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- Responsible Authorities
  1. The representative of the Russian Federation explained that several governmental bodies were responsible for the regulation and enforcement of intellectual property rights in the Russian Federation, namely:
      • The Ministry of Education and Science of the Russian Federation and the subordinate Federal Service for Intellectual Property, Patents and Trademarks (Rospatent);
      • The Ministry of Culture of the Russian Federation and the subordinate Federal Service for Supervision of the observance of the legislation on Protection of Cultural Heritage;
      • Ministry of Communication and Mass Communications of the Russian Federation and the subordinate Federal Service on Supervision in the Field of Communications, Information Technologies and Mass Communications;
      • The Federal Customs Service;
      • The Ministry of Industry and Trade of the Russian Federation;
      • The Ministry of Health and Social Development of the Russian Federation and the subordinate Federal Service for Supervision of Protection of Consumers' Rights and Human Welfare and Federal Service for Supervision in the Sphere of Public Health and Social Development;
      • The Ministry of Internal Affairs of the Russian Federation;
      • The Ministry of Justice of the Russian Federation;
      • The Office of the Public Prosecutor; and
      • The Federal Antimonopoly Service.
  1. More detailed information on Federal bodies involved in the regulation and enforcement of intellectual property rights was provided in Table 35. The Courts of general jurisdiction and arbitration courts of the Russian Federation heard the cases on infringement of intellectual property rights in accordance with the relevant procedural laws.

3. Enforcement

- General provisions
  1. The representative of the Russian Federation noted the importance of IPR protection to the creative and innovative communities of the Russian Federation and the economy of the Russian Federation, and shared with WTO Members the objective of eradicating piracy and counterfeiting in the Russian Federation. He stressed that the Government of the Russian Federation shared the goal of strengthening enforcement of intellectual property rights in Russia and globally. Further, he had stated that the legislation of the Russian Federation would fully comply with the WTO TRIPS Agreement upon accession to the WTO. The respective provisions of the legislation of the Russian Federation, which realized the requirements of the TRIPS Agreement on enforcement issues, were listed in Table 34.

- Civil and Administrative Procedures and Remedies
  1. The representative of the Russian Federation stated that preliminary and final remedies currently available under the Civil Code (e.g., those set-out in Articles 1252, 1301, 1302, 1311, 1312, and 1515) included confirmation of rights, injunctive relief, prohibition of actions violating rights, compensation of damages caused to the right-holder, and statutory compensation. Regarding claims for damages and assessment of damages, civil law cases provided for the general principle of full recovery of damages. The amount of damage was calculated in accordance with the general norms of the Civil Code based on the prices of corresponding legitimate goods adjusted for actual damage and forgone profit of the right-holder. In accordance with existing legal practice, the amount of damage ordered by the court to be recovered by one infringer reached RUB 75 million. As for statutory compensation, it was initially defined by the plaintiff, who had the burden to prove the fact of damage caused without calculating the amount. It was further assessed by the court based on the nature of infringement, income received by the infringer and other relevant facts. The final decision on the amount of compensation rested with court.
  2. He added that civil legislation also provided the possibility of confiscation and destruction of counterfeit and pirated products as well as confiscation of materials and equipment used for their production. Articles 1252.5 and 1302 of the Civil Code provided for confiscation, by judicial decision, of counterfeit and pirated copies of works of art or phonograms, and materials and equipment used for reproducing counterfeit and pirated copies of such works. Confiscated counterfeit and pirated copies of works of art or phonograms were subject to destruction by a decision of the court, or were transferred, to holders of copyright and related rights upon request and decision of the court. According to Article 1252 of the Civil Code, illegally manufactured copies of integrated micro circuits and/or of articles incorporating such integrated micro-circuits, and materials and equipment used for their manufacture could be confiscated, destroyed or transferred to the right holder upon request as compensation for losses. Article 1515 of the Civil Code provided for the destruction, at the expenses of the infringer, of counterfeit goods, labels, and packaging of goods. In exceptional cases only, where introduction of the goods into commerce was necessary for "societal interests", the infringer was required to remove the illegal trademarks from the goods, labels and packaging.
  3. He further informed Members of the Working Party that according to judicial practice, the court would issue a decision on confiscation and destruction when the right-holder had not requested the goods to be transferred to him/her. Should the court not order confiscation of illegal goods in civil proceedings, the right-holder could appeal.
  4. The representative of the Russian Federation confirmed that the Russian Federation would ensure that civil procedures against violators of intellectual property rights would provide an effective method of protection for rights holders. The Working Party took note of this commitment.
  5. Some Members continued to raise concerns about the practice in the Russian Federation of leasing or otherwise using machinery and other implements owned by third parties. In such cases, courts had not ordered confiscation and destruction of items used to commit the infringing activity. These items were released and could be used to commit further acts of piracy and counterfeiting. These Members requested that the Russian Federation provide for confiscation and destruction of machinery and other implements even if third parties owned these items.
