“Kommersant” has found that the pandemic has an impact not only on the judicial Affairs of business with government agencies, but also to disputes between entrepreneurs. The courts mitigate the responsibility for the use of foreign trademarks (Adidas, Angry birds, Rio, etc.), believing that the offender deserves leniency in the current adverse conditions. According to lawyers, if the links to the pandemic and the plight of the business while reducing fines in favor of the state can be justified, the reduction of compensation to be paid to private brand owners, looks at least controversial.During a pandemic, the arbitration courts are finding more opportunities to mitigate liability for violations by business. Among cases in which “Kommersant” has found links to the pandemic as one of the motives of the decision were, in particular, disputes in the field of intellectual property. According to some courts, the pandemic may reduce the liability of the violators of exclusive rights. And it’s not only about the Affairs of entrepreneurs with state bodies, but also about disputes between private parties.”Considering the situation,”In the practice of arbitration courts has tended to reduce the amount of compensation for infringement of exclusive trademark rights. In some cases the courts, while acknowledging the offences, reduced the amount levied several times, referring to the epidemiological situation.So, the arbitration court of the Kemerovo region on 1 June reduced the amount of compensation, exacted PI Natalia Filonenko for violation of exclusive trademark rights (article 1252 and article 1515 of the civil code). Finnish Rovio Entertaiment Corporation (“Rovio entertainment Corporation”) demanded 80 thousand rubles compensation for illegal use of logo Angry birds, images of birds and pigs (in 10 thousand rubles for each trademark). The violation was confirmed by the video and a receipt proving the sale of entrepreneur handkerchief (price — 30 RUB.) with images similar to the point of confusion with the trademark of the Finnish company. “Taking into account the current situation with the pandemic and the spread of coronavirus, the current financial situation of the defendant, taking into account the principles of reasonableness and fairness, proportionality of compensation for the consequences of the breach” and that the offense was committed for the first time, the court sought to Natalia Filonenko of 20 thousand of compensation (2500 RUB. for each sign) and decided to destroy counterfeit scarf.The same formulation was reduced from 230 thousand to 55 thousand. the compensation exacted by the arbitration court of the Kemerovo region on may 25 with “Igrotorg” in favor of the company “Studio of animation cinema “Mill”” for violation of exclusive rights to images of the characters of the animated series “Luntik and his friends” (11 trademarks). Similar images mule��tiplication heroes were found on the defendant sold the designer (price 59 rubles) and other goods proposed to be implemented on the website “Igrotorg”. In addition to links to the pandemic and the proportionality of the sanction to the violation, the court noted that the Studio only demanded compensation, but is not required to prohibit the sale of goods and to remove information about them from the website.Halve the court the amount of the fine for violation of the exclusive rights of the Korean ROI VISUAL Co., demanded 50 thousand rubles with OOO “Papirus service” for selling toys (price — 835 rubles) with the image of four cartoon characters cars-transformers “Robocar Poli” without permission. The decision dated may 27, was also made subject to “the financial situation of the defendant” and “the current situation of the pandemic and epidemic coronavirus”.A similar position was taken by the arbitration court of Yamalo-Nenets Autonomous district. So, on may 18, the court reduced the compensation for infringement of trademark JBL up to 20 thousand. Harman International Industries, as the owner demanded 50 thousand rubles. UI Andrey Ozerov for selling counterfeit speakers with JBL logo (price — 2000 RUB). The plaintiff to appeal to the court demanded the defendant to stop the violation of intellectual property rights, and voluntarily pay compensation, but this did not happen. Nevertheless, the court found it possible to reduce the exacted amount, taking into account in particular “the current economic situation in the country during the pandemic.”So, the Department of the interior Ministry in the city of Urai (Khanty) following the purchase found that SP’s Love Korovin realized the clothes with trademarks Nike and Adidas without permission, and the dress did not fit the original product. The government Agency demanded to bring FE to the liability under article 14.10 of the administrative code (illegal use of trademark) and to impose a fine three times the amount of cost of sales was 72.4 thousand RUB Arbitration court of KHMAO-Yugra 2 Jun decided to reduce the penalty below the minimum, up to 25 thousand rubles., the same court reduced the fine FE Hovik will Zoroglyan for selling counterfeit clothing from Adidas 342,3 thousand rubles (three times the size of the cost of goods sold, to recover which asked the police Department №4 of the Ministry of internal Affairs in Surgut area) to 25 thousand RUB. In all cases, the sale of products occurred prior to the pandemic coronavirus, and counterfeit goods it was decided to destroy. The court explained the reduction of fines, inter alia, given the “challenging financial situation, including due to the suspension of business activities in connection with the pandemic.”The arbitration court of Irkutsk region on June 4 applied