LUXURY LAW in Russia

1. TRADEMARK

1.1 Sources of law

The principal sources of law relating to trademarks are Chapters 69 and 76 of the Civil Code of the Russian Federation (hereinafter, “the Civil Code”). Other important sources of law on trademarks include the Law on Protection of Competition, customs legislation, executive regulations, such as the Orders of the Ministry of Economic Development of the Russian Federation (Nos. 482, 483, 601, 602, 703, etc.).

Russia is also a party to international conventions related to trademarks, including the Paris Convention for the Protection of Industrial Property, the Madrid Agreement Concerning the International Registration of Marks and the Madrid Protocol, the Trademark Law Treaty of 1994, the Singapore Treaty on the Law of Trademarks, the Nice Agreement Concerning the International Classification of Goods and Services, the Vienna Agreement Establishing an International Classification of the Figurative Elements of Marks.

In the event of a conflict of laws, the general rule is that international treaties take precedence over domestic statutes, and at the national level, laws prevail over executive regulations.

Russian law does not formally recognize the concept of binding precedents. Nevertheless, in practice, the courts of the lower instances usually follow the decisions of the courts of the higher instances. For instance, the Resolution of the Plenum of the Supreme Court of the Russian Federation No. 10 dated 23 April 2019 contains useful clarifications on the application of the provisions of the Civil Code on intellectual property, including on trademarks.

Moreover, the majority of cases on the protection of intellectual property, particularly those related to the protection of luxury goods or services, are heard in Russia by a specialized Intellectual Property Court as the first and/or cassation instance. The Intellectual Property Court usually follows its own previous decisions and legal positions which, however, in rare circumstances are subject to review by the Supreme Court of the Russian Federation.

 

1.2 Substantive law

In Russia, only registered trademarks are recognized and legally protected. Non-registered designations used in commerce can be protected by other legal instruments which, however, require higher standard of proof to ensure proper protection compared to registered trademarks. Among such instruments (i) legal protection against unfair competitors, and (ii) “commercial designation” as a quasi-analogue for US unregistered trademarks can be named.

In comparison with “ordinary” registered trademarks Russian law offers a broader legal protection for (i) well-known trademarks, for (ii) trademarks with a higher recognizability [distinguishing capability] (though not officially recognized as well-known), as well as for (iii) series of trademarks.

Russian law does not recognize famous trademarks or trademarks with a reputation.

Well-known trademarks

A trademark is entitled to broader protection if as a result of its intensive use it has become well-known in the Russian Federation among relevant consumers.

To enjoy a broader scope of protection, the holder of a trademark or a designation has to complete a specific administrative procedure at the Russian Federal Service for Intellectual Property (hereinafter, “Rospatent”), as a result of which the trademark or the designation can be recognized as well-known and included in the list of trademarks well-known in the territory of the Russian Federation. For instance, such trademarks as Tiffany (No. 56), Cartier (No. 95-96), Chanel (No. 135-136), and Porsche (No. 196) are currently recognized in Russia as well-known.

The broader scope of protection for officially recognized well-known trademarks includes the following:

• The exclusive right to a well-known trademark is valid for an indefinite period of time;
• The legal protection of a well-known trademark also extends to goods different from those for which it has been recognized as well-known. The extension of legal protection to such dissimilar goods occurs when consumers will associate the use of a particular trademark with the holder of the exclusive right to a well-known trademark.

Trademarks with a higher degree of recognizability

When assessing the similarity of trademarks and the likelihood of their confusion by consumers, courts may take into consideration the recognizability of a trademark, the price of goods, their category, and other criteria[1]. Hence, a degree of recognizability of the trademark among relevant consumers is just one of the criteria that can be taken into account when assessing the likelihood of confusion of trademarks or a trademark and a designation[2].

The holder of a trademark (designation) should provide the following information for it to be officially recognized as well-known or considered enjoying a higher degree of recognizability:

• proof of its intensive use (e.g., volume of sales of goods, average annual number of consumers, position of the manufacturer in the relevant sector of economy, etc.);
• the countries in which the trademark or the designation has become widely-known;
• the costs incurred for advertising the trademark or the designation (for example, annual financial statements), etc.

In practice, the fact that a trademark is well-known or enjoys a higher degree of recognizability can be supported by the following pieces of evidence:

• studies and results of sociological surveys of consumers;
• valuation reports;
• contracts related to the use of the trademark;
• financial and annual reports;
• publications in the mass media and the press;
• materials on advertising campaigns, including online advertising, and so on.

