New edition of Art. 14.10 Code of Administrative Offenses of the Russian Federation
1. Illegal use of someone else’s trademark, service mark, appellation of origin of goods or similar designations for homogeneous goods, except for the cases provided for in Part 2 of this article, -
shall entail the imposition of an administrative fine on citizens in the amount of five thousand to ten thousand rubles with confiscation of items containing illegal reproduction of a trademark, service mark, name of place of origin of goods, as well as materials and equipment used for their production, and other instruments for committing an administrative offense ; for officials - from ten thousand to fifty thousand rubles with confiscation of items containing illegal reproduction of a trademark, service mark, name of place of origin of goods, as well as materials and equipment used for their production, and other instruments for committing an administrative offense; for legal entities - from fifty thousand to two hundred thousand rubles with confiscation of items containing illegal reproduction of a trademark, service mark, name of place of origin of goods, as well as materials and equipment used for their production, and other instruments for committing an administrative offense.
2. Production for sales purposes or sale of goods containing an illegal reproduction of someone else’s trademark, service mark, appellation of origin of goods or similar designations for homogeneous goods, except for the cases provided for in Part 2 of Article 14.33 of this Code, if these actions do not contain criminal offense -
shall entail the imposition of an administrative fine on citizens in the amount of twice the value of the goods that were the subject of an administrative offense, but not less than ten thousand rubles with confiscation of items containing illegal reproduction of a trademark, service mark, name of place of origin of the goods, as well as materials and equipment used for their production, and other instruments for committing an administrative offense; for officials - in the amount of three times the value of the goods that were the subject of an administrative offense, but not less than fifty thousand rubles with confiscation of items containing illegal reproduction of a trademark, service mark, name of the place of origin of the goods, as well as materials and equipment used for their production , and other instruments for committing an administrative offense; for legal entities - in the amount of five times the value of the goods that were the subject of an administrative offense, but not less than one hundred thousand rubles with confiscation of items containing illegal reproduction of a trademark, service mark, name of place of origin of the goods, as well as materials and equipment used for their production , and other instruments for committing an administrative offense.
Commentary on Article 14.10 of the Code of Administrative Offenses of the Russian Federation
1. The object of the offense is social relations developing in the field of intellectual property and the rights of the copyright holder protected by the state.
In accordance with Art. 1 of the Law of the Russian Federation of September 23, 1992 N 3520-1 “On trademarks, service marks and appellations of origin of goods” (hereinafter referred to as the Law), a trademark and service mark (hereinafter referred to as a trademark) are designations used to individualize goods, work performed or services provided (hereinafter referred to as goods) of legal entities or individuals.
The appellation of origin of a product is a designation that is either a modern or historical name of a country, locality, locality or other geographical object (hereinafter referred to as a geographical object) or a derivative of such a name and which has become known as a result of its use in relation to the product, special properties which is solely or mainly determined by the natural conditions and (or) human factors characteristic of a given geographical object. A designation that, although it represents or contains the name of a geographical object, has come into general use in the Russian Federation as a designation of a product of a certain type and is not related to the place of its manufacture is not recognized as an appellation of origin.
The main function of a trademark is distinctive - it helps to distinguish similar products from different manufacturers.
Another function is advertising - the trademark of a proven product advertises it, increasing the reputation of the manufacturer, increasing sales volumes and profit margins.
There are verbal, figurative, three-dimensional, other (for example, sound) trademarks and their combinations. A trademark can be registered in any color or color combination. Collective marks may be used to designate goods that have the same quality or other common characteristics, produced and (or) sold by a union or association of legal entities.
Legal protection is provided only to a trademark that is registered in the prescribed manner (see Order of Rospatent dated March 5, 2003 No. 32 “On the rules for drawing up, filing and consideration of an application for registration of a trademark and service mark”; Order of Rospatent dated March 3, 2003 . N 27 “On the rules for extending the validity period of registration of a trademark and service mark and making changes to it”).
A trademark can be registered in the name of a legal entity, as well as an individual engaged in business activities.
However, registration of a trademark does not give its owner the right to prohibit the use of this trademark by other persons in relation to goods that were introduced into economic circulation directly by the owner of the trademark or with his consent.
