A D A M S & A D A M S B R I C S I P F O R U M

Transcription

1 A D A M S & A D A M S B R I C S I P F O R U M

2 VLADIMIR BIRIULIN GORODISSKY & PARTNERS, Partner Head of Legal Practice

3 BRICS IP Forum London November 21, 2016 Vladimir Biriulin Partner DISPOSAL AND ENFORCEMENT OF IP RIGHTS IN RUSSIA

4 TRANSFERABLE SUBJECT MATTERS Patents know how trade marks & service marks software & databases copyrights

5 IP TRANSACTIONS assignments licenses franchises security interests

6 IP TRANSACTION execution of agreement (in writing) essential elements (as required by law) signatures & titles of signatories (duly authorized officers) corporate seals (if any) notarization/legalization (not required!) recordal of transaction (for registrable IP) power of attorney (notarization/legalization is not required) original agreement, excerpt or statement of disposal statement of trademark license (under the provisions of Singapore Treaty) duly certified translation (to be attached to original agreement) payment of official fees (as set out by state schedule of fees)

7 REGISTRATION state agency: Patent Office all transactions with patents & designs all transactions with trade marks & service marks assignments involving registered software, databases (licenses need not be registered) term: 2 months (no expedited recordal proceedings are available!)

8 DIAGRAM: PATENTS & DESIGNS* Source: Annual Report by ROSPATENT of Assignments Licenses

9 DIAGRAM: TRADE MARKS & SERVICE MARKS* Source: Annual Report by ROSPATENT of Assignments Licenses Franchises

10 DIAGRAM: SOFTWARE & DATABASES Assignments Source: Annual Report by ROSPATENT of 2014

11 ASSIGNMENT: LEGAL CONCEPT under assignment agreement one party (assignor) transfers or is obliged to transfer in full its exclusive rights vested in result of intellectual activity or means of individualization to other party (assignee)

12 ASSIGNMENT: ESSENTIAL ELEMENTS parties (assignor/assignee) subject of agreement (IP registration number/description) full transfer of exclusive rights (no retention of title or rights) consideration (lump-sum payment, periodic payments or other)

13 ASSIGNMENT: DISTINCTIVE FEATURES moment of conclusion (signature date vs. recordal date) no indication of full transfer of rights means license partial assignment (not for every case!)

14 ASSIGNMENT: TAX CONSIDERATIONS value added tax (VAT) 18% exemption (as of *) for IP assignments involving: patents & designs know how & trade secrets software, databases & mask works (trademarks are not exempt from VAT) Source: Letter of Ministry of Finance dated 1 April 2008 No /44 and Tax Code

15 LICENSE: LEGAL CONCEPT under license agreement one party holder of exclusive rights vested in result of intellectual activity or means of individualization (licensor) grants or is obliged to grant to other party (licensee) the right of use of such result or means, subject to terms and conditions set forth by agreement

16 LICENSE: ESSENTIAL ELEMENTS parties (licensor/licensee) subject of agreement (IP registration number/description) licensed products/services (for trademark licenses) type of license (exclusive/non-exclusive) scope of licensable rights (permitted IP use) consideration (lump-sum payment/royalties/both) quality control (for trademark licenses) territory (if agreement is silent license is valid for the whole territory of Russia) term (if agreement is silent license is effective for 5 years)

17 LICENSE: TAX CONSIDERATIONS corporate income tax (CIT) 20% tax relief may be achieved under relevant avoidance of double taxation treaties value added tax (VAT) 18% exemption (as of *) for IP licenses involving: patents & designs know how & trade secrets software, databases & mask works Source: Letter of Ministry of Finance dated 1 April 2008 No /44 and Tax Code

18 TAXATION BENEFITS Avoidance of double taxation treaties with Russia: 0% Austria, Belgium, the United Kingdom, Hungary, Germany, Denmark, Ireland, Iceland, Italy, Cyprus, Korea, Luxembourg, the Netherlands, Norway, the USA, Finland, France, Switzerland, Sweden

