A very interesting question popped up in the Podlodka chat.^[1] I formulated it close to the original as follows:

If we train our model based on the output of another model (when distilling it), available under AGPL-3.0, then should our model also be under AGPL or can it be licensed under another license (for example, BSD)?

That's a cool question. And it immediately calls a number of related questions, which also need to be answered in order to prepare an answer to the first one:

• What are the limits of the AGPL application: software only or not? Is it applicable to AI models and their outputs?
• What is an AI model as intellectual property: software, database, other?
• What is the output of the model: part of the software, database, or other?
• What is distillation (in the context of model learning)? Is there any action within this operation to copy data (or software code) from one model to another? Is there data extraction from a database^[2] here?

Interestingly, there has already been an analysis of a similar issue (about the YOLOv8 code and weights), where the question was raised whether the trained models should be considered as a part of the software or output data. As we can see, they have not come to an unanimous verdict. This is understandable: the Ultralytics representative follows the interests of the company without weakening its position in making money from sales of their commercial licenses and leaving them with their answers to maneuver for the future in case of potential disputes, so that his answers will not be to its detriment in the future if they turn out to have more legal freedom for users of their products, than in their other actions.

To find the answer to this question, let's still go down the path of finding answers to related ones.

The legal context around the AGPL and AI models

To answer, it is necessary to take into account the existing context on the legal side of the issue. I think it's worth outlining this context first, which I was guided by, so that the further course of my reasoning would be more understandable:

1. Surrounding circumstances. A legal comment on such issue largely depends on (a) which jurisdiction we are talking about (since in different countries the norms of laws and legal interpretations may vary greatly), (b) which side of the conflict is accompanied by a lawyer (i.e., in which position to base the answer – who is taking the data or who is taking whether it needs to be stopped or justified as acceptable), (c) what exactly is technically happening in reality.
2. What do I mean by distillation? What is described in the Ultralytics glossary, the well-known article by Hinton et al. (2015), in these blog and tutorial. It is difficult for me to learn the technical details of the above, but in the legal context, the following seemed important: (1) in this process, data is transferred from one model to another; (2) it is saved for the student model (so as not to contact the teacher model later).
3. What do I mean by models? There is no clear general approach yet as to what kind of objects they are under copyright law, and again, see par. (1). But my comments below can apply only for Russia (as a jurisdiction), so for simplicity we assume that the model is a computer program (art. 1261 of the Civil Code of the Russian Federation, the “RCC”) + database(s) (art. 1260 of the RCC).^[3],^[4]
4. Difficulties with the AGPL. Although the AGPL is a copyleft license, as I know, it often stumbles in legal disputes.^[5] And as its text itself is pretty confusing, so is the court practice on it.^[6] And again, the question of its application depends on par. (1) above.
5. Open source and authorship. In Russia, it is sometimes difficult for software developers to prove their authorship on it. Including due to issues of using a third-party open source code in own program.^[7]
6. Software patents and algorithms. I leave questions about patents out of the study (because this is an additional large legal layer, and it also depends on the jurisdiction). But let me remind that the AGPL has section 11 on patents. Perhaps it already has answers to some of your questions.
7. Risks. Since there is no clear answer in the law and established court practice, we are dealing with the risks of legal uncertainty. Moreover, both possible violations of third-party's intellectual rights (when using third-party's data for their model) and possible difficulties in proving violations of your own rights (if someone uses your model, and you have problems proving that you really have rights to the model and its elements, including third-party’s: open source, distilled data, UGC, etc.).

Thus, the reasoning below is a search for an answer to the specified question, taking into account this context above. Starting from it, we should keep in mind the following aspects.

Intermediate knowledge (coming to the answer)

• (a) The concept of software, database. In Russia, software is "... a set of data and commands <...> in order to obtain a certain result, including preparatory materials obtained during development ... and the audiovisual displays generated by it" (art. 1261 of the RCC).^[8] Under the database is "... a collection of independent materials <...>, systematized in such a way that these materials can be found and processed using <...> computers." (art. 1260 of the RCC). In other words, data is included in the software, and materials (also data)^[9] that can be stored outside the software are included in the database.
• (b) Databases included in a model. I include databases in a model (as an object of rights), because, for example, the same weights (as a set of parameters), questions and answers (pairs of user queries and model responses, including the "correct" ones in text, vector or other form) can be recognized as databases (in the legal sense).
• (c) Audiovisual displays. What is meant by this? The RCC (as is often the case) does not disclose the concept. At the same time, this is not the same as an audiovisual work (art. 1263 of the RCC), since it is called differently. It is clear that by default we mean the graphical interface (GUI) of the program itself^[10] (since there is software without it), but it cannot be excluded that multimedia output data (images, videos) can also be attributed to this concept.
• (d) "Infection" of the output data, extraction from a database. I agree with Gemini's answer, but (a) it applies to (A)GPL (see FAQ about this), and the copyright holders can block this with their additional terms (ToS, EULA, etc.);^[11] (b) there are additional clarifications in the same FAQ when such "infection" with the GPL license is possible (it will also apply to the AGPL). And yes, this is consistent with the rule of law that no one has the right to extract materials (=data) from a database and use them without the permission of the copyright holder, with the exceptions provided for in the law. To extract = to transfer all its contents or an essential part of it to another medium by any technical means and in any form (art. 1334 of the RCC).
• (e) Extracted data (from the first database) as part of the second database is a use of the first database. Due to legal uncertainty, as well as based on the interpretation of the concept of "extracting data from a database", it is possible that in a court dispute, the copyright holder of the teacher model (which includes the first database from which data was taken into the second one during distillation) may argue that a significant part of the data was illegally extracted from his database,^[12] and this data was stored in student model (which includes the second database).
• (f) Blurring of the materiality criterion. The laws do not clarify^[13] what is considered an essential part of the database in relation to extraction (i.e. there is no rule about conditional 5-10% of the total volume of the database as an acceptable value for extraction / copying without the consent of its copyright holder). This will be determined by the court situationally, based on the circumstances of a particular dispute.^[14]
• (g) The AGPL limits. The AGPL explicitly states in its preamble that it applies not only to software code. Therefore, we can assume that the AGPL will apply to everything that is in the repository, the content of which has an explicit indication (for example, in the README file) that it is licensed under the AGPL. But again, we come up against the question (see above) whether the output data (which is not in the repository, but is obtained as a result of the work of the contents of the AGPL repository) is subject to the AGPL.

All this leads us to the following.

We formulate the answer (and its assumptions)

I would like to note, there is a number of conditional assumptions in the answer. For example, I proceed from the fact that (1) the legal qualification of the model is software + database,^[15] (2) the AGPL repository applies to all files in it, (3) the output is not an audiovisual display (as understood by art. 1261 of the RCC), (4) the exceptions described in the GPL FAQ do not apply to our issue, (5) if an extraction from a database (which is part of the model) occurs, then it is not possible (or difficult) to determine the amount of extracted data (relative to the total amount of data in it).^[16]

In total, taking into account the above context and assumptions, it turned out the following.

Possible answer

• If only the output data of an AGPL model is used, and there is no use of its code, weights (parameters), or other elements contained as is in the AGPL repository as part of its model, then there is no obligation to license its model under the AGPL too.^[17]
• At the same time, it is worth making sure that there are no accompanying conditions, restrictions or rules from the copyright holder of the AGPL model regarding the application of its output data (for example, in the form of the EULA, ToU, ToS or even rules in README).^[18]
• For reliability, you can also get direct explanations (that you do not need to apply the AGPL) from the copyright holder of the model whose output data will be used.^[19]
• However, the question remains whether the output data of the AGPL model collected (during distillation) can also be considered as extraction from databases (which, together with the AGPL code, are part of the model and are in the repository). If we assume that, in accordance with the Russian laws, we may encounter the fact of using third-party's database (the copyright holder of the distilled model) within the meaning of art. 1334 of the RCC. And then we face with 2-ways fork: (1) if the output contains fragments of files (code, model weights, or other elements) in the same form as they are in the repository under the AGPL (as is), then we can say that the AGPL applies to them (and to the rest IP), see par. 1 above; (2) if the output does not contain, then there is a high probability that this situation will be qualified as the analogy mentioned (when the terms of the GPL will not automatically apply to the book), but taking into account par. 2 of the answer and assumption (4) above.^[20]

Afterword

Naturally, my comments above and the possible answer are just legal reflections out loud, not legal advice. It is noteworthy that even Gemini, in its response, hedge its own copyright holder bets: "... your new model will most likely not be considered a derivative work ...", "It is highly recommended to consult a lawyer ...", "With a high degree of probability, you can use ...". Well, Google developers follow the same path as the guys from Ultralytics: minimize the risks of our company, add disclaimers, and wait for requests for a commercial license.

And yes, there are other wonderful questions right there. For example:

1. Are weights considered objects protected by copyright? If it's just mathematical formulas.
2. How can copyrights be taken into account for the result of combining different models (such as WhisperSpeech)? What will it be, and how to take into account the copyrights and restrictions of the copyright holders of the models that formed the basis?
3. Since computer programs include data, should they be allocated as part of models and databases (as separate objects of rights), or should all elements of the model be recognized only as software?
4. What exactly is meant by audiovisual displays? Should images and videos generated by the neural network be classified as such? If so, then why divide the legal qualification between text data (as not falling under the concept of audiovisual) and images, videos as output data of models?
5. How quickly will we get to litigation over the reverse engineering of models and the examples of cleanroom as successful examples of defensive positions in such disputes?

But their analysis is the subject of research and legal analysis within the framework of other materials.

Aftertaste

Finding a solution to this issue is a legal quest (difficult but fascinating). Naturally, there is no perception of the task as completed – rather, as climbing a mountain opens up a view of other (higher) mountains of the range. And a similar feeling: not hardcore, but close.

I caught myself thinking that presenting the material is like generating an AI response – well, my neural network also thought about it and gave a result. But this was not originally planned: it just quickly became clear that the analysis of the issue would go beyond the format of a convenient answer in a telegram chat, and a description of the context and assumptions would make it possible to more clearly show why and how I have come to such answer.

Materials that can help advance this issue and related topics:

Are AI models’ weights protected databases? - Kluwer Copyright Blog

The ongoing Artificial Intelligence (AI) revolution has machine learning models at its core. Contrary to classic computer programs written by developers, many of these models rely on vast artificial neural networks trained in giant amounts of data. In general, they use what is called a transformer architecture. No one individually writes or encodes these models;... Continue reading

Kluwer Copyright BlogNuno Sousa e Silva

Reading AGPL

a guided introduction for first-timers

Kyle E. Mitchell

P.S. I thank to my friends (developers and analysts) who gave me the necessary explanations to my questions that arose during this quest, and Valentina D. for help with editing.

Due to the constant development of market relations, goods and services have long been provided to consumers not only according to the “producer-consumer” model, but also through intermediaries, which include distributors and dealers. Despite the fact that in the current civil legislation of the Russian Federation the distribution agreement is not singled out as a separate type of agreement, nevertheless, such subjects of market relations have found suitable legal structures for their business relations within the framework of already existing types. Within the framework of this material, we do not plan to look for and present differences in the legal status of a distributor and a dealer, but we propose to consider situations in which such subjects of market relations may be held liable for violating exclusive rights in relation to means of individualization in relation to a domain name.

Let's imagine the situation.

There is a manufacturer of a product that has a corresponding trademark to individualize its product. In order to develop a customer base of consumers of its goods, such a manufacturer attracts an intermediary - a distributor - to sell its goods, with whom it concludes a corresponding agreement. In turn, the distributor, in order to more effectively sell the purchased batch of goods, registers a domain name and creates a website for selling such products (first option) or creates a corresponding section on his existing website dedicated to this product (second option).

In relation to such a situation, the question arises: can a distributor legally use the trademark of a product manufacturer to sell a product that was previously legally acquired (i.e. not a counterfeit product) if a corresponding license agreement has not been concluded between such a distributor and the product manufacturer (who is also the owner of the trademark in relation to such a product) in relation to such a trademark? And if the distributor cannot, then what liability can be imposed on him?

The question about the domain name is related to the fact that distributors often create websites about the products they sell, and often use trademarks of manufacturers of the products both as illustrations on websites and in domain names for such websites and other means of addressing on the Internet.

Examples of such distributors:
https://www.mont.com/ru-ru/vendor/adobe
https://www.bmw-borishof.ru
http://www.asbis.ru/drweb

The above questions are, in fact, not as simple and straightforward as they may seem at first glance. To answer them, the following should be noted.
Since, as stated above, the law currently does not provide for special rules regarding distribution relations, much depends on how the parties have qualified their agreement and what content they have put into it.

As we know, the granting of the right to use a trademark is formalized in the form of concluding a corresponding license agreement (see Article 1489 of the Civil Code of the Russian Federation). In this case, based on the freedom of contract, the parties can legally formalize the provision of such a license either by concluding a separate (license agreement) or by including the relevant provisions on the license in a more complex agreement. Regardless of the option chosen for formalizing such a transaction, the parties will need to register the granting of such a right, as provided by law (see Article 1490 of the Civil Code of the Russian Federation).

Therefore, if a distributor wishes to legally use such a trademark in relation to a product and be calm about the fact that the manufacturer of the product will not come to him with claims or lawsuits regarding such use, then it would be better to immediately eliminate possible uncertainty by concluding an appropriate agreement between the distributor and the manufacturer to obtain a license to use the trademark.

If the distributor has not entered into a licensing agreement with a trademark owner, the following should be kept in mind. An analysis of the provisions of current legislation and established judicial practice allows us to conclude with a certain degree of confidence that the very fact of a distributor purchasing or receiving in another form a product from a manufacturer (either directly from him or through intermediaries), who has a trademark in relation to the corresponding class of his product, for its subsequent sale does not automatically grant the distributor the right to use such a trademark.

Let us turn to judicial practice, which we will consider in the form of theses.

1. The existence of a dealer agreement does not indicate the right to grant the use of a trademark

To begin with, it is worth keeping the following in mind. The courts directly determine that the existence of a dealer relationship does not indicate the right to grant the use of a trademark to third parties. This was verbatim determined in the decision of the Arbitration Court of Kemerovo Region dated May 30, 2016 in case No. A27-23979/2015.

Decision of the Arbitration Court of Kemerovo Region dated May 30, 2016 in case No. A27-23979/2015
The defendants did not provide evidence that Hypertherm, Inc. had entered into an exclusive license agreement for the use of trademarks with anyone, including the persons listed by the defendants - Avtogen Group of Companies LLC, TSK Avtogentekhno LLC, and S-AVT LLC. At the same time, the existence of a dealer relationship does not indicate the right to transfer the use of a trademark to other persons, and the submitted agreements do not confirm the purchase of the goods referred to in the claims.

Therefore, if the dealer has entered into a corresponding agreement with the manufacturer, but the agreement does not mention the granting of the right to use the trademark by third parties, then the dealer does not have the right to dispose of it in this way.

The next point may seem self-evident, but the courts have noted it separately, so it is worth noting it now.

2. Use of a trademark by a dealer will be an infringement if the dealer agreement has already expired.

Similar conclusions were made by the court and recorded in the ruling of the Seventh Arbitration Court of Appeal dated December 29, 2014 in case No. A45-11171/2014 and the decision of the Arbitration Court of the Sverdlovsk Region dated January 20, 2016 in case No. A60-33840/2015. This follows from the general principles of the operation of an agreement, according to which the right granted under a contract remains in force as long as the contract itself is in force, unless otherwise specified in it. If the agreement has terminated and there were no other conditions in the contract regarding the preservation of such a right in force, the right is recognized as terminated.

Therefore, if a party to an agreement previously had the right to use a trademark, but the agreement has terminated, then such party may well be considered an infringer when further using the trademark. And since such a right is granted precisely by contract, the absence of an agreement means the absence of the right itself.

Therefore, if the right to a trademark was not initially granted under an agreement, then the initial use of the trademark by a dealer or distributor will have the characteristics of unlawful use.

Ruling of the Seventh Arbitration Court of Appeal dated December 29, 2014 in case No. A45-11171/2014
The defendants' arguments about the existence of long-term dealer relations between Solar LLC and I. V. Kondratyev, and the entrepreneur's obligation to advertise the plaintiff's goods based on such relations, do not refute the fact of illegal use of the disputed trademark, since the last dealer agreement expired on 01.01.2013.
<...>
Under such circumstances, the court's conclusion that Relief Plus LLC and individual entrepreneur Kondratyev I.V. used, without the permission of the copyright holder (plaintiff), on documentation, in offers for sale on the Internet, including in the domain name, the designation "Solar" or "SOLAR", which is similar to the point of confusion with the plaintiff's trademark and are identical, respectively, is justified, which is a violation of the plaintiff's exclusive right to the trademark.
Thus, the use of a domain name, which is understood as actions to register and directly use a domain name (administration, delegation and other actions), identical or similar to the point of confusion with a trademark, is a violation of the exclusive right to a trademark or other means of individualization of legal entities, goods, works, services and enterprises.

