Court considers unauthorised use of mark for app icon in iTunes store

In OJSC RZD v Apple Inc (Case A40-1849/2013, full judgment published on February 11 2014), the Moscow City Commercial Court has considered the unauthorised use of a trademark in an online app store.

It was the first time that a Russian commercial court had tested how a planned scheme for limitation of liability of a domain name administrator works. Based on the court’s ruling, it may be concluded that carefully drafted licence agreements with developers are useful and effective measures aimed at avoiding unnecessary disputes between domain name administrators and third-party trademark holders.

In August 2012 plaintiff OJSC RZD discovered that a picture identical to its trademark had been used in the logo of an app in a foreign online store (using the top-level domain ‘.com’) adapted for Russian consumers. This was recorded in the notarial protocol of inspection of the website. In the plaintiff’s opinion, such use of the mark was in breach of Article 1484(2)(5) of the Russian Civil Code, under which the exclusive right to a trademark can be exercised to designate goods or services for which the trademark is registered, in particular by placing the trademark on the Internet.

On January 14 2013 the plaintiff sought to recover from defendant Apple Inc damages in the amount of Rb2,000,000 (approximately $56,300) for violation of its exclusive rights to the trademark (which was famous for goods in various classes of the Nice Classification, including software).

The app at issue had been developed by Mr Sirotkin to calculate the tariffs for carrying cargo by train. iTunes SARL was the operator of the website (an online app store) on which the developer had published the disputed app. Interestingly, both the developer and the operator were involved as third parties in the proceedings, but it was Apple that the plaintiff had accused of violating its exclusive rights.

The plaintiff tried to convince the court that, since the defendant was the administrator (owner) of the domain name, the latter was responsible for any breach of third-party rights that may occur when using the domain name. Therefore, the defendant had an obligation to create effective measures to prevent such breaches.

Even though the court agreed that the disputed logo was identical to the plaintiff’s trademark, it dismissed the claim in full based on the following reasons:

• Neither the defendant nor the operator of the website had the opportunity and/or the legal obligation to check whether third-party IP rights were being infringed. Pursuant to the licence agreement concluded between the developer and the defendant, the developer was responsible for any breach of third-party rights.
• The fact that the defendant owned the domain name did not mean that it was responsible for the actions of the developers and that it had an obligation to prevent the violation of third-party rights on the website (again, pursuant to the licence agreement).
• The developer had deleted the disputed picture (which was identical to the plaintiff’s trademark) from the logo of the app before the plaintiff filed its claim with the court on January 13 2013.

The court thus indicated indirectly that the plaintiff had filed a claim against the wrong defendant - it was the developer that the plaintiff should have named as defendant.

The case is currently being considered by the appellate court. However, it is doubtful that the Moscow City Commercial Court’s judgment will be overturned. 

Sergey Treshchev and Alexey Pashinskiy, Squire Sanders Moscow LLC, Moscow