19 FRANCHISE: LEGAL CONCEPT under franchise ( commercial concession ) agreement one party (rights holder) obliges to grant for consideration to other party (user), within or without term, the right of use in user s business of a set of rights holder s exclusive rights combining trade mark rights, service mark rights and other IP rights, as set out by agreement, particularly trade name, trade secrets (know-how)*

20 FRANCHISE: ESSENTIAL ELEMENTS parties (franchisor/franchisee) subject of agreement (trademark and other IP registration numbers/descriptions) franchisor s goodwill & commercial experience (to the extent as permitted) area of business (sale of goods, provision of services, etc.) franchised products/services (according to trademark registration) type of franchise (exclusive/non-exclusive) scope of franchisable rights (permitted IP use) consideration (lump-sum payment/royalties/both) territory (if agreement is silent franchise is valid for the whole territory of Russia) term (if agreement is silent franchise is effective for 5 years)

21 SECURITY INTEREST: LEGAL CONCEPT by operation of security interest, lender - under secured obligation (secured party) - has the right - in case of borrower s default - to obtain preferential satisfaction from the amount of collateral against other lenders of owner of collateral (grantor)

22 SECURITY INTEREST: ESSENTIAL ELEMENTS parties (grantor/secured party) subject of agreement (IP registration number/description) scope of secured rights (in full or within certain limits) appraised value of collateral (specific monetary amount as agreed by parties) description of secured obligations (nature, amount and term of facility/credit) location of document evidencing legal title (with grantor/with secured party)

23 THE PROFITS (INCOME) GENERATED FROM THE USE OF A TRADEMARK, BUT THE TRADEMARK IS NOT REALLY USED? Situation/Agreement Issue/Non-payment of License Fees Trademark License Agreement (between Profit Pharm and Slavyanskaya Apteka) Scope of License: the right to use the trademark (TAUFON) for a specific consideration Consideration: 5% of Net Production License Agreement is terminated earlier by the parties Profit Pharm claims unpaid license fees in the amount of Rb 6,860,840 Slavyanskaya Apteka asserts non-use of the licensed trademark in commerce

24 THE PROFITS (INCOME) GENERATED FROM THE USE OF A TRADEMARK, BUT THE TRADEMARK IS NOT REALLY USED? Case Summary Conclusion First Instance Court (FIC) Satisfies claims (partially) Appellate Court (AC) Upholds the decision of the FIC License agreement shall not be regarded as invalid or not concluded in this case Non-use of the licensed asset under the agreement is irrelevant in this case IP Court (IPC) Upholds the decisions of the FIC/AC Amount of license fees shall be compared with (valued under) the amount usually determined in a situation when the trademark is actually/lawfully used (by the licensee)

25 LICENSING PENDING APPLICATIONS? WILL SUCH LICENSE BE VALID AND SUBJECT TO RECORDAL? No ban to conclude an agreement No registration Risks involved

26 INFORMATION AS KNOW-HOW Know-how is Any information or data of any kind (industrial, economical, organizational or other) related to technologies or business activities actual or potential commercial value unknown to third parties third parties have no access on legal grounds appropriate measures to keep know-how secret are taken

27 THE DAY AFTER

28 THE DAY AFTER: ENFORCEMENT OF IP RIGHTS (PATENTS) What is infringement? Import into Russia, manufacturing, use, offer to sell, sale, other forms of marketing or storage for these purposes of a product in which the invention is used. The actions as above in respect of a product obtained directly by the patented method. If the product obtained by the patented method is new, an identical product shall be considered obtained by the patented method unless proven otherwise. Dealing with a product intended for its use in accordance with the new patented purpose, The realization of a method in which the invention is used, in particular by the application of that method. Article 1358 Civil Code

29 THE DAY AFTER: ENFORCEMENT OF IP RIGHTS (TRADEMARKS) What is infringement? Import into Russia, manufacturing, use, offer to sell, sale, other forms of marketing or storage for these purposes of a product labeled with trademark. Use of trademarks during rendering services (doing works). Use of trademarks on documents Use of trademarks in proposals for sale, signboards, etc. Use of trademarks on the Internet Use of trademarks for similar goods if confusion is possible Article 1484 Civil Code