Decision of the Arbitration Court of the Sverdlovsk Region dated January 20, 2016 in case No. A60-33840/2015
The defendant's reference to the existence of dealer agreement No. D03-06/14 dated 16.06.2014 between the plaintiff and a third party, according to which the third party was granted the right to conduct an advertising campaign, including via the Internet, as well as the fact that the defendant - AQUAFOCUS LLC, in turn, purchased this product from the dealer, i.e. the third party, advertised it and was engaged in its assembly and installation, is untenable and is not taken into account by the court, since this dealer agreement was terminated in June 2014.

Therefore, it is important for dealers and distributors to monitor the validity period of their agreements, under which they are granted the rights to use trademarks of manufacturers of the goods they sell.

In the same ruling of the Seventh ACA, the court also noted the following interesting point regarding business prudence:

3. A dealer should be aware of the registration of trademarks by the manufacturer of the goods

Ruling of the Seventh Arbitration Court of Appeal dated December 29, 2014 in case No. A45-11171/2014
The Court of Appeal takes into account that individual entrepreneur Kondratyev I.V., being a dealer of Solar LLC for a long time after the registration of the trademark, acting reasonably with a sufficient degree of care, should have known about the circumstances of such registration.

This example suggests that dealers and distributors must exercise sufficient caution and be aware of trademarks in relation to the products they purchase for subsequent sale, otherwise the court may consider such negligence in favor of the trademark owner. In practice, this can be expressed either in monitoring database of registered trademarks for new ones, or in requiring manufacturers of goods to promptly notify about the registration of their trademarks.

4. A dealer may not include a third party's trademark in a domain name solely on the basis of a dealer agreement with another person.

If a dealer decides to register a domain name that contains both the manufacturer's trademark and other words, it is important to ensure that such other words do not represent registered trademarks of third parties. Otherwise, the use of such a domain name will be a violation of their rights, and the presence of a dealer agreement will not be a full protection for the dealer in terms of compliance with the rights of such third parties. In this situation, we should refer to the following example from judicial practice:

Ruling of the Ninth Arbitration Court of Appeal dated September 27, 2011 N 09AP-17621/2011-GK in case N A40-3066/11-51-26
However, based on the provisions of paragraph 1 of Article 1229, Article 1484 of the Civil Code of the Russian Federation, the appellate court finds the defendant's arguments that the defendant's rights to the domain name www.bmw-autokraft.ru arose earlier than the priority date of the plaintiff's trademark under certificate No. 416302 and earlier than the date of its acquisition by him on the basis of the alienation agreement of the exclusive right to trademark No. 224630 by its original owner as untenable, with reference to the fact that the defendant is an official BMW dealer in the territory of the Russian Federation, since these circumstances do not indicate the consent (permission) of the plaintiff as the owner of the trademark to use the trademarks belonging to the plaintiff.
Since the plaintiff did not give the defendant permission to use the trademarks that belonged to him, the appellate court considers the plaintiff's demands to prohibit the defendant from using the designation "AUTOKRAFT" on the website www.bmw-autokraft.ru when providing services for the sale of goods (promotion of goods), repair and installation of equipment; to prohibit the defendant from using the designation "AUTOKRAFT" in the domain name bmw-autokraft when providing services for the sale of goods (promotion of goods) are justified.

Thus, arguments about the existence of a dealer agreement may not be recognized as circumstances that would indicate the consent (permission) of third parties as holders of trademarks for their inclusion in a domain name that also contains the trademarks of the manufacturer of the goods, which is in a contractual relationship with the dealer.

As for the liability that the distributor may bear, it is determined by law and can be determined by contract. If we talk about contractual liability, here the parties have the right to independently determine the type and amount of such liability (for example, liability may include a condition on early termination of the distribution agreement, payment of a fine in a certain amount, etc.). If we talk about liability under the law, then we should refer to Article 1515 of the Civil Code of the Russian Federation, which defines liability for violation of the exclusive right to a trademark.

It should be borne in mind that judicial practice knows of cases where a manufacturer of a product managed to recover from a distributor the maximum amount of compensation for violation of the exclusive right to a trademark, one of which is given below in the text.

5. Registering a domain for resale of goods may be a violation of exclusive rights to a trademark and unfair competition

If a distributor has lawfully purchased products from the trademark owner and has decided (for more successful sales) to register a domain name that is identical to such trademark or similar to it to the point of confusion, such actions by the distributor to register the domain name and administer and promote such a site on it carry considerable risk for the distributor. Such actions may be considered a violation of exclusive rights to a trademark, as well as unfair competition.

Thus, the following court document is of interest, which was issued in the case of the ONEGA trademark (it was registered for the implementation of the Onega physiotherapy device for blood pressure stabilization) and the domain name onegagipertonik.ru:

Ruling of the Fifth Arbitration Court of Appeal dated October 19, 2011 in case No. A51-5935/2011
As follows from the case materials, the products (devices for stabilizing blood pressure) sold by the defendant through retail trade, as well as through the website “onegagipertonik.ru”, are identical to the products manufactured by the plaintiff under the trademark “ONEGA”. Moreover, the said products are purchased by the defendant from the plaintiff.
Consequently, the defendant's possession of rights to administer the domain "onegagipertonik.ru" provides the defendant with a real opportunity to attract potential consumers of the plaintiff's products to his domain.
Thus, the very right to administer a domain, the implementation of which depends only on the will of the defendant, creates a threat of violation of the plaintiff's right to a trademark and is an obstacle for the plaintiff to use his trademark on the Internet.
Under these circumstances, the panel of judges concludes that the defendant violated the plaintiff’s exclusive rights due to the illegal use of a designation that is confusingly similar to the plaintiff’s trademark, “ONEGA”.
In this regard, the claims regarding the prohibition of the defendant from using the trademark “ONEGA” and designations similar to it to the point of confusion in the domain name “onegagipertonik.ru” are subject to satisfaction.

The text of the court document does not directly state that the defendant was the plaintiff’s authorized distributor or that a corresponding agreement was concluded between them. However, the text directly states that the products sold by the defendant through its website are identical to the plaintiff’s products, and, moreover, they were purchased by the defendant from the plaintiff. The court concluded that the defendant's possession of rights to administer a domain whose name is confusingly similar to the plaintiff's trademark provides the defendant with a real opportunity to attract potential consumers of the plaintiff's products to its domain.

The court considered such actions to be a violation of exclusive rights to a trademark and unfair competition. The defendant was ultimately held liable in the amount of 5,000,000 (five million) rubles in monetary compensation for the illegal use of a trademark in a domain name.

Collections of Court Decisions. Such Different Domain Disputes

Here you can find a good compilation of domains disputes in Russia, grouped on the basis of different types of violations and compensations.

Denis DorotenkoDenis Dorotenko

In light of the above information, it can be noted that if a person or legal entity plans to become a distributor of a certain product and is at the stage of agreeing on an agreement on the terms of cooperation under Russian law with its manufacturer, such person or legal entity should:

1. decide whether, as a distributor, it will use the name of such products or other elements of individualization of such products in any way on the Internet, and if so, in what way (in particular, in the name of a domain name or other method of network addressing)
2. obtain information from the manufacturer whether it has registered trademarks or has filed applications for such registration in relation to the product of interest to the distributor

And if the distributor has plans to register a domain with the product name, and the manufacturer has corresponding trademarks, it is time to agree with him on the terms of use of such trademarks. Of course, a distributor (especially in cases where the manufacturer does not agree to provide a license for trademarks) may come to the conclusion that its use of a trademark is legally permissible even without the consent of its copyright holder (see paragraph 3 of Article 1484 of the Civil Code of the Russian Federation), but the distributor should not forget about the risk of such actions being recognized as a violation of the exclusive right to a trademark, as well as unfair competition (as was the case in the example with the Resolution of the Fifth Arbitration Court of Appeal dated October 19, 2011 in case No. A51-5935/2011).

Domain names disputes: how to get the most compensation in Russia

The analysis of Russian court practice on domain disputes. It made possible from my own Kardamon.Dm database and identifies factors that could directly affect the amount of compensation awarded in favor of the plaintiffs.

Denis DorotenkoDenis Dorotenko

Text and Origins

If you are using FMDB in your project, I'd love to hear about it. Let Gus know
by sending an email to gus@flyingmeat.com.

And if you happen to come across either Gus Mueller or Rob Ryan in a bar, you
might consider purchasing a drink of their choosing if FMDB has been useful to
you.

Finally, and shortly, this is the MIT License.

It is remarkable that the authors of the code approached the issue of the license with a bit of humor and, in addition to its standard text, left such a postscript. And it is doubly remarkable that such a postscript quite suggests another type of license – Beer-ware. Have you ever heard of such a thing? If not, then let's get to know it. So, meet:

Beer-ware licenses are classified as Donationware licenses. If suddenly you are unfamiliar with such a category, then a couple of phrases from Wikipedia will be enough for our educational program, according to which, donationware is understood as a licensing model in which fully functioning software is provided with the opportunity to make a donation to the developer, the amount of which can be fixed or set by a user independently at his discretion based on his own assessment software values.

Beer-ware, therefore, should be understood as a type of license with fairly permissive terms, according to which a user has the right to use the licensed object freely, but at the same time, if they so wish, can undertake the obligation to thank the copyright holder with beer (hence the name of the license) as a sign of how useful the use of such a licensed object was to them.

According to various sources, originally the term Beer-ware in relation to the license came to the mind of a man named John Bristor on April 25, 1987 in Pensacola, Florida, and the first software distributed under such a license model within various BBSs dates back to 1987-1988. Since then, many variants and variations of this type of license have appeared, but the most famous of them is the following:

/*
 * ----------------------------------------------------------------------------
 * "THE BEER-WARE LICENSE" (Revision 42):
 * <phk@FreeBSD.ORG> wrote this file. As long as you retain this notice you
 * can do whatever you want with this stuff. If we meet some day, and you think
 * this stuff is worth it, you can buy me a beer in return Poul-Henning Kamp
 * ----------------------------------------------------------------------------
 */

The above text is the content of the Beer-ware License (version 42), authored by Paul-Henning Kamp, a venerable UNIX developer originally from Denmark, who, in his own words, decided to give users of their code real freedom regarding its use, not burdened with unnecessary legal formulations of the license. He admits that the GNU family of licenses is just a joke and contains too many vague statements, so he decided to opt for a simpler license, in the spirit of the BSD-lite license. That's how Beer-ware was born.

There is information that this license appeared already in 1998, however according to other sources, it was published only in 2004. But what's most remarkable is that its version number is 42. Those who are in the know clearly understand that there were no previous versions 41, 40, 39, etc. One comrade, for greater authenticity, even talked with Camp about the license version, and he confirmed that 42 really means the following:

The BeerWare license was supposed to be the answer to the BSD vs GPL dispute, so it ovbiously had to be revision 42 ;-)

Legal Status, Similar Licenses

In general, the Beer-ware license is similar to licenses such as WTFPL, MIT in its wide freedom of action for the user. As part of the Fedora project this license is characterized as an extremely liberal one, which allows the use of software code licensed under its terms almost as code in the public domain status. The license contains an optional (i.e. not mandatory) clause, according to which, if the user considers that he should do so, he has the right to purchase beer for the copyright holder. If this condition were mandatory, it would not make the license free. But since this is not the case, the license should be considered free and GPL-compatible. In principle, it can also be considered compatible with proprietary licenses, since it does not require mandatory code disclosure.

The Free Software Foundation has not yet provided any clear guidance on this license, but its comments on so-called informal licenses, which are defined as free, non-copyleft, and GPL-compatible, are described by the Foundation as being applicable to the Beer-ware license as well. At the same time, the Foundation recommends applying more detailed licenses instead of such informal ones.

The Beer-ware license has found practical application in such projects as, for example, mcchunktools, radio, FSL.

It is also worth saying a few words regarding the variations in the text of the license itself. Thus, the resource tldrlegal.com (a project dedicated to software licenses) indicates that some variations of this license are not about buying beer for the author, but about drinking this drink in honor of the author. There is also an option, according to which the author would be happy to receive non-alcoholic beer.

In addition to these variations, there are even derivative licenses that are related to food (for example, like Pizzaware (where instead of beer we are talking about pizza), Sushi-ware, Vegetarian-food-ware) and drinks (for example, Coffeeware, Sake-ware and even Pearl-tea-ware (apparently, there are fans of this too), and just any beverage-ware).

I would also like to single out the author of the tequila-ware license, since he came up with not only about tequila, but also several interesting prohibitions (in particular, about the use of software in relation to communism and socialism).

"THE TEQUILA-WARE LICENSE" (Revision 44): <charlie@wolf.is> wrote this file. As long as you retain this notice you can do whatever you want with this software subject to the following restrictions:

1) If we meet some day, and you think this stuff is worth it, you can buy me some tequila in return.
2) You may not use this software directly or indirectly for any military or paramilitary purpose. This includes, but is not limited to, training, research and development, controlling military hardware, directing military personnel, or troop entertainment. You may not use this software anywhere on a military base or vessel.  You may also not use it for developing "games" produced by the military to recruit players as real soldiers. Special exemptions may be granted on a case-by-case basis to organizations thwarting the spread of communism.
3) You may not use this software or its derivatives to develop any projects created chiefly for the use or benefit of any government, government agency, or government sponsored enterprise
4) You may not use this software or its derivatives in connection with communism, socialism, or any organization practicing or advocating for communism or socialism
5) You may not use this software or its derivatives in connection with mass data collection, whether state-sponsored or private, where "mass data collection" refers to any software or service whose business model is based directly or indirectly on collecting and using data from nonpaying users in exchange for provision of a service to those users not directly related to said data. Projects using this software as a component in a larger project that also interfaces with an organization engaged in this business are exempt (i.e. you can use this in an application that also uses Facebook Connect as long as you are not Facebook.)

It seems that the author has decided to achieve the glory of being the author of the JSON license with its well-known and strange for a legal document formulation:

The Software shall be used for Good, not Evil

Anyway. No less remarkable is the version of the Hug-ware license, where instead of food and drink the software author expects hugs from you:

/******************************************************************************
 * "THE HUG-WARE LICENSE" (Revision 2): As long as you retain this notice you *
 * can do whatever you want with this stuff. If we meet some day, and you     *
 * think this stuff is worth it, you can give me/us a hug.                    *
******************************************************************************/

Conclusion

Of course, one could argue at length about how good a license like Beer-ware really is as a legal document expressing the will of the author of the software code in the form of its conditions. But it is already possible to note with confidence that such a number of derivative license variants allows us to say that the idea with this license has entered the people community of open source users successfully, and the license itself has received its share of attention and fame.

So if anyone wants to be rewarded with a quality alcoholic drink from their grateful users for their software product, now you know which license would be most suitable for such a case.

Or you can do like Gus, just choose the license you want and add a note that you wouldn't mind being treated to something nice when you meet.

_{The illustration is taken from here authored by Kita59, CC-BY-SA 3.0 license.}

What are the risks of identifying vulnerabilities in someone else's software without the owner's consent? Is it possible to incur a fine for such activity? Is there any administrative or criminal liability for this? How can you minimize risks? Will the bug bounty program save you? We will try to answer all these questions, as well as see what the risks are for the customer himself.

In 2013, student Dejan Ornig discovered vulnerabilities in the TETRA encryption protocol and reported it to the police department. It remained silent for two years, until Ornig made information about his findings publicly available in 2015. As soon as the authorities became aware of this, charges were brought against him for hacking the protocol.

As a result, Deyan was found guilty and received a suspended sentence of imprisonment for a term of 15 months. An unexpected turn of events, right? It seems that the person found vulnerabilities, decided to do a good deed, reported them to the right people. But as a result, he received such “gratitude” from the authorities. And this is far from the only example.

What awaits a person who searches for and identifies vulnerabilities in third-party products? There are many options for the development of events. It all depends on the goals of the study. It’s one thing when someone did this “on order” from third parties who need such vulnerabilities for their own purposes (hello, Expocod!). Another is when someone works with the knowledge and consent of the service owner himself within the framework of bug bounty or another agreement. There are also frequent cases when someone finds vulnerabilities and tries to get money from the owner of the service in exchange for information about them.

If everything is more or less clear with bug bounty (since the rules of the game and the acceptable limits of research are set by the owner of the service), then in the absence of agreements, many questions may arise, primarily from the bug hunters themselves.

Is there any responsibility at all for researching and hacking someone else’s program, service, or network?

If we talk about current Russian laws, then there are such responsibilities. When a researcher tests someone else's product for vulnerabilities or penetrates someone else's network without the knowledge and consent of the owner, then in this case his actions may be regarded as unlawful. And the consequence of such actions may be the onset of various types of liability: civil, administrative and criminal.

Which laws are we talking about?

To a greater extent, the study of vulnerabilities (as well as possible liability in the event of illegal acts) concerns those laws that are listed below. Please note that this is not the entire list: this article does not address issues related to personal data, secrets protected by law (state, medical, banking, etc.) and some other issues. For now, we'll talk about the following three laws:

1. Civil Code (part four);
2. Code of Administrative Offenses;
3. Criminal Code.

In which cases will a bug hunter be held liable?

It all depends on the specific circumstances of a case, as well as on the consequences that arose after a specific study (testing, hacking). Depending on them, it will be determined whether such actions of a bug hunter are an offense or not, a crime or not, whether he is subject to liability of the appropriate kind or not.

What do you need to know about civil liability?

