The material is devoted to the issue of collecting representation expenses for participation in the Chamber of Patent Disputes.

1. For reference

Article 1248 The Civil Code of the Russian Federation provides for a mandatory administrative procedure for challenging the registration of intellectual property. In accordance with it, in order to cancel, for example, a trademark, it is necessary to file an objection to the Chamber of Patent Disputes under Rospatent. Only after the Chamber, if you disagree with the decision of Rospatent, can you appeal to the Intellectual Rights Court.

Lawyers accustomed to collecting legal costs had a natural question: Is it possible to recover the costs incurred by the client in the Patent Disputes Chamber and, if so, from whom?

Without going into the history of the issue (perhaps someday later): at first the expenses for the Chamber were not collected, then they began to be included in the legal expenses, i.e. the costs of the Chamber could be returned if the decision of Rospatent was successfully challenged in the Court. 

Actually, in Resolution The Constitutional Court of the Russian Federation dated January 10, 2023 N 1-P stated: 

From now on before appropriate changes are made to the current legal regulation, costsincurred by a party during the administrative proceedings of a dispute over the provision of legal protection to the results of intellectual activity and means of individualization may be attributed to - in case of challenging the decisionadopted by the Federal Service for Intellectual Property, to court - for the losing party according to the rules for reimbursement of legal costsprovided for by arbitration procedural legislation, based on the universal principles of reasonableness and proportionality in the distribution of such costs, taking into account the results of previous administrative proceedings.

2. “Order” of the Constitutional Court 

In pursuance of this Resolution of the Constitutional Court, the Government submitted to the State Duma bill No. 390361-8, which was adopted by the State Duma, approved by the Federation Council and, after its signing, became the President Federal law dated January 30, 2024 No. 4-FZ “On amendments to Article 1248 of Part Four Civil Code Russian Federation".

New edition art. 1248 The Civil Code of the Russian Federation has been in force since February 10, 2024. 

The main change can be formulated as follows:

Costs incurred in the Patent Litigation Chamber, "are subject to compensation to the party to the dispute in whose favor the federal executive body made the decision, by the other party to the dispute" (in quotation marks is a literal quote from art. 1248 Civil Code of the Russian Federation).

3. What is confusing?

It seems to be a completely harmonious and logical norm, but this assessment is fair until you start asking the question: who should pay and to whom? 

For example, in litigation proceedings everything is clear: there is a plaintiff and he is opposed by a defendant, therefore it is reasonable that one of these parties, in case of defeat, reimburses the expenses incurred by the other party to defend the right. 

But is everything so clear in the Patent Disputes Chamber?

4. Other country in dispute obligated to pay costs

There are usually four “figures” involved in Chamber proceedings: 

  • panel of the Chamber for Patent Disputes (analogous to the panel of judges); 
  • the person who filed an objection to the decision of Rospatent (analogous to the plaintiff);
  • the copyright holder of an intellectual property object (rather an analogue of a third party who does not make independent claims);
  • Rospatent expert who directly made the decision to register the disputed object (an expert is formally more like an analogue of a witness, since he is called by the board to give explanations, in accordance with clause 43 of the Procedure for considering objections in the Chamber, approved. By order Ministry of Education and Science of Russia and Ministry of Economic Development of Russia dated April 30, 2020 No. 644/261; but, “in reality,” experts, as a rule, act as opponents of the person who filed the objection, “zealously” defending the decision they made). 

Which of the persons represented is considered a party to the dispute? 

  • Legal protection of the object is preserved: if the claim is denied, then the party obligated to reimburse the costs is likely the person who filed an unfounded objection to the decision of Rospatent to register the object. 
    However, it is unclear who is considered the person entitled to reimbursement of expenses. 
    Apparently, Rospatent and the copyright holder of the disputed object can claim this status, because in fact, the decision to maintain legal protection of the object is to their benefit.
  • Legal protection of the object has been revoked: if the claim is satisfied, then the person who filed the objection can obviously demand reimbursement of his costs. 

But who is obliged to pay? 

