S.T.A.L.K.E.R. videogame brand

The case of the copyright infringements in IT area went up to the Russian Higher Commercial Court

INTELLECT-S began its biggest case related to the IT rights in the internationally recognized S.T.A.L.K.E.R. videogame brand infringed by a publishing group (AST, Astrel Publishers) which published a namesake book series.

INTELLECT-S partner Maxim Labzin and the firm's practice head Alexander Latyev represented S.T.A.L.K.E.R.'s owner Transavision Limited, a Cyprus company, and the Ukrainian video game software developer Mir Igr (CSC Game World), from the beginning. The firm's attorneys won the defense of their client's brand in 2012 when they proved the solidity of the logo owner's case. The judgment did not however stand on appeal and subsequent cassation review: both appellate and cassation courts disagreed with the initial decision and sided with the plaintiff. The high-profile case went on certiorari before the Higher Arbitrazh Court's Presidium.

The origins of the case date back to 2008 when the Cyprus company Transavision Ltd sublicensed AST Publishing Group the right to publish a series of fiction books based on S.T.A.L.K.E.R. video games under its logo. No one could possibly foresee at the time how things would turn out in the future.

The conflict emerged three years later as AST ceased sending the licensor its financial statements as was required by the license agreement, but went on publishing the best-selling S.T.A.L.K.E.R. book series. In July 2011 Transavision Limited terminated the license and sent AST notice requiring to stop publishing S.T.A.L.K.E.R. fiction.

The litigation flared up in September 2011 when AST group's affiliate Astrel Publishers struck back suing Transavision in the Moscow City Arbitrazh Court for the nullity of the sublicense agreement it had published the books under. The plaintiff alleged that the Cyprus company had no right or title whatsoever to the S.T.A.L.K.E.R. logo as sublicensor, whereas no other subject matter in any form, such as screenshots or other graphics, had not been agreed on in either license or sublicense agreements.

The defendant, represented by INTELLECT-S, sued back: in December 2011 it filed three suits for relief against the infringement on its rights to the video games by AST's unauthorized publication and distribution of the S.T.A.L.K.E.R. fiction series, and later followed up with another action filed in October 2012 over the breach of fiction rights in the publication of the book Call of Pripyat.

Our comment:

Labzin Maxim

Labzin Maxim

Represented by the firm's ablest attorneys, the Cypriot sublisensor prevailed at the first trial early in 2012 when the court dismissed Astrel's action for the annulment of the sublicense after it ascertained a few decisive facts it had based its important holdings on. The court held, in part, that logos are protectable under copyright law, and that Astrel's publication of fiction did constitute the parties' agreement regarding the graphic solutions. The judgment also granted Transavision protection against the potential future refund of the license fees it had been paid.

Transavision's successful defense hinged on its license agreement with OOO NPP ParaType, a well known font developer. The parties made it legally retroactive under the Civil Code: the plaintiff had built its case on the defect of Transavision's title to the logo S.T.A.L.K.E.R. on Transavision, which used ParaType's typeface without the developer's formal consent. The court accepted Transavision's retroactive agreement with the ParaType made on INTELLECT-S's suggestion to legitimize the prior use of the typeface. Astrel attempted to challenge the impromptu typeface agreement, but Transavision, still represented by INTELLECT-S, successfully rebutted the attempt.

In the meantime, the courts did not hear on merits the actions filed by INTELLECT-S on behalf of its client against AST for copyright breaches pending the outcome of the first suit. Finally, the HCC Presidium's opinion rested the long drawn out case.
Trial lawyers are well aware of how hard it is to have a lower court's judicial error rectified on certiorari in the Higher Arbitrazh Court. INTELLECT-S's attorneys made it — on November 5, 2013 the HCC Presidium accepted their client's case and voted to uphold the trial court's judgment and reverse the appellate and cassation review opinions.

The principal case lasted through the entire 2012 and 2013 as higher courts reversed the trial court's judgment on appeal and cassation. The case finally ended in our client's favor in the Higher Arbitrazh Court's Presidium on certiorari: the highest judicial body granted our application for review, reversed the appellate and cassation opinions and upheld the judgment of the Moscow City Arbitrazh court which granted Transavision relief against Astrel Publishers, represented by Uskov & Partners.

Our success was based on several factors. Apart from thorough homework and professional performance before the HCC Presidium, we relied on our flexible trial strategy we used throughout our engagement. Faced with judicial refusals to grant relief against AST after our temporary setbacks, and seeking to avoid creating adverse precedents that would have denied us success in the other, more important actions, we appealed and then abandoned our claims in the court of appeal. As a result, the proceedings were terminated or dismissed.

We therefore sacrificed smaller claims to keep the key actions going. These actions, in which we sought relief for infringement of copyright by the publication of 51 books in the S.T.A.L.K.E.R. series and, respectively, the production of S.T.A.L.K.E.R. school workbooks, were pending until then. The court heard them at the end of 2013 and 2014 and decided them in Transavision's favor.

In May 2014, the Moscow City Arbitrazh Court handed down its judgment on the largest and most complicated of the cases involving the publication of 51S.T.A.L.K.E.R. books, in which it recognized infringement of copyright and granted the action in part, awarding c.RUB35million in damages to be paid by AST and Astrel Publishers.

Before that, the court granted our suit for RUB13million in damages against AST for unlawful publishing of the S.T.A.L.K.E.R.: Call of Pripyat book series in 2013. Although the judgment was reversed on appeal in 2014, the Intellectual Property Court disagreed, reversed the appellate opinion, granted our cassation appeal and remitted the matter for a new trial.

Our other action which we filed against AST and Premiera Publishers over the manufacture and sale of S.T.A.L.K.E.R. workbooks, was granted in part.

The case was carried out by Maxim Labzin, Partner, and Alexander Latyev, Head of practice, PhD, INTELLECT-S.

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