about $170 000 may be awarded, there hasn't been a single case when a court decision led to a bankruptcy of any of the pirates. I believe that such statistics say it all.
More often than not, a person or entity whose rights have been infringed does not go to court because they know that their legal expenses will be higher than the court's award. Only those who really want to hear the court proclaim the adverse party an infringer usually go to court. The other accustomed category of plaintiffs in IP infringement disputes is rich corporations where legal fees are not a serious issue.
In the early years after the fall of the USSR, Russian judges were often said to have limited experience when it came to matters of IP. Is this still the case today?
I'm afraid so. Although more judges have a better understanding of IP nowadays, they are a dramatic minority. What seems to be the real problem is that most judges who are assigned to hear IP-related disputes are also involved in general civil law, labor law, family law and administrative law. In other words, with very rare exceptions, there is no specialization among judges.
I will never forget my conversation with a judge not so many years ago. According to the existing procedure in the Russian courts of general jurisdiction, I had to personally submit a copyright infringement claim to the judge who was assigned to hear such cases. After the judge finished reading the claim, I asked her if the number of copyright cases was increasing. Her response put me to total shock and frustration. She said: "Yes, there are really lots of them, maybe it is time that I skim through the Copyright Law". Unfortunately, this is still the general attitude of most of the Russian judges in today's Russia.
Why does the Coalition for Intellectual Property Rights (CIPR) seem to consider the Russian Government’s initiative of codifying the IP legislation in the Civil Code of the Russian Federation as premature?
As regards Part IV, Backer & Mackenzie and I personally are strongly against the adoption of Part IV of the Civil Code, and we are working in collaboration with CIPR.
To make a long story short, if the draft of the Part IV of the Civil Code is enacted, the whole IP protection system (as weak as it is at the moment) will collapse. The proposed draft implies that all specialized laws, including the Copyright Law, the Trademarks Law, the Patent Law as well as others will be abolished and replaced by the Civil Code.
It would probably not be such a dramatic problem, had the drafters not decided to exclude some presently working provisions and include some experimental theoretic norms. Presently the draft contains a lot of deteriorative norms, while none of the issues that needed to be fixed in the existing laws seem to have been resolved. Discrepancies between protection of trademarks, trade names, company names and domain names have just become worse.
For example, the draft does not include any rules to fight against unfair competition.
As regards domain name changes, the current draft of Part IV of the Civil Code contains a small section, whereby domain names are conferred with almost the same level of protection as trademarks. It is contrary to the world practice and that of WIPO, pursuant to which domain name disputes should be resolved on the basis of unfair competition norms.
Thus, article 1544 prohibits registration of domains that are confusingly similar with trademarks of other rightholders and article 1481§8 prohibits registration of a trademark that is identical to a domain name with an earlier priority date, but these two provisions do not take into account the type of goods or services for which a trademark has been registered.
In general, we believe that if the new draft is enacted, it will take Russia at least five years to reach the same, rather poor, level of protection of intellectual property as exists at present.
Trademarks are protected by the law of the Russian Federation No 3520-1 On Trademarks, Service Marks and Appellations of Origin of Goods of September 23, 1992 (amended) and trade names are protected by the article 150 of the Civil Code R. F. What about the protection of the domain names? Are they considered as distinctive signs in Russia (as it is the case, for instance, in France and in the USA)?
Currently, there is no legal protection of domain names. They are only mentioned in the Russian Law on Trademarks, Service Marks and Appellations of Origin of Goods, as one of the many forms of use of trademarks, for which a permission of the trademark owner should be secured. It makes it relatively easy for trademark owners to reclaim confusingly similar domain names, provided that these domain names are used to resolve in websites offering goods or services for which the trademark is registered. If there is no such use or if the website is related to other goods or services then there is virtually nothing that a trademark owner can do by virtue of law.
There have been several cases where domain names were "returned" to the owners of famous brands pursuant to trade name infringement or unfair competition theories, but these cases are exceptions rather than rules.