  6. In response to Members' concerns, the representative of the Russian Federation informed Members that the optical disc licensing regime of the Russian Federation had been amended to require as a condition to obtain or extend a licence to produce optical media bearing content protected by copyright or related rights that the applicant own the equipment used in the plant to produce optical media. Violation of this condition would be grounds to deny or suspend, and then immediately seek revocation by a court of a licence.
  7. Regarding provisional measures under Articles 72, and 90 through 100 of the Arbitration Procedure Code, the representative of the Russian Federation informed Members of the Working Party that the arbitration court could take a decision on application of provisional measures for conservation of evidence, conservation of the status quo between the parties, prevention of irreparable damage to the right-holder, and preservation of assets for fulfilment of a future court decision. Provisional measures could include: prohibition of infringing actions, preservation of assets, including bank accounts, monetary funds and other property, seizure of documents and other evidence. Such provisional measures could be sought during a trial as well as before the filing of a claim in cases where any delay would likely cause irreparable harm to the right-holder or there was a demonstrable risk that evidence could be destroyed. In addition, the court had the authority to issue an order for a preliminary injunction based on the petition of the plaintiff, without participation of the parties. Such measures were to be aimed at securing the claim. In accordance with Article 93 of Arbitration Procedure Code, the arbitration court must reach a decision on the application for provisional measures not later than the next day after the right-holder filed a petition with the court, and did so without notifying the parties. Provisions stipulating similar measures were also provided in Article 64 of the Civil Procedure Code (Federal Law No. 138-FZ of 14 November 2002). In his view, these provisions fully complied with the requirements of Article 50 of the WTO TRIPS Agreement.
  8. With regard to administrative procedures and remedies, the representative of the Russian Federation stated that Articles 7.12, 7.28 and 14.10 of the Code of Administrative Offences established administrative liability for violation of copyrights and related rights, rights regarding inventions and industrial designs, trademarks, service marks and indications of origin. Article 13.14 of the Code of Administrative Offences also provided for administrative liability (in form of a fine) for offences in the field of information, including disclosure of information by persons having received access to such information in connection with performance of a service or professional duties. In addition to fines of up to RUB 40,000 (i.e., about US$1,300), administrative sanctions in case of copyright infringements included obligatory confiscation of counterfeit and pirated products, materials and equipment used in their production, and other instruments used in committing the administrative offence. In accordance with Article 32.4 of the Code, confiscated products, materials, equipment and instruments were subject to destruction or, at the request of the right-holder, transferred to such right-holder.
  9. Members noted that cases of infringement through retail outlets in the Russian Federation were increasingly handled under administrative authority, resulting in very small fines or none at all. While pirate products were generally confiscated, shop operators were normally not the owners of the product and the latter were seldom caught and fined. In addition, the Code on Administrative Offences of the Russian Federation effectively limited the time period for the investigation of copyright infringements to several days, even when a longer time was necessary to investigate such cases. In their view, the Code should provide for at least a one-month period for the investigation of copyright infringing cases, as it does in other cases of administrative misdemeanours. Members also stressed the need for administrative authorities to refer more cases, including those involving repeat offenders and wilful piracy and counterfeiting, to the appropriate authorities for initiation of criminal actions.
  10. In response the representative of the Russian Federation stated that the Government of the Russian Federation had adopted Resolution No. 185 of 27 March 2007 "On Amendment to the Rules of Selling of Particular Types of Goods", which prohibited the selling of copies of audio-visual works, phonograms, computer programs and data bases from stalls/kiosks. This resolution also established requirements for the information that the seller was to provide to the consumer. This included information on the producer of the goods, on technical characteristics of the media and on the respective right-holder of copyright or related rights.
  11. In response to questions concerning appeal processes in intellectual property matters, the representative of the Russian Federation explained that Russian legislation provided for enforcement of intellectual property rights through both judicial and administrative procedures. Pursuant to Article 1248 of the Civil Code, rights in copyright and related rights and commercial secrets were enforced only by the courts. For other intellectual property rights, the Chamber of Patent Disputes of Rospatent also conducted an administrative dispute procedure in cases connected with submission and consideration of applications for the issuance of patents for inventions, utility models, industrial designs, achievements of breeding, trademarks, service marks, and designations of places of origin of goods, involving State Registration of these results of intellectual activity and means of individualization, and issuance of the corresponding right-establishing documents. These cases involved contesting the grant or denial of registration for these results and means of legal protection or with the termination of such protection. These administrative decisions could be appealed to a court. The procedure for lodging objections and applications to the Chamber of Patent Disputes and the procedure for their consideration were determined by the Order of Rospatent No. 56 of 22 April 2003 "On the Rules of Filing Objections and Applications and the Consideration Thereof by the Chamber of Patent Disputes" (as amended on 11 December 2003). Pursuant to this Order, the Chamber of Patent Dispute performed the following functions:
      • Considered objections to refusals to issue a patent for an invention, industrial design or certificate for utility model or to accept an application for trademark, service mark or appellation of origin/indication of place of origin based on the results of a formal examination;
      • Considered objections to refusals to issue a patent for an invention, industrial design or to register a trademark, service mark, designation of place of origin of goods and/or to grant the right to use a designation of place of origin of goods, based on a merits examination of applications and of designations applied for; and
      • Considered objections from individuals and legal entities against issuance of patents for inventions, industrial designs and certificates for utility models in violation of existing certificates for inventions and certificates for industrial designs of Russian authors, and against registration of trademarks, service marks, designation of place of origin of goods, and issued certificate to use designation of place of origin of goods.