For example, when considering a dispute related to the protection of the right to a trademark, the arbitration court indicated that if goods designated by a trademark are put into economic circulation by other persons with the consent of its owner, then it does not have the right to prohibit them from using this trademark ( clause 7 of the Review of the practice of resolving disputes related to the protection of rights to a trademark, annex to the information letter of the Supreme Arbitration Court of July 29, 1997 No. 19).
2. In accordance with the letter of the State Customs Committee of the Russian Federation dated May 29, 2003 N 01-06/22096 “On the direction of Methodological Recommendations”, the objective side of the offense in question is the use of someone else’s trademark, service mark, name of place of origin of goods or similar designations for homogeneous goods in civil circulation without the permission of the copyright holder.
Illegal use of a trademark is the use without its permission in civil circulation on the territory of the Russian Federation of a trademark or a designation confusingly similar to it in relation to goods for the individualization of which the trademark is registered, or homogeneous goods, including the placement of a trademark or similar to it confusingly notation:
on goods, on labels, packaging of these goods that are produced, offered for sale, sold, displayed at exhibitions and fairs, or otherwise introduced into civil circulation on the territory of the Russian Federation, or stored and (or) transported for this purpose, or imported into the territory RF;
when performing work or providing services;
on documentation related to the introduction of goods into civil circulation;
in offers for the sale of goods;
on the Internet, in particular in the domain name and other addressing methods.
The practice of applying the commented article can be illustrated by the following example.
Tambov customs, Tambov, appealed to the arbitration court with an application to bring to administrative responsibility an individual entrepreneur (hereinafter referred to as the individual entrepreneur) for the illegal use of the trademarks “Nike”, “Puma”, “Reebok”, “Adidas” on the basis of Art. 14.10 Code of Administrative Offences.
During the inspection, it was established that in the premises of a store owned by an individual entrepreneur, sports shoes (sneakers) with the trademarks “Nike”, “Adidas”, “Reebok”, “Puma” are being sold without documents confirming the fact of customs clearance. Tambov customs adopted a resolution to confiscate goods.
Based on the results of the inspection, a protocol on an administrative offense was drawn up against the individual entrepreneur, liability for which is provided for in Art. 14.10 Code of Administrative Offences.
The copyright holders of exclusive rights to these trademarks are, respectively, the law office “Shevyrev and Partners”, LLC “Vlasta-Consulting”, LLC “NIKE”, LLC “PUMA-RUS”.
Neither the law office "Shevyrev and Partners", nor Vlasta-Consulting LLC, nor NIKE LLC, nor PUMA-RUS LLC entered into a contractual relationship with the individual entrepreneur and did not transfer the rights to use trademarks.
The individual entrepreneur was not provided with documents confirming the customs clearance of goods on the territory of Russia, confirming the right to use trademarks, since the entrepreneur does not have any.
By the decision of the Arbitration Court of the Tambov Region, an individual entrepreneur was brought to administrative liability under Art. 14.10 of the Code of Administrative Offences, in the form of a fine with confiscation of footwear with the trademarks “Nike”, “Puma”, “Reebok”, “Adidas”.
It should be emphasized that goods, labels, and packaging of goods on which a trademark or a confusingly similar designation is illegally used are counterfeit.
A designation is considered confusingly similar to another designation if it is associated with it as a whole, despite their individual differences. In controversial cases, it is recommended to use the opinions of experts of the Russian Agency for Patents and Trademarks or the Federal Institute of Industrial Property (FIPS) on the confusing similarity of the designation under study with the protected trademark.
3. The subjects of this offense are citizens and legal entities, as well as officials.
4. The subjective side of the offense is characterized by guilt in the form of intent, which is confirmed by materials of judicial practice.
Thus, Birobidzhan customs (hereinafter referred to as the customs office, customs authority) appealed to the Arbitration Court of the Amur Region with an application to bring the limited liability company (hereinafter referred to as the company) to administrative liability under Art. 14.10 Code of Administrative Offences.
The grounds for the customs authority's appeal to the arbitration court were the following circumstances. During customs control, goods with the Adidas logo were identified - used, worn out textile products that could not be repaired. At the same time, the company has not submitted documents for the right to own a trademark with the Adidas logo in civil trade turnover on the territory of the Russian Federation.