Several decisions refused to order the transfer of domain names (probably registered in bad faith) to complainants because the business form indication ("OOO" for example) was not being used with the name of the company (for instance, in a "Kodak" decision of the Moscow Arbitration Court). Is this still the case today?
The relevant laws have not changed. Legally, company names are still understood as a combination of the business form and the distinctive part of the name. For example, previously existing entity OOO SomeCompany may not object to registration of ZAO SomeCompany, because the latter has a different business form. It has always been a serious issue for the owners of well-known company names.
Nonetheless, there have been several cases where the judges agreed that unauthorized use of the distinctive part of the trade name of a foreign entity was enough to be qualified as an infringement. Unfortunately, these cases are exceptions rather than rules. A victim of cybersquatting may generally expect that the courts will deny trade name claims if only the distinctive part of the name was used, as opposed to the full name containing the business form indication.
What avenues of defence can the victim of cybersquatting on a Dot RU domain name explore?
Basically, there are not many options in this case. First, one has to notarise the contents of the website associated with the domain name in question. Such notarised reports are about the only evidence generally accepted by the Russian courts. Usually the courts are not equipped with computers with Internet access and will not agree to accept a real-time demonstration of a website as sufficient evidence of the wrongdoing. Neither are simple printouts of the web pages accepted.
The next step is usually to send a cease-and-desist letter to the domain name owner. This serves two purposes – one is that the domain name owner may decide to surrender the domain name without any compensation. The other is that such notification may be then used in court as evidence of an intentional infringement.
Then a lawsuit should be submitted to a court of general jurisdiction or to an arbitrazh (state commercial) court, depending on whether the defendant is an individual or a legal entity. Currently there is a strange trend of submitting all claims to arbitrazh courts. While we do not see a legal reason for such a trend, more and more claims against individuals are being denied in the courts of general jurisdiction and re-submitted to and then heard in arbitrazh courts.
In most cases, one may rely on such court hearings only if a blatant trademark infringement is involved, in other words, if the domain name is identical or confusingly similar to a trademark registered in the Russian Federation, provided that the domain name is used to resolve to an active website offering goods/services for which the trademark is registered.
In accordance with the rules of the Russian registrars, the owner of a trademark may not request that the domain name be transferred to them directly. One may only request that the registration of the domain name with the cybersquatters be cancelled. Then the trademark owner would have a 30-days grace period to register the domain name in its own name.
Since the claim is filed in the form of a trademark infringement lawsuit, in addition to claiming that the domain name registration be cancelled, the trademark owner may also request that a monetary compensation be paid for the infringement of the trademark. In many cases such claims alone induce a cybersquatter to settle.
Why has the Dot RU registry yet to set up a UDRP-like dispute resolution procedure?
Both Russian registrars and the state are against setting up such a dispute resolution policy. While I am personally a big supporter of UDRP or nationalized UDRP policies, it does not look as though Russia will be applying a similar arbitration procedure soon.
The opponents of UDRP in Russia seem to ignore that UDRP is a contract-based policy and try to come up with the reasons why UDRP arbitration does not fit into the existing legal procedures prescribed in the Russian Civil Procedure and Russian Arbitrazh Procedure Codes, as well as in the Law on Arbitration Courts. Indeed, the Codes and the Law contain several provisions that would not allow the UDRP, in its unchanged state, to be implemented on the court level.
But this is something that UDRP has never been and was not supposed to be. Being a contract-based policy, UDRP would be a perfectly working solution if the registrars agreed to implement not only the decisions of the courts, but also of the UDRP panels. The reluctance of the registrars to implement such a policy on the national level is very unfortunate.
However, since one of the major Russian registrars (RU-Center) has recently been nominated as the ICANN-authorized registrar for the registration of the global top level domain names like .COM, .NET and .ORG, the Russian registrars would likely be subject to UDRP much more often. It could be the necessary starting point for implementing UDRP in Russia. And I personally hope to see the Dot RU disputes resolved pursuant to UDRP in the foreseeable future.
Andrei M. MINCOV Baker & McKenzie, Moscow
General Intellectual Property Advice
andrei.mincov@bakernet.com
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