Probably, the right holder of the canceled intellectual property is the party to the dispute obligated to reimburse the costs, BUT the application is submitted to the Chamber not against the copyright holder, and against the decision of Rospatent about object registration. 

Even when challenged in the Intellectual Rights Court, it is not a “legal claim” (as indicated in the explanatory note to bill No. 390361-8), but a statement against the non-normative legal act of Rospatent in accordance with Chapter 24 of the Arbitration Procedure Code of the Russian Federation.

Interpreting the norm, it is therefore logical to assume that the party to the dispute obligated to reimburse expenses is Rospatent, the decision of which is challenged by the person who filed the objection.

This conclusion also seems justified due to the following.

5. Using the example of the invention

The inventor has created a design. The law does not oblige him to check novelty, inventive step, etc. The inventor himself submits an application for registration of the invention and the issuance of a patent. A Rospatent expert evaluates the development and concludes that a patent can be issued for it. As a result, the inventor receives a patent. However, the patent is then challenged, say, due to non-compliance with the patentability condition of “novelty”. 

Why should the inventor pay in this scenario? 

The law gives him the right to obtain a patent, he exercises his subjective right. The inventor acts absolutely lawfully. The fact that the Rospatent Examination did not find a source discrediting the novelty obviously does not fall within the scope of responsibility of the inventor. 

This reasoning is also true for other intellectual property. 

6. The courts have a different opinion... 

The Supreme Court in Review of Judicial Practice No. 1 for 2024 invited lower courts to consider the parties to the dispute: the person who filed the objection and the copyright holder of the disputed intellectual property.

A small amount of judicial practice is developing in the same vein. 

Indicative is the Decision of the Arbitration Court of the Chuvash Republic dated September 26, 2024 in case No. A79-6398/2024.

Fabula

A trademark was registered in the name of JSC "AKKOND".
KONTI-RUS JSC challenged the registration and appealed to the Arbitration Court of the Chuvash Republic with a demand to AKKOND JSC to recover costs incurred in the Chamber of Patent Disputes. 
At the same time, Rospatent is involved as a third party.

Court decision 

The requirements were satisfied in full, because. the court concluded that:

JSC "AKKOND" is the losing party in the administrative dispute, since in fact the objection of the company "Konti-Rus" to the provision of legal protection to the trademark owned by the company "AKKOND" was satisfied.

The opinions of the parties regarding the role of Rospatent are somewhat amusing:

- Rospatent indicated that it is not a person obligated to reimburse expenses.

- The plaintiff stated that he did not enter into confrontation with Rospatent, but defended his rights in the only available way provided for by the Civil Code of the Russian Federation, and Rospatent performed its function within the framework of the powers granted to it to consider administratively a dispute about challenging the legal protection of a trademark.

7. Rospatent is removed from the financial blow

Considering that Rospatent is a subordinate service of the Ministry of Economic Development, which prepared the current draft law art. 1248 Civil Code of the Russian Federation, a quote from the movie “Ivan Vasilyevich Changes His Profession” of 1973 (dir. L.I. Gaidai, Mosfilm studio) comes to mind:

- Wait a minute, at whose expense is the banquet? Who will pay?
- At least not us! 

Still from the film “Ivan Vasilyevich is changing his profession”, 1973.

 8. Total

Editorial art. 1248 The Civil Code of the Russian Federation establishes “ruble punishment” for the lawful behavior of the copyright holder who exercised the subjective right to state registration of an intellectual property object. Now the applicant (including non-entrepreneurs) is forced to take this risk into account. 

It seems that such an edition art. 1248 The Civil Code of the Russian Federation is more than unfair in relation to the copyright holders of disputed objects.

Expenses incurred by a private individual in the Chamber of Patent Disputes must be reimbursed in cases of dishonest behavior, since in this case actions contrary to law resulted in property losses for a bona fide participant in the turnover. For example, when a person files an opposition to the registration of a trademark only with the intent to harm the copyright holder. 

In other cases, it is doubtful that the costs incurred in the Patent Litigation Chamber should, in principle, be reimbursed.

Milyukov Sergey

Source: Law.Ru