Details of procedures for carrying out these functions were also set-out in Order No. 56.
  1. He further added that lodging an application to the Chamber was subject to payment of a fee, in accordance with the Article 1249 of the Civil Code. The rates of such a fee were established by Government Resolution No. 793 of 12 August 1993 (as last amended on 26 January 2007).
  2. The representative of the Russian Federation confirmed that the Russian Federation would act effectively against acts of infringements of intellectual property rights, including by expeditious action, on the basis of complaints lodged by right-holders and otherwise, with the objective of eliminating such acts in the Russian Federation. He also confirmed that the Russian Federation would also pursue effective and improved application of legislation concerning the infringement of intellectual property rights, including the imposition of penalties that take into account the high degree of public harm from such infringement, the concrete circumstances of the crime and the objective of preventing future crimes. The Working Party took note of these commitments.

- Border Measures
  1. The representative of the Russian Federation stated that as of 1 July 2010, border measures in the Russian Federation were applied pursuant to Chapter 46 of the CU Customs Code (Articles 328 to 334) and Section 42 of the Federal Law on Customs Regulation (No. 311-FZ of 27 November 2010). Consistent with the procedures set-out in Chapter 46, the customs authorities of the Russian Federation (i.e., the Federal Customs Service of the Russian Federation (FCS)) were authorised to take action to protect intellectual property rights that were included in a customs register maintained by the FCS and in the unified customs register of intellectual property rights of the CU Parties. In addition, the CU Customs Code provided that, in accordance with the national legislation of the Russian Federation, the Russian customs authorities were authorised to enforce intellectual property rights with respect to intellectual property not included in those customs registers. In this regard, Article 305 of the Federal Law on Customs Regulation authorised the FCS to take action without an application from the right-holder (i.e., pursuant to ex officio authority) in accordance with Section 42 of that Law.
  2. The representative of the Russian Federation explained that intellectual property rights could be included in the customs register of the Russian Federation based on an application filed by the right-holder in accordance with the procedure and under the conditions established in the national legislation of the Russian Federation. In order to be included in the customs register of the Russian Federation, the CU Customs Code required that the intellectual property right had to be protected in the Russian Federation.
  3. He explained that, in accordance with procedures established by the customs authorities of the Russian Federation, copyrights, related rights, trademarks, service marks and names of places of origin of goods could be included in the customs register of intellectual property. The applicant was required to submit an application to the customs authorities to have an intellectual property right included on the national register and customs authorities had 30 days to decide on including the intellectual property right on the register. The representative of the Russian Federation further explained that while no fee was charged for including an intellectual property right in the register of the Russian Federation, the right-holder was required to provide a security or contract of insurance to cover potential liability for damages to the declarant, owner, recipient of the goods or other persons in connection with suspending the release of goods suspected of violating intellectual property rights in the national register. The amount of the security or the insurance must be at least RUB 300,000 (US$10,000) and if the customs authorities did not receive confirmation of the security or insurance bond within the 30 day period during which the authorities were deciding on the application, customs authorities were authorised to refuse the application to suspend entry of goods. He also noted that the Federal Law on Customs Regulation included grounds for removal of items from the register, i.e., removal at the request of the right-holder or his representative; for failure to provide the required security or insurance contract; termination of the protection of intellectual property right; for failure to apply for enforcement of the intellectual property right (court, office of Public Prosecutor, Ministry of Internal Affairs, customs authorities) for the protection of his/her rights in accordance with civil, administrative, and criminal legislation, during the period when release of the goods has been suspended, to the competent authority for enforcement of intellectual property rights in the Russian Federation; and for submitting false information in the application for measures to suspend the release of goods.
  4. The representative of the Russian Federation explained that the term of protection of an intellectual property right included on the national register was established in the national law of each CU Party, taking into account the term specified by the right-holder in its application for registration, but the term of protection cold not exceed two years from the date the intellectual property right was included in the register. The right-holder could apply to extend the term of protection an unlimited number of times, but each extension could not exceed two years and could not exceed the term of protection for the intellectual property right in the CU Party.
  5. With regard to the Customs Union unified customs register of intellectual property rights, the representative of the Russian Federation informed Members that the conditions for including intellectual property in the unified register and the procedure for maintaining the unified customs register were set-out in the Agreement on the Unified Customs Union IPR Register for Member States of the Customs Union of 21 May 2010. In the case of an intellectual property right included in the Customs Union Unified Register, the minimum security/guarantee was €10,000. The term of registration was similar to that for the national customs register of the Russian Federation, namely, the term of protection could be up to two years from the date the intellectual property right was included in the register. The right-holder could apply to extend the term of protection for an unlimited number of times, but each extension could not exceed two years and could not exceed the term of protection for the intellectual property right in the CU Parties.