30 ENFORCEMENT OPTIONS CIVIL ACTION ADMINISTRATIVE ACTION CRIMINAL ACTION UNFAIR COMPETITION ACTION

31 CIVIL REMEDIES IP owner may claim: Injunction - cessation of the infringing actions Removal from the channels of commerce and destruction of the counterfeit goods, labels and packages, the equipment and materials used for infringement Full recovery of real and circumstantial damages including unfair profits Compensation (instead of damages) for the fact of violation (the IP owner is not obliged to prove the amount of damage) in the amount of: ~3, ,000 USD; in the double amount of the total cost of the counterfeit products, or royalties which would have been due if the infringer had requested authorization to use IP Publication of court decision Liquidation of legal entity if infringement is recurrent!!

32 CEASE AND DESIST LETTER Case under jurisdiction of the common courts No obligation to send a C&D letter Case under jurisdiction of the commercial courts C&D letter must be sent A lawsuit can be filed in 30 days from the date of sending

33 PRELIMINARY*/INTERIM** INJUNCTION Seizure of property or monetary funds Ban on performing certain actions Ordering to perform certain actions Transfer of disputed property to the plaintiff Other INJUNCTIONS SHOULD BE ADEQUATE TO THE CLAIMS * Before filing the lawsuit (up to 15 days for filing) ** After filing the lawsuit or along with the lawsuit

34 COLLECTING AND SECURING EVIDENCE Evidence should be collected by the plaintiff: Proof of infringement; Duration of infringement; Amount of damages.

35 COLLECTING AND SECURING EVIDENCE Without assistance Detective Notary Public Court Order Within the frame of administrative or criminal case No discovery proceedings are provided by the law

36 COLLECTING AND SECURING EVIDENCE Plaintiff himself or: DETECTIVE: Report of a detective may be used as evidence Respective documents confirming facts stated in the Report (receipt, invoice, contract, etc.) should be attached Detective may be invited to the hearings as a witness

37 COLLECTING AND SECURING EVIDENCE NOTARY PUBLIC: The Notary Public can secure evidence in case there is a risk that it would be difficult or impossible to obtain evidence in future. Printouts from the web-site Test purchase Demonstration of a product and/or distribution of materials at an exhibition

38 EXPERTISE Experts: May be entrusted to a State expert organization Individual expert Group of experts Rights of the parties: propose experts propose questions challenge the experts requesting new or repeated expertise Payment: burden lies on the party which filed the motion (Plaintiff, Defendant or both)

39 DAMAGES Lost profit Expenses related to restoration of the infringed rights

40 DAMAGES SUPPORTING ARGUMENTS: There is a granted license with respect to the same subject-matter license fees Standard license fees Valuator s report Court expertise Marketing research

41 DAMAGES OR COMPENSATION In case of infringement the right holder can claim, instead of payment of damages, a statutory compensation: Up to $165,000 to be determined by the court, or double price of a license in comparable circumstances

42 RUSSIAN COURTS

43 STRUCTURE OF RUSSIAN COURTS Supervisory instance Supreme Court of the Russian Federation Common courts Commercial courts Cassation instance Supreme Courts of constituent unit of the RF/ City Courts Federal Commercial Courts / IPR Court Appeal instance City and District Courts Commercial Courts of Appeal IPR Court 1 st instance District Courts/ Magistrates Commercial Courts of constituent unit of the RF/ IPR Court

44 THE INTELLECTUAL PROPERTY RIGHTS COURT (IPR COURT) Cassation Instance Cases considered by IPR Court as a court of the first instance (to be considered by the Presidium); IP infringement cases considered by commercial courts of the constituent units of the Russian Federation and courts of appeals (to be considered by a Panel of Judges). Appeal Instance NO APPEAL INSTANCE 1 st Instance Appeals on decisions of the Patent Office (expertise, oppositions, etc.) and FAS RF; Validity of legal and non-legal acts in the IP field; Trademarks non-use cancellation actions; Cancellation of Patents and Trademarks (except those handled by PTO)