The court found that the owner of the exclusive rights to the Adidas trademarks is , which authorized Vlasta-Consulting LLC to represent the principal in relation to any issues arising in connection with the protection of intellectual property and rights to the company’s trademarks in the Russian Federation.
From the statement of Vlasta-Consulting LLC sent to customs, it follows that this company represents the interests of Adidas International Marketing B.V. for the protection of exclusive rights to the Adidas trademarks in Russia. Neither the copyright holders nor Adidas LLC, which, by virtue of a license agreement, has a non-exclusive license to use the Adidas trademarks, transferred to the company any rights to use these trademarks.
The customs considered that since the import of goods designated by a protected trademark was not carried out by the copyright holder and not under an agreement with the copyright holder or without his consent in accordance with the chosen customs regime, which provides for the possibility of using the goods in civil circulation, it constitutes an illegal act, the responsibility for which is provided Art. 14.10 Code of Administrative Offences.
Considering that the objective side of the administrative offense provided for in Art. 14.10 of the Code of Administrative Offences, consists of using someone else’s trademark or similar designations for homogeneous goods in civil trade without the permission of the copyright holder; the company’s actions contain signs of an administrative offense imputed to it in the field of entrepreneurial activity.
As the court found, the company really could not have information that, in pursuance of the contract it concluded with the commercial and industrial (China), the Chinese side would supply the goods stipulated by the contract with the presence of the Adidas trademark on it.
Thus, the declarant did not have any proper information about the presence of the Adidas trademark on used goods.
In addition, from the case materials it follows that none of the shipping documents (waybills, invoices) contained instructions from the Chinese party to the contract regarding the designation of the supplied goods with the trademark of the copyright holder. This circumstance also indicates the absence of guilt in the actions of society.
The grounds of liability, based on the general concept of the offense, include guilt.
Thus, the absence of guilt is one of the circumstances that excludes proceedings in the case of the offense in question, since it indicates the absence of the corpus delicti of the administrative offense itself.
5. A specific form of violation in the field of names of geographical objects is the use of a registered name in translation into other languages. A violation is considered to be the use of a registered name in combination with such expressions as “genus”, “type”, “imitation”, etc., as well as the use of a similar designation that can mislead consumers regarding the place of origin and special properties of the product.
Identification by customs authorities of signs indicating illegal use of a trademark is usually carried out during customs clearance of goods or during customs control after the release of goods, including during an audit of the financial and economic activities of a participant in foreign economic activity (FEA).
When carrying out customs clearance and control, by comparing the information contained in the letters of the State Customs Committee of Russia on the inclusion of intellectual property in the Register, and the information declared about the goods in the cargo customs declaration (hereinafter referred to as the CCD), and the documents submitted together with it, it is possible to establish their inconsistency . Such a discrepancy in information will indicate the need to monitor the legality of the use (import) of goods designated by a protected trademark. In order to compare information and documents when checking the customs declaration, it is necessary to pay special attention to the following information:
— name of the trademark declared in column 31 of the customs declaration;
— about the trademark, its verbal, figurative and other elements recorded in the customs inspection report;
— about the trademark, obtained during the selection of samples and specimens for examination of the goods being processed (when such examination is a prerequisite for customs clearance of goods);
— on certification of goods marked with the trademark of the copyright holder (for goods subject to mandatory certification);
- other information indicating the use of a trademark (if they are necessary for the purposes of customs clearance).
In this case, the following information can be additionally checked:
— on the movement of goods designated by the trademark of the copyright holder, contained in the documents provided during the inspection by the foreign trade participant (waybills for goods, invoices, etc.);
- selling goods to others.
Control over the legality of using a trademark can also be carried out in the process of checking the financial and economic activities of a participant in foreign trade activities, carried out in accordance with the Regulations on the organization of inspection activities of the customs authorities of the Russian Federation, approved by Order of the State Customs Committee of Russia dated April 2, 2002 N 300.