  6. Under the CU Customs Code, for goods containing intellectual property which were included in the customs register of the Russian Federation or the unified CU register of intellectual property, if there were any signs of a violation of intellectual property rights, customs authorities were authorised to suspend the release of such goods for ten business days. At the request of the right-holder or his representative, the customs authority could extend the term of suspension by up to ten business days, provided that the right-holder or his representative applied to the authorised authorities for a decision on protection of rights of the right-holder in accordance with the national legislation of the Russian Federation. Decisions to suspend the release of goods and to extend the term of suspension had to be in writing. The representative of the Russian Federation noted that Chapter 46 included provisions regarding notification of the declarant and the right-holder and information to be provided to these persons or their representatives, and requirements that the declarant and right-holder, or their representatives treat such information as confidential and not subject to disclosure or transfer to third parties and other authorities, except as prescribed in the national law of a CU Party. In addition, with the written permission of the customs authority, the right-holder, declarant or their representatives could, subject to customs control, take samples and specimens of the relevant goods and inspect, take photos of or otherwise identify the goods and undertake investigations of these goods.
  7. When the term of the suspension expired, the goods were released under normal customs procedures unless documents were submitted to the customs authorities confirming the seizure, confiscation, or detention of the goods, or, in accordance with the national law of the CU Party that the goods were otherwise not subject to release.
  8. The representative of the Russian Federation also explained that the right-holder was, in accordance with national law, liable for damage caused to the declarant, owner, recipient of the goods containing intellectual property, resulting from suspending the release of the goods unless there was a violation of rights of the right-holder. He explained that the determination of a violation could be through administrative or judicial procedures.
  9. Answering the question from a Member in respect of cases where goods being detained by the customs body and considered to be counterfeit had been abandoned by the importer, the representative of the Russian Federation explained that in accordance with Article 1515 of the Civil Code of the Russian Federation in such cases the goods, except for cases of societal interest, were subject to destruction upon request of the right-holder at the expense of the importer. If the importer or the owner of the goods were not available, then, in accordance with the Article 190 of the Federal Law "On Customs Regulation" in the Russian Federation, the destruction was to take place at the expense of the Federal budget.
  10. Pursuant to section 306 of the Federal Law on Customs Regulation right-holders of trademarks, copyright and related rights, and designations of place of origin of goods (or his/her representative), who had sufficient grounds to believe that his/her rights could be violated, could submit an application requesting the FCS to suspend the release of suspected goods that were under customs control. The application had to contain information on the right-holder (and if filed by a representative - also information on such representative); the IPR object, including documents establishing that the applicant had rights in the intellectual property; the goods that, in his/her opinion, were counterfeit in sufficient detail to permit identification of the suspect goods; and the term of protection under the regulation that he/she believed was needed. Samples of the suspect goods could be included with the application and could serve as confirmation of the alleged violation. The presentation of the application must be accompanied by documents confirming an obligation (in written form) for compensation of possible property damage to the importer, owner, or recipient of the goods if the goods were not found to be counterfeited or pirated. The application must also be accompanied by a document guaranteeing fulfilment of the named obligation or a by contract of insurance of the liability from the causation of damage. In all cases, the required amount of the guarantee must be not less than RUB 300,000 (US$10,000.) The most widespread form of meeting this obligation was a bank guarantee, i.e., a contract between a bank and an applicant. In accordance with that contract, the bank guaranteed payments to compensate for property damage. The sum of the real expenses of the applicant for signing such contract would amount to not higher than 3 to 7 per cent of the above-mentioned figure (not more than approximately US$700).
  11. He further confirmed that the RUB 300,000 insurance/bank guarantee was required for each application, but that an application could cover unlimited trademarks and objects of copyright, and a guarantee>
  12. A Member of the Working Party expressed the concern that, considering the risk posed by growing number of IPR infringements other than copyright and trademark, these provisions should also be extended to other types of IPR infringements, such as infringements of designs, patents and plant varieties. In response the representative of the Russian Federation noted that Article 51 of the WTO TRIPS Agreement did not require application of border measures in respect of enforcement of intellectual property rights other than copyright and trademarks.
  13. The representative of the Russian Federation also confirmed that the Russian Federation would ensure that the guarantee requested from right-holders to lodge a registration request with Customs authorities would not constitute a dissuasive element to the use of this instrument, as required by Article 53 of the WTO TRIPS Agreement. The Working Party took note of this commitment.