First of all, you need to know that it can occur due to the following circumstances:

1. the research entailed a violation of copyright;
2. during the research, personal or property damage was caused;
3. the terms of use (licensing terms) of the object under study were violated.

Option 1. Copyright

In most cases, the website or computer program under study is a full-fledged object of copyright. Consequently, its copyright holder has the exclusive right in relation to such an object (Article 1270 of the Civil Code of the Russian Federation). This means that, as a general rule, it is the copyright holder who determines whether his object can be copied (in whole or in part), or whether changes, distortions, or modifications can be made to it.

To understand, let’s imagine a situation: researching a web-service for vulnerabilities entailed copying part of the program code of such a service and storing it on the researcher’s own storage device. Such copying is the use of a copyrighted object (software code) by reproducing it. This means that, in fact, the copyrighted object was used by the researcher without the consent of the copyright holder. Formally, this will be considered a violation of the rights of the web-service owner.

Therefore, if during the vulnerability research there was (even fragmentary) copying, modification, change, or distortion of the copyright object under study, then formally this can be recognized as a violation of the exclusive right of its copyright holder to its object. Below is the simplest example from practice.

Terms of use of materials from the website registre.ru
https://www.registre.ru/copyright.html

Materials posted on the website www.registre.ru belong to Profdelo LLC and are prohibited from reprinting. In case of illegal reprinting of site materials, the violator pays the copyright holder a penalty in the amount of 10,000 rubles for each article or part of the article.

What is meant by “materials” is not clear. There is also no mention that this rule applies only to published articles. Therefore, if we imagine a situation that during testing of this website for vulnerabilities, some materials (be it the texts of unpublished articles, fragments of script code, etc.) were copied by a researcher, then with certain reservations it will be possible to say that when such copying violated the copyright of the owner of this website.

If we talk about the amount of liability for such a violation in monetary terms, it is defined in Article 1301 of the Civil Code of the Russian Federation:

• between 10,000 and 5,000,000 rubles (at the discretion of the court);
• twice the cost of a license for the object under study (for its use in the manner in which it was used during the study).

Liability can also be expressed in the form of compensation to the copyright holder for losses incurred during the research. However, the law does not limit the amount of such damages. Therefore, if the copyright holder can prove their amount (even if it is more than 5,000,000 rubles), then the declared amount will have to be paid. How losses will be proven is another question.

Option 2. Harm to person or property

In addition to copyright infringement, liability is also provided for damage to person or property (Chapter 59 of the Civil Code of the Russian Federation). As a general rule, harm caused to a person or a property of a citizen, as well as harm caused to a property of a legal entity, is subject to compensation in full by the person who caused the harm. In turn, the suspect is released from compensation for losses if he proves his innocence.

This can be explained more clearly like this. Let's imagine a situation: there is a software package that is responsible for the automatic supply of hot water to residential buildings. If vulnerability research caused the failure of this complex, then the owner will have the right to expect to recover from the researcher all losses incurred by him (including the cost of repairs and restarting of the equipment). If these same actions caused damage to property in those houses, the water supply, which is located within the computer program complex, then owners of the apartments will also count on recovering their losses.

That is, it should be understood that if, as a result of testing, an expensive and complex software product is disabled, then the consequences can be serious, as well as liability for them. And monetary penalties here can easily exceed the limits that we talked about when considering cases of copyright infringement.

Option 3. Violation of terms of use (license)

Often, the object of research (be it a website, software or other service) has its own terms of use. They may be called rules of use, terms of service, license agreement, etc. Under these conditions, additional responsibility may be provided for the user for the actions he performs in relation to the object of study.

See the example above about the "Profdelo" website. Although the copyright conditions are incorrectly written there, we can assume that in this case a researcher is liable for violating the terms of use of the website - 10,000 rubles for each article or part thereof.

In addition, we may be talking about compensation for losses to the owner of the necessary resource under study. A couple of examples for clarity.

Terms of use of the website
https://snob.ru/basement/term
The User undertakes to reimburse Snob Media LLC for losses, including legal costs, resulting from the User’s materials, non-compliance with the provisions of this Agreement or violation of the rights of third parties, regardless of whether the User is registered or not. The User is personally responsible for actions when using the Website, including, but not limited to, payment of the cost of Internet access during such use.

Terms of service
http://ru.besv.com/terms-of-service/
5.Compensation
In case of violation of these Terms of Service, as well as other legal requirements, in case of violation of the rights of third parties and when initiating legal proceedings as a result of such violation, you agree that the Company and its affiliates, managers, agents, employees, services or content providers, distributors and sellers are exempt from legal liability in connection with such a violation. You further agree to indemnify the foregoing entities for all losses, damages, civil liability and expenses (including reasonable attorney's fees and other legal costs) incurred as a result.

According to these texts, a researcher whose actions lead to losses for the owners of the sites snob.ru and ru.besv.com may be held liable for these losses. And, if proven guilty, he will be forced to pay damages.

There are even resources whose terms of use explicitly prohibit searching for vulnerabilities.

Rules and conditions for registration on the Masters of Taste website
https://mastersoftaste.club/legal
In particular, Users should not:
<…>

• attempt to assess or test the vulnerability of the Website, as well as violate the security rules and user identification systems of the Website without the prior written consent of the Organizer

Terms of use (offer) of the website kartatalanta.ru
http://kartatalanta.ru/text/terms.php
By using the Webite, the Registered User undertakes not to violate or attempt to violate the information security of the Website, which includes:
<…>
5.2. attempts to check the vulnerability of the Website’s security system, violation of the registration and authorization procedure without the permission of the Contractor;

Therefore, before testing for the vulnerabilities of a specific software product, it would be a good idea to familiarize yourself with the rules for its use: see if they mention prohibitions on such actions and whether potential liability for them is indicated.

What is administrative responsibility?

The Code of Administrative Offenses of the Russian Federation contains an extensive list of possible violations in the field of information protection, among which two points can be distinguished.

Engagement in activities in the field of information protection (except for information constituting a state secret) without obtaining a special permit (license) in the prescribed manner, if such a permit (such license) is mandatory in accordance with federal law - 13.13 of the Code of Administrative Offenses. Possible liability: administrative fine of up to 1,000 rubles with or without confiscation of information security equipment (for individuals); up to 20,000 rubles with or without confiscation of information security equipment (for individuals).

Disclosure of information to which access is limited by federal law (except for cases where disclosure of such information entails criminal liability) by a person who has gained access to such information in connection with the performance of official or professional duties - 13.14 of the Code of Administrative Offenses. Possible liability: administrative fine of up to 1,000 rubles (for individuals) and up to 5,000 rubles (for officials).

Administrative liability may be imposed separately from civil liability. That is, some violations do not lie in the civil law plane, so formally one can also be held accountable if the corresponding offense is provided for in the Code of Administrative Offenses.

What is the criminal liability?

Criminal liability for crimes in the field of computer information is provided for in Chapter 28 of the Criminal Code of the Russian Federation and is applied when socially dangerous consequences occur. Let's start with Article 272 of the Criminal Code of the Russian Federation.

The Criminal Code of the Russian Federation, article 272. Unauthorized access to computer information

1. Unlawful access to computer information protected by law, if this act entailed the destruction, blocking, modification or copying of computer information, is punishable by a fine in the amount of up to two hundred thousand rubles or in the amount of the wages or other income of the convicted person for a period of up to eighteen months, or by correctional labor for a term up to one year, or restriction of freedom for a term of up to two years, or forced labor for a term of up to two years, or imprisonment for the same term.

According to it, only actions in the form of access to legally protected computer information can be punishable. The concept of access is given in Article 8 of the Federal Law “On Information, Information Technologies and Information Protection” dated July 27, 2006. No. 149-FZ, which means searching and obtaining any information in any forms and from any sources, subject to compliance with the requirements established by law.

Computer information (according to the Federal Law “On Amendments to the Criminal Code of the Russian Federation and Certain Legislative Acts of the Russian Federation” dated December 7, 2011 No. 420 Federal Law) means information (messages, data) presented in the form of electrical signals, regardless of the means of their storage, processing and transmission.

It is important to keep in mind that criminal prosecution is possible only if the actions of the perpetrator entailed material consequences: destruction, blocking, modification, copying of computer information. In the absence of such consequences of guilt in committing a crime under Art. 272 of the Criminal Code of the Russian Federation is excluded.

For example, if a citizen Ivanov, wanting to check the fidelity of his girlfriend, uses her (illegally obtained) login and password, accesses her email, views messages without taking action to copy, change or destroy information, then Ivanov will not be held liable under Art. 272 of the Criminal Code of the Russian Federation, since no socially dangerous consequences are seen in Ivanov’s actions. However, in such actions there may be another corpus delicti, which is provided for in Art. 138 of the Criminal Code of the Russian Federation “Violation of the secrecy of correspondence, telephone conversations, postal, telegraph or other messages.”

The Criminal Code of the Russian Federation also provides for criminal liability for the following acts:

The Criminal Code of the Russian Federation

Article 273. Creation, use and distribution of malicious computer programs

1. The creation, distribution or use of computer programs or other computer information, knowingly intended for unauthorized destruction, blocking, modification, copying of computer information or neutralization of means of protecting computer information, is punishable by restriction of freedom for a term of up to four years, or forced labor for a term of up to four years, or imprisonment for the same period with a fine in the amount of up to two hundred thousand rubles or in the amount of wages or other income of the convicted person for a period of up to eighteen months.

Article 274. Violation of the rules for operating means of storing, processing or transmitting computer information and information and telecommunication networks

1. Violation of the rules for operating means of storing, processing or transmitting protected computer information or information and telecommunication networks and terminal equipment, as well as rules for access to information and telecommunication networks, resulting in the destruction, blocking, modification or copying of computer information, causing major damage, is punishable by a fine in the amount up to five hundred thousand rubles or in the amount of wages or other income of the convicted person for a period of up to eighteen months, or by correctional labor for a term of six months to one year, or by restriction of freedom for a term of up to two years, or by forced labor for a term of up to two years, or imprisonment for the same period.

That is, the use of any malicious programs (trojans, keyloggers, etc.), as well as disruption of information networks or equipment during the study of a service or other software product, can also become a separate crime.

In aggravating circumstances (for example, an action was committed by a group of persons by prior conspiracy), or when grave consequences occur, or when an official position is abused, the punishment, as a rule, increases.

How can a researcher reduce the risk of liability?

Liability can be excluded in situations where the researcher’s actions do not violate the law, rights and legitimate interests of third parties. For example, the risks of liability can be reduced when the research is conducted with the knowledge and consent of the owner (copyright holder) of the software or the web-service being studied. This may be a written consent from the owner (a bilateral agreement or another written form of consent, at least electronic correspondence), or it may be a general agreement to carry out such activities (the bug bounty program will be precisely this kind of agreement). The main thing is that the researcher has at his disposal evidence confirming the fact of consent.

In addition, the research should not cause harm to the person or property of other third parties, or violate copyright. It is also worth reading the terms of use of the product under study, as they may contain provisions that could lead to additional troubles for the researcher in cases where he is brought to justice in court. This recommendation is also valid for bug bounty programs: after all, they can sometimes present surprises.

And of course, we should not forget that everything depends on the circumstances of a particular situation, so in different cases the answers to the same questions may differ.

To date, Russian courts have developed a certain practice for considering litigation regarding domain names. Thus, domain names are the main subject of litigation, and sometimes appear as optional. As a rule, such proceedings arise due to violations of the rights of owners to their trademarks. However, there are also cases when the actions of domain owners are recognized as violations of the rights to a company name or commercial designation.

As established by Russian civil legislation, compensation for violations of the exclusive right to intellectual property can range from 10,000 to 5,000,000 rubles. In court practice, there are examples when a similar amount of compensation (for violation of trademark rights) was set by the court as the maximum - 5,000,000 rubles.

Trials in such cases can be classified on several grounds. Below I present a classification based on the categories of intellectual property objects whose rights were violated by domain name administration actions:

1. Domain name vs trademark

1.1. The domain name is identical to the trademark

swatch.ru

The date of decision: 13.10.2010
The decision text: http://docs.pravo.ru/document/view/5216339
The case summary: The plaintiff (Swatch AG) is the owner of the trademark “SWATCH”. The domain was registered by the defendant after priority of rights to the trademark. According to the court, although the domain was not used and is not in use, the very fact of owning an Internet page, the domain name of which contains a designation identical to the trademark, creates the opportunity for the defendant to attract to his page potential consumers of services similar to those for which the trademark used by the copyright holder. A graphical similarity between the trademark and the domain has been established.
Decision: transfer of the domain to the plaintiff, compensation for violation of the use of the trademark is 10,000 rubles (the plaintiff requested 50,000 rubles).

It should be understood that when it comes to the identity of a domain and a trademark / company name / commercial designation, I mean that the domain name completely coincides with the name of trademark / brand name / commercial designation (at the same time, I do not take into account the element of the domain name that makes up the domain zone – .рф/.ru/.com, etc.). The courts, in turn, in most cases recognize such domains and a trademark / company name / commercial designation as confusingly similar, but not identical to each other.

Other examples include court cases against the domain higer.ru (link), ombrello.me (link).

1.2. The domain name is confusingly similar to the trademark

This category of cases is best characterized by litigation, where the plaintiff was Alliance LLC in defense of the rights to its trademark “ufarabota.ru”:

rabota-ufa.ru

The date of decision: 14.08.2009
The decision text: http://docs.pravo.ru/document/view/3597100
The case summary: The plaintiff (Alliance LLC) is the copyright holder of the trademark “ufarabota.ru”. The defendant is the owner of the domain rabota-ufa.ru. The court found that the defendant's domain "rabota-ufa.ru " and the plaintiff's trademark "ufarabota.ru " are similar in phonetic and semantic features.
Decision: ban on the use of the trademark “ufarabota.ru” in the domain name “rabota-ufa.ru”. Compensation is 100,000 rubles.

Alliance LLC did not stop there and won similar proceedings for the domains ufa.rabotavgorode.ru (a settlement agreement was approved) and rabota-ufa.info (link).

Also, a domain name can be considered confusingly similar to a trademark when only part of its name is someone’s trademark:

miraxa.net.ru

The date of decision: 19.10.2011
The decision text: http://docs.pravo.ru/document/view/20227310/
The case summary: the plaintiff is the copyright holder of the trademark "MIRAX" and "МИРАКС". The court found that individual elements of the domain were confusingly similar to the trademark.
Decision: Prohibition for the defendant to use trademark in the domain miraxa.net.ru. The amount of compensation is 50,000 rubles.

2. Domain name vs company name

2.1. The domain name is identical to the company name

курскпромбанк.рф

The date of decision: 20.10.2011
The decision text: http://sudact.ru/arbitral/doc/Jib78IJQ4eom
The case summary: The plaintiff demanded to stop using its abbreviated company name JSC Kurskprombank ("ОАО Курскпромбанк" in Russian) in the domain name курскпромбанк.рф. The domain name was registered by the defendant later than the plaintiff's right to the company name arose. The court found that when registering the domain, the verbal designation "курскпромбанк" was used, identical to the company name belonging to the plaintiff. The domain name is "курскпромбанк.рф" was administered by the defendant, a person unrelated to banking transactions and who did not receive consent from the plaintiff to use his company name.
The defendant also did not have any legal rights and interests in this domain name, since he was not the owner of the trademark or trade name of the same name, and the domain name does not reflect his name or the trade name of his company. Also, the defendant did not provide evidence of other legitimate interests in the use of the disputed designation.
Interestingly, according to the court, the defendant should and could have known that a legal entity was registered in the city of Kursk - JSC Kurskprombank, and the presence of a domain of the same name in the Russian Internet sector could lead users astray. It is obvious that the complete coincidence of the second-level domain name with the plaintiff’s business name constitutes an abuse of the technical uniqueness of the domain name.
Decision: the defendant’s actions were recognized as a violation of the plaintiff’s rights to the company name and he was prohibited from using the domain name "курскпромбанк.рф".
Note: the case was reviewed in the Ninth Arbitration Court of Appeal and the Federal Arbitration Court of the Central District, but higher authorities confirmed the correctness of the decision of the court of first instance.

2.2. The domain name is confusingly similar to the company name

traktornye-zavody.ru

The date of decision: 06.03.2013
The decision text: http://sudact.ru/arbitral/doc/gje0U5einiNx
The case summary: The plaintiff is the owner of the exclusive right to his company name - Corporate Management Company "Concern "Tractor Plants" Limited Liability Company (Tractor Plants are "Тракторные заводы" in Russian). The defendant is the owner of the domain traktornye-zavody.ru (it is "Тракторные заводы" in Latin). A linguistic examination was carried out, its result: in the plaintiff’s company name the words “tractor plants” are identical to the domain name. The court concluded that there was a confusing similarity between them. According to the court, one should not take into account the presence of such words as “Concern Corporate Management Company” in the plaintiff’s company name, since they do not draw attention to themselves, unlike the words “tractor plants”. The plaintiff and the defendant are competitors, and the website traktornye-zavody.ru is used by the defendant to bring to the attention of consumers information about the goods sold to them, which are produced, among other things, by factories that are part of the Tractor Plants Concern. Therefore, the defendant's actions were qualified as an act of unfair competition.
Decision: prohibiting the defendant from using the domain name traktornye-zavody.ru.
Note: The hearing of the case in the appellate instance will take place on May 28, 2013.