Basically, the same criteria and evidence can be used for well-known trademarks and trademarks with a higher degree of recognizability. However, for a trademark (designation) to be officially recognized as well-known, the right holder needs to complete a specific administrative procedure in advance (the court cannot rule that the trademark is well-known ex post facto), and a more stringent standard of proof is applied for well-known trademarks.  

Series of trademarks

A trademark owner who has succeeded in registering at least 3 or more trademarks containing identical or similar verbal or graphical elements is recognized in Russian case law as the owner of a “series of trademarks”, which also results in the broader protection of a designation forming such “series”. In practice, it means that the owner of a “series of trademarks” can recognize as “confusingly similar” certain designations used by a counterparty on the market which in other circumstances (when the owner has only one trademark registered) would not be recognized as such.

In Russia, there are no specific rules governing trademarks in the luxury industry, nor the “aura of luxury”. Courts apply the same rules to luxury brands and do not offer such brands any broader range of protection except in the instances described above.  

 

1.3 Enforcement

Generally, a trademark owner can take action claiming either one or both: (i) trademark infringement and/or (ii) unfair competition for the same set of facts. Depending on the circumstances of the case, the trademark owner can either file one claim with a court, as trademark infringement is a form of unfair competition, or bring separate administrative unfair competition proceedings before the Federal Antimonopoly Service.

As a rule, a breach of the exclusive right to use a trademark is established by the court only if a distinctive sign is identical or confusingly similar to the trademark and is used for goods and services similar to those for which the trademark is registered. The use of a distinctive sign solely for information purposes does not constitute a breach of the exclusive right to use a trademark (e.g., using words included in the trademark in a common way). Similarly, the use of a trademark in parody is legitimate as long as it is not aimed at commercial promotion of products similar to those for which the trademark is registered. The trademark can be enforced against another trademark, trade name, commercial designation, geographical indication, industrial design, and other distinctive signs if such trademark has a priority date before other distinctive signs.

When enforcing a trademark against a domain name, which is not recognized as intellectual property in Russia, the court typically applies a three-step test:

• whether the domain name is confusingly similar to the trademark;
• whether the owner of the domain name has rights or legitimate interests in the domain name;
• whether the domain name has been registered and is being used in good or bad faith.

Enforcing the trademark against its unauthorized use as a metatag or a key word, in social media or comparative advertising, is also possible, but will depend on the circumstances of a particular case.

Luxury brands face various issues in expanding and protecting their exclusive rights to trademarks in Russia, such as difficulties in obtaining recognition of well-known trademarks (requires completion of an administrative procedure in advance and collection of substantial evidence; some criteria for recognition of well-known trademarks are difficult to satisfy); lack of specific legal instruments relating to the protection of brands in the luxury goods sector; registration by competitors of trademarks that were registered in other countries, but not in Russia, and others.

 

2. COPYRIGHT

2.1 Sources of law

The principal sources of copyright and related rights (to the extent to which they concern advertising and marketing of luxury goods or services) are Chapters 69, 70 and 71 of the Civil Code. Additionally, provisions on copyright and related rights are contained in a number of other normative acts, including the Law on Mass Media, government decrees “On minimum rates of renumeration for certain types of use of works of literature and art”, “On approval of the rules on paying remuneration to the author when reselling original works of visual art, authors’ manuscripts of literary and musical works”, “On approval of the rules on state accreditation of organizations engaged in collective management of copyright and related rights”, etc.

Russia is a party to a number of international treaties on copyright and related rights, including but not limited to the Berne Convention, the Universal Copyright Convention, the WIPO Copyright Treaty, the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations, the WIPO Performances and Phonograms Treaty, the Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms (Geneva Phonograms Convention), the Convention Relating to the Distribution of Programme-Carrying Signals Transmitted by Satellite, the CIS Agreement on Cooperation in the Field of Copyright and Related Rights Protection.

In the event of a conflict between international and national laws, as a rule, the international law takes precedence over the national law. Within national legislation, laws prevail over executive regulations. Russia is a civil law jurisdiction, hence, when a conflict arises, the courts primarily follow statute, but also take into consideration judicial practice (case law), especially the resolutions of the Supreme Court of the Russian Federation and the Intellectual Property Court.

