If in 2023 you once again failed to run for president, become Time Person of the Year or launch a startup, don’t feel bad, you’re not alone!

We decided to steer away from self-criticizing personal achievements and to reflect, as usual, on IP results of 2023 instead: how the lawmakers made us happy, what court cases kept us at the edge of our seats and what comes next in 2024?

1.      LAND TO THE PEASANTS, TRADEMARKS TO PEOPLE

Starting from June 29, 2023, any individual can hold rights to trademarks, which means applying for registration of new trademarks and acquiring rights to trademarks that have been already registered.

Previously, only legal entities and individual entrepreneurs could register a trademark with Rospatent – Russia's trademark authority, since it was considered that only they do business and provide goods and services. However, with the advent of the “self employed” status, individuals have gained the opportunity to engage in entrepreneurial activity without registering as an individual entrepreneur, and now, after the tax laws, the civil laws have also been renewed.

2.      THE FUTURE HAS ARRIVED OUT OF THE BLUE

If you read our Telegram channel, then you are well familiar with the words “voice synthesis,” “deepfake,” “neural networks” and “machine learning.”

George Martin and the Authors Guild weren't too excited about neural networks. The writers filed a collective lawsuit on copyright violation against OpenAI, the company that developed ChatGPT, where they complained that the chat bot was able to “write” sequels, prequels and short summaries of George Martin's books. The court has not made a ruling yet, but this likely is not the last lawsuit against OpenAI.

Actors too have become victim, as the deepfake technology can in fact deprive them of their career. We already wrote about cases with Maksim Vitorgan (the actor's face was substituted with a deepfake and his name was removed from the credits) and with Keanu Reeves (the actor doesn't even suspect he has forgotten to turn off the iron at home).

Tech development has also created a threat for voiceover actors: Alena Andronova made a recording of her voice for training Tinkoff bank's voice assistant. The actress later learned that her voice is actively being used for various texts, including erotic ones. Alena filed a lawsuit against the bank for unlawful speech synthesis. The court has not ruled on her complaint yet – according to the Moscow court site, the lawsuit has been left without action.

3.      500,000 RUBLES FOR A TELEGRAM POST

If you recall, amendments to the federal advertising law took effect on September 1, 2022. Now, advertisements on the Internet must be marked with an ERID, and all information related to the advertisement, including copies of agreements and acts, must be submitted to Roskomnadzor.

In 2023, new administrative fines were introduces by law for not complying with the marking rules (Parts 15 through 17 Article 14.3 of the Russian Administrative Offenses Code). Advertising without an ERID can result in a fine of up to RUB 500,000 for a company. Companies can also be fined for not providing to Roskomnadzor information about the advertising. The biggest fines (up to RUB 700,000) can be levied on advertising data operators if they violated their duties.

The fines are real indeed: Roskomnadzor has already levied the first fine of RUB 300,000 for lack of an ERID in three posts in an  entrepreneur's Telegram channel.

This year, the CLS team grew their expertise in Internet advertising marking and shared their accumulated knowledge on the SPIBA venue as part of the Legal Aspects of Blogging course. To get a copy of the presentation, please write to the Marketing department at marketing@cls.ru.

4.      DIVIDING AN ORANGE (IP)

The moment everyone has been waiting for: a draft law on co-owning an exclusive right was adopted in the first reading.

The explanatory note states that in practice there are often several rightholders, and their interests do not always coincide, causing problems with the disposition over the exclusive rights.

The draft law provides a possibility to allocate shares in an exclusive right in certain cases, including by agreement between rightholders. The agreement needs to contain terms and conditions concerning how decisions are to be made regarding the disposition over the exclusive right and addressing the issue of when a party ceases to be a rightholder.  The issue of co-ownership of patents and trademarks are treated in a similar manner.

The other issues to be regulated by the law are those of distribution of income and expenses of the rightholders, procedure for protecting “shared” IP rights in court, as well as rules for enforced collection in respect to an exclusive right in general and, in particular, a share in such right.

At this point, the draft law has only passed first reading, so many amendments and clarifications are expected, which we will be on the lookout for in 2024!

5.      ORPHAN WORKS TO FIND HOME?

A draft law dedicated to “orphan” copyright and related rights was introduced to the State Duma. This concerns orphan objects of copyright and related rights that have not become part of the public domain yet, but their rightholder is unknown or cannot be reached.

