Russian courts do not allow companies that have withdrawn from Russia to earn money in Russia

"After Russia's Supreme Court softened the penalty for selling copycats, lawyers warn it will open the country's doors wide to copycat products from such companies.

 

February 9 The Supreme Court of Russia issued a decision in the case of compensation for the sale of copied goods in 2019 in April, a businesswoman from Pyatigorsk, Olga Prudnikova, was brought to administrative responsibility for selling six pairs of copycat Chanel and Christian Dior glasses. She was ordered to destroy the copies.

 

Later, "Chanel SARL" (Switzerland) and "Christian Dior Couture S.A." (France), as rights holders, demanded compensation of 125,000 RUB (1,602 EUR) from O. Prudnikova as loss of income.

 

This amount was calculated on the basis of the principle that "one unit of the copy product displaces one unit of the original product from the market", i.e. i.e. the price of six pairs of copies is equal to the price of six pairs of original branded glasses.

 

According to kommersant.ru, in three cases, the arbitration courts satisfied the claim of the trademark owners. The case was transferred to a panel of the Supreme Court, which overturned all previous decisions and referred the dispute for a new trial, providing important clarifications to the practice.

 

The Supreme Court explained that damages "are compensatory in nature and aim to restore the injured party's financial position." At the same time, lost income is compensated if such income "could have been received under normal trading conditions". In other words, the plaintiff must prove that the violation committed by the defendant "was the only obstacle that prevented him from receiving benefits," the Russian court emphasizes.

 

The bottom line is that the plaintiffs have banned the supply of their goods to Russia, so they cannot claim that they are "directly losing customers".

 

In addition, it is not possible to recover damages for cheap copies in favor of the rights holder, equating the number of copies sold to the value of the original products.

 

According to Veronika Popelenskaya, an attorney and patent attorney in the intellectual property practice of the Andrej Gorodissky & Partners law firm, the fact that the Supreme Court "relaxed liability for copycats and tightened the requirements for the rights holder to prove damages" could "open Russia's doors wide for copycats" because "copycats'  distribution will be more profitable than the cost of payments to rights holders".

 

Julia Yarnikh, a partner at Semenov & Pevzner law firm, also sees the risk that due to the small amount of the fine, "violations may increase" and Russia "will be flooded with copycats"."