3. Domain name vs commercial designation

defence-e.ru

The date of decision: 01.06.2012
The decision text: http://ras.arbitr.ru/PdfDocument/e1a495d2-ecb4-4d6c-bdb1-0925913b0758/А60-15926-2012__20120601.pdf
The case summary: The defendant registered the domain defense-e.ru on January 31, 2008 for the purpose of further sale of the domain name. The plaintiff demanded the transfer of rights to this domain name on the basis that he owned the rights to the commercial designation "Defense". However, due to the peculiarities of the emergence of rights to a commercial designation, the court recognized that the plaintiff had such a right only after July 13, 2010, the date of registration of the plaintiff as a legal entity. Thus, the defendant acquired the right to use the domain name defence-e.ru much earlier than the date of registration of the plaintiff in the Unified State Register of Legal Entities ("EGRUL").
Decision: the claim was denied.
Note: the case reached to the Federal Antimonopoly Service of the Ural District, however the decision of the trial court was upheld.

4. Domain name: trademark vs trademark

людидела.рф

The date of decision: 05.04.2013
The decision text: http://sudact.ru/arbitral/doc/6AcpIJPfArdu
The case summary: The plaintiff is the owner of the trademark "ЛЮДИ ДЕЛА" (“People of business” in Russian) in relation to a number of works and services of 09, 14, 28, 35, 36, 38, 39, 42, 43 classes of the ICGS (International Classification of Goods and Services). The defendant is the owner of the "ЛЮДИ ДЕЛА" trademark in relation to goods of classes 16, 41, 42 of the ICGS. The defendant, being the administrator of the domain name "людидела.рф", posted on the website information about the services for searching and recruiting personnel provided by the company "Recruitment Agency "People of business" (Рекрутинговое агентство "ЛЮДИ ДЕЛА" in Russian). In turn, the plaintiff is the owner of the exclusive right to the trademark “ЛЮДИ ДЕЛА” in relation to those services (advertising agencies, advertising, recruitment offices, staffing, consultations on business management (class 35 of the ICGS) provided by a third party - Recruiting Agency "ЛЮДИ ДЕЛА" LLC, including using the website людидела.рф, the administrator of which is the defendant. At the same time, a comparative analysis of trademarks according to the evidence of the plaintiff and defendant indicates that these trademarks are confusingly similar. According to paragraph 6 of Art. 1252 of the Civil Code of the Russian Federation, if various means of individualization (incl. trademark) turn out to be identical or confusingly similar and, as a result of such identity or similarity, consumers and/or counterparties may be misled, then the means of individualization, the exclusive right to which arose earlier, has priority. The owner of such an exclusive right may, in accordance with the procedure established by the Civil Code of the Russian Federation, demand that the provision of legal protection to a trademark (service mark) be invalidated. Since the plaintiff’s trademark has priority on July 30, 2001 (priority is established by the date of receipt of the application), that is, earlier than the defendant’s trademark (20.09.2004), there is a possibility of misleading the consumer due to the similarity of the services provided by the plaintiff and a third party, as well as trademarks of the plaintiff and defendant have been established; therefore, the plaintiff’s trademark has priority, and therefore the claims must be satisfied.
Decision: Prohibition for the defendant to use the plaintiff’s trademark “ЛЮДИ ДЕЛА” in the domain name “людидела.рф”

henco.ru

The date of decision: 26.04.2012
The decision text: http://kad.arbitr.ru/PdfDocument/50cb88b5-4c2f-4001-bae2-a8d8ab6a8fc3/A41-10659-2010_20121022_Reshenija i postanovlenija.pdf
The case summary: The plaintiff is the owner of the "Henco" trademark. The defendant is the owner of the trademark "HENKO". The plaintiff believed that the actions of the defendant to register and administer the domain name "henco.ru" were the violation of right. However, the court concluded that the parties' areas of activity had different focuses; since the defendant and plaintiff are the owners of the Henco trademark, both of them are equal owners of this trademark and therefore can use it in all ways provided for by law (including in a domain name); therefore, the plaintiff’s argument about violation of rights on the part of the defendant is not accepted by the court. In addition, the plaintiff believed that the defendant actually created obstacles for him to register a domain that reproduced its trademarks, which did not allow the plaintiff to exercise his legal rights to trademarks in the Russian segment of the Internet. But as the court rightly pointed out, the plaintiff was not deprived of the opportunity to become a domain name administrator in the “.рф” zone domain. According to the court, the plaintiff did not prove that the defendant does not have any legal rights and interests in relation to the domain name and that it is using the domain name in bad faith.
Decision: the claim was denied.
Note: This proceeding has a long history. The above was the decision of the court of first instance, the correctness of which was confirmed in judicial authorities.

5. Domain name: trademark vs commercial name

See below for the dispute regarding the domains lad-m.ru and ladm.ru, since in that case the plaintiff indicated that the actions of the defendant violated his rights to both the company name and trademarks. But the court refused to satisfy the plaintiff’s demands for protection of trademark rights, since the domains were registered with the defendant before the registration of the plaintiff’s rights to the trademarks “LAD-M” and “LADM” and before the emergence of priority on them.

6. Domain name: trademark vs commercial designation

prontopizza.ru

The date of decision: 31.08.2012
The decision text: http://kad.arbitr.ru/PdfDocument/07ebb335-8999-4c72-b85a-6c7be6ee82ed/A43-15155-2012_20120831_Reshenie.pdf
The case summary: The plaintiff is the owner of the trademark "PRONTO", the defendant - the owner of the commercial designation "Pronto PIZZA e PASTA" and the above domain. Due to the fact that the visual image was widely used in the defendant’s business activities before the priority date of the plaintiff’s trademark (23.05.2007), the plaintiff, as the owner of the trademark, does not have the right to prohibit the use of the disputed designation by a person who in good faith used it to individualize his enterprise before the priority date trademark. Moreover, the court stated the following: despite the fact that the trademark is registered, the actions of the plaintiff aimed at its registration, based on the factual circumstances of the case stated above, constitute an abuse of right.
Decision: the claim was denied.

7. Domain name: company name vs company name

lad-m.ru and ladm.ru

The date of decision: 08.12.2009
The decision text: http://www.arbitr.ru/bras.net/f.aspx?id_casedoc=1_1_00ce1c87-ae9b-4cf4-8999-54e43b3da84c
The case summary: The applicant is the owner of the trademark "LAD-M" and "LADM" (certificates no. 335306 and 337921). The defendant has been administering the domain name "ladm.ru" since April 20, 2004, and the domain name "lad-m.ru" since May 2, 2006.
Decision: the decisions of the lower courts were overturned, the defendant's actions in administering the domain names "lad-m.ru" and "ladm.ru" were recognized as a violation of the rights of CJSC "LAD-M" to the company name, the defendant was prohibited from using these domain names.

I would also like to draw attention to the following interesting aspects that have emerged in court practice:

8. Interesting aspects

8.1. The owner of the domain name offered the owner of the trademark (or an unlimited number of persons) to purchase the domain from him

svetaled.ru

The date of decision: 12.12.2012
The decision text: http://sudact.ru/arbitral/doc/U93q5pcgror1
The case summary: The plaintiff is the owner of the trademark "SvetaLED". The defendant is the owner of the above domain. On June 23, 2011, he sent the plaintiff a commercial offer to purchase the domain name “svetaled.ru” for 3,000,000 rubles. The domain name used by the defendant was registered for him later than the registration of the plaintiff’s trademark. An Internet page with the domain name “svetaled.ru” is actually used by the defendant to post information about similar products for the use of which the plaintiff’s trademark is registered.
Decision: prohibiting the defendant from using the trademark “SvetaLED” or a designation confusingly similar to it in the domain name “svetaled.ru”.

медиа-маркт.su

The date of decision: 10.03.2010
The decision text: http://docs.pravo.ru/document/view/4275864
The case summary: The plaintiff is the owner of the trademarks “Media Markt” and “Медиа маркт”. On the website медиа-маркт.su, its trademark is used without the consent of the plaintiff. In addition, this website contained an offer to sell a domain name, namely, information that the domain name медиа-маркт.su was for sale and indicated email addresses for communication. In addition, the website contained links to the websites of companies selling electrical household goods (i.e., the domain name was used by the defendant in relation to goods similar to the goods protected by the plaintiff’s trademark).
Decision: the defendant’s actions in registering and using the domain name медиа-маркт.su were recognized as an abuse of right. The defendant was prohibited from using the designation “Медиа Маркт” in domain names, as well as on website pages, for goods and services for which the plaintiff’s trademark was registered.

8.2. The subjects of proceedings in Russian courts are domains not only in the RU/SU/РФ zones

miraxanet.com – link – compensation of 50,000 rubles
bolshoi.me – link – compensation of 10,000 rubles
ombrello.me – link – compensation of 60,000 rubles
mirax.me and mirax.tv – link – compensation of 50,000 rubles
hansa-lex.info – link – compensation of 50,000 rubles
guahoo.org – link

At the same time, in the case regarding the domain miraxanet.com, the defendant was a foreign citizen (citizen of Ukraine), but the case was considered by the Arbitration court of Moscow, since the plaintiff has a Russian trademark “MIRAX”.

8.3. Successful plaintiffs (litigated more than once, sued successfully)

a. Individual entrepreneur Starostin V.A.

onegagipertonik.ru
The date of decision: 19.10.2011
The decision text: http://docs.pravo.ru/document/view/20353087
The case summary: The claims of this plaintiff are among the most interesting on this topic. The plaintiff is the owner of trademark "ONEGA". Initially, they filed a lawsuit regarding this domain name. During the trial, the court found that the products sold by the defendant through retail trade, as well as through the website “onegagipertonik.ru”, are identical to the products manufactured by the plaintiff under the trademark “ONEGA” (moreover, these products were purchased by the defendant from the plaintiff), which was recognized by the court as a violation by the defendant of the plaintiff’s exclusive rights due to the illegal use of a designation that was confusingly similar to the plaintiff’s trademark.
Decision: to prohibit the defendant from using the plaintiff’s trademark in the domain name “onegagipertonik.ru”, to recover from the defendant in favor of the plaintiff compensation for the illegal use of the trademark in the domain name in the amount of 5,000,000 rubles (and this is an absolute record for today in court practice on such matters!).

Then this plaintiff won another lawsuit regarding another domain - onegamed.ru (the court decision is available here), and he also wanted to receive compensation in the amount of 5 million rubles , however, the court reduced it to 500,000 rubles.

b. PJSC "KAMAZ"

A representative of the automobile industry confidently won court cases regarding the domains kamaz-nsk.ru (link to decision), obves-kamaz.ru (link to decision), kamaz-02.ru and kamaz-444.narod.ru (link to decision), kаmazcentrservis.ru (link to the decision).

c. Alliance LLC

This plaintiff has already been discussed above: it is the owner of the trademark “ufarabota.ru” and won disputes regarding the domains rabota-ufa.ru, ufa.rabotavgorode.ru and rabota-ufa.info.

However, there are many such subjects. One can immediately recall only Buki LLC (koza-dereza.ru (link to decision), ko3a-dere3a.ru (link to decision) and Brookvale Finance Limited (miraxa.net.ru (link to decision ), miraxanet.com (link to decision). But it is clear that the list of such plaintiffs is not limited to this.

8.4. High amounts of compensation by court decision

a. 100,000 rubles or more

• alviz.ru – link - 100,000 rubles
• uma.msk.ru - link - 100,000 rubles
• autolunch.ru – link - 100,000 rubles
• navitel.ru – link - 100,000 rubles
• terrinco.ru - link - 100,000 rubles
• бытпласт.рф - link - 100,000 rubles
• shelestowo.ru - link - 100,000 rubles
• fujikura.su - link - 100,000 rubles
• lafei-nier.ru, lafeinier.ru - link - 100,000 rubles
• louisvuittonstore.ru - link - 100,000 rubles
• mexx.ru - link - 150,000 rubles
• vefk.ru - link - 190,000 rubles
• icq.ru - link - 200,000 rubles
• osnova.ru - link - 225,000 rubles
• renesa-market.ru - link - 250,000 rubles
• ak-verdikt.spb.ru - link - 250,000 rubles
• kamaz-02.ru, kamaz-444.narod.ru - link - 250,000 rubles
• cesab.ru - link - 500,000 rubles (reduced to 300,000 rubles in the next instance)

b. 500,000 rubles or more

• mvidio.ru - link - 500,000 rubles
• kamaz-nsk.ru - link - 500,000 rubles
• bacus2006.ru - link - 500,000 rubles
• onegamed.ru - link - 500,000 rubles

c. 1,000,000 rubles or more

• severstalspb.ru - link - 1,000,000 rubles
• мамамаркет.рф - link - 1,350,000 rubles
• onegagipertonik.ru - link - compensation of 5,000,000 rubles

8.5. Funny domain names that were subjects of the proceedings

However, even in such disputes, sometimes you come meet names that can make you smile:

• sexvideogid.ru - link - the claim was denied.
• koza-dereza.ru - link - compensation for violation of the exclusive right to a trademark in the amount of 75,000 rubles.
• клиникабобыря.рф - link - in relation to this domain, the plaintiff filed a waiver of satisfaction of the claim (But in this case the parties themselves had funny names: the plaintiff - LLC "Bobyr Clinic", the defendant - LLC "Spine Clinic").

Unfortunately, I did not find any suitable examples from Russian court practice when they were held accountable for administering a domain name that was used for phishing purposes (the Ukrainian practice knows such an example: the domain headhuhter.ru, see more news about this here), as well as an example when a domain name - the subject of a dispute - would contain the surname of one of parties (in this situation, only news came across regarding the domain name advocatekim.ru, see more news about this here, but if this address redirects to another website of this lawyer, then most likely the case was resolved in his favor).

This material is a look at software reverse engineering from the perspective of Russian law. In addition to the analysis of legal norms, examples of both contractual practice and court practice are given.

I propose to start considering this type of activity as software reverse engineering from the perspective of Russian law by presenting the following abstract situation:

There is a computer program. There is a company that has acquired a license for such software and uses it in its activities. For some unknown reasons, the program is unstable on the company's servers. The company's management plans to commission a group of third-party specialists to reverse engineer this program to determine the causes of instability of its operation on the company's servers in order to eliminate them.

This situation is just one example when the question arises of carrying out reverse engineering of the required software. The reasons for this can be very different. A couple more abstract examples:

• it is necessary to modify a program, the author of which is unknown and there is no way to install it and contact him to communicate about the program code;
• in order to keep up with a competing company that has published a new release of its software, you need to quickly study what kind of code is contained in the latest version of the company’s software in order to make your product even better than theirs.

In short, there are many such reasons. And if you get down to business closely, then not only the technical side of the issue arises, but also the legal side. Namely, is it possible, from a legal point of view, to engage in such activities in principle? Is there any liability for the person who reverse engineered the program? And is it provided for the one who ordered such execution? As you understand, there will be a lot of such questions, so I propose to get to the heart of the matter.

If among the readers of this material there are those who are not very familiar with the term reverse engineering itself, then I believe it would be appropriate to immediately define what is meant by this.

Software reverse engineering refers to the following:

Reverse engineering is the study of a device or program, as well as its documentation, in order to understand the principle of its operation and, most often, reproduce a device, program or other object with similar functions, but without copying as such. [1]

Reverse engineering (the process of systematically disassembling a program (restoring its source text and structure)) or a microcircuit to study the algorithms of its operation with the aim of simulating or repeating some or all of its functions in another form or at a higher level of abstraction, removing protection, studying algorithms, adding new ones capabilities, protocol recovery or error correction, etc. [2]

Reverse engineering is the process of analyzing an application to determine its functional characteristics, internal architecture and, in fact, its operation: modules, functions, algorithms. [3]

To summarize, it can be stated that reverse engineering of software is the process of examining the contents of a program by converting it into source code to determine its structure and principles of its operation.

If the question of the term itself can be considered resolved, I suggest turning your attention to the legal side of reverse engineering. The content of this side is presented in this material in the following sequence: legislative provisions, contractual practice, court practice.

Legal provisions

Let's start, first of all, with the legislative norms. This may surprise some, but such a phenomenon as reverse engineering is quite familiar to Russian legislation. It is discussed in Article 1280 of the Civil Code of the Russian Federation:

Civil Code of the Russian Federation (part four) dated December 18, 2006 N 230-FZ
Article 1280. Computer program and database user right
3. A person who legally owns a copy of a computer program has the right, without the consent of the copyright holder and without paying additional remuneration, to reproduce and convert the object code into source text (decompile the computer program) or instruct other persons to carry out these actions if they are necessary to achieve interoperability a computer program independently developed by this person with other programs that can interact with the decompiled program, subject to the following conditions:
1)the information necessary to achieve the ability to interact was not previously available to this person from other sources;
2)these actions are carried out in relation to only those parts of the decompiled computer program that are necessary to achieve the ability to interact;
3)information obtained as a result of decompiling can only be used to achieve the ability to interact with an independently developed computer program with other programs, and cannot be transferred to other persons, except in cases where this is necessary to achieve the ability to interact with an independently developed computer program with other programs, and also cannot be used to develop a computer program that is substantially similar in appearance to the decompiled computer program, or to carry out other actions that violate the exclusive right to a computer program.

