On amendments to the Civil Code's provisions on the recovery of compensation for the infringement of exclusive rights to IP assets

1. The court's right to change the method of calculating compensation

The articles of the Civil Code of the Russian Federation governing liability for the infringement of exclusive rights (Articles 1301, 1311, 1406.1, 1515, and 1537 of the Civil Code of the Russian Federation) establish several methods for calculating compensation:

• compensation in a fixed monetary amount
• compensation equal to twice the value of the counterfeit physical articles
• compensation equal to twice the value of the right to use IP objects as determined by the price customarily charged under comparable circumstances for lawful use of said IP objects

Until now, plaintiffs have had the sole right to choose the most appropriate method of calculation based on the available evidence, the duration of the infringement, and other factors. The court was not entitled to alter the method of calculating compensation selected by the plaintiff. Federal Law No. 214-FZ has amended this rule:

BIRCH's Comment: The introduction of this provision will specifically resolve the frequent challenge of substantiating the amount of compensation calculated based on the value of the counterfeit physical articles in question.

In certain cases, it is extremely difficult to determine the quantity of counterfeit goods – particularly in the context of sales on marketplaces, where different brands’ products (including those bearing distinctive designations) may be sold under the same product listing at varying times. Under such circumstances, it is practically impossible for the plaintiff to ascertain the value of the counterfeit goods. A notable example is the Resolution of the Supreme Court of the Russian Federation dated 24 April 2025 No. 307-ЭС24-21900 in case No. A42-5880/2023 (the Rigel Premium Accessories case).

At the same time, it remains unclear how the court will evaluate the applicability of the method for calculating compensation selected by the plaintiff in relation to the specific circumstances of the infringement. This lack of clarity may create a period of legal uncertainty until these criteria are developed and consistently applied through judicial practice.

It should be noted separately that these amendments do not affect or override the court’s authority, as established by the Constitutional Court of the Russian Federation in Resolution No. 28-P dated 13 December 2016 and subsequently confirmed in Resolution No. 40-P dated 24 July 2020, to reduce the amount of compensation below the statutory minimum upon the defendant’s request.

Accordingly, even if the court alters the method for calculating compensation, the defendant retains the right to request mitigation of the compensation in accordance with the Constitutional Court’s position, provided there are valid grounds for such reduction.

2. Amendment of the limits of compensation claimed in a fixed monetary amount

As a result of the adoption of Federal Law No. 214-FZ, the maximum amount of compensation recoverable in a fixed monetary sum has been increased. Additionally, the amendments also revised the minimum amount of compensation for patent law infringement:

BIRCH's Comment: In practice, plaintiffs typically opt for a method of calculating compensation based on double the value of the counterfeit goods or on double the value of the right to use the relevant IP objects particularly in cases where the damage suffered by the rightsholder substantially exceeds RUB 5 000 000 – the current statutory maximum for fixed-sum compensation under the Civil Code of the Russian Federation.

As Federal Law No. 214-FZ grants courts the authority to substitute the method chosen by the plaintiff with fixed-sum compensation, increasing the maximum limit represents a coherent and necessary development of this legislative reform. It is intended to prevent undue limitation of the infringer’s liability and to ensure that the compensation awarded to rightsholders reflects actual losses rather than being merely symbolic.

3. Establishment of compensation limits for the infringement of multiple IP objects embedded in a single counterfeit physical article

Federal Law No. 214-FZ establishes general rules for determining the amount of compensation where multiple IP objects are unlawfully used within a single counterfeit physical medium (i.e., when a CD contains several phonograms):

With regard to liability for the simultaneous infringement of exclusive rights to multiple works (as objects of copyright), Federal Law No. 214-FZ establishes specific limitations on the amount of compensation:

4. Consideration of fault in determining liability for the infringement of exclusive rights

Pursuant to Paragraph 3 of Article 1250 of the Civil Code of the Russian Federation, liability measures for the infringement of exclusive rights to IP objects committed by an infringer in the course of entrepreneurial activity shall apply regardless of the infringer’s fault, unless such person proves that the infringement of intellectual property rights occurred as a result of force majeure, i.e., extraordinary and unavoidable circumstances under the given conditions.

