SURVEY LETTER OF THE SUPREME ECONOMIC COURT OF UKRAINE

of December 14, 2007 No. 01-8/974

About practice of application by economic courts of the legislation on protection of the rights to intellectual property items

(on the materials considered in cassation procedure by the Supreme Economic Court of Ukraine)

According to the procedure of information and for accounting in hearing of cases the overview of the disputes solved by economic courts on which judgments are reviewed in cassation procedure by the Supreme Economic Court of Ukraine is sent.

1. Performance of works which was included as component into other complete audiovisual work (the television movie) the right on which execution is acquired on legal causes, in essence is not non-contractual use of the author's work and does not violate the rights of the organization of collective management. In that case the organization of collective management has the right to appeal to economic court with the recovery suit of award, but not about compensation collection.

The organization of collective management appealed to economic court with the recovery suit of compensation for copyright violation on the piece of music (song) by its public performance during demonstration of television series.

In adoption of judgments on case economic courts including the Supreme Economic Court of Ukraine, proceeded from the following.

According to part two of article 17 of the Law of Ukraine "About copyright and the related rights" (further - the Law) if another is not provided in the agreement on creation of the audiovisual work, authors who made contribution or undertook to make contribution in creation of the audiovisual work and transferred property rights of the organization which performs production of the audiovisual work, or to the producer of the audiovisual work have no right to object to execution of this work, its reproduction, distribution, public display, public demonstration, public performance, and also subtitling and duplication of its text, except the right to separate public performance of the pieces of music included in the audiovisual work. For promulgation and each public performance, display, demonstration or the notice of the audiovisual work, its delivery in property hiring and (or) commercial hire of its copies for all authors of the audiovisual work the right to fair remuneration which is distributed and paid in the organizations of collective management or in a different way remains.

According to article 50 of the Law copyright violation and (or) the related rights which gives the grounds for judicial protection is making by any person of actions which violate the personal non-property rights of subjects of copyright and (or) the related rights determined by articles 14 and 38 of this Law, and their property rights determined by Articles 15, of 39, 40 and 41 these Laws taking into account the restrictions of property rights provided by articles 21-25, 42 and 43 of this Law.

Therefore in appropriate cases the composer has the right to fair remuneration and if unauthorized use of the work - on collection of compensation for copyright violation takes place.

Considering brought, economic courts, having determined the fact of proper transfer of the corresponding copyright of the piece of music of the organization which performed production of the audiovisual work (the television movie), came to reasonable conclusion about absence at the claimant of the right to object to further use of the piece of music as a part of the audiovisual work and legally refused satisfaction of the recovery suit of compensation.

2. The name of the work is subject to protection as copyright object only if it is result of creative activities of the author (is original) and can independently be used.

Society appealed to economic court with the claim for prohibition to the defendant to use part of the name of the work, property copyright of which belong to the claimant, and also asked to collect compensation for copyright violation in its advantage.

Claims are satisfied by the previous degrees of jurisdiction with reference to the fact of use by the defendant of part of the name of the work of the claimant.

By results of consideration of the writ of appeal on the corresponding case the Supreme Economic Court of Ukraine specified the following.

According to article 1 of the Law of Ukraine "About copyright and the related rights" the author is physical person which the creative activity created the work.

According to instructions of article 9 of the called Law part of the work which can independently be used including the original name of the work, is considered as the work and is protected according to this Law.

According to this Article legal protection is provided not to any name to the work (its part) but only that which contains work signs i.e. is original and displays creative identity of her author (for example, different names of one and that work - public statement - in the form of standard accomplishment of the word "performance" and the name stated in original poetic form can differ on legal protection).

Therefore for the correct decision of this dispute to the previous degrees of jurisdiction it was necessary not only to determine the fact of use by the defendant of part of the name of the work of the claimant, but also to find out whether this part is result of creative activity of the author of the work (is original) and whether it can independently be used as the work.

As the specified circumstances were not established neither local, nor appeal by economic courts, cassation instance judgments on case are cancelled, and the case is submitted on new trial to Trial Court.

3. The choice of method of protection of the violated right is performed by the claimant, but economic court, making the decision on case, shall check compliance of the chosen method of the law and purpose of judicial protection.

Society as the owner of trademark "Ch" appealed to economic court with the claim to the defendant (the producer of confectionery products) about:

- withdrawal from the civil goods circulation, made and introduced into circulation under sign for goods and services "Ch" (further - sign for goods and services);

- withdrawal from the civil address of materials and tools which were used by the defendant for production of goods under sign for goods and services;

- duty of the defendant to publish in the newspaper of the message on violation of intellectual property right and contents of the relevant decision of court.