This legal norm makes it clear that reverse engineering is only legally permissible if certain criteria are met. I suggest you pay attention to the following:

1. Lawful receipt of a copy of the program. An instance (copy) of the program that will be the object of reverse engineering must initially be obtained by any legal means.
   That is, purchasing software from an official digital app store is the right approach for reverse engineering. If an illegal (pirated) version of the program is downloaded on a torrent tracker, reverse engineering of such a program will be illegal.

2. The goal of reverse engineering. The goal of reverse engineering should be to achieve the ability to interact with the program (version of the program) created during reverse engineering with other programs.
   That is, when the goal of reverse engineering is only to study a new version of a competitor’s product in order to understand how to implement similar functionality in your product, then such a goal, as a general rule, will allow one to speak about the illegality of the reverse engineering carried out.

3. Lack of necessary information in other sources. The information needed to achieve interoperability was not previously available from other sources.
   That is, if there is freely available documentation somewhere on the Internet for a program that is the object of reverse engineering, the content of which will allow achieving an effect already achieved using reverse engineering, but such documentation has not been found, then this fact with a high degree of probability can be used as evidence of the illegality of the reverse engineering.

The remaining criteria can also be determined based on the text of the above article. But in any case, the matter is not limited to the provisions of the law. The practical application of this rule is expressed in both contractual and court practice.

Contract practice

In my opinion, reverse engineering activities have found the most widespread use within the framework of contractual practice in the form of its direct prohibition, enshrined in the texts of various agreements for the use of software products and services (EULA, ToS, ToU, etc.). However, this is quite expected – many copyright holders want to limit the user’s actions in terms of researching a program obtained under a license, reducing the restriction of the user’s freedom of action to such a ban.

A few examples from various texts of similar documents:

License Agreement for Kaspersky Rescue Disk 10
It is prohibited to decompile, disassemble, modify, or make derivative works based on the Software, in whole or in part, except as permitted by applicable law.

Skype Terms of Use
4.2 Restrictions. You must not take the following actions and undertake to refrain from:
<…>
(b) undertake, cause, permit or authorize modification, creation of similar products or improvements, translation into other languages, reverse engineering for reproduction purposes, decompilation, reverse assembly, decoding, emulation, tampering, recovery or attempt to recover source code, or protocols of the Software or any parts thereof or functionality of the Software, except when such actions are permitted by law;

License agreement for the use of the "2GIS Dialer" program
5.1. The user does not have the right to independently or with the involvement of third parties:
5.1.1. To open technology, emulate, create new versions, modify, decompile, disassemble, decrypt and perform other actions with the Program code aimed at violating the Program's protection system from unauthorized use, as well as obtaining information about the implementation of algorithms used in the Program.

RoboForm License Agreement
NOT PERMITTED: Consumer shall not: (a) remove copyright notices or restrictions from the program; (b) extract algorithms from the program or attempt to decompile the program.

In fact, such wordings about the ban on reverse engineering are a kind of legal reinsurance for the copyright holder against user actions to study the "stuff" of a closed-source software product (proprietary software). And the guarantee of the user's compliance with such a ban is the prospect of various negative consequences for it (starting from the early termination of the license and ending with the recovery of losses incurred by the copyright holder or monetary compensation for copyright infringement). By the way, in the examples of foreign court practice (for example, the case Blizzard v. MDY Industries, LLC), the plaintiff’s position regarding the violated rights is based not only on copyright infringement, but also on violation of contractual obligations by the defendant (since it is assumed that the defendant, having started using the program under study, agreed with the provisions of its license agreement, i.e. became a party to the contractual relations with the plaintiff as the licensor of such program).

As for the involvement of third parties (specialists with the necessary technical knowledge) to perform reverse development of the software of interest to the customer, here the contractual relationship, in my opinion, boils down to the following:

• if the performer’s actions ultimately involve the creation of results of intellectual activity (for example, when reverse engineering involves writing code and creating any programs, scripts, etc.), then in this case a contract for the performance of work should be concluded (and in the case its conclusion with an individual, an author’s order agreement will also be applicable) specifying in it the status of the customer’s intellectual rights to the results of work under such an agreement;

• if the performer’s actions do not imply the creation of results of intellectual activity (for example, if the program under study needs to be tested), in this case an agreement for the provision of services should be concluded.

By and large, there are no special specifics in such contracts, they will differ little in their content from other contracts for the performance of work or the provision of services in the field of software, so I propose not to dwell on them separately within the framework of this material, but move on to the next part articles.

Court practice

Of course, the greatest interest on the topic is court practice, since through the prism of the conflict of the parties it allows one to trace both the interpretation and application of the law, and the application of the provisions of the contract (in the event of a contractual dispute between the parties), and this, in turn, will allow draw for yourself certain conclusions for the future regarding the specific wording used (or planned to be used) in documents, their legal force and practice of application.

Speaking about the court practice of Russian courts in relation to reverse engineering of software, I will immediately note that it has not yet managed to accumulate such striking court cases as other countries have (at least if we talk about those cases that were studied when preparing the text of this material). By vivid cases, we mean processes such as Sega Enterprises v. Accolade, Atari Games Corp. v. Nintendo of America, Inc, Blizzard v. Internet Gateway, Inc (all – USA), Microsoft v. Vest Corporation (France), SAS Institute Inc v World Programming Ltd (UK). Nevertheless, in our Russian practice there are examples that will be quite suitable for the topic under discussion and which are definitely worth paying attention to (see, for example, case No. 09AP-23848/2013-GK on the claim of StroySoft Firm LLC to the National Association of Estimated Pricing and Cost Engineering and Bureau of Economic Consulting LLC).

A review of court practice, I think, should begin with the following judicial document:

Resolution of the Plenum of the Supreme Court of the Russian Federation No. 5, Plenum of the Supreme Arbitration Court of the Russian Federation No. 29 of March 26, 2009 “On some issues that arose in connection with the entry into force of part four of the Civil Code of the Russian Federation”:

cannot copy the text

This resolution says exactly that in the case of determining the legality of reverse engineering a program, the question must be analyzed whether the person who performed the reverse engineering of the program legally owned a copy of such a program or not. If it is unlawful, then most likely the outcome of the case will not be in favor of such a person. This is exactly what was already mentioned above in the explanation about the first criterion for the permissibility of performing actions on reverse software development.

Such a statement is actually duplicated in such decisions as, for example, the Decision of the Fifteenth Arbitration Court of Appeal of August 6, 2014 in case No. A32-42112/2013, the Decision of the Arbitration Court of the Kirov Region of March 28, 2014 in case No. A28-152/2014.

Further, the second point that is worth paying attention to: does one person have the right to attract other persons to perform reverse engineering or should this person carry it out independently? The answer to this question can be given by the following court decision:

The decision of the Arbitration Court of the City of Moscow dated May 29, 2013 in case No. A40-10750/2013:

Within the meaning of Article 1274 of the Civil Code of the Russian Federation and clause 2 of Article 1280 of the Civil Code of the Russian Federation, research of a computer program, like any other object of exclusive rights, can be carried out either by the user independently or by any other person with special knowledge, but in the interests of the user, with his knowledge and consent. This is explained by the fact that research itself, by virtue of Article 1270 of the Civil Code of the Russian Federation, is not indicated as a method of using the object of exclusive rights and does not imply its alienation for compensation or other introduction into circulation.

That is, it allows us to draw the following conclusion: research of a computer program can be carried out either by the user independently or by any other person with special knowledge, but in the interests of the user, with his knowledge and consent.

Moreover, there is no direct ban on such research by one person and in the interests of another in the current legislation. This also follows from court practice:

The decision of the Ninth Arbitration Court of Appeal dated August 12, 2013 N 09AP-23848/2013-GK
There is no direct prohibition in current legislation on carrying out research in the interests of the user, with his knowledge and with his consent, by any person with the necessary special knowledge.

The same conclusion can be found in the above-mentioned Decision of the Arbitration Court of the City of Moscow dated May 29, 2013 in case No. A40-10750/2013.

Let's move on. If the agreement under which the program is distributed (which is an object for reverse engineering) does not say anything about the right of the user of such a program to carry out reverse engineering, then is it permissible to carry it out without securing such a right in the content of the agreement or not?

The answer to this question can be found in this resolution:

Resolution of the Eleventh Arbitration Court of Appeal dated October 25, 2012 in case No. A55-13189/2012
The conclusion of a license agreement means that the user of the program has the right to perform in relation to it the actions provided for in Art. 1280 of the Civil Code of the Russian Federation, as well as other actions stipulated by the contract and related to the operation of the program. <...> This agreement, unlike other license agreements, is not subject to the rules established by paragraphs 2 - 6 of Article 1235 of the Code.

A similar answer, by the way, is contained in the above Resolution of the Plenum of the High Court of the Russian Federation and the Plenum of the Supreme Arbitration Court of the Russian Federation dated March 26, 2009 No. 5, 29 "On some issues that arose in connection with the entry into force of part four of the Civil Code of the Russian Federation."

Interestingly, there is a court practice according to which making corrections to identified software errors may be a violation of the rights of the copyright holder:

Resolution of the Federal Arbitration Court of the North-Western District dated June 07, 2013 in case No. A13-6254/2012
Clause 6.6.1 of the said license agreements restricts the licensee's right to perform actions: disassemble, decompile (convert object code into source code), adapt and modify programs and other software components. <...>

Having examined and assessed the evidence presented by the persons participating in the case in accordance with the rules of Articles 65 and 71 of the Arbitration Procedure Code of the Russian Federation, including contracts concluded by the Company in 2010-2011 for the provision of software maintenance services <...>, the courts found that the changes to the software, <...> correction of identified errors in the software <...> without the consent of the copyright holder <...> will lead to a violation of the exclusive right <...> to the result of intellectual activity.

According to this logic, an attempt to eliminate errors in a program (in order to ensure its functioning for oneself in the right way, without errors) independently, without involving the copyright holder himself, can lead to liability. Then it turns out that in the case of reverse engineering, in order to comply with all the criteria of legality provided for by the above paragraph 3 of Art. 1280 of the Civil Code, it will be necessary to have a justification that independent (meaning, without the involvement of the copyright holder himself) elimination of errors was necessary to achieve the ability of the copyright holder’s program to interact with other programs.

The next point: if reverse engineering of the program under study is performed only for the purpose of checking whether such a program is not the object of a rights violation, then is reverse engineering permissible for such purposes?
In this situation, not everything is so simple. Of course, a lot depends on the specific circumstances of the case, but the following example from practice (which was already discussed above in the text) suggests that research of the program for the purpose of such verification and for collecting evidence by the defendants in their defense was a legal action:

The decision of the Ninth Arbitration Court of Appeal dated August 12, 2013 N 09AP-23848/2013-GK
<...> the study of the program was carried out by the defendants within the framework of a bona fide and justified need, solely for the purpose of fulfilling the obligation to prove claims in accordance with Article 65 of the Arbitration Procedure Code of the Russian Federation, did not have the purpose of creating any negative consequences for the plaintiff and did not lead to such consequences.

In my opinion, this is a fairly significant judicial act, from which we can conclude that the study of a third-party program for the purpose of collecting evidence may well be recognized as a lawful method in relation to the program under study (and therefore, the absence of violation of the copyright of its rightholder).

Therefore, for those who are interested in this topic in detail, I recommend that you familiarize yourself with the case of the claim of StroySoft LLC v. the National Association of Estimated Pricing and Cost Engineering and Bureau of Economic Consulting LLC: read the Ruling of the Ninth Arbitration Court of Appeal dated August 12, 2013. N 09AP-23848/2013-GK and other documents on it.

Conclusions

As for the general conclusions on court practice on the subject of the matter, it is worth noting the following:

1. Since it is for the courts to determine whether the program that was the object of reverse engineering was obtained for research legally or not, then first of all, they should pay attention to this aspect. If it turns out that it was obtained illegally, then most likely no other arguments will benefit the researcher's defensive position;
2. The research can be carried out by the user himself or by any other person, but with his knowledge and consent. Therefore, if a third-party specialist is involved, it will be necessary to confirm the existence of such knowledge and consent;
3. Reverse engineering a program to collect evidence may be considered a legal action.

Coders’ Rights Project Reverse Engineering FAQ

Table Of Contents Introduction What Aspects Are Most Legally Risky? What Legal Doctrines Affect Reverse Engineering? Copyright Law Limiting Reverse Engineering Copyright Law Allowing Reverse Engineering Reverse Engineering Court Decisions Trade Secret Law and Reverse Engineering DMCA Anti-...

Electronic Frontier FoundationGeorge Wong

Author's note.

1. [1] Dictionaries and encyclopedias on the Academic website // http://dic.academic.ru/dic.nsf/ruwiki/1070713 , accessed: 01.10.2016.
2. [2] Multitran // http://www.multitran.ru/c/M.exe?l1=2&amp;l2=1&amp;s=Reverse+engineering, accessed 08.10.2016.
3. [3] Anna Andreeva, "Reverse engineering in the context of desktop and mobile application security" // http://www.a1qa.ru/blog/revers-inzhiniring-v-kontekste-bezopa , accessed: 05.10.2016.

This article of court chronicles series tells us about an intense judicial life of a well-known producer of hits in the world of computer games – the company "Blizzard Entertainment".

Of course, the material does not cover absolutely all court cases involving this company, because I selected (only to my opinion) a few most interesting and noteworthy cases. The selection of cases is arranged according to the chronological principle of filing lawsuits.

v. Internet Gateway, Inc (Blizzard v. BNETD)

The first case in this collection goes back to 1998, when in February 1998 Blizzard released its new game "Starcraft". A few months after this release, Mark Baysinger, a student of the University of California, San Diego, started working on reverse engineering the protocol by which game users connected to the game server using their client software Battle.net.

The result of his job was successful, and Mark published his development of the StarHack emulator online. After he had made this publication, he almost immediately received a letter from Blizzard containing a written warning about the violation of their rights and the termination of such violation. In response, Mark sent questions about exactly which his actions violated company's copyrights. Having received no response from Blizzard, he decided to stop developing the project, but posted the source code of his code on the Internet under the GPL license. This is how the BNETD open source project appeared, which supported the functionality of the official game server Battle.net on an alternative multiplayer game server bnetd.org.

In 2002, Blizzard began beta testing their new product, the Warcraft III game. And in 2003, based on an analysis of the beta version of this company’s game and the Battle.net company server, a fork of BNETD called Warforge appeared, into which support for the functionality of this game was introduced from Blizzard.

A few days after the release of "Warforge", the Internet Gateway company, which provided hosting to the BNETD project, received a similar written warning (the so-called C&D letter) from Blizzard, the content of which was that the creators of BNETD violated Blizzard's rights to the game software created by it.

Since no action was taken to stop using the BNETD project after receiving the warning, Blizzard decided to go to court.

Therefore, in 2002, Blizzard filed a lawsuit against the above-mentioned host and Tim Jung. The latter was the president of the Internet Gateway company, one of the developers of the BNETD project and the system administrator of the domain bnetd.org (the number of respondents was later increased). Blizzard in their lawsuit, in particular, claimed that BNETD was a server program that emulated the service Battle.net, but at the same time they did not check the validity of the CD key to determine whether a client software is used legally to connect to the game server or not. In addition, fragments of Blizzard computer program code were illegally copied and incorporated into the code of the BNETD server code.

In general, Blizzard claimed violation of their copyrights, trademark rights (in relation to Battle.net), as well as unfair competition on the part of the defendants.

During the consideration of court claims in 2004, the court nevertheless ruled in favor of the plaintiff, recognizing that the defendants violated the plaintiff's copyright by reverse engineering his software, as well as bypassing his copyright protection systems (i.e. by not implementing the CD key verification functionality of user client programs on their server).

The defendants decided to appeal the court decision and filed an appeal. In 2005, the Eighth Court of Appeal upheld the decision of the Court of First instance on both important positions, confirming the illegality of reverse engineering and the lack of a CD key verification mechanism.

In general, the BNETD case turned out to be very significant for the industry, since at that time online services were just beginning to become popular. At the same time, the trial has become a kind of guide for software manufacturers on such issues and has shown a very low level of tolerance towards such open-source projects.

v. Daniel Mele and Blizzard Records, Inc

In 2002, Blizzard received a lawsuit from Daniel Mele and the record company Blizzard Records, Inc. regarding the violation by a computer game manufacturer of the rights to the trademark "BLIZZARD RECORDS", owned by the plaintiffs.

According to the text of the lawsuit, Mele began using the BLIZZARD RECORDS trademark back in 1986 in relation to the promotion of musical artists and the distribution of their phonograms. The beginning of the use of the trademark was expressed in the fact that the plaintiffs began promoting the rock band "Zillion". In 1995, they started promoting another band, "Chillin' Sun", and in July 1997 they released the first album of this band under the label "BLIZZARD RECORDS". In 1999, the plaintiffs began selling music tracks from the website blizzardrecords.com. In 2000, Mele filed an application for registration of the name "BLIZZARD RECORDS" as a trademark for use in "computer online retail services for sale of music on CDs and audio cassettes; promotion of performers' phonograms through a global computer information network". In November 2000 Mele licensed to Blizzard Records, Inc. the trademark "BLIZZARD RECORDS".