  14. With regard to enforcement of intellectual property rights that were not included in the national register or the Customs Union unified register, the representative of the Russian Federation explained that, if during the performance of customs formalities and customs control, customs authorities discovered goods potentially violating intellectual property rights and in case of available information about the right-holder in the Russian Federation, the clearance of such goods could be suspended for up to seven working days. The decision to suspend the customs clearance of goods, the reasons for such a decision, and the terms of the suspension had to be notified to the importer/exporter and to the right-holder no later than one day after the decision had been taken. The right-holder had the right to take, under customs control, samples, specimens, pictures or otherwise record the goods whose release had been suspended. The customs authorities could prolong the term of suspension of customs clearance for up to ten working days upon request of the right-holder, provided the right holder (or his/her representative) had submitted an application to the Customs authorities. The decisions to suspend customs clearance were subject to revocation on the day following the expiry of the term of suspension, unless a decision to withdraw, seize, or confiscate the goods had been taken before the date of expiry. Revocation decisions were taken by the chief of the custom office and were notified within three days, along with a justification, to the higher customs body. The decisions could be cancelled before the initial term upon request of the right-holder.
  15. The representative of the Russian Federation added that Russian legislation also provided customs authorities the right to apply for urgent measures on suppression of IPR violations even if the objects of Intellectual Property were not included in the national customs register or the Customs Union unified register. In addition to the provisions of the Federal Law "On Customs Regulation", the Code of Administrative Offences had introduced administrative liability for infringements of intellectual property rights (Article 7.12 "Infringements of Copyright and Related Rights, Inventive and Patent Rights" and Article 14.10 "Illegal Use of a Trademark"), that while not specifically directed at border enforcement of intellectual property rights, covered, inter alia, intellectual property infringements found in connection with import-export operations and vested the customs authorities with the powers to exercise administrative prosecution where infringements were detected.
  16. In response to the questions of some Members with regard to ex officio authority, the representative of the Russian Federation stated that the CU Customs Code and the Federal Law on Customs Regulation gave explicit rights to customs authorities to take action "ex officio" to stop the release of goods suspected of infringing copyright, related rights, trademarks, service marks and designations of place of origin. Thus, the customs authorities were endowed with powers to fully exercise the function of protecting intellectual property rights in the course of export and import operations, both on the basis of the application of the right-holder or without one in accordance with the "ex officio" principle of Article 58 of the WTO TRIPS Agreement. In addition, in accordance with Chapter 28 (Articles 28.2 and 28.3) of the Code of Administrative Offences, the customs authorities could upon their own initiative, if they had acquired prima facie evidence, initiate an administrative investigation. In the course of such investigation, customs authorities were authorised to suspend the release of suspected goods (to execute requisitioning or seize) and seek from the right-holder any information that may assist them in the investigation. All persons concerned had the right to familiarize themselves with the record of the case, as well as submit explanations and comments, which were attached to the record of the case. The suspension of the release of suspected goods normally lasted one month (a period prescribed for the administrative investigation) and could be extended for a maximum of six months. Final decisions on administrative offences were taken by a court.
  17. A Member of the Working Party noted that although ex officio action by Customs was foreseen in the law, the right-holders consistently reported that it>
  18. He further explained that criminal procedures could also be used in the framework of border procedures. Federal Law No. 144-FZ of 12 August 1995 "On Operational-Investigative Activity" authorizes customs authorities to carry out operational-investigative actions to identify, prevent and suppress illegal import or export of goods containing objects of intellectual property to and from the territory of the Russian Federation, and to receive and gather updates on events and actions associated with illegal cross-border shipment of intellectual property, and on illegal channels through which counterfeit and pirated goods may be carried across the border. If customs authorities had reasons to consider that there was an element of crime in a particular case, a criminal investigation could be opened and the case would be treated in accordance with standard rules of criminal procedures.
  19. More generally, the representative of the Russian Federation confirmed that intellectual property right-holders would be provided, whether by the Russian Federation or the competent bodies of the Customs Union, with procedures related to border measures that complied fully with the relevant provisions of the WTO TRIPS Agreement (Articles 51 to 60). The Working Party took note of this commitment.

- Criminal Measures
  1. The representative of the Russian Federation stated that the Criminal Code of 13 June 1996 as last amended on 9 April 2007 included four articles specifically dealing with intellectual property: Article 146 (Copyright and Related Rights Violations); Article 147 (Patents Violations); Article 180 (Trademark Violations), and Article 183 (Illegal Receipt and Disclosure of Information Containing Commercial, Tax or Bank Secrets). The representative of the Russian Federation informed Members of the Working Party that during 2006-2007, the production of counterfeit optical discs was suppressed in the Russian Federation at ten licensed plants and at 17 illegal plants. Also the activities of six major wholesalers and 30 illegal warehouses of counterfeit optical media were stopped. More than 8.5 million of counterfeit CD and DVD discs were seized for the total amount of more than RUB 1 billion. In 2006, 7,423 crimes stipulated by Article 146 (copyright infringement) of the Criminal Code of the Russian Federation were discovered, 5,126 criminal cases were sent to the court, criminal procedures were instituted against 3,833 persons; and, 991 crimes stipulated by Article 180 (trademarks violations) of the Criminal Code of the Russian Federation were discovered.