 

2.2 Substantive law

The Civil Code provides for a non-exhaustive list of works (i.e., objects of copyright) which may enjoy copyright protection, including literary, musical, dramatic, choreographic, audio-visual works, painting, sculpture, graphics, works of art, works of architecture, photographic works, and other works.

The works of design, including industrial, fashion and accessory design, are eligible for copyright protection under the same conditions as any other copyrightable work.

The rights covered by copyright in Russia include:

• the exclusive right to the work (i.e., property right to exploit an object of copyright to its fullest extent), which consists of the right to reproduction, distribution, public show, public performance, import, lease, radio and television broadcasting, cable transmission, rebroadcasting, translation and other processing of a work, practical implementation of an architectural, design, town planning or landscaping project, making the work available or otherwise communicating it to the public;
• other economic rights, such as the right to renumeration (e.g., in case of works made for hire), the resale royalty right, the right of access to artistic work;
• moral rights, encompassing the right of authorship, the right to author’s name, the right of integrity of the work, the right of first publication, the right of withdrawal.

The Civil Code also sets forth moral and economic rights for holders of related rights. However, these rights are limited in comparison with copyright.

The exclusive right to the copyrightable work initially belongs to the author (a natural person), but it may be transferred to other persons, including legal entities, pursuant to an agreement or on other grounds prescribed by law (in particular, for works made for hire). In contrast, moral rights are non-transferable and cannot be waived.

Works made for hire and assignment of copyright

Moral rights to a work made for hire belong to the author (employee); the exclusive right to such a work belongs to the legal entity (employer), unless agreed otherwise. When the work is created, the author is obliged to put the work at the employer’s disposal. Once the author fulfills this obligation, the employer has 3 years to start using the work, assign the exclusive right to it, or inform the author that the work will be kept in secret. In case of failure to perform one of the above actions, the exclusive right to the work made for hire will return to the author.

Therefore, by default, the employer holds the exclusive rights to the works made for hire. To ensure that the rights to the works made for hire are properly acquired, the employer should insert respective clauses on the employee’s obligations to create copyrightable works in employment contracts and instructions. Although case law does not name a particular assignment as an essential prerequisite for a copyrightable work to be recognized as a work made for hire, it is highly recommended for employers to issue specific assignments to their employees as well.

There are no specific rules regarding the legal entity acquiring the rights in the works made for hire from consultants, shareholders, directors, or suppliers. If a copyrightable work is created for a legal entity by another legal entity (e.g., supplier or external consultancy agency) under a contract, the exclusive right to the copyrightable work will belong to (i) the client, if the creation of such work was directly provided for by the contract, or (ii) the contractor, if the contract did not expressly require the creation of the work. However, the parties to a contract can agree otherwise, hence, it is recommended for legal entities to insert specific provisions to that effect in their contracts.

If a legal entity does not have employment or other contractual relations with a consultant, shareholder, director, or supplier, it will then need to enter into an assignment agreement to acquire the rights in the works.

For a copyright assignment agreement to be valid, it must be in writing and must identify the work and the price of the agreement as its key terms. The parties can also specify the territory and the term of the agreement; however, these provisions no not affect the validity of the agreement. When drafting a copyright assignment agreement, the following should be taken into consideration:

• The assignment agreement should state that the exclusive right is assigned in full (partial assignment is not allowed under Russian law) for the entire territory and is not limited in time. If the assignment agreement introduces certain restrictions as to its term, territory and so on, it may be either qualified by the court as a license agreement or deemed invalid.
• The conclusion of a gratuitous assignment agreement is generally possible, but it requires the inclusion of express wording to that effect in the agreement. Otherwise, if the price is not provided, the agreement can be deemed unconcluded.
• As a rule, it is not allowed to assign gratuitously the exclusive right in an agreement between commercial entities.
• The payment of remuneration under the assignment agreement may be in the form of a fixed fee, periodical payments, interest deductions from the income, etc.
• Moral rights of the author cannot be assigned.

As a general rule, the exclusive right to the copyrightable work is effective and protected for the entire author’s lifetime, and during 70 years from 1 January of the year following the year of the author’s death. After the author’s death it is protected by author’s heirs. As for moral rights, there is no limit for their protection after the death of the author.

In case the work is created by co-authors, the exclusive right should be effective for the entire lifetime of the author who survives the other co-authors and during 70 years from 1 January of the year following the year of this author’s death.

