CIS Legal Update - September 2013: Russia Joins the Fight Against Online Piracy

by Dechert LLP
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[co-author: Ramil Shafigulin]

In response to mounting global pressure to implement effective legislation to curb Russia’s rampant online piracy, the President of Russia on July 2, 2013 signed Federal Law No. 187-FZ “On Amendments to Certain Legislative Acts of the Russian Federation Concerning the Protection of Intellectual Property Rights in Data and Telecom Networks,” (the “Anti-Piracy Law), which entered into force on August 1, 2013.

In its final form, the Anti-Piracy Law establishes procedures for prohibiting access to movies that are illegally hosted on data and telecom networks, including on the Internet, and for seeking damages in court. Although the draft law had also initially provided for prohibitions on access to audio records distributed in violation of intellectual property rights as well, these measures were later deleted and left for discussion at a later date.

According to the provisions of the Anti-Piracy Law, those with rights to films who come across their content on the Internet – hosted without their permission or without any legal justification – may apply to the Moscow State Court (the “Moscow Court”) for the implementation of interim measures, namely blocking access to the website on which the content is illegally hosted. The reasoning behind entrusting the Moscow Court with this responsibility is unclear given that there already exists an intellectual property court within the system of arbitrazh (commercial) courts that specifically hears disputes concerning the protection of intellectual property rights. Moreover, adding to the Moscow Court’s docket is only likely to lead to further congestion and organizational problems. Taking this into account, it may be worthwhile for legislators to consider establishing a pre-court dispute resolution procedure for disputes concerning intellectual property rights relating to illegally-hosted content. 

If interim measures are granted by the Moscow Court, the right holder should submit an application to the Federal Service for Supervision over Communications, Information Technology, and Mass Media (“Roscomnadzor”) in order to restrict access to the resources that distribute the illegally-hosted content. Upon receipt of the application, Roscomnadzor must then send a notification to the service provider of the web hosting company, which, in turn, must inform the owner of the respective website of the need to remove or restrict access to the illegally-hosted content. If neither the hosting company nor the owner of the website takes the requested measures, the website/page in question will be subsequently blocked by the service provider.

In this respect, the Anti-Piracy Law shifts the burden of protecting intellectual property rights from the right holders (as was previously the case) to those directly or indirectly engaged in the illegal hosting and/or transfer of the materials in question (the “information intermediaries”). Simply put, the Anti-Piracy Law unconditionally holds liable hosting companies, owners of websites, including websites dedicated to file-sharing (torrents), and service providers for breaches of intellectual property rights (with respect to films).

Experts anticipate that “information intermediaries” may also be interpreted to include sites and users posting links to illegally placed material. In particular, experts have expressed concerns that search sites, such as the well-known internet-encyclopedia Wikipedia, as well as users who post links to illegally hosted materials, can become subject to the punitive measures of the Anti-Piracy Law (although the Anti-Piracy Law is silent on users who simply access (watch/download) illegally posted movie content).

The Anti-Piracy Law provides right holders with the opportunity to sue the relevant information intermediaries for damages caused by any illegal hosting of films. Although the law does not currently stipulate any other punitive measures that can be taken against the culpable information intermediaries (except for suspending or further canceling the operating licenses of service providers), Draft Law No. 303374-6, which was introduced to the State Duma of the Russian Federation on June 25, 2013, provides for administrative liability in the form of fines for the failure to remove or restrict access to illegally hosted films.

At present, it is difficult to predict how effectively the Anti-Piracy Law will be applied in practice and what further steps will be taken by lawmakers. Individual users as well as business representatives, including those from large internet companies such as Yandex, Google, and Mail.ru, have criticized the Anti-Piracy Law, predicting that it will have a negative effect on the investment climate for internet-based businesses and could possibly lead to an environment of unfair competition and abuse by government officials. However, considering the Anti-Piracy Law has not yet entered into force, it is difficult to properly predict any adverse consequences.

Despite the criticism surrounding the Ant-Piracy Law, the deputies of the State Duma intend to prepare a similar law in the near future that will provide a procedure for protecting the intellectual property rights of other kinds of illegally placed content such as music, computer games, programs, and literature. We will monitor this situation and provide updates as appropriate.

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