  2. The Members of the Working Party noted that improvements were needed with respect to the enforcement of existing laws. For example, penalties imposed were often suspended or at levels insufficient to deter further infringement. These Members emphasized the continuing need for additional enforcement efforts by the Government of the Russian Federation, in particular against optical disc production and distribution. In 2005, there were over 40 optical disc plants in the Russian Federation with production capacity far exceeding legitimate demand. Some of these manufacturers of optical discs, which included intellectual property, were located on Government controlled sites. Location on these limited-access sites could impede enforcement efforts. Members suggested that the Russian Federation needed to increase surprise plant inspections and raids, prosecute plant operators and owners who manufacture pirate material and impose deterrent criminal penalties, close plants that violate copyright rights, and stop the exportation of pirated optical discs and other copyrighted materials from the Russian Federation.
  3. In response, the representative of the Russian Federation explained that the actions of the Government to remove optical media plants operating on the territory of government-controlled military industrial sites had been intensified. As a result of these efforts, no optical media plants were operating on the territory of government-controlled military industrial sites. Moreover, the Government did not intend to lease or otherwise make such sites available to plants producing optical media bearing content protected by copyright or related rights in future.
  4. As regards the activities of law enforcement agencies engaging in surprise plant inspections and raids, he noted that in the first six months of 2007, these agencies discovered and suppressed the activities of four licensed and 16 illegal plants producing optical discs and 30 illegal warehouses engaged in production and distribution of counterfeit optical media. Eight-and-a-half million counterfeit CD and DVD discs, worth over RUB 1 billion were seized. He noted that the policy of his Government was to ensure the continuation of efforts to suppress effectively the illegal activities of enterprises engaged in the production of optical discs.
  5. While Members welcomed the results of enforcement efforts in 2007 with regard to optical disc plants, some Members continued to emphasize the need for more intensive inspection efforts, in particular the need for un-announced inspections of plants. They expressed concern about the decline in the number of inspections and prosecutions of plants conducted during the second and third quarter of 2007, while the Russian Federation reorganized the Federal body responsible for inspection of optical discs (OD) plants.
  6. Members also noted that the Russian Federation needed to address in laws or regulations some issues that had arisen during attempts to enforce intellectual property rights, in particular instances of copyright infringement. Individuals and enterprises (legal "persons") must be held responsible for all their IPR infringing activities and subject to civil and/or criminal liabilities. In cases of infringement of an IPR which the owner of the IPR deemed the circumstances serious, the person directly responsible for the infringement should be prosecuted under the relevant provisions of the criminal law. Other necessary reforms included providing for criminal prosecution and penalties under the Criminal Code for aiding in copyright infringement on the Internet, including through circumvention of technological protection measures, and criminalizing certain cam-cording activities (i.e., making unauthorised copies of films in theatres). Piracy on the Internet was a serious and growing concern, as right owners had documented the operation of numerous websites based in the Russian Federation that offered pirated material. Members noted that with regard to internet piracy, there has been inadequate enforcement activity in the face of increasing online piracy. For example, Members noted that the Russian Federation was one of the few countries in the region that still had large illegal pay-per-download sites.
  7. In response, the representative of the Russian Federation stated that his Government would ensure that facilities on the territory of government-controlled military-industrial sites would not be leased or otherwise made available to companies producing optical media bearing content protected by copyright or related rights and action was being taken to stop such production on these sites. In addition, the enforcement authorities would continue to conduct repeated, unannounced inspections of all plants licensed to produce optical media bearing content protected by copyright or related rights. Such inspections would take place regularly, without prior notice, and at any time, day or night. If evidence of unauthorised production of optical media bearing content protected by copyright or related rights on a commercial scale was found, criminal proceedings would be initiated. Enforcement officials would also continue to conduct actions to find and shut down unlicensed plants producing optical media bearing content protected by copyright or related rights, as well as actions to find and inspect warehouses that store significant quantities of pirated and counterfeit goods. If pirated or counterfeit goods were found at these locations, the goods would be seized and retained as evidence, investigations would be initiated, including investigations to determine the owner, distributor, and manufacturer of such goods, and prosecutions of these persons and enterprises initiated. In particular, criminal proceedings would be initiated in cases of piracy or counterfeiting on a commercial scale. The Working Party took note of these commitments.
  8. With regard to piracy on the Internet, the representative of the Russian Federation noted significant efforts on the part of the Government to shut down servers situated on the territory of Russia and websites that promote illegal distribution, which included making the object of a copyright or related right available, of content protected by copyright or related rights. In the first quarter of 2007, there were a number of large-scale operations to discover and suppress the functioning of Internet resources that were engaged in the distribution of unlicensed software and counterfeit audio visual works and phonograms. As a result, 166 suspected informational resources (sites) were discovered, including 96 sites that were operating from technical means of Russian-based hosting companies, and 70 that were operating from technical means of foreign-based hosting companies. The activity of 72 resources (sites), which were operating in the territory of the Russian Federation, was suppressed. In the first six months of 2007, the relevant authorities suspended the functioning of 90 internet sites engaged in illegal distribution of copyright and related rights objects with servers situated on the territory of the Russian Federation and 38 criminal cases under Article 146 of the Criminal Code were instituted against persons engaged in administration of these sites. He confirmed that the Government would continue to take actions against the operation of websites with servers located in the Russian Federation that promote illegal distribution of content protected by copyright or related rights, such as phonograms (sound recordings) and investigate and prosecute companies that illegally distribute objects of copyright or related rights on the Internet. The Working Party took note of these commitments.