Gamemaker Blizzard took a position on the lawsuit, according to which their activities did not violate the plaintiff's trademark rights to BLIZZARD RECORDS. Moreover, Blizzard claimed that by the time of registration of their own trademarks "BLIZZARD" and "BLIZZARD ENTERTAINMENT", the plaintiffs had no longer used the trademark "BLIZZARD RECORDS" in any way.

During the consideration of the case, the court established the following:

In 1986 Mele registered the Blizzard Records Company in Buffalo, New York. The same year, the plaintiffs began to promote the "Zillion" group. In 1987, the last performance of this group took place, and therefore its promotion was discontinued. In 1995, the plaintiffs resumed their activities: they started promoting the band "Chillin' Sun", and in 1997 the label "BLIZZARD RECORDS" released the first album of this group. In 1999, the plaintiffs launched the label's website at blizzardrecords.com and started using it to sell musical phonograms of various artists.

In turn, Blizzard began using the trademarks "BLIZZARD" and "BLIZZARD ENTERTAINMENT" back in 1994 and filed appropriate applications for registration of these trademarks with the U.S. Patent and Trademark Office in relation to the class of "computer programs for video and computer games and documentation implemented together with the programs". This trademark registration did not cover classes such as music or soundtracks. Users of Blizzard products first gained access to game soundtracks outside the framework of the games created by the company in December 1995, and the ability to download soundtracks appeared to users in 1998. In 2002, Blizzard applied to the above-mentioned Office to extend the validity of its previously acquired trademark rights to new classes, including musical activities.

Therefore, in order to resolve the dispute between the parties, the court had to determine:

1. Whether the plaintiffs actually stopped using the BLIZZARD RECORDS trademark, and if so, since when such termination took place?
2. Do the rights obtained by Blizzard in connection with its registration of the BLIZZARD and BLIZZARD ENTERTAINMENT trademarks in 1994 apply to the company's distribution of its own game soundtracks through the sale of CDs and downloads from corporate servers? And if so, at which point should we consider the beginning of such distribution: since 1994 (i.e., from the period when Blizzard registered its trademarks, and the plaintiffs stopped using their trademark "BLIZZARD RECORDS") or has it been since 2002 (i.e., since Blizzard filed an application with the Office to expand the number of classes for which Blizzard trademarks will be applied, and, as is obvious, after the plaintiffs resumed using the BLIZZARD RECORDS trademark)?
3. Is there a violation of the plaintiffs' rights caused by Blizzard's aforementioned activities of distributing their soundtracks separately from their games?

Resolving the issue of the fact of termination of use of the trademark “BLIZZARD RECORDS” by the plaintiffs were significant in the case, since according to the US law (see the so-called Lanham Act), failure to use a trademark for three consecutive years without the purpose of its subsequent use in the future creates a presumption of refusal to use the trademark. If the person or entity who owns such a trademark does not prove the invalidity of the presumption, then he loses the right to it.

During the trial, the court concluded that the plaintiffs' use of the BLIZZARD RECORDS trademark was discontinued in 1987 due to the termination of the "Zilion" group's promotion, and resumed only in August 1999, when the plaintiffs launched the website blizzardrecords.com. At the same time, the court examined the facts of the plaintiffs' activities and the evidence presented by them in relation to working with the "Chillin’ Sun" group and their promotion, but concluded that in the course of such cooperation with "Chillin’ Sun" the plaintiffs did not use their trademark after all.

It should be noted that the plaintiffs fundamentally had serious problems with the evidentiary base throughout the entire trial: the CDs of the groups they promoted were not branded with their trademark, the label was not known to the public throughout almost the entire history of its existence, the plaintiffs had no even corporate documentation containing the company’s branding. Here is one example from the case: during the trial it turned out that in 1985 (even before cooperating with the plaintiffs) "Zilion" entered into a recording and promotion agreement with another label "Axe Killer Records", therefore it was established that the public associated the "Zillion" promotion with Axe Killer Records, and not with Blizzard Records.

As a result, in relation to Blizzard, the court ruled that in 1994 Blizzard did not receive legal protection for its trademarks in relation to such a registration class as music, but received only those classes that it claimed when registering its trademarks. Thus, the plaintiffs obtained the rights to the music class in relation to the trademarks previously Blizzard.

However, despite the above, the court concluded that Blizzard's use of the BLIZZARD trademark does not constitute a violation of the plaintiffs' rights with respect to their own BLIZZARD RECORDS trademark. Moreover, the use of their own trademarks by the parties to the case does not lead to misleading consumers of the products of both participants, since the consumers of Blizzard products are gamers, i.e. people who are well aware of the manufacturers of computer games and the music they produce for them. Due to their awareness, misleading them with the products of the parties to this lawsuit is not possible in reality.

v. MDY Industries, LLC

In 2004, Blizzard created their iconic game "World of Warcraft". And soon after that, the Arizona company MDY Industries created a game bot "Glider" for this game, which allows users to complete the initial levels of the game in a fairly short time, while under normal game conditions it would take users several weeks to complete it. Sales of the bot began in 2005, and by the time the lawsuit was filed against MDY, they have already sold more than 100.000 copies of their bot.

In 2006, Blizzard filed a claim with MDY that their activities violate the company's rights, and if it does not stop it, Blizzard will go to court to protect its rights. MDY rejected the game maker’s claims and decided to obtain a court ruling that the sale of Glider does not violate any Blizzard rights, and the use of this bot expands the gaming experience for users. MDY positioned itself as an innovator, and considered Blizzard's actions towards them to be unjustified.

In response, Blizzard filed a lawsuit for the existence of a number of violations committed by the actions of MDY: in particular, copyright infringement, violations of the terms of the contract, unjustified enrichment, trademark infringement were indicated.

Based on the results of consideration of all materials submitted by the parties, the court ruled in favor of Blizzard, recognizing MDY Industries as violating the plaintiff's rights. In particular, the court determined that users of the bot were not entitled to use it, because according to the provisions of the End-User License Agreement for the game World of Warcraft (EULA WoW), users were prohibited from using bots or other third-party software that modifies the game world WoW. Since users violated the terms of the license agreements between them and Blizzard in this way due to the use of MDY software, MDY was found responsible for such violation of contractual relations. In addition, the provisions of the DMCA were violated, because the bot bypassed the "Warden" program designed to protect the game server from unauthorized use.

MDY appealed the court's decision to the Court of Appeal, in which in 2010 the U.S. Court of Appeals for the Ninth Circuit ruled that MDY was not recognized as responsible for copyright violations of the plaintiff, but MDY did violate the provisions of the DMCA, using technologies to circumvent protective measures by "Warden".

This decision was also quite significant both for the industry and for judicial practice, because it addressed rather controversial issues regarding the responsibility of the manufacturer of third-party software in relation to the copyright of the software manufacturer, as well as its contractual relationship with its users, who simultaneously use both the original software and third-party software created to interact with the original software.

v. Scapegaming, LLC

In October 2009, Blizzard decided to sue Alison Rees, the owner of the Scapegaming game project, and five persons whose identity Blizzard had not established by the time they filed the lawsuit (but who, according to the plaintiff, were related to Scapegaming activities).

Scapegaming, previously available at scapegaming.com, was a private game project created for commercial purposes and allowed its users to play a modified version of the World of Warcraft game on one of its five servers. This project was not under any management or control from Blizzard, and for access to it, players paid (between $1 and $300) directly to Scapegaming, not Blizzard.

Blizzard claimed in its lawsuit that the defendants carried out their activities, fully aware that they were violating Blizzard's rights in this way. Blizzard counted the actions of Scapegaming:

1. violating the provisions of EULA WoW and ToU WoW,
2. violating Blizzard's copyrights to its own game software, which was subjected by the defendants to unlawful modification and reverse engineering (the results of which, in particular, made it possible to roll back to previous versions of the game to bypass the protective mechanisms embedded by Blizzard in new versions of the client game software), as well as due to the fact that the servers Scapegaming did not check the running copies of the game for their legality,
3. unfair competition against Blizzard,
4. intentionally obstructing the contractual relationship between Blizzard and their users.

According to Blizzard's own estimate, Scapegaming earned approximately 1.5 million US dollars through their portal.

Interestingly, Rees decided not to file an objection to the claim (the co-defendants, whose identities were not identified too), so the court in 2010 ruled in favor of Blizzard as the plaintiff due to the lack of objections to the claim from the defendants, awarding more than $88 million in compensation in favor of Blizzard: $3,052,339 in lost revenue, $85,478,600 in damages and $63,600 in court costs incurred.

Blizzard itself commented on the court's decision as follows: "In addition to last year's decision in the case against MDY Industries, the creator and distributor of cheat software, the decision regarding Scapegaming is another confirmation of the correctness of our efforts to vigorously protect our intellectual property rights."

However, the answer the question of whether Blizzard eventually managed to recover the compensation awarded to it by the court from the defendants could not be found in open sources.

v. Benstar Limited and ANO "RNIC"

This court case was in 2009 in Russia and related to the domain name worldofwarcraft.ru. The defendant, Benstar Limited registered with the domain name registrar ANO "RCIC" (Ru-Center now) worldofwarcraft.ru and it was its administrator. The domain was used for the fan website of the Blizzard game of the same name: various walkthrough guides, descriptions of the game and characters, tasks, etc. were posted on it.

Benstar Limited at one time even received an official letter from Blizzard, according to which the copyright holder recognized this Internet resource as the "official Russian-language site of fans of the game "World of Warcraft".

However, after a certain time, Blizzard decided to get this domain for itself. It is not known for sure whether any claims were sent to Benstar Limited or not regarding the transfer of the domain, however, Blizzard filed a lawsuit with the arbitration court, starting a lawsuit in case No. A40-22747/2009.

As a justification for the violation, it was stated that the plaintiff owns the registered trademark "WARCRAFT" (including for goods of the 09 class of The Nice Classification (NCL) and services of the 41 class of the NCL), and the domain name worldofwarcraft.ru is identical to the plaintiff's trademark in terms of sound, graphic, and semantic features, and also fully includes the name is the trademark of the plaintiff.

Blizzard provided the court with a notarized protocol for securing evidence, according to which on the website worldofwarcraft.ru a user was provided with graphic images with text, including links: "All the news of WOW", "World of Warcraft", "General information", "About World of Warcraft", "Video Guides", "World Map", "History of the World of Warcraft", "Main Forum", "Game Mechanics", "Servers", "Other forums", "Screenshot Contest", "Role-playing game", "Translations", "Site Usage Rules".

The defendant's arguments that they did not use a trademark confusingly similar to the plaintiff's trademarks, as well as that the plaintiff officially recognized the domain worldofwarcraft.ru by sending the defendant a corresponding letter recognizing this resource as the official Russian-language website of fans of the game World of Warcraft. However, they were rejected by the court.

As a result, the court recognized the defendant's actions as violating Blizzard's rights and ordered him to stop using the WARCRAFT trademark in the domain name worldofwarcraft.ru and pay compensation in favor of the plaintiff in the amount of 10,000 rubles.

As for Blizzard’s attempt to recognize the registrar ANO "RNIC" as a defendant, the court denied this to the plaintiff, pointing out that in the .RU domain zone a declarative registration procedure has been established, and ANO “RNIC” is not the administrator of the domain name worldofwarcraft.ru and therefore does not use the plaintiff’s trademark.

v. Bossland GmbH

The German company Bossland GmbH is the creator of gaming bots, including for Blizzard games: Honorbuddy and Gatherbuddy (for World of Warcraft) and Demonbuddy (for Diablo III).

Blizzard, believing that Bossland's actions were a violation of its own rights to game software, filed a lawsuit in 2011. Blizzard determined that Bossland's activities constituted unfair competition and a violation of Blizzard's copyrights and trademark rights for the following reasons:

1. By creating and offering for sale Honorbuddy and GatherBuddy bots, Bossland provokes users of the WoW game to violate the Rules of using the WoW game (WoW EULA);
2. The use of cheat software (bots) significantly affects the game balance, which gives the players who use them unfair advantages over honest players;
3. The use of bots accelerates the onset of the moment of saturation of the gameplay for users, which reduces the subscription period for which the game is usually purchased by users;
4. Bots are programmed in such a way that in their work they bypass the Warden program of the Blizzard defense mechanism for their game;
5. Bossland violates the trademarks of Blizzard "World of Warcraft" and "WOW" by including them in the names of its products;
6. The use of bots violates the plaintiff's copyright because, due to the caching of the software in the computer's RAM, each player using such Bossland software creates a copy of the game that violates Blizzard's copyright. And although such copies are created with the consent of the players themselves, due to their violation of the provisions of the WoW EULA, such consent of the players is seen by Blizzard as illegal actions.

Separately, Blizzard stated in the lawsuit that the use of bots by users of the game is prohibited in accordance with the provisions of Section III of the WoW EULA.

Bossland has not admitted responsibility for any of the violations identified by Blizzard in its lawsuit. So the court had the last word.

The Hamburg District Court in May 2013, having studied all the materials in the case, decided that Bossland is prohibited from distributing game bots related to the World of Warcraft game in Germany. Moreover, in the territory of the European Union, the company is also prohibited from distributing its bots under the names "World of Warcraft Bot" and "WOW Bot". In case of non-execution of the court decision, the company may be fined 250,000 euros, and its CEO may be criminally liable.

After the announcement of the court's decision, Blizzard made a security payment in the amount of 650,000 euros so that the preliminary execution of this court decision would begin immediately after the trial.

It is interesting to note, that after the trial Bossland made appropriate notes on the page of each of its bots that the use of a particular bot is not an offense, and the use of Demonbuddy is not an offense anywhere except in Germany.

v. Ceiling Fan Software, LLC

In December 2011, Blizzard decided to file a lawsuit against Ceiling Fan Software LLC, the creator of another gaming bot for WoW called Pocket Gnome. The owners of the company and unnamed persons were involved in the co-defendants (by analogy with the case against Scapegaming).

The defendants sold the bot at a price of $25 (a one-time payment for the entire period of use), $6.99 (per month for a period of six months), 8.99 (for 1 month). According to Blizzard, the defendants sold copies of their bot for hundreds of thousands of dollars.

According to Blizzard, the defendants' actions resulted in the following violations:

1. Intentional interference in contractual relations (between Blizzard and users of its game and service);
2. violation of the provisions of the EULA and ToU (because users, according to the provisions of these documents, cannot "use cheats, automated software (bots), hacks and any other unauthorized third-party software created to modify the gameplay"), including with the extraction of commercial profits from games and Blizzard services;
3. unfair competition.

In their lawsuit, Blizzard asked the court to recognize the defendants as having violated its rights, to stop selling Pocket Gnome and other similar software, and to pay monetary compensation to the plaintiff.

Later, the court determined that in addition to "Pocket Gnome", the defendant also sold the "Shadow Bot". Bots allowed the player to earn virtual currency, artifacts, and experience for his character without the direct participation of a player himself. These bots were designed to interact with the plaintiff's game and could not be used for any other computer game.

Ceiling Fan Software not only sold its software, but also distributed instructions for their effective use (including videos, manuals, FAQ, etc.), and also used the plaintiff's trademark "WoW" as a keyword in the Google AdWords advertising network and advertised their software by posting advertising banners.

On their website, in the FAQ section, the respondents even had such a question-answer pair:

Question: Is Pocket Gnome a violation of the Terms of Use of the service?

The answer was "yes". Pocket Gnome is definitely a violation of the Terms of Use of the service. You don't need to have an excellent knowledge of English to fully understand how contrary this is. If you are caught using this bot, you may be blocked. So be careful and don't get caught.

And there was also such a disclaimer on the website of the bot manufacturer:

"We are aware that Blizzard is against the use of bots in their programs and does not allow their use in its TOS/EULA. You may be blocked from using our software due to violations of such provisions of TOS/EULA."

According to Blizzard, the co-defendants provided technical support to users on their own forum and gave advice on how to avoid situations in the game of being detected using a bot.

According to the defendants, their bots were not detectable by the Blizzard gaming system, the bots themselves were not reproduced in the computer's RAM, so they could not be detected by standard means.

Interestingly, the defendants had their own license agreements for the use of bots, in which there was a clause stating that they reserve the right to terminate them with those users who used bots improperly or transferred their bots to other users who did not purchase a license to use them from the defendants. However, the defendants have never terminated license agreements with any of the bot users for such a reason.

The defendants decided to retaliate and filed a counterclaim against Blizzard.

As a result, in September 2013, the court ruled in favor of Blizzard, recognizing the defendants' actions as a violation of Blizzard's rights, since they were unlawful intentional interference in the plaintiff's contractual relations, unfair competition, and violation of contractual obligations.

The court also issued an injunction prohibiting further activities of the defendants in the sale, distribution, and licensing of its bots. Plus, the court awarded compensation in favor of the plaintiff in the amount of 7 million US dollars (interestingly, the defendant did not have enough money to cover its compensation costs, so they even appealed to their own users to help them pay the rest of the compensation).