the same approach to SP Marina Ilchenko, which intermunicipal Department of the Ministry of internal Affairs of the Russian Federation “Brotherly” in April, accused of selling condoms Contex without the permission of the trademark owner, OOO “Reckitt Benckiser IP”. SP asked smahcit is the responsibility, citing unfavorable financial situation because of the pandemic, availability of mortgage and three kids to raise. The court went to meet her, taking into account inter alia “the unstable economic situation in the country”, and changed the penalty to a warning with destruction of counterfeit goods.”The risk is equal for both parties”Lawyers say that the possibility of establishing the infringement of intellectual property compensation below the minimum imposed by the constitutional court on 13 December 2016. The approach was developed by the Supreme court of the Russian Federation, in the practice and was later indicated possible conditions: first offense, a small cost of counterfeit goods, losses of the right holder many times less than the amount of compensation to be paid and so on.Senior associate at CMS Irina Shurmina explains that the courts in each case, analyze the good faith of the defendant, and if he is the PI or part of a small or medium business, then check the arguments about the financial situation.”Since the spread of coronavirus infection was the cause of the economic crisis and difficult financial situation of many small businesses, it is not surprising and it is logical that these circumstances are used by defendants to justify reduction of compensation”,— believes Ms. Shurmina. The argument about a pandemic, “there are psychological, emotional logic”, the more that these cases were dealt with at the peak of the epidemic, when the government made concessions business, adds the head of the practice “Intellectual property” AB “Andrey Gorodissky and partners” Elena Gorodisskaya.”By itself, the pandemic is not a factor which by law can influence the amount of liability of the infringer of intellectual property rights,— object partner Bryan Cave Leighton Paisner Elena Trusova.— The courts in this case, the expansion is interpreted by the criterion of proportionality and fairness of compensation and take into account the property status of the offender and the situation in the country”.
In her opinion, “from a purely legal point of view this approach is questionable.”Irina Shurmina adds that link to the coronavirus not automatically confirms the difficult financial situation of the defendant and the courts should check the connection between the spread of the virus and loss of the Respondent. “By itself, the pandemic coronavirus should not justify the violation of rights to objects of intellectual property,” agrees Eversheds partner Sutherland Catherine tilling.According to her, the epidemic is likely to be additional, and not an independent basis for leniency, that is, all other conditions must also be respected, but the defendant himself can ask the court to reduce the compensation of and to cause arguments. At the same time, says MS Shurmina, the argument about the influence of pandem��and may be rejected with reference to the fact that entrepreneurial activity is at your own risk and the seller shall be obliged to inspect the purchased and sold goods in the presence of encumbrances by third parties.”Despite the fact that compensation is penal in nature, the funds collected in favour of the persons engaged in entrepreneurial activities. In turn, the administrative liability is imposed in the framework of public-legal relations, and the fine collected to the state budget, which imposes corresponding restrictions on businesses during a pandemic. Therefore, the choice of sanction for an administrative offence, the courts have come more loyal than in determining the amount of compensation for infringement of exclusive rights under the civil code of the Russian Federation”,— said Mrs. tilling.Administrative penalty in favor of the budget can be justified in a pandemic, but reducing compensation violates the principles of proportionality, fairness and equality, says Ms. Gorodisskaya. “At its core, compensation is a measure of responsibility for violation of the law, the purpose of which is the compensation of losses of the right holder from the illegal actions of the infringer, the amount of which must balance the economic interests of the parties. But in the period of a pandemic, the risk of economic losses equal to both parties, and infringement of the right holder’s interests with reference to this circumstance in favor of the offender is hardly fair,” said Elena Gorodisskaya.Elena Trusova agrees that “from the pandemic and suffering of the plaintiff, not the defendant only”, so the balance of interests of the parties “is to equal the attitude towards them in the light of the circumstances of a global nature”. “In these cases, the court assumes the negative impact of the pandemic on the financial position of the offender, but does not account for this effect on the activities of the plaintiff and his need to receive due compensation, which is due to this epidemic may be especially acute,”— draws attention to Ms. Trusova.According to Ekaterina tilling, before the courts have the difficult task to strike a balance between the interests of copyright owner and the infringer: “on the one hand, reduction of compensation can improve the position of small business which suffered from the pandemic. On the other leniency is always adversely affects the holders, and if the amount of compensation is reduced such that violate their rights becomes profitable, the number of violations will increase.”The arbitral panel