  9. The representative of the Russian Federation reported that during 2007, 7,874 crimes stipulated by Article 146 of the Criminal Code of the Russian Federation were discovered (up 9 per cent compared to the same period of 2006), 7,418 in a large scale, and especially large scale. 5,405 criminal cases were sent to the court (up 5 per cent compared to 2006), and criminal procedures were instituted against 4,088 persons (up 6.5 per cent compared to 2006). The amount of damage inflicted came to RUB 1,154 billion (100 per cent lower than 2006), and property and materials valued at RUB 2.44 billion was seized (up 162 per cent compared to 2006). During 2007, 957 crimes stipulated by Article 180 of the Criminal Code of the Russian Federation were discovered, criminal procedures were instituted against 154 persons.
  10. As regards the copyright infringements on the Internet, the representative of the Russian Federation noted that Article 146 of the Criminal Code (as amended on 9 April 2007) reinforced criminal liability for illegal use of objects of copyright and related rights as well as for purchase, storage, transportation of counterfeited works or phonograms for the purpose of their sale on a commercial scale. The penalty provided by Article 146 could be up to six years of imprisonment and also covered the illegal use of works through posting them on the Internet. He confirmed that, according to the Civil Code, reproduction (including temporary copies on the memory of a computer) of copyright-protected audio-visual works without permission of its author, was illegal except for cases provided in the Code (e.g., reproduction for private purposes, reproduction for court purposes). Moreover as of 1 September 2006, an author had the exclusive right to perform his work so that the author could control when any user would have access to his work in interactive mode from any place and at any time - the right "to make it available to the public". The infringement of these rights would be considered as illegal use and would entail criminal responsibility, if it was done in on a commercial scale.
  11. The representative of the Russian Federation stated further that decisions on confiscation and destruction of counterfeit products and equipment used in their production were taken within the framework of criminal prosecution as provided in Articles 81 and 82 of the Criminal Procedure Code and it was a normal practice to confiscate these goods and machinery as "material evidence". Criminal procedure rules (Article 81 of the Criminal Procedure Code) were also applied with regard to destruction of confiscated "pirated" products. Under this Article, items which were used as "instruments of crime", "preserved traces of crime", or "which could serve as a means for detecting a crime and establishing circumstances of a criminal case" were recognised as "material evidence", filed to the criminal case, and could only be destroyed upon a decision of the court. Pursuant to the Criminal Procedure Code, when passing sentence, a court had to decide whether to order seizure or destruction of "material evidence" (including goods and machinery).
  12. The representative of the Russian Federation stated also that under Article 147 of the Criminal Code, the illegal use of an invention, utility model or industrial design, or disclosure of the essence of an invention, utility model or industrial design, without the consent of its owner or applicant before any official publication of information about them; illegal acquisition of authorship; or compelling of co-authorship were criminally punishable if these acts had inflicted serious damage. Article 147 provided punishment by fines of up to RUB 300,000 (more than US$10,000) or up to two years of wage, salary, or any other income of the convicted person, arrest for up to six months, or deprivation of liberty for up to six years. In accordance with Article 180, the illegal use of a trademark or service mark, appellation of origin, or similar designations for homogeneous goods, as well as the illegal use of a special marking, designating a trademark or designations of origin which had not been registered in the Russian Federation, were criminally punishable if these acts had taken place more than once or had inflicted serious damage. Article 180 provided punishment by fines of up to RUB 300,000 or up to two years of wage, salary, or any other income of the convicted person, arrest for up to six months, or deprivation of liberty for up to six years. As for Article 183 of the Criminal Code, it established criminal liability for the illegal receipt and disclosure of information containing commercial, tax, or bank secrets.
  13. Some Members responded that although the current Criminal Code (Article 146) permits the confiscation and destruction of pirate and counterfeit goods, Article 146 does not explicitly provide for the confiscation and destruction of the "machinery" used in the making of illegal copies. In response, the representative of the Russian Federation noted that the provisions of Part IV of the Civil Code, Civil Procedural Code, (Article 140), Arbitration Procedural Code and Code of Administrative Offences provided judges with the authority to order that materials and implements used to create the infringing goods be disposed of outside the channels of commerce in such a manner as to minimize the risks of further infringements (see Table 34 for the details).
  14. The representative of the Russian Federation explained that the general authority to seize, confiscate and destroy materials and implements used to create infringing goods, was provided in Article 104.1 of the Criminal Code and Article 81 of the Criminal Procedural Code. These Articles allowed for confiscation and destruction of the means for committing a crime. In the context of piracy and counterfeiting, this would include machinery and materials used to create the illegal goods. Article 104.1.1(d) of the Criminal Code stipulated that implements, equipment and other means of committing a crime that belong to the defendant were subject to seizure in accordance with the decision of the Court. Article 81 of the Criminal Procedure Code stipulated that the implements used to commit a crime were to be retained as evidence and, in accordance with the decision of the Court, could be seized or destroyed.