Currently following the links pocketgno.me and shadowbot.net opens legal.ceilingfansoftware.com with information that the company is prohibited from distributing the created bot, and a link to the court decision.

v. Benjamin Bell and Christopher Spellman

In 2012 in California two gamers (Benjamin Bell and Christopher Spellman) filed a class action lawsuit against Blizzard for the fact that the company did not inform users that additional game elements should be purchased separately after purchasing the game itself in order to ensure the security of information stored in customers' gaming accounts. According to the plaintiffs, such silence on the part of Blizzard was misleading consumers of Blizzard products, and their negligence in protecting confidential user data compromised millions of users (we are talking about events of August 2012). Blizzard should not shift their costs of ensuring the security of user data to the users themselves by selling them such protection measures.

In turn, Blizzard considered the lawsuit pointless, since it was about such company products as an Authenticator – a technical solution to increase the security of user accounts by generating passwords, which can be purchased as a mobile application or device and which is an optional product that allows you to use your account on Battle.net even if his username/password has been compromised. The cost of such a product at the time of filing the claim was only 6.5 US dollars.

The case dragged on for 2 years, and eventually, in May 2014, the parties to the case concluded a confidential settlement agreement between themselves, after which a corresponding application was submitted to the court, on the basis of which the judge of the district court judge dismissed the case.

Blizzard Wins Overwatch Clone Lawsuit in China

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the original article was written before these legal cases described below were finished

v. Worlds, Inc

March 30, 2012 Worlds, Inc. has filed a lawsuit against Blizzard for violating the latter in their games "Call of Duty" and "World of Warcraft" American patents of the plaintiff No 8,082,501, 7,493,558, 7,945,856 and 7,181,690, entitled as "A system and method that allows users to interact in a virtual world".

They cover technologies and methods related to scaling architecture for three-dimensional multiplayer gaming systems that allow users to interact with the environment recreated in game systems using their game character. In fact, such patents give the company a monopoly on the technologies that form the core of most MMO games.

Some sources recognize Worlds, Inc. as a typical patent troll, because the company's activities are limited mainly to licensing its patents and litigation against those who violate patent rights and do not want to license them.

On October 3, 2014, a court hearing was held in which questions regarding the wording in the claims for inventions for which patents were issued were considered. Consideration of the claim on the merits will take place in the foreseeable future.

In the end, Blizzard won this legal fight. Meanwhile, an affiliated company of Activision Publishing Inc has patented a way to stimulate players to purchase in-game items.

v. DOES 1-10

And in this case in 2014, Blizzard is already the plaintiff. The fact is that the defendants created and sold copies of ValiantChaos MapHack and other similar software, which was essentially a cheat code for the Blizzard "StarCraft II" game: it removes the so-called "fog of war" from the game map, allows you to observe the movements of the opponent's units and receive other information that is not available to the user in normal game mode. According to Blizzard, the company suffered significant damage from the actions of the defendants (including reputational damage).

The name of the defendants is indicated exactly this way, since Blizzard itself does not know and has not been able to identify the names of real people involved in the production and sale of such software. As stated in the lawsuit, the creation and use of such software is:

1. violation of the terms of the contracts, namely: the Rules of use of the service Battle.net and StarCraft II EULA,
2. violation of the company's copyright on their game product,
3. the use of measures to circumvent the protection of intellectual property (in the United States, this is a separate type of violation),
4. intentional interference in contractual relations between other users and Blizzard.

In its lawsuit, Blizzard demanded to stop these violations, transfer to the company all copies of materials violating their rights, provide the company with all reports on sales of such software, pay monetary compensation in their favor for violated rights, as well as reimburse all legal costs incurred by it.

Since the identity of the defendants has not been established, and the deadline for providing a response to the claim by the defendants has already expired, in accordance with the procedural law of the state of California, the decision was made in favor of the plaintiff on all points stated in the lawsuit.

The case remains small: it is only necessary to determine the identity of the defendants and bring them to justice in accordance with the court decision.

v. Via Vadis LLC and AC Technologies SA

The most recent of Blizzard's court cases at the moment within the framework of this collection, since the lawsuit against the company was filed 2 months ago in August 2014. The plaintiffs (Via Vadis and AC Technologies) sued the game maker for infringement of their own patents. One of the plaintiffs is known for the fact that at the same time filed a lawsuit not only against Blizzard, but against a number of well-known companies: Amazon, D-Link, Skype, Netgear.

The subject of the lawsuit is the plaintiffs' alleged infringement of patents 7,904,680 and RE40,521 and 8,656,125, all of which are entitled "Data Access and System management, as well as a method of data access and data management for computer systems".

These patents are directly related to distributed data storage technology and peer-to-peer networks (including BitTorrent protocol).

The lawsuit states that Blizzard uses these technologies, which are covered by the plaintiffs' patents, by creating, selling, offering for sale, and distributing their products, including using the BitTorrent protocol. The lawsuit mentions the defendant's products such as games "World of Warcraft", "Starcraft", "Diablo".

The plaintiffs stated that they want to obtain monetary compensation from Blizzard for infringement of the rights to these patents.

Blizzard has not yet spoken publicly about this new lawsuit. But overall, this case seems interesting.

Decoding Blizzard and Valve’s trademark dispute: who really owns DOTA?

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PC GamerTim Edwards

Article 1265 of the Civil Code of the Russian Federation consolidates that the author has the right to have their name that is inalienable and non-transferable (even in case of alienation of the exclusive right to his work). This right was legislated a long time ago: it also existed in the Resolution of the CEC of the USSR, Council of People's Commissars of the USSR "Fundamentals of Copyright", and in The Law of the USSR "On approval of the Foundations of the Civil Legislation of the USSR and of the Union Republics", and in the Law of the Russian Federation "About copyright and related rights". This is not a domestic legislative invention, the right to a name has already been enshrined in the Berne Convention:

"(1) In order for an author of literary and artistic works that are protected by this Convention, to be considered in absence of evidence to the contrary as such and, accordingly, have the right to apply to the court in countries of the Union regarding the violation of his rights, it is sufficient if the author's name is indicated in the usual way on their work. Current paragraph applies even if this (the author’s) name is a pseudonym, in case that the pseudonym adopted by the author leaves no doubt about his identity."

Examples of the implementation of copyright a name in a variety of areas of intellectual activity are:

• software – developer names are listed on “About” screens or on separate pages (which is especially typical for open source projects, where not only developers are listed, but also contributors are): Adobe Photoshop, 7-Zip, React
• paintings – author's signatures are presented on the front and back sides of the canvases
• sculptures – remembering history Miсelangelo's "Pieta"
• movies – authors are typically listed in posters and titles (which sometimes are both advertising and a consequence of contractual obligations)
• video games - in many ways, the approach is similar to movies, but there may be with a smaller advertising component (see below why authors’ names of games are not always presented in the credits)
• books – authors names / pseudonyms are listed directly on book covers
• musical notes - typically, the author's name is listed at the very beginning of a musical notation of a piece of music

This right is one of the personal non-property rights of author, i.e. it cannot be transferred or sold. The right to a name is directly related to the right of authorship, but it also has its own value. [1] Thus, it is itself is a subject to legal protection regardless of other intellectual rights (property and personal non-property), and sometimes the violation of this right becomes a subject of legal disputes. For example:

Judicial practice on the author's right to their name

Pseudo-paintings by M.F. Larionov

In the framework of the court case no. A40-44111/2015 The Ministry of Culture of the Russian Federation filed a lawsuit against Antique Collectors Club Ltd. and Internet Solutions LLC (the owner of the brand Ozon.ru ) on the obligation to withdraw from sale on the territory of the Russian Federation all copies of the book (monograph) "Goncharova: the Art and Design of Natalia Goncharova" by Anthony Parton's, containing a reproduction of Peacocks. 1907-1908. Canvas.oil. 80x70,5 with an indication of the authorship of M.F. Larionov.

The court found that in 2010 Antique Collectors Club Ltd. published the specified monograph containing reproductions of works by Russian artists N.S.Goncharova and M.F. Larionov, which extended, in particular, to Ozon.ru. The Ministry, having at its disposal evidence that the specified painting does not belong to the brush of Larionov, filed a corresponding lawsuit.

By the decision of the Arbitration Court of the City of Moscow dated by June 24, 2016 in the case No. А40-44111/2015 the following has been established:

1. distortion of the facts of the history of Russian painting, expressed in particular in attributing to famous artists the authorship of works that do not belong to their brush is a violation of the public interests of Russian citizens and of the Russian Federation in the field of culture;
2. the distribution of a book with a reproduction of a falsified painting "Peacock" may cause property damage to the Russian Federation as the owner of the reference paintings of the "Peacocks" series since the value of federal property may significantly decrease;
3. publication of other people's paintings under the name of M.F. Larionov violates the copyrights of artists (Article 1255 of the Civil Code of the Russian Federation), particularly their rights to the name (Article 19, 1265 of the Civil Code of the Russian Federation).

In this connection, the court ordered the defendants on the territory of the Russian Federation to withdraw from sale all copies of the said book containing this reproduction indicating the authorship of M.F. Larionov as well as to publish such a book.

Bottles of vodka "Karelian tale" with "Fabulous city"

In 1992, the artist Kronid Gogolev created the work "Fabulous City" in the technique of three-dimensional wood carving. His signature is on it, and it is located in the author's gallery which is Exhibition hall in Sortavala (Karelia). Aalto LLC, without the artist's knowledge, placed on its product which is vodka bottles named "Karelian Fairy Tale" a photo image of Kronid Gogolev's work "Fabulous City" (he found out about it and about violation of his rights accidentally in September 2010 from his friend, who brought and showed him this product). The conflict was not settled out of court (the society left the author's complaint unanswered), so Gogolev filed a lawsuit.

In the statement of claim, the plaintiff asked the defendant to prohibit the release of this product with the labes having a photo of his work on them, to withdraw this product from trade, to recover compensation for moral damage and to make an official apology through the media. Later, three more co-defendants joined the defendant.

The Court found the following:

1. this work was indeed created by the plaintiff, and was made public in 2002, and he did not give permission for the use of his work to the co-defendants;
2. The defendant Aalto LLC from 2003 to 2010 produced the specified alcoholic beverages with a label, the design of which is based on the image of the plaintiff's work;
3. the defendant's argument about reaching an oral agreement on placing an image of the painting on the label is rejected, since an oral agreement cannot indicate the granting of the right to use the work;
4. the actions of the defendant violated the non-property rights of the author, because the work is depicted on the label without specifying the author's name.

Besides, in addition to the obligation of Aalto LLC to pay compensation to the plaintiff for intellectual property infringement, the same decision of the Lahdenpokh District Court (Republic of Karelia) No. 151/2012 of July 2, 2012 in case No. 151/2012, the court also awarded compensation for moral damage. An appeal was filed to the Supreme Court of the Republic of Karelia, but it upheld this decision, increasing the amount of compensation in favor of the plaintiff.

Музей частной коллекции Кронида Гоголева в городе Сортавала

Уникальная коллекция работ Народного художника России Кронида Александровича Гоголева. Кронид Гоголев - выдающаяся личность города Сортавала и Республики Карелия, Народный художник России.

Кронид Гоголев

Conclusions on examples of judicial practice:

1. the right an author to their name is a subject to legal protection, therefore it can be protected in court;
2. violation of copyright in a name may entail violation of the public interests of Russian citizens and of the Russian Federation in the field of culture;
3. the protection of the right to a name on the territory of the Russian Federation may be implemented, in particular, by withdrawing from sale all copies of tangible media containing violations of such a right, prohibiting the further sale of such bearer and their release (publication);
4. the author has the right to receive monetary compensation for the violation of such a personal non-property right.

Anonymous use

Employment contracts with employees

In order to observe such a right of an author to their name, but at the same time not to use it when using the work, it is enough to obtain from the author the right to use his work anonymously (i.e. without mentioning his name). That is why, for example, in employment contracts with developers write down granting such a right from an employee to an employer, so that the latter could not specify the names of the authors when distributing their program code if he wishes so. The presence of such a written agreement will clearly indicate that an author has indeed allowed another person (for example, an employer) to use the object(s) of his copyright without mentioning his name as the author.

Всем спасибо: почему разработчиков не всегда указывают в титрах — Индустрия на DTF

И можно ли с этим что-то сделать.

DTFДмитрий Мучкин

Open licenses

In addition, such permissions may be provided in open licenses. For example, MIT-0 license:

The "MIT No Attribution" or "MIT-0" license is a modification to the usual MIT license that removes the requirement for attribution.

Thus, if the content / program code or other copyright object becomes available under the terms of a license that does not require specifying the author's name when using it, such a condition will allow the author's right to the name to be respected and not violate it.

For feedback on my experience and qualifications on the topic of publication, as well as relevant recommendations for cooperation with me, see my profile on LinkedIn. Any questions and comments on this article or suggestions for cooperation, please send me here.

How to START Localize End-User Docs

Many web-services and cloud-based platforms want to scale their business and quantity of active users. Such wishes push them to enter…

STARTteamDenis Dorotenko

Us and multilingual end-user service docs

Our video service START (similar to Netflix, Hulu, Amazon Prime) offers a paid subscription model which provides users the access to certain content on our platform (web, apps, Smart TV). Like others, we have our own legal docs to clearly describe the rules that govern use of our service, how we collect the user data, apply promocodes and so on. Users from different countries watch movies on START, and step by step, we scale our presence in different states. In respect to legal docs, we need to:

• make the user experience more convenient,
• meet the requirements of the applicable laws,
• find the right way to manage the “papers” as easy as it is possible.

To do so, we had to translate our rules into different languages. We did it, and now, users receive our service’s agreements and policies on the corresponding language selected automatically: our system makes the selection based on the user device’s probable location (a country) and the device’s language. Let’s say if the user is in Bulgaria, he will get the Bulgarian versions of our documents. If the user moves to a different country he gets an access to the local one (if it’s available). START followed the Uber Legal model’s idea (thank you, guys!) when users get one agreement in English and it’s localised versions in different languages in which the particular provisions reflect the features of each of the jurisdictions.

Our software can identify the correct language based on the customer device's geolocation data. For situations when our user is in another country we provide the option to switch the location manually. Besides, many prefer to use streaming services to learn foreign vocabulary and choose a language different from their native one. This choice is recognised at the user profile level, so viewers do not need any further actions. On the other hand, the previously selected language is applied automatically when the user switches to another application.

L10n of user agreements: the general points

The main points of departure for localization have just been indicated, but let's look a little bit deeper and go through each point.

(a) User experience

No doubt, most of us like the interfaces, where all stuff and content are intuitively understandable and readable. The legal documents are not the exclusion. When you pay for something, you’d like the terms of the deal are clear, don’t you? Here is the same. We have own legal documents, users should know them. That’s not good when the language of the legal policies text diifers from the user’s language. So, the service team should strive to provide proper documentation in a convenient form (in respect to its own documents too) and users will appreciate it, really. If you don’t agree, then ask your support team about it. They are the first who find out the user problems on misunderstanding of your rules. And if you prepare your service rules properly, readable and on the right language for users, they will contact your support team much less often. So, save your and colleagues’ business hours for more interesting things through improving the user experience.

(b) Requirements of the laws

Every state has its own consumer protection laws. For example,

Although their principles are relatively general the user must know what kind of service he/she is purchasing and under which conditions, its price, and duration. Accordingly, the customers should be aware of their rights, they should be able to refuse the service on understandable terms. While localising user agreements, we took into account not just the translation of the text, but also the legislative features of the applicable country. Therefore, we developed one general document with information applicable for each country in English and separate specific local versions.

If you have a service agreement (main and actual version) in one language and an additional one localized version in another, do not forget to clarify in both, which document legally binding in case of conflicts between them. Otherwise, you will meet the risk of having two separate agreements (e.g., in English and Bahasa Indonesia) and your team will rely on the English version, but disgruntled user (and his attorney) on another text unknown by your in-house lawyers and managers. Because previously you’ve just ordered the translation of your doc and none of your teammates know this language. And if that user is suing you for your service in a local court (referencing to the translation you hardly understand), just think about, what version of both your documents the court will consider and find applicable. Keep it in mind. You can mitigate this risk by adding in both documents a statement about which document (in what language) is applied and prevail. Need examples? A lot of them. E.g., see them from Amazon (first sentence), Apple (section 12), Intel (clause 12.1) Maxim (section XIII), and our End-user agreement for Serbian users (first paragraph).

Denis Dorotenko, Legal Team Lead at START

Different states may have different rules in respect to personal data too. If a service collects and processes personal data, it should notify users of the rules for such collecting and processing (usually through its own privacy policy). A privacy policy describes how a service provider may process personal data when someone is using this service. It describes purposes, legal bases and retention periods of user data processing, rules to apply for international data transfers, use of cookies and similar technologies, marketing and PR activities based on user consent, etc. Of course, START have its own policies (e.g., this one) based on the requirements of the GDPR for users from the EEA. For users outside these territories to collect and process their personal data we may use different policies.

As you already understood, localisation requires a lot of effort not just from the product perspective, but we also need to comply with the national laws for each particular case. So, we have external legal consultants who guide us through local requirements in different countries and we reflect their advices in our end-user documents.

(c) Manage the “papers”

Our service is designed to be used by users among different lands, so it is designed to scale. In respect to our documents, the task was the same – to design a simple, flexible and scalable solution of providing the documents for users. As indicated above, our development team followed the spirit of Uber Legal model. So, the users get the access to applicable documents and may read the texts in English (which prevail). But this in front of the users. What is the behind the curtain?

