On Court For Intellectual Property Disputes

A special court for intellectual property disputes is to be set up by February 2013. This court, embedded in the system of commercial (arbitrazh) courts, will hear cases on intellectual property rights, including those challenging statutory instruments on IP, in the first instance and cassation. Thereafter cases can be brought to the Supreme Commercial Court for an appeal.

At the moment, courts of law have several divisions comprised of judges who specialize in certain categories of disputes, like companies, taxes, contracts and so on. The idea of the Intellectual Property Court seems to be that this specialization isn’t good enough and that the IP trials need a structure of their own.

Roman Shabrov

Muranov, Chernyakov & Partners
+7 495 783-74-50

The old argument - and, since recently, the rivalry between the Supreme Commercial Court and the Supreme Court - about a specialized court for intellectual property disputes is over: on December 7, 2011 the federal constitutional law establishing the court has been published and has come into force. Also, changes have been made to the Code of Procedure in Commercial Courts.

Legislators, to be safe, have given the Supreme Commercial Court of the Russian Federation more than a year to form the new court (it must be created by February 1, 2013). It is likely that the court on intellectual property disputes will become operative before the deadline.

The court will exist within the system of commercial courts and deal with disputes in the first instance and cassation.

The fact that the court will be part of the system of commercial courts stirred up controversy about commercial courts ‘pulling’ the influence from the courts of general jurisdiction. This writer believes that, taking into account the shortcomings of the courts of general jurisdiction - they have very broad jurisdiction, their judges are unpredictable and often of low qualification – the decision to establish the patent courts within the system of commercial courts was a good one.

Besides, disputes over intellectual property rights are, usually, commercial by nature.

Some experts suggested that the court should be independent. However, this would require a separate system of courts and a set of special regulation, which is hardly feasible, relevant or appropriate. In addition, this option would not comply with the Constitution.

Two groups of disputes have been included in the jurisdiction of the court as the court of the first instance: 1) cases concerning challenges to regulations in the field of intellectual property, 2) disputes about the provision or termination of legal protection over intellectual property and means of individualization of legal entities. Disputes with Rospatent, the Ministry of Agriculture (about breeding achievements) and other authorities (for secret inventions) are in the second category.

As the court of cassation, the court will consider cases that it had already considered in the first instance, as well as cases involving the protection of intellectual property rights, considered by the commercial courts of the first instance and commercial appellate courts.

There is no appellate court for disputes that had been considered by the intellectual property court. This raises questions about the right for the appellate review. This issue is particularly relevant in light of the claims made by some international organizations that there are no appellate courts for certain cases.

Of course, the argument that some intellectual property disputes are considered in administrative proceedings, and therefore there is no need for appeal, does not hold water.

The Supreme Commercial Court will provide the judicial review of the intellectual property court’s practice and, thus, it will control the creation of the case law on intellectual property.

Disputes on copyright, Integrated Circuit Topographies were removed from the jurisdiction of the court (with the exception of challenging legal acts in this area). Disputes with regard to software are also outside the jurisdiction of the court. This distribution of competences is caused primarily by the desire not to overburden the court with caseload.

Commercial courts of 'general competence' will try cases as courts of first instance and an appellate courts disputes about the protection of intellectual property rights which the intellectual property court can hear as a court of cassation. Thus, commercial courts will deal with disputes between private parties not directly related to the competence of the intellectual property court and courts of general jurisdiction.

This includes (but not exclusively): infringement of the exclusive rights to an invention, utility model or industrial design; on the conclusion, on the execution, of the change and termination of contracts on the transfer of exclusive rights (alienation of the patent) and licensing agreements to use an invention, model, industrial design; the right of prior user, the right of subsequent use, the amount, time and manner of payment of compensation under part 4 of the Civil Code.

The status of persons with special technical knowledge who take part in the hearing was the subject of debate: they could have the status of judges, jurors or simply experts. As a result, some mixed model was chosen. Advisers will be included in the court’s administration which will have the authority to bring in specialists and send questions to experts. The advisers will examine special issues arising in proceedings.

The legislator’s decision to leave experts essentially passive in the hearing and their uncertain status raises some questions, especially in light of international practices. In particular, in Germany - where the patent courts (Bundespatentgericht) exist since 1961 - experts have the status of judges. They are appointed for life and this makes their position stronger.

The court is entitled to submit requests to scientists, professionals and others who posses the knowledge related to a case. Why only specialized commercial courts have such a right is not entirely clear. Of course, one could argue that any requirement of the court to submit evidence or explanations must be granted. But why the legislator has specifically given to the intellectual property court this right is not clear. In practice, this can lead to the situation when commercial courts of ‘general competence’ would not have this right.

Alternatively, courts may involve specialists with necessary expertise to participate in trial. In such event, the position of a specialist is similar to the position of an expert. An expert expresses an opinion in the form of conclusion and a specialist, in the form of advice or explanations.

What is the specialist’s responsibility is not entirely clear: there is no provision on criminal liability for knowingly giving false advice or explanation. On the other hand, given that the Criminal Code (Art. 307) provides the general rule on the liability of an expert, we cannot exclude the possibility that there will be attempts charge specialists with knowingly giving false advice.

Another problem of ‘human’ nature is that the order of inclusion of judges in the appeal and trial in the first instance is not defined. In particular, the text of the law is not clear on whether, for example, the same judge can be assigned to the appeal and first instance hearing (this is not the re-appointment to the same case, and for the appointment of judges in different cases in the appellate and cassation courts).

Let’s clarify that in commercial courts of ‘general competence the appointment of judges in different instances is defined quite clearly as instances belong to different judicial institutions, which excludes the appointment of judges to the court of the next or previous instance in different cases, except when a judge is transferred to another court.

In intellectual property court the first and appellate instances will be merged, but they will be within the same judicial institution. In this regard, the problem of fairness and impartiality of the judges serving in the same institution arises and hearing appeals on decisions handed down by their own colleagues. The Supreme Commercial Court will have to find a mechanism to eliminate this conflict of interest.

The intellectual property court will consider cases collectively or by the Presidium. The court will consist of at least 30 judges. Supreme Commercial Court will determine the organizational activities of the court.

So far, the bulk of disputes regarding intellectual property are considered in Moscow. This can be explained by high level of business activity in this region and that Rospatent and other organizations are based Moscow. Therefore, placing the court in Moscow seems reasonable. I hope that the system of electronic filing would help litigants from other parts of Russia.

The question of whether the creation of a specialized court for intellectual property is a boon, to a large extent is determined by the need for specialization. The opponents of specialized courts are few and their position is based on an attempt to keep the institution untouched. Taking into account the complexity of disputes regarding intellectual property rights, their position is not justified.

The need for specialization in the field of intellectual property is explained by the presence of bulk of the ‘technical components’. In this context, there is the objective need for specialization of judges and professionals in various fields of science and technology. Proceedings in intellectual property court will be exercised by judges who have specialized knowledge in the field of intellectual property and who can use the above mechanisms for finding the the ‘technical component’ of cases.

In addition, the court’s existence is justified by a large amount of procedural peculiarities of disputes regarding intellectual property. The adopted laws take into consideration only a small part of this specificity. However, analyzing the practice of foreign legal systems, one can see procedural peculiarities of the disputes about intellectual property and the need to address them. It would be logical in the future, in addition to those already adopted legal acts, to take other law (statutory documents).

Weak protection of intellectual property in Russia is a well-known problem, especially in the light with the country’s ascension to the WTO. If the creation of the specialized court can help solving at least a fraction of these problems, this would do a fairly good job already.

Muranov, Chernyakov & Partners