  15. Some Members expressed concern regarding the requirement that illegal use of a trademark or service mark inflict serious damage as a condition for punishment. While Members appreciated that the Russian Federation used the market price of legitimate goods to calculate the thresholds for initiating criminal procedures, in their view, these thresholds did not authorize use of criminal procedures in all cases that could involve wilful trademark counterfeiting or copyright piracy on a commercial scale. These Members noted that Article 61 of the WTO TRIPS Agreement required Members to provide for criminal procedures and penalties to be applied at least in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale.
  16. In response, the representative of the Russian Federation noted that under the comments to Article 169 of the Criminal Code of the Russian Federation, damage inflicted by actions specified in Article 180 of the Criminal Code of the Russian Federation, was to be regarded a serious one when it exceeds RUB 1.5 million (US$50,000). For copyright and related rights, the amount specified in Article 146 was RUB 50,000 (approximately US$1,700). He further stated that, in his view, the application of thresholds was in conformity with the provisions of Article 61 of the WTO TRIPS Agreement, as these thresholds determined the commercial scale of wilful trademark counterfeiting or copyright piracy. He further explained that the application of thresholds was traditionally used in Russian legislation to separate criminal offences punishable by means of criminal prosecution from administrative misdemeanours. He further added that this clear and unambiguous criterion was an effective, practical tool for enforcement, as it can be implemented easily and contained no element of subjective evaluation. Further, he noted that, if the suspected infringer had been found to have previously engaged in infringement of intellectual property rights, including in an administrative proceeding, under the repeat-offender provisions, the thresholds mentioned above did not apply.
  17. Recognizing Members' concerns, the representative of the Russian Federation stated that, in order to improve the effectiveness of enforcement measures in the area of intellectual property rights, when determining the existence of a large or especially large scope of the activity, the prosecutor/court would take into account that, storage of pirated copies of works or phonograms for the purpose of sale was also considered to be a crime. Thus, application of the thresholds to the activity would take into account both the value of the pirated copies of works or phonograms that were sold, and the value of the pirated copies in storage. In accordance with the legislation of the Russian Federation, the value of pirated copies was calculated by reference to the value of the corresponding legitimate products, and not by reference to the price of the pirated product. This approach of taking into account copies in storage would also apply in cases of copyright infringement over the Internet.
  18. Some Members continued to have concerns that the threshold of the Russian Federation for application of criminal procedures and penalties precluded action against certain cases of wilful trademark counterfeiting or copyright piracy on a commercial scale. These Members requested that the Russian Federation modify law and practice to ensure that criminal procedures and penalties would be applied to all cases of wilful trademark counterfeiting or copyright piracy on a commercial scale. In their view, the value of the products that were counterfeited or pirated>
  19. In response to concerns from Members regarding thresholds of the Russian Federation for application of criminal procedures and penalties with regard to cases of wilful trademark counterfeiting or copyright piracy on a commercial scale, the representative of the Russian Federation confirmed that the thresholds of the Russian Federation in such cases would be set and applied in a manner that reflected the realities of the commercial market place in the Russian Federation, including with regards to the internet market. The Working Party took note of this commitment.
  20. The representative of the Russian Federation noted that in accordance with the legislation in force on intellectual property, initiating actions to address the violations set-out in Article 146, paragraph 1, and Article 147, paragraph 1, of the Criminal Code, required the filing of a private complaint, and criminal procedures could not be initiated without a complaint by the right-holder (Article 20 of the Criminal Procedure Code). Other intellectual property criminal offences could be initiated through "public accusation" and the right-holder did not need to file a complaint (action could be taken "ex officio"). The time limits for investigation and working up of an accusatory act on cases provided for in paragraphs 1 and 2 of Article 180 of the Criminal Code in accordance with the Criminal Procedure Code were 20 days and, for the complex cases, 30 days from the date of institution of the criminal case. This term could be prolonged to 12 months in the complex cases. Official State examination of goods seized in criminal cases might be done by the Centre for Expertise of the Ministry of Interior. At the request from an anti-trust or law enforcement body and on the basis of a relevant court order, Rospatent experts provided an opinion regarding a trademark, invention or another industrial property issue. An investigator, prosecutor or court would then make a decision based on the results of the examination. The examination initiated by the law enforcement bodies was free of charge.
  21. Noting all the above, Members of the Working Party sought a commitment that the Russian Federation would be in compliance with the WTO TRIPS Agreement, including its enforcement provisions, as from the date of accession, without recourse to transitional arrangements.
  22. The representative of the Russian Federation confirmed that the Russian Federation would apply fully the provisions of the WTO Agreement on Trade-related Aspects of Intellectual Property Rights from the date of accession to the WTO, including provisions for enforcement, without recourse to any transitional period. The Working Party took note of this commitment.