In decision making and resolutions according to which claims were satisfied completely local and appeal economic courts proceeded from validity of unauthorized use by the defendant in production of one of types of confectionery products (wafers) of the trademark of the claimant registered for number of goods and services 16, of 30, of 35 and 43 classes of the International classification of goods and services.

According to part one of Article 16 of the Civil code of Ukraine each person has the right to take a legal action behind protection of the personal non-property or property right and interest.

According to Article 432 of the Civil code of Ukraine:

- each person has the right to take a legal action behind protection of the intellectual property right according to article 16 of this Code;

- the court in cases and according to the procedure, established by the law, can make the decision, in particular, about:

- withdrawal from civil circulation of the goods made or introduced into civil circulation with violation of intellectual property right;

- withdrawal from civil circulation of materials and tools which were used mainly for production of goods with violation intellectual property rights;

- publication in mass media of data on violation of intellectual property right and contents of the judgment on such violation.

According to item 4 of article 5 of the Law of Ukraine "About protection of the rights to signs for goods and services" the amount of legal protection which is provided, determined by the image of sign and the list of goods and services, entered in the Register and makes sure the certificate with provided in it by the copy of the image of sign entered in the Register and the list of goods and services.

Therefore the option of method of protection of the violated or disputed right belongs to the claimant whereas check of compliance of this method to available violation and the purpose of judicial review is obligation of court which shall make the decision on case in borders of claims and taking into account the actual circumstances of specific case, in view of as opportunity one way or another to protect the violated right (in the presence of the bases for this purpose), and need of further accomplishment of the decision made by court.

Thus for the correct decision of this dispute the previous degrees of jurisdiction were necessary to establish:

- by what method and for what goods (services), except wafers, the defendant uses (used) the trademark registered by the claimant;

- regarding withdrawal from the civil goods circulation of the defendant which are made and introduced into civil circulation under sign for goods and services - what goods, according to the claimant, are subject to withdrawal and at whom (whether these persons participants of this legal procedure are);

- regarding withdrawal from the civil address of materials and tools which were used by the defendant for production of goods under sign for goods and services - what production of goods is meant by the claimant; what materials and tools (means), according to the claimant, are subject to withdrawal at whom and how; duration and production volume and realization by the defendant of products with violation of the rights of the claimant; whether the materials and tools determined by the claimant were used it is preferential for production of goods with violation of intellectual property right.

At the same time by the claimant the requirement about implementation of the corresponding publication in the specific printing edition also shall be proved.

However, as the specified circumstances not was are established neither local nor appeal by economic courts, cassation instance judgments on case are cancelled, and case - is told to new trial to Trial Court.

4. Only entrepreneurial society can be the person of law of intellectual property on commercial (corporate).

Lawyer consolidation appealed to economic court with the claim for prohibition to the subject of business activity - to physical person to use in the activities in the field of the right the sign "Legal advice bureau" that with reference to instructions of Articles 16, of 23, of 50, of 51, of 90, of 431, of 432, of 489-491 Civil code of Ukraine motivated with need of protection of its right to the commercial name.

At the same time according to paragraph one of part two of Article 90 of the Civil code of Ukraine the commercial (corporate) name can have the legal entity who is entrepreneurial society.

According to article 42 of the Economic code of Ukraine the entrepreneurship is independent, initiative, systematic, on own risk economic activity which is performed by subjects of housekeeping (entrepreneurs) for the purpose of achievement of economic and social results and profit earning.

According to instructions of article 1 of the Law of Ukraine "About legal profession" the legal profession of Ukraine is the voluntary professional public association designed to promote according to the Constitution of Ukraine to protection of the rights, freedoms and to represent legitimate interests of citizens of Ukraine, foreign citizens, stateless persons, legal entities, to give them other legal aid.

According to Item 2.1 of the charter of the claimant registered in the Ministry of Justice of Ukraine in pursuance of instructions of article 4 of the Law of Ukraine "About legal profession" the purpose of activities of lawyer consolidation is creation of optimum conditions for successful work of professional activity of partner lawyers, assistance to reorganization of the democratic constitutional state, protection of internationally recognized rights and human freedoms, to formation of the market relations in Ukraine.