If the goods designated by the trademark were not imported by the copyright holder, licensee or persons authorized by the copyright holder specified in the information communicated to the customs authorities, the customs authority is provided with additional information and documents confirming the consent of the copyright holder for import (introduction of goods into civil circulation on the territory of the Russian Federation ). In practice, the existence of contractual relations between the copyright holder and the importer (foreign trade agreements, dealer, distribution agreements, etc.) providing for the import into the territory of the Russian Federation of goods marked with a trademark can be considered as consent to the introduction of such foreign-made goods into civil circulation.
When verifying the declared information, data received from the copyright holder can be used both proactively and after appropriate notification by the customs authority about the fact of movement of goods marked with a protected trademark.
If a statement is received from the copyright holder indicating signs of an administrative offense, it must be considered by the customs authority in accordance with Art. 28.1 of the Code of Administrative Offenses in accordance with the Methodological Recommendations on the procedure for working with materials, messages, statements containing data indicating the existence of an administrative offense event, communicated to the customs authorities by letter of the State Customs Committee of Russia dated August 28, 2002 N 01-06/34816.
Since administrative offenses related to the illegal use of a trademark are not subject to administrative investigation, a protocol on the administrative offense is drawn up within two days. The collection of materials that can form the basis of the evidence base must be carried out as part of customs control, both during the customs clearance of goods and after their release. These materials include:
— Customs declaration with the attached package of documents;
— an act of customs inspection (re-inspection), which indicates the name of the trademark;
— goods and (or) packaging with a trademark designation;
— an act of verification of financial and economic activities, containing information on the movement of goods marked with a trademark;
— a copy of the trademark certificate issued by Rospatent, or an extract from the State Register of Trademarks and Service Marks, or a trademark registration certificate issued by FIPS, or a document on international registration at WIPO;
- other documents indicating the fact of an offense (expert opinion, statement of the copyright holder containing data indicating the existence of an administrative offense, and materials received during its consideration).
Protocol on an administrative offense under Art. 14.10 of the Code of Administrative Offenses, is based on data from the above materials and other protocols (seizure of goods, documents, seizure of goods, interviews with persons related to the fact of use (import, sale) of goods marked with a trademark), which are important for the correct resolution of the case .
Order of the Federal Customs Service of the Russian Federation dated March 15, 2005 N 198 approved the List of customs officials authorized to draw up protocols on administrative offenses.
Protocols on administrative offenses drawn up by officials of the customs authorities of the Russian Federation under Art. 14.10 of the Code of Administrative Offences, in relation to legal entities and individual entrepreneurs, are submitted for consideration to judges of arbitration courts at the location or place of residence of the person in respect of whom a protocol on an administrative offense has been drawn up.
The transfer of materials to the arbitration court is carried out in accordance with the norms of Part 3 of Art. 23.1, part 1 art. 28.8 Code of Administrative Offenses and Art. 203 of the Arbitration Procedural Code of the Russian Federation (APK RF). In addition, Order of the State Customs Committee of Russia dated May 23, 2002 N 514 approved the Procedure for transferring cases of administrative offenses to judges, which is applied to the extent that does not contradict the Arbitration Procedure Code of the Russian Federation.
Cases of administrative offenses provided for in Art. 14.10 of the Code of Administrative Offences, are considered according to the general rules of claim proceedings with the features that are defined in Ch. 25 Arbitration Procedure Code of the Russian Federation.
It is necessary to take into account that when considering these cases in court, the copyright holder is not a plaintiff in the case of bringing the offender to administrative responsibility and it is advisable to involve the copyright holder in the consideration of the case of an administrative offense as a third party.
Administrative responsibility under Art. 14.10 of the Administrative Code provides for penalties in the form of a fine and confiscation. The execution of the decision to confiscate goods that are the subject of an offense is determined by Chapter 32 of the Code of Administrative Offences.
The RF Armed Forces clarified the bringing of entrepreneurs to administrative liability
On December 6, the Presidium of the Supreme Court of the Russian Federation approved the Review “On some issues arising when arbitration courts consider cases of administrative offenses provided for in Chapter 14 of the Code of the Russian Federation on Administrative Offenses.”
The document examines cases of administrative offenses in the field of licensing, industrial safety, consumer protection, illegal use of means of individualization of goods, product certification, and compliance with technical regulations of the Customs Union. The issues of responsibility of arbitration managers and the activities of bodies authorized to draw up protocols on administrative offenses are also considered.
