Intellectual Property Protection as a Basis for Economic Growth: Problems and Prospects

The development of civilization over the millennia has followed the path of increasing importance of knowledge and culture in the life of society.

At present, the creations of the human mind and other intellectual property (intellectual property) have become essential elements of economic well-being, forming the basis for an accelerated transition from an economy based on the waste of non-renewable resources to an economy of ever-growing accumulated knowledge.

The results of a study conducted by the European Patent Office (the European Patent Office, EPO) and the European Union Intellectual Property Office (the European Union Intellectual Property Office, EUIPO) in 2019 more than 45% of total economic activity in the European Union is accounted for by IPR-intensive industries, the contribution of such industries to EU GDP amounted to more than 6.6 trillion euros.

According to this study, industries based on the intensive exploitation of intellectual property rights generated 29.2% of EU jobs (63 million) between 2014 and 2016. In 2019, more than 38.9% of all jobs in the EU (83.3 million) are directly or indirectly related to industries based on the intensive exploitation of intellectual property rights. Wages in such industries are significantly (on average 47%) higher than in other industries. Industries with a high level of use of intellectual activity and other intellectual property rights provide the majority of EU exports and trade surpluses, thus contributing to the balance of EU foreign trade.

Sustainable economic development has always required the preservation of stability of social relations, guaranteed protection of the rights and legitimate interests of all their participants. "Knowledge economy", based on intellectual property rights, is in this respect even more vulnerable than its predecessor forms of organization of economic turnover. For development based on innovation, it is necessary to ensure reliable protection of intellectual property rights, guarantee the stability of legal regulation and predictability of law enforcement practice.

It is precisely the stability and predictability of the legal conditions of business that allow to develop and test various strategies for creating economic value, attract investments in innovative projects, create intellectual value and ensure commercialization of intellectual property objects.

The protection of intellectual property rights in the world is largely unified due to international agreements in this field and active international cooperation, which has led to the recognition of basic principles and certain standards of protection of rights to works, inventions, trademarks and other objects of intellectual property rights.

However, despite the fact that the legislation of the Russian Federation complies with all major international treaties in the field of intellectual property, the practical implementation of the principles laid down in such international treaties and domestic legislation is becoming increasingly difficult.

In many respects, this situation can be explained by the inconsistent development of judicial practice, which for decades has been unable to provide a uniform solution to homogeneous issues arising from subjects of economic activity.

In a number of court cases, there is a de facto rejection of basic approaches declared at the legislative level, but not observed and not protected by the judiciary. Judicial practice is becoming less and less predictable, and courts are increasingly assuming the role of "correctors" of existing legislative provisions through arbitrary clarifications and additions, regardless of the literal meaning of the words and expressions used in legislative acts.

Thus, for example, subparagraph 1 of paragraph 9 of Article 1483 of the Civil Code of the Russian Federation provides that designations identical to the title of a work known in the Russian Federation on the date of filing an application for trademark registration, a character or a quotation from such work may not be registered as trademarks, if the rights to the relevant work arose earlier than the priority date of the registered trademark. The legislator, by adopting this norm, established the priority of copyright for works as the results of creative activity of their creators, obliged in the registration of trademarks to respect the exclusive rights of the authors of the work and their legal successors in accordance with the general principle that implies the need to obtain the consent of the right holder - the owner of the exclusive right to use the object of intellectual rights.

In general, judicial practice has adhered to this approach until very recently. Thus, the Definition of the Supreme Court of the Russian Federation from 16.08.2019 № 300-ES19-6196 was recognized as correct the Decision of the Presidium of the Court of Intellectual Rights of 28.01.2019 № SIP-199/2018 in which, resolving the issue of the familiarity of the quotation from the work - "system-vector psychology" when challenging the registration of the trademark in which this word combination was used, the courts rightfully proceeded from the criterion of complete obscurity of this name in the territory of the Russian Federation on the date of filing for registration of the trademark, justifying the decision on the absence of grounds for termination of protection of the trademark in which this word combination was used, referring to the "absence of evidence from the Russian Federation". Similar views were expressed by experts and supported by the court when the Intellectual Property Rights Court considered the case No. SIP-296/2013 in its decision dated 09.10.2014.

However, in 2019 Case No. CIP-387/2019, the court assumes that mere "familiarity" of the works is no longer sufficient to protect them; it is necessary that the familiarity be broad, and that evidence of "factual consumer awareness of their content and authors" be presented.

In rejecting the applicant's argument that the law refers exclusively to the fame of a work as an objective fact, the Court cites interpretations of the legislator's intentions and will in writing the provisions of the law that are not based either on the provisions of the legislation or on judicial practice: "The Court also proceeds from the fact that the said interpretation of this norm would mean the introduction of a general prohibition on registration as trademarks of any publicized copyright objects that would automatically fall into the category of famous. It seems that the will of the legislator was not aimed at establishing such a prohibition, which would create serious obstacles to the normal functioning of trademarks as means of individualization of goods, works and services" (p. 27 of the Decision of the Intellectual Rights Court of 28.11.2019 in case No. SIP-387/2019).

Copyright arises from the moment of creation of a work, its expression in an objective form, for the use of a work both under the earlier legislation and the current legislation requires the consent of the author, the right holder, that is why the work can not be used as part of a trademark without such consent, as the use of the results of creative activity is a borrowing of a certain part of the work, its name.

According to the court, authors and other right holders, in order to protect their rights, must constantly maintain a high level of recognition of the authors themselves and their works. In addition, following the court's logic, interpreting ad absurdum, if the author was known but died, and until his heir is also widely known, the work and any parts of it may be used for trademark registration by any outsiders.

Following this logic, it also turns out that if for any reason the majority of consumers believe that the author of a work, including its title, is some other person who is not the author of the work, the author of the work is deprived of the right to protect his rights when other persons register trademarks using the names, parts of the protected copyright object.

Thus, justifying its position, the court clarified the will of the legislator in contradiction with the literal meaning of legislative provisions and implements legal regulation by interpretation contrary to the literal content of the law. Going beyond its competence, the court, instead of interpreting the law, actually establishes new legal norms.

The court's new approach, which requires "widespread publicity" as a condition of protection, contradicts, in particular, the requirements of the Agreement on Legal Aspects of Intellectual Property Rights Protection (TRIPS Agreement), which is part of the WTO package of agreements. The TRIPS Agreement provides, in particular, for mandatory compliance with the provisions of the Berne Convention for the Protection of Literary and Artistic Works, which establishes the basic principles of protection of the rights of authors and other copyright holders. Article 1259 of the Civil Code of the Russian Federation also stipulates that protection of copyrighted works is granted "regardless of the merits and purpose of the work, as well as the manner of its expression", which is a universally recognized principle of copyright protection.

The absurdity of the situation is that, in fact, the refusal to comply with international obligations in this case does not involve any public-law problems, being conditioned solely by the position of the court, which gave preference to protecting the interests of one of the parties to the private-law proceedings.

Thus, the problem is not only and not so much to provide remuneration for authors in order to maintain, as Abraham Lincoln said, "the flame of genius fueled by interest", but rather to solve the problem of achieving stable conditions for the economic exploitation of the objects of intellectual rights.

The way out of this situation, as it seems, could be the continuation of unification of legal protection of intellectual property, including taking into account the best domestic examples and foreign samples, as well as guarantees of application of unified unified approaches in judicial and other law enforcement practice with maintaining a rational balance of interests of authors, right holders, users and all members of society.

Author of the article: Dmitry Ivanov