In the last two months, the Russian lawmakers’ activity aimed at protecting IP rights in the Internet has exceeded all expectations.

The breaking point was the so called the “Anti-piracy law”  (the “Law”) [1] enacted on August 1, 2013, which provides owners (“Rightholders”) of audiovisual works (“movies, including movies for TV and cinema”) with additional opportunities to fight against their unlawful posting on the Internet.

Key elements of the new Law are the following provisions:

    1. The Moscow City Court has exclusive competence to consider, as a first-instance court, applications on preliminary interim measures for disputes related to unlawful movie distribution on the Internet, as well as to examine disputes, including between legal entities, for which such measures have been taken.

    2. The institute of preliminary interim measures is introduced into civil proceedings. The said measures consist in limiting access to pirated content for the period up to 15 days BEFORE the Rightholder files a claim with the court. The Moscow City Court may adopt an order on applying such measures based only on two documents:

• document confirming the applicant’s rights to the content in question;

• document confirming a violation of such right.

The application can be filed electronically by filling out the form placed on the court’s web site.

The Law stipulates the following procedure:

a) The Rightholder must file a petition with the Moscow City Court on the violation of his right (the “Petition”) together with confirming documents;
b) The Moscow City Court must consider the Petition within one day and adopt an order on taking preliminary interim measures;
c) The Moscow City Court sends a copy of the order to the applicant, other interested parties and to the Federal Service for Supervision in the Sphere of Telecom, Information Technologies and Mass Communications (the “Roskomnadzor”) [2]  within the following day;
d) Within 3 business days Roskomnadzor must send an electronic notice of the violation to the hosting provider of the relevant Internet resource (the “Provider”);
e) The Provider must notify the site owner within 1 day and block access to the resource within 3 days, if the content is not removed voluntarily. The hosting provider and the site owner do not bear any responsibility toward users or rightholders for limiting access to the information;
f) Within one day after the notice is received from Roskomnadzor, the communications providers must limit access to the resource if other responsible parties have not fulfilled the requirements. Blocking an entire web site is also allowed;
g) Within 15 days the Rightholder must file a claim with the court, otherwise the preliminary block will be lifted. If the claim has been filed, the interim measures continue being in force as a measure for securing the claim.

Entities whose rights have been violated by preliminary interim measures are entitled to request the applicant to reimburse them for their losses before the claim is filed by the applicant with the court or if the claim is dismissed by the court.

    3.    The Law has introduced a new concept of “Information Intermediary.” The Information Intermediary is an entity conveying material in informational and telecommunications networks, as well as providing a possibility to post materials or information for accessing. The Intermediary can also be held liable for violating IP rights.
        Nevertheless:

3.1.    An Intermediary conveying materials is not held liable if he, in aggregate,

a) is not the initiator of such conveyance and does not determine the recipient;
b) does not alter the materials;
c) was not aware and should not have been aware that the initiator of the conveyance uses them unlawfully the materials unlawfully.

3.2. An Intermediary posting materials is not held liable, if he, in aggregate:

a) was not aware that the materials are used by third parties unlawfully;
b) took necessary timely and sufficient measures to stop violation of the right, in the event he received a written request from the Rightholder about the unlawful content posted on the site by a third party.

This Law has given rise to numerous disputes and criticism. In particular, there were expressed concerns related to:

    1.    The competence of the Moscow City Court established by the Law. Pursuant to the Arbitration Procedural Code of the Russian Federation, disputes on violating proprietary rights (including IP rights) between legal entities must be considered by commercial arbitration courts. Nevertheless, according to the Law, these powers are given to the Moscow City Court, which is a court of general jurisdiction;

    2.    The concept of “information intermediary.” This concept is formulated incorrectly and does not provide a clear limitation to the range of parties who can be held liable. This creates grounds for broad interpretation of this definition;

    3.    Possibility to block Internet resources without the court examining the case on its merits. It is allowed to block not only separate pages where pirate content is posted, but the entire web site as well. The risk of blocking other sites not containing unlawful content, but located at the same IP address is not taken into account either. Thus, there are grounds created for abusive practices and bad faith competition.

After the Law had been passed, a number of draft laws were introduced, altering, cancelling or supplementing its provisions.

For example, the draft law [3] dated August 28, 2013 making reference to the above-mentioned flaws of the Law proposes to cancel it in full.

On the contrary, one of the recent draft laws published on the State Duma web site dated September 17, 2013, proposes to expand the effect of the Law, by extending it not only to audiovisual products, but to all the other items of copyright and associated rights, including literary works and pieces of music, as well as software. The draft law specifies that all cases, except for those related to violating intellectual rights to movies, must be under the jurisdiction of the Court of Intellectual Rights.

In particular, the said draft law specifies that the access to unlawful content must be limited first of all through the URL and if this is impossible, then and only then through the IP address.

The draft law also introduces the use of complaint procedure as part of pre-trial order of settling disputes on the Internet. Under this procedure, the Rightholder may apply to court only after he has raised a complaint against the information intermediary and only if the intermediary has not undertaken necessary and sufficient measures to cancel or suspend the access to the information. The party who posted controversial content on the Internet may raise an objection against such limitation of access.

Also, another draft law [4] was introduced to the State Duma for consideration, proposing to impose penalties for failure to take measures on limiting access to unlawful content and on deleting it. The following penalties are proposed:

a) For individuals –  5,000 Rubles;
b) For officers – 50,000 Rubles;
c) For legal entities – from 300,000 to 1,000,000 Rubles.

The legislation related to protecting IP rights on the Internet is undergoing active development. We will monitor the status of draft laws and keep you informed.

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[1] Federal Law No.187-FZ “On amending certain legislative acts of the Russian Federation with respect to protecting intellectual rights in information and telecommunication networks”

[2] Federal Executive Authority in charge of control and supervision in the sphere of mass media, information technologies and mass communications

[3] Draft law No.336400-6 “On amending certain legislative acts of the Russian Federation with respect to protection of actors’ rights in using information and telecommunication technologies”

[4] Draft Law No. 303374-6 “On amending the Administrative Offences Code of the Russian Federation as pertains to establishing administrative liability for failure to take measures on limiting access to information resources which provide information with violating IP rights”

Additional notes

Should any questions arise in connection with the above or if you need any additional materials, please contact Anna Shmalyuk, St. Petersburg Office of Capital Legal Services.

This Information letter keeps the clients of Capital Legal Services and other interested parties abreast of information that may, to any extent, affect their activity or cater to their particular interests. The opinions and commentaries expressed in this information letter shall not be deemed as legal opinions and do not cancel the need to obtain legal advice or legal opinion on separate issues.