Recent legislative amendments introduce a qualified limitation on liability in cases where the infringement was committed without fault:

If the infringement was committed by a person in the course of entrepreneurial activity and the infringer neither knew nor should have known that the infringement of exclusive rights was being committed, the court may determine the amount of compensation within the following limits:

• from RUB 10 000 to 500 000
• or within the range from the value of the counterfeit physical goods up to twice their value, or from the value of the right to use the infringed IP objects and up to twice that value

BIRCH's Comment: This provision raises substantial concerns regarding the protection of rightsholders’ interests. Given that the Civil Code of the Russian Federation now permits fixed compensation of up to RUB 10 000 000 for IP infringement, the introduction of a maximum cap of RUB 500 000 in cases of non-culpable infringement may significantly undermine the compensatory function of the legal remedy.

Notably, under a literal interpretation of the provision, the upper compensation limit in this context is determined based solely on the subjective circumstances of the infringer (i.e., lack of knowledge or intent) without due consideration for other potentially significant factors, such as: (a) The duration of the infringement; (b) The economic value or public significance of the unlawfully used IP object.

5. Joint liability of the exclusive licensee and the rightsholder

A third party’s use of an IP object, the exclusive right to which is held by the rightsholder, but the right to use which has been granted to an exclusive licensee, constitutes an infringement of the rights of both parties.

Courts have consistently recognized that, despite the involvement of two parties (the rightsholder and the exclusive licensee), the case concerns a single act of unlawful use of one IP object.

In this context, courts have grounded the joint nature of claims by reference to the general provisions of the Civil Code of the Russian Federation – specifically Articles 322 and 326.

To provide legal clarity, Federal Law No. 214-FZ introduces an explicit provision to Article 1254 of the Civil Code of the Russian Federation:

“If both the rightsholder and the licensee, who has obtained rights under an exclusive license agreement, bring claims for compensation against a third party for a specific infringement of exclusive rights, the claims of such rightsholder and licensee shall be joint and several.”

6. Composition of infringement of exclusive rights

Federal Law No. 214-FZ introduces a legal definition of infringement of exclusive rights into Article 1252 of the Civil Code of the Russian Federation:

“An infringement of exclusive rights shall be recognized as the unlawful use of a single result of intellectual activity or means of individualization by any one method.”

Based on this definition, multiple infringements are to be understood as: (a) the unlawful use of several IP objects within the same set of actions and/or (b) the unlawful use of a single IP object by multiple methods.

According to a literal interpretation of these provisions, compensation is determined for (a) each unlawfully used IP object (as explicitly stated in the current wording of Article 1252 of the Civil Code of the Russian Federation) and (b) each separate method of infringement. At the same time, Federal Law No. 214-FZ contains specific exceptions (see paragraphs 3 and 7 of the Review).

7. Interdependence of multiple methods of using IP objects

Federal Law No. 214-FZ introduces the following new provision to Article 1252.1 of the Civil Code of the Russian Federation:

“Compensation shall not be awarded in the case of the use of such a method of exploiting a result of intellectual activity or means of individualization that is objectively necessary for the application of another method of exploitation and which, by itself, has no independent economic significance.”

However, this amendment is not entirely novel, as it intersects with the existing principle of considering a “single economic purpose”, which has already been reflected in the position of the Supreme Court of the Russian Federation.

According to paragraph 56 of the Resolution, the use of a result of intellectual activity or means of individualization by one person through various methods aimed at achieving a single economic purpose constitutes a single infringement of exclusive rights.

From the clarifications contained in paragraph 56 of the Resolution, it follows that to recognize the existence of a single economic purpose in the actions of one defendant, it is necessary to establish that the defendant consecutively performed interconnected actions, each of which represents an independent method of using the intellectual property object, whereby one action is objectively necessary for the performance of the other and by itself has no independent economic significance for the rightsholder (does not cause additional property losses for the rightsholder).

As indicated in the explanatory note, examples of “dependent” methods include the transportation and storage of counterfeit goods which are subsequently sold or the reproduction of a work for the purpose of making it publicly available on an Internet website.