The first Court decision in connection with violation of rights to IP items owned by a foreign entity from a ‘hostile’ country

Pepeliaev Group advises that the decision of the State Commercial Court of the Kirov Region dated 3 March 2022 in case No. A28-11930/21 has been published. This decision denied protection of an exclusive right of a foreign entity due to its originating from a country that was included in the list of ‘hostile countries’.

Entertainment One UK Limited (UK) filed a lawsuit against a Russian individual entrepreneur to protect the exclusive right to trademarks and copyright items for the character Peppa Pig.

At the same time, the foreign plaintiff asked to recover from the Russian defendant the minimum amount of compensation for a violation of exclusive rights in the amount of RUB 10,000 for the violation of each IP item.

According to the long-standing established practice of considering such a category of court cases, it is sufficient for the plaintiff to prove that:

• the plaintiff has the exclusive rights to the IP item; and

• the defendant used this IP item without the consent of the right holder (the plaintiff).

The defendant in turn can prove that the plaintiff abuses its rights when it applies to the court with claims. In such a case the court may refuse the plaintiff to protect its exclusive right under article 10 of the Russian Civil Code.

In a court decision dated 3 March 2022, the State Commercial Court of the Kirov Region referred to the well-known fact that in late February - early March 2022, Western countries, including the UK, adopted restrictive (political and economic) measures imposed against the Russian Federation, legal entities and individuals, as well as senior officials of the Russian Federation.

In this regard, the State Commercial Court of the Kirov Region considered that the appeal of the right holder from the UK with claims for the protection of the exclusive right to IP items is an abuse of law and refused to satisfy the claims.[1]

The court decision has not yet entered into force and can be appealed until 3 April 2022 to the state commercial court of appeal. The cassation court for this category of court cases is a specialised one - the Intellectual Property Court.

Time will tell whether this court decision stands in the higher courts.

We are monitoring this case and keep you posted regarding its outcome.

What to think about and what to do

In the light of hostile actions of foreign states, the case law may significantly change in cases with the involvement of foreign parties. This could lead to those cases that were previously unequivocally resolved in favour of one party being, in the light of new events, resolved in the opposite way.

The analysis of the latest case law will give the opportunity to prevent possible risks.

Help from your adviser

Pepeliaev Group’s lawyers are closely monitoring the latest case law, and the practice of state authorities, including in the area of intellectual property. This allows us to successfully protect the rights of our clients, and provide them with effective legal assistance in matters related to intellectual property.