Published archives. Each service should decide, whether it will be transparent or not, when updating end-user’s documents. If so, the service provides users with not only the latest version of service agreement, but the previous archived version too. Through this approach one can see a service document’s evolution. It is appreciated not only by users, but also by regulatory authorities. We prefer to be transparent, so you can find our prior legal texts in the bottom of end-user agreements and policies (e. g. here). Many other services keep the ways to their prior texts as well: Corel, Stadia, Ubuntu, YouTube, Wikimedia Foundation.

Inventory matrixes. That’s wonderful to have the legal texts for different jurisdictions and update them in time. But how to keep in mind, how large is your Candyland right now? We prefer to deploy the tables in Confluence. We indicate the following data for each our end-user document: a scope, version and status (current or archived), where it is available on the service, is it in the progress of updating or not (if so, in which ticket), where this version was approved, additional comments. It helps us to manage our agreements and policies, so they don’t get in a muddle.

Files Storage. We shouldn’t forget about physical storage of our files containing the text of all our end-user legal documents. It would be awful, if we lost one of them and did not find it published on the service. So, our internal server kindly helps us to keep them safely. To avoid any unexpected surprises with it we have an alternative separated solution – upload files directly into Confluence and attach them to the matrix. This is a big part of our worktime, but it helps to avoid the risk related to internal server and sudden loss of files.

Legal risks in the localization of end-user documents

The service team faces several major risks when localising end-user agreement. There can be a danger of not complying with local laws and other legal requirements of the certain jurisdiction. If a web-service ignores some requirements or cannot satisfy them it can be forcibly blocked inside the country. As happened, for example, with Telegram in Russia, Indonesia and China or TikTok in India and Bangladesh.

First of all, a language of your service’s rules. A simple example: let’s imagine, your service is now available in Canada. Nice move! Now try to answer without googling: should your end-user documents for Canadian users be published in English, French, or both languages? Don’t you know? Hmm... Let’s find the answer at Apple:

If You are located in the province of Quebec, Canada or are a government organization within France, then the following clause applies to You: The parties hereby confirm that they have requested that this Agreement and all related documents be drafted in English. Les parties ont exigé que le présent contrat et tous les documents connexes soient rédigés en anglais.
Apple Developer Program License Agreement,
Section 14.11 “Entire Agreement; Governing Language”

Legalese in French? Parties confirm the request of all documents in English? Seems like a kind of some privilege for Quebec… What is all about? Let's get it sorted out.

Quebec has a special Act respecting French, the official and common language of Québec (also known as Bill 96) and the Québec Charter of the French Language. In accordance with it:

Quebec contracts containing printed standard clauses or that are predetermined by one party must be in French unless the parties expressly request that they be in another language. Quebec consumer protection legislation similarly requires that consumer contracts be drawn up in French unless the parties agree to use another language. Parties wishing to contract in English may do so by including a clause expressly stating their consent to do so.
Canada: Languages of Business Overview
Stikeman Elliott LLP

So, we can conclude the following. Apple, having the business in Quebec and being obliged by these local laws, does not wish to translate and maintain dozens of its legal pages in French, just add a couple of sentences in the end-user agreement in compliance with Quebec regulations – and voilà! they apply the English text only. This is just an example of local legal requirements related to a language of an end-user agreement! Not personal data, terms and costs of services and so on. Just the language!

The second and third major risks are related to breaking the laws on consumer data protection and personal data processing. The fines vary by jurisdiction. However, companies can lose thousands and millions of EUR.

Just some examples of fines, imposed for violating the GDPR:

Our lawyers need to identify the risks in different jurisdictions and prioritise those possible dangers, saying if they are average, above average, or critical. Thereafter they contact the team to make a common decision of accepting or not accepting those risks and minimising them as much as possible.

Let’s speak about next four aspects. First, the following issues may be different in other countries as usual: the ways of communication between users and a company; time to response on a user's request; refunds; termination of an agreement.
Second, if you send documents to lawyers for review, it is recommended to make sure that lawyers understand your work model correctly.
Third, for translation of end-user documents, it is best to hire special translation agencies experienced in legal translations. They care on their reputation and hire good translators. However, translators can make incorrect translation of your company name, so you should double-check this after them. It may happen, for example, when translating into Armenian, Georgian, Arabic. You should have correct translations of your company in the languages you need, so that each document has one its correct name.
And finally, it is also a good idea to check the translation results – the main terms of your documents before publishing: essential conditions of an agreement; license conditions; methods of payments and refund terms. You can self-translate these clauses using online automatic translation services to ensure that important terms remain unchanged.
Nurguyana Tretyakova, Legal Counsel at START

How to prevent risks — a short guide for international multilingual services

Overall, a service rising and appearing into new markets or jurisdiction is an exciting, but responsible journey. And working on end-user legal documents is a part of it. Be ready for this. Of course, we made the mistakes too. But it is also a part of journey. And our experience we may summarize in the following short guide for you:

• Keep in mind local legal differences and features. If a company does not have the budget to hire in-house legal adviser or an external consultant, the gaps that remain in the end-user documents will emerge sooner or later, it's just a matter of time. Try to find budget and order revising of your docs by local expert.

• Documents are becoming outdated. The laws are not static, many legislative bodies adopt acts so quickly as if they are in a car race. So, it is advisable to make revisions to the end-user agreements at least once a year and check for any changes in local laws.

• Do not forget on the refactoring. For many people the legal texts are just the “blahblahblah-yawn-small print”. A code and legal text have a lot in common: both of them are written to solve applied problems, in accordance with certain rules, most likely have a structure, and so on. As programmers remember their embarrassing code in past, lawyers remember their shame too. All we keep in mind the advantages of a code refactoring, but rarely apply them in respect to legal documents (therefore, the GDPR forces many of us to simplify the texts of our privacy policies). And localization is a good reason to review the structure and scope of your texts. Especially when your translators became expensive, because of your multi-page end-user policies.

• Think ahead about scaling of your service. Solve the issues keeping in mind the service’s possible scaling. The team has to develop a systematic approach toward user documents: developing agreements for 2 countries is not the same as having them for 15 jurisdictions and in 12 different languages.

• Save your working time and the working time of your colleagues. As mentioned above, readable documents can really reduce the number of user requests about them and increase the level of respect to your service. Maybe it’s time to take the CDPR’s approach?

• Maintain your Candyland. You are that hero who just in seconds may answer what document is applicable for that land, what the differences between these two policies and where Rachel can take the right .docx to send it for a translation. Don't let us down.

• Merge documents. Sometimes it is better and cost-effective to merge documents in the same language and highlight just some particular differences. TikTok’s Terms of Service is one of the best examples of this realisation. See the “Supplemental Terms – Jurisdiction-Specific” section: Brazil, India, Indonesia, Mexico, UAE, Turkey. Not the separate agreements with a lot of common rules, but just some paragraphs for certain jurisdictions. Briefly! Or you may merely form your documents like a layer cake, next text under the previous one as Bethesda does.

• Guerrilla translation. Not enough budget for lawyers and translators? Just keep in mind the automatic translators. By the way, are you an Atlassian products user? If so, that guys have already cared about you and your language skills, see their footer. It may help you to provide a user with your agreements on his language, but may not mitigate the corresponding legal risks.

For your convenience, these conclusions are also available to print, you can download them here.

That’s all. Thanks for reading. If you are just starting the path of legal translation or localization, good luck!

Against the background of the claims of the Cinema Foundation (for example, to the film company "RFG Corp" and KD STUDIOS LLC) there is an interest in the judicial side of the Russian film industry as a whole: what problems do its participants have to solve in court? How successful are the plaintiffs in their claims? What factors do they overlook, and as a result, fail? Even a cursory glance at it suggests that the problems and conflicts that reach the court are very diverse in this industry. I propose to turn our attention to some of them in this article. As objects of study, I propose three court cases on the production of audiovisual works in Russia. Based on the results of their analysis, I am ready to share the following observations:

Responsibility of an investor who does not own the rights to the movie

ABC LLC (the plaintiff and producer) and Triofilm LLC (the defendant) have entered into an investment agreement to finance the production of a feature movie. This producer undertook to carry out the production of the movie, whereas Triofilm LLC - to finance of such production in full in the amount of 100,000,000 rubles. Triofilm LLC undertook to transfer funds to the payment account of ABC LLC in the amount of 100,000,000 rubles within 20 days from the date of the agreement signing. The funds were not transferred to the payment account of ABC LLC, and so, this company filed the claim for collecting interest for improper fulfillment of obligations under the investment agreement in the amount of 10,100,000 rubles (case No. A40-83445/18-105-407 ).

The court, considering the case, has determined: this agreement is essentially a loan agreement and is not concluded. Under the Russian laws, the loan agreement is a real deal, i.e. it is considered concluded only from the moment of transfer of money or other things. Since the money under the disputed agreement were not transferred by the defendant to the plaintiff, the disputed agreement is not considered concluded and the defendant cannot be held liable for non-fulfillment of contractual obligations on the basis of this agreement, which is considered not concluded. Due to the lack of money of this agreement, it is not concluded, and the defendant has no obligations to fulfill it.

The return of investment funds is made within 6 years from the date of the end of the movie production (clause 1.5. of the agreement). The producer obliged to return to the company the funds paid as part of the financing of the movie production at the expense of proceeds from the theatrical rental and other ways of using it (clause 1.3. of the agreement). Thus, an investment agreement, under the terms of which the investor undertakes to deposit funds and at the same time has the right to return the invested funds, but does not acquire ownership on the result, is a loan agreement.

The Court of first instance concluded that the plaintiff had not proved a violation of his rights. The agreement has not been concluded because the money have not been transferred. The court has no grounds for satisfying the claims.

Conclusions of this case: (1) if, under an investment agreement for the creation of intellectual property results (IP), a party (investor) undertakes to deposit funds, receives the right to return them, but does not acquire intellectual property rights on the IP, such an agreement should be qualified as a loan agreement; (2) since the loan agreement is a real transaction (i.e. concluded only from the moment of transfer of money or property), if funds under such an agreement were not transferred, it is not considered concluded, and the defendant cannot be liable for non-fulfillment of obligations under it (in particular, for depositing funds).

Turning prepayment into unjustified enrichment

The case No. A40-107142/2019-134-800 arose as a result of the following situation. FREDZHIL LLC (the customer and plaintiff) and individual entrepreneur D.V. Ivanov (the author and defendant), have made the author's order agreement, according to which the defendant was obliged to create, by order of the plaintiff, scenario materials of a multi-part television feature movie, including the script of the 1st series, the script of the 2nd series and the serial (12 series) scenario plan, to alienate the exclusive right to them to the plaintiff in full. The plaintiff transferred the prepayment (788,620 rubles) to the defendant, which was confirmed by a payment order.

The defendant failed to fulfill the obligations to create the scenario materials stipulated by the agreement, namely: (1) did not create and did not provide to the plaintiff with the final version of the script of the 1st series of the Movie as amended (amendments, corrections, additions) of the plaintiff; (2) did not create and did not provide to the plaintiff with the script of the 2nd series of the Movie; (3) did not create and did not provide to the plaintiff with a serial (12 episodes) scenario plan of the Movie.

In view of the defendant's improper fulfillment of the terms of the agreement, the plaintiff sent to the defendant (including by e-mail) a proposal to terminate the agreement by mutual consent of the parties with the attachment of two copies of the relevant agreement signed by the plaintiff, it contained a condition on the defendant's obligation to return the prepayment previously paid under the agreement. Within the 30-day period established by law and later, the defendant did not provide the plaintiff with a signed copy of the additional agreement on termination of the agreement prepared by the plaintiff, and did not return the prepayment. Therefore, the plaintiff filed the claim for termination of this agreement and recovery of the unprocessed prepayment.

The court, having established that the plaintiff provided proper evidence to substantiate the claims regarding the recovery of the advance, which the defendant did not challenge, ruled that the defendant without legal grounds withholds the plaintiff's funds, in connection with which, the funds in full amount of the advance are unjustified enrichment of the defendant, which according to Article 1102 of the Civil Code of the Russian Federation is subject to return to the plaintiff.

Conclusions in this case: (1) it makes sense to pay a contractor in advance not in full, but only for part of the work, (2) when proving payments to a defendant, a plaintiff must submit to the court appropriate payment orders for such payments, (3) the unprocessed advance previously received by a contractor for the fulfillment of obligations that were not eventually fulfilled may be recognized as unjustified enrichment.

Refund of remuneration for services rendered partially through the fault of the customer

The plaintiff (production company) and the defendant (production director) have made the agreement for the creative development, shooting and editing of a feature-length movie. The director was obliged to complete the script and submit it for consideration and approval to the plaintiff no later than 01.02.2014, to develop a director's script based on the completed script and submit it for consideration and approval to the plaintiff no later than 15.06.2014.

Suing for the recovery of the amount of unjustified enrichment in the amount of 8,470,088 rubles 76 kopecks, interest for the use of the plaintiff's money (case No. A40-110997/15), the plaintiff indicated that, in violation of the agreement, the director did not provide the script he had completed on time, so the plaintiff decided to cancel the agreement and sent him a corresponding notification by mail. According to the plaintiff, their agreement is terminated from the moment of receipt of the notification, and the prepayment transferred to the defendant is subject to refund. The defendant pointed out that the agreement did not contain a provision that the director was obliged to provide a completed and/or director's script in writing.

Since the form of providing the script is not provided for by the agreement, the defendant provided it by e-mail. It was found that the defendant repeatedly provided to the authorized persons of the plaintiff with a modified script (for example, the first edition was provided 11 days before the end of the term stipulated by the agreement).

The plaintiff stated that the results of the defendant's fulfillment of his obligations by the plaintiff were not accepted. It was established that the defendant sent a letter by e-mail to the general producer of the company about the need for the production company to attract a number of specialists and carry out the work to move to the next stage of the movie production - the preparatory period, but there was no response from the defendant. Notification from the plaintiff about the suspension (conservation) of the production of the film according to the contract was also not made. Guided by the need to continue the production process and fulfill obligations, the defendant provided a number of services under the agreement (in particular, the development of the director's script was started; the formation of the movie crew was started; the selection of the cast was started). The plaintiff did not fulfill his obligations related to the preparatory period of the movie's production (in particular, he did not participate in the formation of the main creative team of the movie crew; he did not properly consider the revised script of the movie provided by the director). These arguments have not been objected by the plaintiff.

The plaintiff demanded the return by the defendant of the remuneration paid to him as prepayment. The disputed sum of money was transferred to the defendant in nine payments for the provision of services in the pre-preparatory and preparatory periods of the production of the movie. According to the agreement, (1) the first payment was paid to the director for the provision of services during the pre-production period of the movie, and (2) other payments in the amount stipulated by the agreement were paid to the director monthly for the provision of services during the preparatory and filming periods of the movie production. In accordance with Article 408 of the Civil Code of the Russian Federation, Article 406 of the Civil Code of the Russian Federation and the agreement, the obligations of the defendant in the pre-production period of the movie are terminated (completed) by their proper execution. Thus, the remuneration received by the defendant is a payment for the services rendered by him in the pre-preparatory period of the production of the movie and is not subject to refund.

Monthly payments were discontinued after 04.04.2014. On 23.06.2014, the defendant sent a notice to the plaintiff that the plaintiff still had not taken any action to ensure the preparatory period for the production of the movie, and therefore its production could not be carried out within the terms of the agreement. In the period since October 2013 till April 2014, the plaintiff made seven (7) payments. They are the reward for services partially rendered by the defendant during the preparatory period of the movie production according to the agreement. The services were rendered by the defendant partially through no fault of his own according to Article 401of the Civil Code of the Russian Federation. Thus, the remuneration received by the defendant in accordance with part 1 of Article 779 of the Civil Code of the Russian Federation is the payment for services partially rendered, through no fault of his own, during the preparatory period of the movie production. The partial provision of services by the defendant in the preparatory period was the result of the plaintiff's failure to provide the movie production process due to his violation of a number of provisions of the agreement, as well as the termination of contractual relations by the plaintiff by termination of the agreement, which deprived the defendant of the opportunity to provide services in full.

As a result, the court has established and determined: (1) the defendant has violated neither the terms nor the form of submission of the revised script; in addition, (2) the defendant sent the revised script to the plaintiff before the date from which the plaintiff considered the agreement terminated (i.e., before the date when the defendant received the notice of termination of the agreement); (3) the defendant has been taking all necessary measures for the proper performance of obligations for several months; (4) the defendant, through no fault of his own, was unable to provide services in full; (5) the remuneration received by the defendant for services rendered in part, through the fault of the plaintiff, during the preparatory period of the movie production, is not subject to refund, the claims are subject to rejection.

Conclusions on this case: (1) when determining the scope of the director's services during the production of the movie, the court is guided not only by the agreement, but also by the established film production practice (although the court did not specify in its decision what exactly is relevant to the latter), (2) if the form and method of providing the results of services are not fixed in the agreement, they can be provided by e-mail to authorized representatives of the customer, (3) if the services are provided by the contractor partially through the fault of the customer, the remuneration received by him is not subject to refund to the customer, (4) the customer's fault may be expressed in non-fulfillment by it its own obligations under the agreement (for example, not taking part in the formation of the creative composition of the movie crew; not considering a properly submitted movie script).