Under such circumstances economic court, having determined that the claimant, without being entrepreneurial society, is not person of law of intellectual property on the commercial name, came to reasonable conclusion about need of refusal for satisfaction of the claim.

5. The amount of legal protection of the owner of registered trademark is not identical to amount of protection of the rights of the owner of the patented industrial design.

The plant appealed to economic court with the claim for prohibition to the defendant to use the trademark (verbal designation "T") registered by the claimant and designations, similar to it. The claimant motivated the request with placement by the defendant on bottles with self-produced vodka of labels which contain the sign registered by Plant for goods and services (including for vodka).

By the previous degrees of jurisdiction satisfaction of the claim it is refused with reference to use by the defendant not of trademark of the claimant, and registered by other person of industrial design "label" (based on the license agreement) which also contains verbal designation "T".

According to instructions of article 1 of the Law of Ukraine "About protection of the rights to signs for goods and services" the sign is designation in which goods and services of one persons differ from goods and services of other persons.

According to item 4 of article 5 of this Law the amount of legal protection which is provided, determined by the image of sign and the list of goods and services, entered in the Register and makes sure the certificate with provided in it by the copy of the image of sign entered in the Register and the list of goods and services.

By Items 2, of 4, of the 5th article 16 of the Law of Ukraine "About protection of the rights to signs for goods and services" it is determined that the certificate grants to its owner the right to use the sign and other rights determined by this Law; use of sign drawing it on any goods for which the sign is registered, packaging which contains such goods, the related sign the label, stripe, label or other subject attached to goods, storage of such goods with the specified drawing sign for the purpose of the offer for sale, the offer it for sale, sale, import (import) and export (export) is recognized, in particular; the sign is recognized used if it is applied in the form of registered mark, and also in shape which differs from registered mark only in separate elements if it does not change in general sign otlichitelnost; the certificate grants to its owner exclusive right to prohibit to other persons to use without its consent if another is not provided by this Law:

- registered mark of the goods and services which are rather given in the certificate;

- registered mark concerning goods and services, related with provided in the certificate if owing to such use it is possible to mislead concerning person who makes goods or provides services;

- the designation similar with registered mark, the goods and services which are rather given in the certificate if owing to such use these designations and sign can be confused;

- the designation similar to registered mark, concerning goods and services, related with provided in the certificate if owing to such use it is possible to mislead concerning person who makes goods or provides services, or these designations and sign it is possible to confuse.

In turn according to instructions of article 1 of the Law of Ukraine "About protection of the rights to industrial designs" the industrial design is result of creative activities of the person in the field of art designing.

At the same time according to Item 2 of article 20 of the Law of Ukraine "About protection of the rights to industrial designs" use of industrial design production of product using the patented industrial design, application of such product, the offer for sale, including via the Internet, sale, import (import) and its other introduction in civil circulation or storage of such product for present purposes is recognized. The product is recognized made using the patented industrial design if at the same time all essential signs of industrial design are used.

Therefore, in this case production of products using the patented industrial design is production of labels for bottles.

Thus, use of industrial design "label" not only for production and distribution of labels for bottles, but also for designation of certain goods (what their placement on bottles with vodka is) oversteps the bounds of legal protection which is provided to the owner of the patent according to Item 2 of article 20 of the Law of Ukraine "About protection of the rights to industrial designs".

Considering brought, the decision of the previous degrees of jurisdiction on case was cancelled by cassation instance, and the case is submitted on new trial to Trial Court for establishment and research of all set of the actual circumstances which enter proof subject of this dispute.

6. Compensation collection as method of legal protection of the violated intellectual property right shall be applied only in cases and according to the procedure, established by the law.

Society, having appealed to economic court with the claim for protection of its intellectual property right as owner of registered trademark, required collection from the defendant of compensation (one-time cash collection) in the amount of 250 000 UAH based on Article 432 of the Civil code of Ukraine.

5 parts two of Article 432 of the Civil code of Ukraine are determined by Item that the court in cases and according to the procedure, established by the law, can make the decision, in particular, on application of one-time cash collection instead of indemnification for unauthorized use of object of intellectual property right. The amount of collection is determined according to the law taking into account fault of person and other circumstances which have essential value.

At the same time the Laws of Ukraine, including the Law of Ukraine "About protection of the rights to signs for goods and services", establish neither cases, nor the amount of the specified collection that would be performed on protection of the rights which arise under the certificate on sign of goods and services (unlike instructions of article 52 of the Law of Ukraine "About copyright and the related rights". Therefore implementation of such collection by court in this case is not possible.

