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Patent Disputes and Enforcement in Russia. Problems and Solutions.
Valery Medvedev
Managing Partner
"Gorodissky & Partners"
Enforcement of IP rights in Russia is one of the most important issues in Russian in the field of intellectual property. The industrial property laws as they are today adequately reflect the needs of the market economy.
Intellectual property laws and relevant sections of other laws have recently undergone revision and greatly improved opportunities for the rights holders to safeguard their rights.
Aside from the Russian IP laws proper the following laws can be brought into play: Civil Code, Criminal Code, Law on Competition, Administrative Code and other laws.
Civil Code sets forth a most general provisions pertaining to the problem of protection of rights. It states that the results of intellectual activity are an object of exclusive rights and that they cannot be used by third parties without a permission of its owner.
Administrative Code was amended in July of 2002 to the effect that unlawful use of a patent shall entail an administrative fine in the amount of 10 to 20 minimal salaries for individuals and 300 to 400 minimal salaries for legal entities.
Criminal responsibility may arise depending on the amount of damage caused. If the damage is “significant” criminal charges may be brought against an infringer. If there are criminal charges the alleged infringer is faced with a fine of 200 to 400 minimal salaries or imprisonment of up to two years. If there is a team of infringers or if there is a collusion among them the punishment goes up automatically from 400 to 800 minimal salaries and imprisonment to five years.
The number of patent disputes has grown in the last years. The term “patent dispute” is two-fold.
First, a patent dispute is a dispute on patentability of a certain invention (design or utility model).
Second, disputes emerge as a result of unlawful use of a patent.
Patent disputes of the first kind are considered by the Chamber of Patent Disputes. This is one of the novel features of the new Patent Law in this country. If an applicant does not agree with the Official action of refusal, with the Official action of grant (on the terms suggested by an examiner) or that an application is withdrawn he may file an objection with the Chamber of Patent Disputes during six months from the date of receipt of the Official action. This is a simplified procedure for the applicant as compared to the former procedure where the applicant had to monitor and observe different terms with two different bodies.
The decision of the Chamber of Patent Disputes may be contested in a court. An appeal to the court shall be filed during three months from the date of the decision of the Chamber of Patent Disputes. Examination of the conflict in a court is not different from any other civil court case.
The disputes resulting from the infringement of rights for patents can be dealt with in an administrative and judicial route. The administrative route is the one conducted by the Ministry for Antimonopoly Policy. The antimonopoly body, on establishing the fact of any misdemeanor issues a directive prohibiting the malefactor to continue with his offending activities. In case of disobedience the case may find its way to court where an infringer will be heavily fined.
The offended party may also file a civil suite.
The Patent Law provides that a patent owner has the exclusive right to an invention, utility model or industrial design. No one has the right to use a patented invention without the permission of the patent owner. It is not allowed to import to Russia, manufacture, use, offer for sale, sale, other marketing or storage of a product for these purposes, in which a patented product is used.
Where a product obtained by a patented method is new, an identical product is considered to be a product obtained through the use of a patented method in the absence of proof to the contrary.
Where there are several owners of the same patent their relations with regard to the use of the invention shall be determined by agreement among them. Where no such agreement exists, each of the owners is entitled to use the patented invention at his discretion, but may not grant a license or give the exclusive right (assign the patent) to another person without the consent of the other owners.
In the case where a patent is not used, or is insufficiently used by the patent owner or the licensee for four years from the date of the grant of the patent which results in an insufficient offer of corresponding goods or services on a commodity market, any person desiring and ready to use the patent has the right to go to court with an action against the patent owner for the issuance of a non-exclusive compulsory license for use of such a patent.
The patent disputes dealt with by the Russian Patent Office: the number of appeals against Official actions of rejection is not significant since the Russian Patent Office issues relatively few decisions of rejection and not all of them become subject of appeal.
There are common and commercial courts for patent disputes. The common courts are proper venue where one of the conflicting parties is an individual patentee, while a commercial court is applied to when corporate patentees cross swords.
In both cases the party that lost may contest the decision of the court in the court of appeal.
When a patent dispute is examined by the court and there are complex technical details in the field of the patent the court may order an independent technical investigation. The court may rely on the results of that investigation at its discretion. Sometimes, one has to use a doctrine of equivalents according to which equivalent are those features which fit the function performed but differ in their embodiment.
Examples of patent disputes.
- The patentee is an individual. Patent: a medical device for sterilization of surgical instruments. When a patent owner marketed his invention it quickly become an object of imitation.
The court appointed an independent technical expert in mechanics who was also familiar with the patent matters to prepare a report. The expert confirmed that the patent in question had been infringed and that an equivalent feature was used by an infringer in his device. The court satisfied the plaintiff and prohibited the infringer to further manufacture the device. The infringer was also demanded to pay for the preparation of the investigation report which had cost about one thousand US dollars.
There was an appeal which was not satisfied.
- Another case was handled in the commercial court since the conflicting parties were both legal entities. The patent concerned a method of preservation of vegetables. There were two infringers who produced canned green peas according to the patented process.
The commercial court ordered an investigation report which was eventually prepared by two technical experts. The experts prepared mutually excluding reports and it was to the discretion of the court to evaluate the circumstances of the case. After a prolonged deliberation the court took a decision in favour of the plaintiff and prohibited manufacturing of canned green peas violating the rights of the patent holder. The defender filed an appeal with the higher court which confirmed the decision of the lower court. Another appeal was filed by the defender to the court of cassation which is a third instance in the Russian judicial system. The court of cassation confirmed the decision of the lower courts.
To complete the picture it is worth mentioning that the new Arbitration Procedural Code was adopted late last year. It specified in more details the options available to the parties in conflict.
One of the new features in the said Code is that only qualified attorneys at law may represent parties in a conflict. Such practice exists in other countries and being faced with the reality of life.
To summarize, the Russian legal system is being dynamically adapted to the demands of the day and owners of intellectual property titles have today every opportunity to safeguard and efficiently protect their interests in Russia.
The main topic of the 12th international conference “TRENDS AND MEANS OF OBTAINING COMPLEX IP PROTECTION”, September 3 - 6, 2003, Budapest (Hungary)
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