45 IP INFRINGEMENT CASES IPR Court 21 Commercial Appeal Courts 3 months 2months 2months 1month A supervisory appeal may be filed within 3 months. Presidium of the Supreme Court is a supervisory instance. It can reconsider a case on limited grounds Further cassation appeal may be filed within 2 month. It is considered by the Judicial Chamber on Economic Disputes Cassation appeals may be filed within 2 months. A panel of 3 Judges considers the appeals. Checks compliance with the law. Not empowered to revise the case on the merits Appeals may be filed within 1 month after the first instance court decision. A panel of 3 Judges considers the appeals. Appeal courts empowered to reconsider judgments of the first instance courts on the merits 84 Local Commercial Courts Cases are considered by a single judge IP infringement suit to be filed with the court at the defendant s location

46 NUMBER OF CASES IN IPR COURT AS FIRST INSTANCE Civil cases from July 3, Cases of public interest

47 NUMBER OF CASES IN IPR COURT AS CASSATION INSTANCE The number of cases from 3/07/

48 Cases Considered IP CIVIL PROSECUTION by Common Courts

49 CIVIL PROSECUTION OF IP INFRINGEMENT IN COMMERCIAL COURTS 6000 patents trademarks copyrights & related rights

50 GENERAL ASPECTS Duration: 6-8 months (1st instance) 2-3 months (appeal instance) 2-3 months (first cassation instance) 2-4 months (second cassation instance) 2-4 months (supervisory instance) New evidence: limited possibility at the appeal instance Legal costs can be reimbursed in the reasonable amount to be determined by the court Invalidity defense: patent infringement action in the commercial courts is not suspended in case of invalidation action launched in the administrative order

51 Number of Convicted Persons CRIMINAL PROSECUTION Trademark s Patents

52 ADMINISTRATIVE ACTION (CODE OF ADMINISTRATIVE OFFENCES) Art Infringement of copyright, inventors and patent rights: Confiscation of infringing items Art Unfair competition Art Unlawful use of a trademark: Fines: up to $1700 (officers), $17000 legal persons Fines up to $70 (individuals), up to $700 (officers), $1000 legal persons

53 PROTECTION OF IP RIGHTS IN THE EURASIAN ECONOMIC UNION Eurasian Economic Union Structure

54 MEASURES ON BORDER CUSTOMS CODE OF CUSTOMS UNION

55 PARALLEL IMPORT Regional exhaustion of rights Positive court practice Eurasian Economic Commission examines PA issue Automotive spare parts, cosmetics, pharmaceuticals? No light in the parallel tunnel September 28, 2016, Minsk EAEC TM and Parallel import discussed

56 CIRCULAR FIRING SQUAD

57 DESTRUCTION Report on destruction Place and time Basis for confiscation Quantity Description of goods Cost of goods

58

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60 WARNING LETTER SENT O R I G I N A L C O U N T E R F E I T

61 WARNING LETTER RECEIVED Voluntary destruction

62 COUNTER ACTIONS OF DEFENDANT

63 DEFENDANT S STRATEGY Attempt to prove absence of the infringement Invalidation of the patent Patent term extension nullity action Use of file wrapper estoppel doctrine Use prior-right doctrine Use of subsequent-right doctrine

64 INVALIDATION OF PATENT Granted patent validity can be opposed and the patent can be invalidated in case of: Non-correspondence of the claimed subjectmatter(s) to criteria of patentability Revealed introduced new subject-matter Granted patent can be considered invalid: Totally Partially new patent with the amended claims shall be issued Revealed double patenting Improper inventorship or assigning

65 RESTRAINT ON ABUSE OF PATENT RIGHTS Doctrine of equivalents: An equivalent feature should be known in the art as such equivalent before the filing (priority) date of the inventions the allegedly infringing actions Prior-User-Rights Defense Prior user right shall be available in respect of identical technical solution as well as equivalent technical solution

66 THANK YOU FOR YOUR ATTENTION! G0RODISSKY & PARTNERS +7 (495) / (495) / 6123 biriulinv@gorodissky.ru B.Spasskaya str., 25, bldg. 3 Moscow , Russia Gorodissky & Partners, 2016