There are also specific rules regarding the term of protection of copyright and related rights of authors who were repressed, participated in Great Patriotic War (i.e., part of the World War II), etc. After the expiration of the term of the exclusive right, such works fall into the public domain.

The terms of protection of related rights are as follows: 50 years for a performance (for the entire lifetime of the performer, but no less than 50 years), a phonogram and the transmission of a radio or television program, 15 years for a database, and 25 years for а work which had already fallen into the public domain and later was rediscovered and published with respect to the rights of the publisher of such work.

 

2.3 Enforcement

Russian law does not provide for any formal requirements for the protection of copyrightable works, such as registration or deposit. Similarly, copyright notices are not required to claim copyright protection in Russia. Nevertheless, it would normally be advisable to display a copyright notice to alert the public that the work is protected. There is also a non-compulsory deposit of works with the Russian Authors Society (hereinafter, “RAO”), currently managed by partner organizations of RAO, as well as voluntary registration of computer programs and databases with Rospatent.

To obtain copyright protection, the copyrightable work has to meet the following requirements: (i) it must be the result of an intellectual creation of the author, and (ii) it must have an objective form. The copyrightable work is presumed to have creative character, unless proven otherwise.

In comparison with other jurisdictions (e.g., Switzerland or Belarus) Russia requires a rather low threshold for creativity result for a work to be protected as an object of copyright. There are also no limitations for copyright protection depending on whether protected design was placed into industrial process and further marketing or not (i.e., differently from Lucasfilm ltd v Ainsworth case in UK). In Russia, industrial designs are subject to copyright protection like any other works, insofar as they meet the essential requirements mentioned above.

When assessing a copyright infringement, the court would normally establish either that there was an actual copying, or that there was an illegal processing of the work which has led to the creation of a derivative work (remake, remix, etc.). In the latter case, the burden to prove that the derivative work was actually based on the original work falls to the copyright holder, but the work does not necessarily need to be a complete reproduction.

Copyright law in Russia does not extend, among others, to ideas, concepts, principles, methods, processes. Thus, when it comes to luxury law, general ideas or concepts lying behind a particular brand fall outside the scope of copyright protection, however, they can be protected by other legal instruments (e.g., by law against unfair competition).

In principle, copyright can be potentially enforced against any type of work, including trademarks, designs, and any other intellectual property rights. For instance, a trademark registration can be challenged if the trademark is identical or confusingly similar to the title of a scientific, literary or artistic work, a character or a quotation from a such work, if the rights to the relevant work emerged prior to the priority date of the trademark and it is well-known for the audience in the territory of the Russian Federation. Copyright can also be enforced against its unauthorized use in social media and comparative advertising under the same conditions.

The doctrine of “fair use” or “fair dealing” is not recognized in Russian law compared to common law jurisdictions. However, the Civil Code recognizes a comparable limitation and sets out an exhaustive list of defences based on the “free use” of works, which an alleged infringer may rely upon. This list includes, inter alia, “free use” for personal purposes, for information, scientific, educational, or cultural purposes (e. g. quotation, parody, reproducing articles legally published in periodical press on current economic, political, social and religious issues, etc.), “free use” of works by libraries, archives and educational organizations, “free use” of musical works during official or religious ceremonies or funerals. Generally, “free use” of works is permitted without the consent of the author or renumeration, but in certain cases a reference to the name of the author is required.

As a general rule, a copyright will not be deemed unenforceable owing to misconduct by the copyright holder. Nevertheless, the copyright holder’s otherwise valid claim can be dismissed due to abuse of rights[3].

A three-year time limit applies for bringing a copyright infringement action.

 

  

3. DESIGN

3.1 Sources of law

The primary sources of law relating to design are Chapters 69, 70 and 72 of the Civil Code. Executive regulations on industrial designs include, for example, Order of the Ministry of Economic Development of the Russian Federation No. 695, establishing rules on the registration of industrial designs.

Russia is also a party to various international treaties on design, such as the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), the Eurasian Patent Convention, the Locarno Agreement Establishing an International Classification for Industrial Designs, the Paris Convention for the Protection of Industrial Property, Geneva Act of the Hague Agreement Concerning the International Deposit of Industrial Designs.

The order of priority of the relevant sources of law is as follows: provisions of an international treaty prevail over national law, and national law prevails over executive regulations. Judicial practice (case law) is formally not considered a source of law in Russia, but it can be taken into consideration by the court when deciding a particular case.