At the same time the reference of the claimant to analogy of the law was not taken into account as indispensable condition of its application Article 8 of the Civil code of Ukraine determines lack of regulation of the civil relations this Code, other acts of the civil legislation whereas the bases for the conclusion that the disputable relations which are not settled by the civil legislation no.

Considering brought, the economic court legally refused to the claimant - the owner of trademark - satisfaction of its requirements of rather one-time cash collection.

7. The possibility of making of the actions directed to avoidance of responsibility for violation of intellectual property right tightening of the dispute resolution and impossibility of accomplishment of the judgment on case can be the basis for application of measures to providing the claim at any stage of legal procedure.

Society appealed to economic court with the invalidation action of the patent of the defendant for industrial design and asked to oblige State department of intellectual property of the Ministry of Education and Science of Ukraine to enter corresponding changes in the State register of patents of Ukraine for industrial designs and to perform the necessary official publication.

Determination of Economic Court of Appeal before adoption of the resolution on case satisfies the petition of the claimant for taking measures to providing the claim and it is forbidden to transfer to the defendant to any person (persons) the ownership to industrial design according to the disputed patent and to provide to any person (persons) permission to use of this industrial design, and called State to departamentureshat any questions about it, to enter corresponding changes in the State register of patents of Ukraine for industrial designs and to perform official publications.

The petition for taking measures to providing the claim was motivated available possibility of transfer by the defendant of the property right to industrial design to other person.

According to Article 66 of the Economic Procedure Code of Ukraine (further - GPK of Ukraine) the economic court according to the statement of the party, the prosecutor or his deputy who submitted claim or on the initiative has the right to take measures to providing the claim. Providing the claim is allowed in any production stage on case if rejection of such measures can complicate or make impossible accomplishment of the decision of economic court.

According to Article 67 GPK of Ukraine the claim, in particular, can be provided with prohibition to the defendant to make certain actions.

Under such circumstances the Economic Court of Appeal came to right conclusion that uncontrolled expansion of the group of people which rights and interests the decision of this dispute, and/or transfer of property on the industrial design registered according to the disputed patent to other person who does not participate in this legal procedure concerns can not only complicate, but also make impossible accomplishment of the decision of economic court.

8. The economic court of appeal or cassation instance cannot review correctness of appointment of judicial examination as local court separately from review of resolution of the Trial Court in fact of dispute.

Society appealed to economic court with the claim for the termination of actions of the defendant which violate its intellectual property right.

On case judicial examination of intellectual property items which conducting is entrusted to expert organization is appointed determination of local economic court. Due to the purpose of examination proceeedings are stopped.

The specified determination of economic court of the first instance is changed by the resolution of Economic Court of Appeal: conducting the appointed judicial examination is entrusted to other organization; the list of the questions raised by local court before experts is added.

The provided resolution of Appeal Court is repealed by court of cassation instance, and determination of local court is upheld taking into account the following.

According to parts one and the second Article of 41 GPK of Ukraine for explanation of questions which arise in case of the decision of economic dispute and need special knowledge, the economic court appoints judicial examination. Participants of legal procedure have the right to offer economic court questions which shall be explained by the court expert. The final circle of these questions is established by economic court in determination.

According to instructions of part five of Article 42 GPK of Ukraine court expert's report for economic court is not obligatory and is estimated by economic court by rules, stipulated in Clause 43 these Codes.

106 GPK of Ukraine are determined by Article part one that determinations of local economic court can be appealed in appeal procedure in the cases provided by this Code and the Law of Ukraine "About recovery of solvency of the debtor or recognition by his bankrupt".

In Article of 41 GPK of Ukraine and other regulations of this Code possibilities of appeal are not provided in appeal procedure for determination of local economic court about purpose of judicial examination.

Therefore provisions of determination of Trial Court which concern purpose of judicial examination are not subject to revision in appeal procedure whereas the economic court give assessment to the expert opinion (including about competence of experts, quality and completeness of expert research), making the decision on the substance of dispute.

In turn Appeal Court, being effective in borders of 101 GPK of Ukraine of powers provided to it by Articles 99,, shall check correctness of appointment of judicial examination as local court and estimate its conclusions only during reconsideration of the case according to the petition for appeal on resolution of the Trial Court on the substance of dispute.

At the same time Trial Court, having appointed judicial examination, legally stopped proceeedings based on Item of 1 part two of Article 79 GPK of Ukraine which confers it appropriate authority.

 

 

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