The new regulations are intended to simplify the turnover of exclusive rights – anyone interested can obtain a license to an orphan item by applying to an accredited organization for collective rights management.

If the rightholder does “turn up,” they are entitled to terminate all license agreements signed without them and request that the accredited organization pay a fee.

The draft law passed first reading, subject to further edits in 2024.

6.      STEP TOWARD AN INDEPENDENT RUNET

At the end of 2023, a law was signed prohibiting authorization on Russian web sites using foreign services.

Starting December 1, 2023, you can be authorized to use Russian services only if you use a Russian email, phone number of a Russian operator, the Gosuslugi portal, the Unified Biometric System or with the use of other Russian systems (for example, VK ID or Yandex ID).

The focus is specifically on authorization, i.e. entering a service through an existing account (in another service). For example, previously some Russian web sites allowed you to bypass registration and the creation of a new account by entering the site through a third-party service, including a foreign one (Google, Apple). Now authorization using foreign service is not available.

7.      RECOMMENDER TECHNOLOGIES UNCOVERED

Starting October 1, 2023, there are new requirements web sites and information systems must follow if they use “recommender technologies” (we recommend reading our comments  here).

Recommender technologies are those that collect and analyze information about a user’s preferences (what site pages they visited, what search queries they entered, what products were of interest to them). This is a principle which marketplaces use (“May be of interest to you...”), as well as streaming services (“Recommended: ...”)and social networks.

Now, all owners of information resources must inform users of recommender technologies being in place and post on their web site the rules governing how they are used. If the new rules are not followed, Roskomnadzor can block your web site and you can be subjected to criminal or administrative liability.

8.      TRANSFER OF PERSONAL DATA ABROAD TIGHTENED

Staring from March 1, 2023, the amendments to Federal Law “On personal data” regarding the cross-border transfer of personal data have taken effect.

A company transferring personal data abroad must notify Roskomnadzor about the intent to perform cross-border transfer (not to be confused with the intent to process personal data – a different story!). Roskomnadzor has 10 work days to examine the notice and can either resolve to ban/restrict the cross-border transfer or give “silent” approval.

Breaching the rules for cross-border personal data transfer can lead to administrative liability (Articles 13.11 and 19.7 of the Russian Administrative Offenses Code), civil liability (losses, emotional suffering), as well as to the operator's web site being blocked.

In May of 2023, the CLS team held a business breakfast on the topic of “Cross-border transfer of personal data: how business must live with the new rules.” To get a copy of the presentation from this event, please write to the Marketing department at marketing@cls.ru.

9.      THE RUSSIAN CONSTITUTIONAL COURT TO SAFEGUARD IP

The year 2023 gave us new rulings of the Russian Constitutional Court on intellectual property issues.

In January, the Russian Constitutional Court ruled that the expenses borne by a party in the course of a dispute being examined in the Patent Disputes Chamber (patent duty, payments to experts, specialists, interpreters, etc.) are to be compensated by the party against which judgment is made.. Previously, courts have denied such compensation.

In March, the Russian Constitutional Court explained that payment of remuneration to an author for use of an employee's invention, utility model or industrial sample on its own does not depend on actual use by the employer. However, the court can change the amount of the remuneration, depending on the degree to which the work object is used and on the author's personal contribution.

A new judgment came out at the end of the year. Two affiliated rightholders filed claims on recovering compensation for violation of exclusive rights to similar trademarks, and the Russian Constitutional Court indicated that this does not constitute abuse. At the same time, the court is entitled to decrease the compensation amount if it exceeds greatly the amount of the rightholder's losses.

10.   CHANEL SUNGLASSES FOR 150 RUBLES

At the beginning of 2023, we had a lively discussion about counterfeit CHANEL and Christian Dior sunglasses (read our comments here).

Foreign rightholders sued an entrepreneur for compensation of losses for violating trademark rights in the amount of RUB 125,000 of lost income (based on the cost of original glasses). The violator insisted that losses comprised RUB 900.

During the first examination, the courts ruled in favor of the plaintiff. But then the dispute went to the Supreme Court: court acts were canceled and the case was sent back to be examined once again. The rightholders did not prove that the contraband prevented them from receiving income from sale of original goods. It is not obvious that consumers of the contraband glasses that cost RUB 150 are from among the consumer group of original Chanel and Christian Dior products. During the new examination, the court awarded compensation of RUB 30,000 (case № А63-6499/2021).