 

3.2 Substantive law

А design can be protected both by copyright law and/or patent law as long as it meets essential requirements.

To obtain protection under copyright law, a design has to satisfy the minimum requirements of having a creative character and being expressed in an objective form. Like for any other copyrightable work, neither registration, nor deposit are required.

To enjoy protection under patent law, an industrial design must be registered with Rospatent or (since 1 June 2021) with the Eurasian Patent Office. The owner must ensure that the requirements of novelty and originality are met to obtain a valid registered right to industrial design. Any product of industrial or handicraft production, in particular, packaging, composite product, set of products, font, as well as an independent part of the product may be protected by way of registered industrial design.

Unregistered industrial design cannot be protected by patent law. However, failure to obtain an industrial design patent does not preclude the owner of industrial design from enjoying protection under copyright law[4].

Designs made for hire and design rights assignment

When it comes to the designs made for hire, the general rule is that moral rights belong to the author (employee) and are non-transferable, while the exclusive right and the right to obtain a patent belong to the legal entity (employer). To keep these economic rights, the legal entity must begin to use the design, file an application to register the industrial design with Rospatent or (since 1 June 2021) with the Eurasian Patent Office, assign the exclusive right to design or inform the employee that the design will be kept in secret, and all the above must be done:

• within 3 years counting from the date when the design was put at employer’s disposal (if the design is intended to be protected as a copyrightable work); or
• within 4 months counting from the date when the author informed the employer that the industrial design was created (if the latter is intended to be protected under patent law).

There are no specific rules on acquiring the rights in the designs created by shareholders, consultants, directors, or suppliers. To acquire rights in the designs, the legal entity should either conclude assignment agreements with these persons or include relevant provisions on the allocation of intellectual property rights in the respective contracts for works.

For a design assignment agreement to be valid, it must be in writing and must identify the design and the price as its essential terms. When drafting a design assignment agreement, the same precautions apply as for a copyright assignment agreement. 

If the design is registered as an industrial design under patent law, then the assignment of the exclusive rights to it must be registered with the relevant patent authority. However, failure to comply with the requirement of state registration does not entail the invalidity of the contract itself.

The right to obtain a patent to industrial design can also be assigned. The assignment of this right must be in writing. The risk of non-patentability is generally borne by the acquirer of such right.

The designer cannot transfer or waive his/her moral rights neither under copyright law, nor under patent law.

Under patent law, the protection of an industrial design can be obtained for five years. The effective term of the exclusive right to an industrial design can be repeatedly extended upon an application of the patent holder by 5 years, but not exceeding 25 years in total.

Under copyright law, as noted above, the exclusive right to a design as a copyrightable work should be effective for the entire lifetime of the author, and during 70 years from 1 January of the year following the year of the author’s death.

 

3.3 Enforcement

When assessing design infringement under copyright law, the court usually considers the relevant creation dates of the two designs, and whether the latter design is based on the original design – actual copying is not necessary to establish design infringement.

As regards the infringement of a registered industrial design, the court assesses the similarity of the industrial designs in their essential features and their relevant priority dates. Essential features determine the appearance of the product, in particular the shape, configuration, ornament, combination of colors, lines, contours of the product, or texture of the product material.

An industrial design can be enforced against another design, trademark, patent, work of art and other intellectual property rights, including against its unauthorized use in social media and in comparative advertising. To enforce registered industrial design against other rights, the court will need to establish whether they are identical or give the same overall impression.

For a registered industrial design the following defenses are available to an alleged infringer: the use of an industrial design in a scientific experiment, its use during the exploitation of transport, occasionally or temporarily being in the territory of the Russian Federation, in extreme circumstances, for personal non-profit purposes, for national security purposes, the exhaustion of the exclusive right to an industrial design, the cases of prior use, posterior use, the invalidity of industrial design.

For a design protected by copyright law, the same defenses based on “free use” (mentioned above) apply as for any other copyrightable work.

Under patent law, a registered industrial design can be deemed unenforceable if there are validity issues (e.g., if the industrial design does not satisfy the requirements of patentability). The validity of an industrial design patent can be challenged within its effective term and in certain cases upon the expiry of this term.

The misconduct of a design owner generally does not make the design being unenforceable. However, in certain instances an otherwise valid copyright or patent can be deemed unenforceable if the claimant abuses their right to bring a claim. Furthermore, the Civil Code provides for the granting of a compulsory license in case of failure to use or insufficient use of a registered industrial design which leads to the lack of supply of relevant goods on the market.

