IP rights and competition
These amendments should affect the relationships connected with virtually all items of IP.
Some general provisions relating to the entire IP sphere are also likely to undergo substantial changes. Along with the Civil Code, some federal laws are likely to be amended, including the Federal Law on Trade Secrets, as it is closely linked to the provisions of the Civil Code dealing with production secrets (know-how).
It is not planned, however, to change the approaches to regulating relationships that arise in connection with the use of IP items and affect, to a certain extent, the competition between holders of right and other business entities. We emphasise this point because over the past few months numerous attempts have been made to extend anti-monopoly legislation to items of IP, including means of identification.
There have also been a number of discussions about so-called ‘monopoly’ IP rights. It is often claimed that such monopoly rights are excessive and adversely affect scientific and technical development, and that certain limits should be imposed.
At the same time, however, many academics and legal practitioners specialising in IP believe that the current legal framework for regulating IP rights in Russia, from the perspective of competition, is appropriate in the given market environment and consistent with international standards in this area.
Advocates of the abolition or limitation of monopoly rights tend to ignore the need to balance the interests of all participants in civil law relationships where IP items are created and used. First and foremost, they disregard the rights of the authors of IP items—the very same people who are at the forefront of advances in science and technology.
In a bid to place limits on ‘monopoly’ IP rights by using competition legislation, proponents of this approach appear to forget about existing rules of Russian law that already place limits on monopoly IP rights and specify the terms for such restrictions. Such rules work quite well—unfortunately, they are actually implemented in other countries, and not in Russia.
Restrictions include: (1) provisions that allow third parties to use copyrighted material without requesting the consent of the right holder and without paying royalties; (2) provisions about compulsory licensing with respect to patented items; and (3) provisions regarding the exhaustion of rights to trademarks put on the market by or with the consent of the right holder.
Over the past few months numerous attempts have been made to extend anti-monopoly legislation to items of IP, including means of identification.
It would appear that current Russian legislation has plenty of rules that limit the rights to use IP when these rights are at variance with or contravene public interest. It is not only unreasonable, it is even detrimental to apply mechanically the rules of competition legislation to the relationships governed by another area of law. Moreover, it should be recalled that Article 10 of the Competition Law does not apply to exclusive rights to IP and equivalent means of identification of a legal entity, means of identification of products, work or services.
It is notable that the suggestion to remove this provision from the competition law is not supported by rights holders and professionals. Many opinions against it were expressed, for instance, on September 12 in the Civic Chamber of the Russian Federation, where participants discussed draft amendments to Federal Law No. 199585-6, “On alterations to the Federal Law on Protection of Competition”.
Some provisions could certainly be improved, including definitions of actions that constitute unfair competition—they could be applied to the unlawful use of IP items and means of identification without the consent of the right holder. There is apparently no difference between actions that constitute, for instance, an unlawful use of a trademark and actions deemed to be unfair competition, also with respect to trademarks.
Yet, it is impossible to classify simulation or imitation from the perspective of competition law. Another example: foreign legislation and case law describe such an offence as freeloading off a competitor’s reputation, IP and means of identification. Unfortunately, this concept is not covered in the Russian law. It would be more beneficial if legislators concentrated on improving those provisions of the competition law that really need improvement.
Valentina Orlova is head of Pepeliaev Group’s IP and trademarks practice. She can be contacted at: v.orlova@pgplaw.ru