After analyzing the Review, partner of AB KIAP, lawyer, head of administrative practice, customs law and foreign trade practice, Alexey Sizov, and lawyer at Pliev and Partners, Yakub Bekov, noted that it contains important clarifications for practitioners.
Alexey Sizov drew attention to paragraph 10 of the Review. As the expert noted, in the given example, the Supreme Court agreed with the conclusions of the lower courts that termination of the status of an official does not affect the possibility of bringing him to administrative responsibility, since, firstly, according to Art. 24.5 of the Code of Administrative Offenses of the Russian Federation, this is not a circumstance that excludes proceedings in a case of an administrative offense, and secondly, punishment in the form of disqualification meets the goal of preventing the commission of new offenses, since it consists in depriving the right to hold the corresponding position in the future.
Thus, explained Aleksey Sizov, the dismissal of an official from his position or termination of the status of a special subject (for example, an arbitration manager) does not exclude deprivation of his right to have a corresponding position or status in the future within the statute of limitations for bringing to administrative responsibility established by Art. 4.5 Code of Administrative Offenses of the Russian Federation.
The expert also considered it important to clarify clause 13, which contains the position of the Intellectual Property Rights Court, that the legality of applying a trademark to an imported product is determined based on the legislation of the country of origin of the product. And the fact that the designation used to mark the imported goods is confusingly similar to another trademark with international registration, the copyright holder of which is a foreign company, has no legal significance for establishing the presence of signs of an administrative offense under Part 1 of Art. 14.10 Code of Administrative Offenses of the Russian Federation.
As Alexey Sizov noted, this conclusion of the SIP complicates the activities of customs authorities in suppressing the import of counterfeit goods. “In order to bring administrative liability in the case under consideration, it will be necessary to additionally establish and evaluate the legality (illegality) of applying a controversial designation, confusingly similar to another protected trademark, in the country of origin of the imported product,” he explained.
Alexey Sizov also drew attention to clause 21 of the Review, which states that the actions of a person to sell products without accompanying documentation, which must contain information about the declaration or certificate of conformity of the products sold, are subject to qualification under Art. 14.45 Code of Administrative Offenses of the Russian Federation. In this case, the appellate court, overturning the decision of the lower court and holding the company accountable, indicated that since the company does not have accompanying documentation and, therefore, it is impossible to establish the presence or absence of information in it about the declaration or certificate of conformity of products subject to mandatory confirmation of compliance with the requirements technical regulations, then the company’s actions to implement it should be qualified precisely according to the specified article of the Code.
According to Alexey Sizov, this conclusion of the court is rational. He also noted that the absence of accompanying documentation in relation to the products being sold and, accordingly, information about the declaration or certificate of conformity may additionally lead to the violator being held liable under Art. 14.46 of the Code of Administrative Offenses of the Russian Federation “Violation of the procedure for labeling products subject to mandatory confirmation of conformity”, since both the sale of products in the absence of such labeling and the presence of labeling in the absence of documents confirming compliance will be unlawful.
In turn, Yakub Bekov noted the case cited in paragraph 20 of the Review, which, in his opinion, is interesting because the arbitration court of appeal put all subjects of advertising activity in their place, which is necessary to bring a person to justice under Art. 14.37 Code of Administrative Offenses of the Russian Federation.
“The prosecutor, having chosen, as follows from the Review, the shortest way to solve the problem, filed a statement to bring to justice the advertiser whose advertisement was placed on the wall of the house. However, the advertiser is not the subject of an administrative offense under Art. 14.37 of the Code,” the expert indicated. Since there was no evidence in the case that the advertiser and the owner of the advertising structure are the same person, bringing the advertiser to administrative liability in accordance with the article in question is illegal.
A different point of view on the Review was expressed by legal lawyer Artem Berlin, who called the document casuistic. According to the expert, the examples given in it can hardly be called abstract explanations, since they are strongly tied to the specific circumstances of the cases under consideration. Artem Berlin also noted that most of the points in the Review represent rather trivial tasks to distinguish between qualifications for various administrative structures.
“Perhaps, in some cases, the Review may be useful to a lawyer in justifying his position in a case with the same plot, but in general, it seems to me that it will not be widely used by the courts,” noted Artem Berlin.