A design holder can claim both design infringement (under patent or copyright law) and unfair competition for the same set of facts. An unfair competition claim can be filed with the Federal Antimonopoly Service or brought directly before the court. It is up to the design owner to choose whether to bring parallel or separate proceedings depending on the circumstances of the case.

Luxury brands face certain difficulties in expanding and protecting their design rights in Russia. One of them is the difficulty to prove rights over a design once a dispute has arisen, since fashion tends to repeat over time and modern designs often copy trends of the past.

Further, it can be difficult to prove an infringement of a copyright to a design when the infringer did not actually copy design, but rather created a derivative design based on the original design without obtaining consent of the right holder. The latter has to satisfy rather strict requirements of proof to prove that the other work is dependent on its original design and often lacks sufficient evidence in this respect. The claimant often needs to present a special design expert opinion in support of its claim.

As noted above, ideas, concepts and other elements reflecting the “essence” of luxury brands (as opposed to their form) are not protected by copyright or design right, however, they can be protected by other legal instruments (e.g., law against unfair competition).

 

4. RIGHT OF PRIVACY, PUBLICITY, AND PERSONAL ENDORSEMENT

4.1 Sources of law

Russian law recognizes certain elements of the right of publicity, such as the right to one’s name and pseudonym, right to one’s image, right of authorship, other immaterial values and moral rights, as well as the protection of honor, dignity, and reputation.

The principal sources of law relating to the right of publicity include the Civil Code and the Constitution of the Russian Federation. Certain aspects of the right of publicity are endorsed in other legislative acts, such as the Law on Advertising.

 

4.2 Substantive law

The right of publicity is inherent to any private individual and there are no specific requirements for an individual to enforce the right of publicity in this respect.

Moral rights, constituting the elements of the right of publicity, are non-transferable and cannot be assigned or licensed. The individual can give consent for the use of his/her name, pseudonym, or image; however, such consent is not considered a license under Russian law.

The consent for the use of one’s name can be provided on condition that such use does not mislead third persons about the identity of individuals and excludes other forms of abuse of rights.

The consent for the use of the image can be revoked at any time. However, a person to whom the consent was given is entitled to claim damages caused by the revocation.

Moral rights and other immaterial values do not formally survive the death of the individual. However, these rights can be protected by the heirs and other interested persons after the death of the individual in cases provided for by law. For instance, interested persons have the right to protect the honor, dignity, and reputation of the deceased individual.

As for the protection of the right of authorship, right to author’s name, and right of integrity of the work, the author may indicate a person who will protect such rights after the author’s death. This person protects the deceased author’s moral rights throughout such person’s life. In the absence of the appointment of a specific individual, these rights can be protected by the author’s heirs and other interested persons.

In addition, the heirs have certain rights over the deceased individual’s moral rights. For example, the image of the deceased individual can be used by third persons only with the consent of his/her children or surviving spouse, and in their absence – with the consent of parents. In the event of the death of the individual, the death of the named heirs, or of their absence, the consent for the use of the image is not required.

Furthermore, the heirs can give consent for the registration of the trademark identical to the name, pseudonym, or portrait of the deceased well-known person.

4.3 Enforcement

The right of publicity can be enforced against any unauthorized use, whether for commercial purposes or not. Therefore, it is not necessary to prove that an individual’s name, or other aspects of one’s identity have a commercial value to obtain remedies for the unauthorized use.

As regards defenses available to an alleged infringer, it can be argued that the consent was given for the use of one’s name, pseudonym, or image.

The main defenses for the dismissal of the claim for the violation of the right to one’s image are the following:

• the use of the image in public interests;
• when the image was taken at a public event, except for cases where the image of a person is the main object of use;
• the person in question was paid for posing.

As for the protection of reputation, one may argue that the information that was disseminated is true and is not defamatory. A further argument can be that the information is not fact-based, but rather expresses one’s opinion (freedom of speech and expression).

If the violation consists in the registration of a trademark identical to a name, a pseudonym or a portrait of a person, a potential defense can be that such person has not become well-known in Russia as of the date of registration of the trademark. Importantly, such defense is not available if the person has become well-known in certain narrow social circles, but not in the whole territory of the Russian Federation[5].