The lesson to be learned here is that recovering losses might not be the most effective way to protect exclusive rights.

 

Happy New Year and see you in 2024! 

what comes next in 2024?

1.      LAND TO THE PEASANTS, TRADEMARKS TO PEOPLE

Starting from June 29, 2023, any individual can hold rights to trademarks, which means applying for registration of new trademarks and acquiring rights to trademarks that have been already registered.

Previously, only legal entities and individual entrepreneurs could register a trademark with Rospatent – Russia's trademark authority, since it was considered that only they do business and provide goods and services. However, with the advent of the “self employed” status, individuals have gained the opportunity to engage in entrepreneurial activity without registering as an individual entrepreneur, and now, after the tax laws, the civil laws have also been renewed.

2.      THE FUTURE HAS ARRIVED OUT OF THE BLUE

If you read our Telegram channel, then you are well familiar with the words “voice synthesis,” “deepfake,” “neural networks” and “machine learning.”

George Martin and the Authors Guild weren't too excited about neural networks. The writers filed a collective lawsuit on copyright violation against OpenAI, the company that developed ChatGPT, where they complained that the chat bot was able to “write” sequels, prequels and short summaries of George Martin's books. The court has not made a ruling yet, but this likely is not the last lawsuit against OpenAI.

Actors too have become victim, as the deepfake technology can in fact deprive them of their career. We already wrote about cases with Maksim Vitorgan (the actor's face was substituted with a deepfake and his name was removed from the credits) and with Keanu Reeves (the actor doesn't even suspect he has forgotten to turn off the iron at home).

Tech development has also created a threat for voiceover actors: Alena Andronova made a recording of her voice for training Tinkoff bank's voice assistant. The actress later learned that her voice is actively being used for various texts, including erotic ones. Alena filed a lawsuit against the bank for unlawful speech synthesis. The court has not ruled on her complaint yet – according to the Moscow court site, the lawsuit has been left without action.

3.      500,000 RUBLES FOR A TELEGRAM POST

If you recall, amendments to the federal advertising law took effect on September 1, 2022. Now, advertisements on the Internet must be marked with an ERID, and all information related to the advertisement, including copies of agreements and acts, must be submitted to Roskomnadzor.

In 2023, new administrative fines were introduces by law for not complying with the marking rules (Parts 15 through 17 Article 14.3 of the Russian Administrative Offenses Code). Advertising without an ERID can result in a fine of up to RUB 500,000 for a company. Companies can also be fined for not providing to Roskomnadzor information about the advertising. The biggest fines (up to RUB 700,000) can be levied on advertising data operators if they violated their duties.

The fines are real indeed: Roskomnadzor has already levied the first fine of RUB 300,000 for lack of an ERID in three posts in an  entrepreneur's Telegram channel.

This year, the CLS team grew their expertise in Internet advertising marking and shared their accumulated knowledge on the SPIBA venue as part of the Legal Aspects of Blogging course. To get a copy of the presentation, please write to the Marketing department at marketing@cls.ru.

4.      DIVIDING AN ORANGE (IP)

The moment everyone has been waiting for: a draft law on co-owning an exclusive right was adopted in the first reading.

The explanatory note states that in practice there are often several rightholders, and their interests do not always coincide, causing problems with the disposition over the exclusive rights.

The draft law provides a possibility to allocate shares in an exclusive right in certain cases, including by agreement between rightholders. The agreement needs to contain terms and conditions concerning how decisions are to be made regarding the disposition over the exclusive right and addressing the issue of when a party ceases to be a rightholder.  The issue of co-ownership of patents and trademarks are treated in a similar manner.

The other issues to be regulated by the law are those of distribution of income and expenses of the rightholders, procedure for protecting “shared” IP rights in court, as well as rules for enforced collection in respect to an exclusive right in general and, in particular, a share in such right.

At this point, the draft law has only passed first reading, so many amendments and clarifications are expected, which we will be on the lookout for in 2024!

5.      ORPHAN WORKS TO FIND HOME?

A draft law dedicated to “orphan” copyright and related rights was introduced to the State Duma. This concerns orphan objects of copyright and related rights that have not become part of the public domain yet, but their rightholder is unknown or cannot be reached.

The new regulations are intended to simplify the turnover of exclusive rights – anyone interested can obtain a license to an orphan item by applying to an accredited organization for collective rights management.

