The PBN Company
Unofficial Translation

Finansovaya Rossiya
December 6, 2001

You Counterfeited Vodka - Give It to Kristall

By Artur Shumkov

An interesting bill has been recently submitted to the State Duma by a group of Deputies led by Pyotr Shelisch. (The group includes famous singer Iosif Kobzon.)

The deputies have proposed to amend several Russian laws simultaneously to prevent counterfeit products from penetrating the market. Counterfeit products are defined in the draft legislation as products put into circulation with infringement of intellectual property rights. Thus, the blow should strike on counterfeit medicine, pirate CDs and fake coffee with the labels of famous companies.

The draft legislation increases the maximum criminal liability for trading such goods from two to six years of imprisonment, but it is not only about the Criminal Code. The existing legislation allows the trademark owner to demand compensation for damage from the counterfeiter, however, in practice, the enforcement of this procedure faces the problem that it is impossible to substantiate the exact damage. The draft by Shelisch's group eliminates this obstacle, granting the claimant the right to demand a compensation ranging from 1000 to 5000 minimal salaries from the defendant without the substantiation of the losses incurred.

In addition, the draft entitles the court to seize or prohibit the defendant from transporting suspicious products upon the request of the claimant even before the case's consideration. This provision is aimed at stopping the defendant from selling or hiding all counterfeit goods before the court session.

Finally comes the most interesting amendment. The goods recognized as counterfeit are subject to destruction, but the process of destruction costs money. The expenses of destruction should be recovered from the defendant, but defendants in such cases usually disappear without a trace. The new law resolves this problem: seized goods and equipment may be destroyed, but they also may be handed over to the claimant upon his request 'as a compensation for damages incurred'.