Under Russian law, the right of personal identity is not protected as such, separately from other moral rights. Thus, the issue that celebrities may face in exercising their right of publicity is the lack of legal instruments that would allow for the protection of their identity as a whole, independently from other rights. Currently, most cases related to the exercise of the right of publicity by celebrities concern the illegal use of celebrities’ images or names (pseudonyms) without their permission in the commercial activity of third persons, including in advertising or when registering trademarks.

 

5. PRODUCT PLACEMENT

There are no specific laws or regulations in Russia that would provide a clear and definite legal regime for product placement. Thus, the conditions for product placement will be determined on a case-by-case basis.

According to Article 2 of the Law on Advertising, references to a product, means of its individualization (such as trademarks), the manufacturer or the seller of the product fall outside the scope of the Law on Advertising if two criteria are met, namely:

1.  such references are organically integrated into the works of science, literature, or art;
2.  they do not constitute information of advertising nature.

Hence, as long as these conditions are satisfied, product placement is permitted and does not need to meet specific requirements for advertising prescribed by law.

For example, in one case, the Intellectual Property Court did not acknowledge the violation of exclusive rights to trademarks, as the film scenes with the image of alcohol with particular trademarks were organically integrated into the plot of the film, conveying the habits of the main character[6].

According to the clarifications of the Federal Antimonopoly Service, the information about a product can be considered organically integrated into a particular work if it forms an integral part of the overall plot and provides additional characteristics of an actor or a situation. Thus, when the information about the product is not perceived as a part of the plot and goes beyond the content of the work, with the attention focused on the characteristics of the product itself, such information cannot be considered organically integrated into the work. In this case, product placement is permitted, but must comply with the requirements of the Law on Advertising.

Such requirements include, inter alia, prohibition on advertising which encourages committing illegal or violent actions, forms a negative attitude towards persons who do not use the advertised goods, demonstrates the processes of smoking of tobacco or consumption of alcoholic beverages; standards on the length of advertising in the programs; rules on advertising in TV and radio programs; standards on advertising of certain categories of goods, and so on.

There are no specific remedies in the event a product placement contract is breached. A brand owner is entitled to sue the non-compliant party for breach of contract and intellectual property rights infringement. The brand owner may also seek damages, termination of the contract, combatting actions violating his/her rights, destruction of counterfeit goods, etc.

The main concern for product placement that luxury brand owners may face is the legal prohibition of “hidden” advertising, established by Article 5 of the Law on Advertising. “Hidden” advertising is defined as advertising which has an impact on the consciousness and mind of the consumers who do not realize being influenced by such advertising. The case law on the prohibition of product placement as “hidden” advertising is controversial and inconsistent.

 

6. PROTECTION OF CORPORATE IMAGE AND REPUTATION

In Russia, the right of publicity does, to a certain extent, encompass legal entities.

In particular, companies are entitled to the protection of their reputation in the event of defamation. However, legal entities can recover only economic damages, as the provisions of the Civil Code on the compensation of moral damages do not extend to legal entities.

Further, a company may defend its image or reputation through the means of individualization, such as a trade name, a commercial designation or a trademark. It should be kept in mind, however, that in Russia luxury brands do not enjoy a broader scope of protection by virtue of “aura of luxury” or trademarks with reputation.

The Civil Code does not provide for the protection of the identity (image) of the brand as such, independently from the company’s reputation or means of individualization. However, a company may defend the identity (image) of its product reflecting the style of the brand on the grounds of unfair competition. Under Article 14.6 of the Law on Protection of Competition it is prohibited to copy or imitate the appearance of the goods of a competitor, the packaging of such goods, their label, name, set of colors, or corporate identity as a whole.

In Russia, companies do not have the right of privacy. Nevertheless, they can protect commercially sensitive information by introducing a commercial secret or a confidentiality legal regime. Further, companies can claim intellectual property rights infringement if such information is considered know-how (in particular, by implementing internal business process to select and protect such information as know-how).

In accordance with the principle of freedom of contract, it is generally possible to include specific clauses in agreements aimed at protecting the corporate image or reputation of a company, subject to the scrutiny of the Law on Protection of Competition. For example, a clause prohibiting to sell the products to re-sellers whose image is below a defined standard or to sell the products below a certain price may under certain conditions violate the Law on Protection of Competition.

It is not prohibited to include penalty clauses in such contracts under Russian law.