If the rightholder does “turn up,” they are entitled to terminate all license agreements signed without them and request that the accredited organization pay a fee.

The draft law passed first reading, subject to further edits in 2024.

6.      STEP TOWARD AN INDEPENDENT RUNET

At the end of 2023, a law was signed prohibiting authorization on Russian web sites using foreign services.

Starting December 1, 2023, you can be authorized to use Russian services only if you use a Russian email, phone number of a Russian operator, the Gosuslugi portal, the Unified Biometric System or with the use of other Russian systems (for example, VK ID or Yandex ID).

The focus is specifically on authorization, i.e. entering a service through an existing account (in another service). For example, previously some Russian web sites allowed you to bypass registration and the creation of a new account by entering the site through a third-party service, including a foreign one (Google, Apple). Now authorization using foreign service is not available.

7.      RECOMMENDER TECHNOLOGIES UNCOVERED

Starting October 1, 2023, there are new requirements web sites and information systems must follow if they use “recommender technologies” (we recommend reading our comments  here).

Recommender technologies are those that collect and analyze information about a user’s preferences (what site pages they visited, what search queries they entered, what products were of interest to them). This is a principle which marketplaces use (“May be of interest to you...”), as well as streaming services (“Recommended: ...”)and social networks.

Now, all owners of information resources must inform users of recommender technologies being in place and post on their web site the rules governing how they are used. If the new rules are not followed, Roskomnadzor can block your web site and you can be subjected to criminal or administrative liability.

8.      TRANSFER OF PERSONAL DATA ABROAD TIGHTENED

Staring from March 1, 2023, the amendments to Federal Law “On personal data” regarding the cross-border transfer of personal data have taken effect.

A company transferring personal data abroad must notify Roskomnadzor about the intent to perform cross-border transfer (not to be confused with the intent to process personal data – a different story!). Roskomnadzor has 10 work days to examine the notice and can either resolve to ban/restrict the cross-border transfer or give “silent” approval.

Breaching the rules for cross-border personal data transfer can lead to administrative liability (Articles 13.11 and 19.7 of the Russian Administrative Offenses Code), civil liability (losses, emotional suffering), as well as to the operator's web site being blocked.

In May of 2023, the CLS team held a business breakfast on the topic of “Cross-border transfer of personal data: how business must live with the new rules.” To get a copy of the presentation from this event, please write to the Marketing department at marketing@cls.ru.

9.      THE RUSSIAN CONSTITUTIONAL COURT TO SAFEGUARD IP

The year 2023 gave us new rulings of the Russian Constitutional Court on intellectual property issues.

In January, the Russian Constitutional Court ruled that the expenses borne by a party in the course of a dispute being examined in the Patent Disputes Chamber (patent duty, payments to experts, specialists, interpreters, etc.) are to be compensated by the party against which judgment is made.. Previously, courts have denied such compensation.

In March, the Russian Constitutional Court explained that payment of remuneration to an author for use of an employee's invention, utility model or industrial sample on its own does not depend on actual use by the employer. However, the court can change the amount of the remuneration, depending on the degree to which the work object is used and on the author's personal contribution.

A new judgment came out at the end of the year. Two affiliated rightholders filed claims on recovering compensation for violation of exclusive rights to similar trademarks, and the Russian Constitutional Court indicated that this does not constitute abuse. At the same time, the court is entitled to decrease the compensation amount if it exceeds greatly the amount of the rightholder's losses.

10.   CHANEL SUNGLASSES FOR 150 RUBLES

At the beginning of 2023, we had a lively discussion about counterfeit CHANEL and Christian Dior sunglasses (read our comments here).

Foreign rightholders sued an entrepreneur for compensation of losses for violating trademark rights in the amount of RUB 125,000 of lost income (based on the cost of original glasses). The violator insisted that losses comprised RUB 900.

During the first examination, the courts ruled in favor of the plaintiff. But then the dispute went to the Supreme Court: court acts were canceled and the case was sent back to be examined once again. The rightholders did not prove that the contraband prevented them from receiving income from sale of original goods. It is not obvious that consumers of the contraband glasses that cost RUB 150 are from among the consumer group of original Chanel and Christian Dior products. During the new examination, the court awarded compensation of RUB 30,000 (case № А63-6499/2021).

The lesson to be learned here is that recovering losses might not be the most effective way to protect exclusive rights.

Happy New Year and see you in 2024!