When drafting penalty clauses, it is recommended to specify very clearly the mechanism of calculating a penalty, as courts are reluctant to enforce vague penalty clauses. In addition, it should be taken into consideration that Russian courts enjoy a wide discretion to reduce the amount of penalty indicated in a contract.

Liquidated damages are not directly regulated under Russian law, however, their inclusion in contracts is generally permissible. 

While the inclusion of specific clauses into agreements aimed at protecting the corporate image or reputation of companies as well as penalties for their violation is possible, such agreements are rarely concluded in Russia and case law on the matter of enforceability of such clauses has not been formed yet.

The main concern for luxury brands in protecting their corporate image and reputation is the insufficiency of legal instruments for complex brand protection. Currently, the identity (image) of the brand can be protected only through subsidiary legal instruments (such as defamation proceedings or trademarks). The protection of identity of the brand as a whole is only possible on unfair competition grounds, which clearly does not reflect the needs of business in the luxury industry. Further, the concepts of “trade dress” or “aura of luxury” are poorly developed in Russia.

As for the secondary market, including resale, the main issue here is the attempts of certain brands to coordinate prices and influence re-sellers, which may result in the violation of the Law on Protection of Competition.

 

AUTHORS’ BIOGRAPHIES

Igor Nevzorov

Igor Nevzorov is a managing partner at CLAIMS. Under his leadership, CLAIMS has developed and implemented cutting-edge strategies and tactics related to intellectual property operations for major FMCG companies, devised methods for protection of key brands, and carried out more than 100 complex cases in intellectual property protection. Igor has significant experience in consulting major Russian and international FMCG companies on implementing strategies for intellectual property and brand protection, trademark and trade dress dispute resolution. Igor is the author of more than 50 publications on intellectual property protection and a series of research articles on law and history of copyright and trademarks. He has also lectured on Intellectual Property Law and Commercial Law at the Faculty of Law of the Saint Petersburg State University since 2004. Igor is a member of the International Association for the Protection of Intellectual Property (AIPPI) and the International Trademark Association (INTA) since 2017.

Anastasia Savosina

Anastasia Savosina is a patent attorney and a partner at CLAIMS. Anastasia has successfully completed a program in European law, including intellectual property law, at Université Paris 2 Panthéon-Assas (France). Anastasia is a member of the International Association for the Protection of Intellectual Property (AIPPI) and the International Trademark Association (INTA) since 2017. Anastasia is also an individual member of the Art Law Foundation since 2019. Anastasia has more than six years of experience in intellectual property dispute resolution and consulting. She advises clients in the field of intellectual property law, specializing in the legal protection of works of art. Anastasia’s vast experience in European and Russian civil law allows her to coordinate and support transactions relating to intellectual property and artworks by applying legal tools provided by French and European law, and to develop effective systems for protecting intellectual property taking full advantage of favorable policies in foreign jurisdictions.

Polina Semina

Polina Semina is an associate at CLAIMS. Polina holds LL.B. from National Research University Higher School of Economics and LL.M. from Queen Mary University of London. Polina has experience in handling multi-jurisdictional litigation projects involving intellectual property rights protection. Polina specializes in complex multi-faceted international litigation and arbitration with foreign elements. Polina also manages projects on trademarks and copyright protection in the countries of Asia and Europe. Polina represents clients in courts, including the Intellectual Property Court, and at the Federal Antimonopoly Service.

This chapter and the research behind it would not have been possible without the exceptional knowledge and enthusiasm of our junior lawyers Nikita Petrov, Eugenia Buldakova, Maya Prosvitlyuk.

 

 

 

 

 

[1] Resolution of the Plenum of the Supreme Court of the Russian Federation dated 23 April 2019 No. 10 “On the Application of Part Four of the Civil Code of the Russian Federation” (clause 162).
[2] See, for example, Resolution of the Intellectual Property Court dated 7 June 2019 in case No. SIP-644/2018.
[3] Resolution of the Intellectual Property Court of the Russian Federation dated 20 November 2020 in case No. А21-1160/2020; Resolution of the Intellectual Property Court of the Russian Federation dated 11 July 2018 in case No. А40-61874/2017. 
[4] Resolution of the Intellectual Property Court of the Russian Federation dated 22 December 2021 in case No. А10-891/2020.
[5] Decision of the Intellectual Property Court of the Russian Federation dated 22 May 2019 No. SIP-858/2018.
[6] Resolution of the Intellectual Property Court of the Russian Federation dated 10 February 2020 in case No. А40-64050/2019.