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I. Introduction

In general, the protection of trade secrets[1] and the trade secrecy regime with respect to information comprising production secrets (know-how) is provided in the Civil Code of the Russian Federation,[2] particularly Part IV, which deals with intellectual property objects.[3] Some specific areas of trade secrecy protection are regulated by individual federal acts, such as the Federal Law of the Russian Federation on Trade Secrets,[4] the Labor Code of the Russian Federation, [5] and other laws and regulations that relate to different aspects of trade and production secrets, including measures of civil protection and remedies for breach of the trade secrecy regime.  

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II. Protection of Trade Secrets Under Russian Legislation

Russian legislation defines two types of secrets that receive the same level of protection: trade secrets and production secrets, [6] and while “the legal rules might seem sketchy,” [7] such secrets are protected from 

  • insiders to whom the secrets have been entrusted,
  • outsiders who obtain the secrets by improper means, and
  • government agencies that might obtain and release the secrets.[8]

The Civil Code defines “production secret” as information of any type (production, technological, economic, organizational, etc.) that is not generally known, to which the general public does not have open access, and with respect to which the owner of such information has instituted the regime of trade secrecy.[9] Such information could relate to the results of intellectual activity in the areas of science and technology and the methods for carrying out any professional activity having real or potential commercial value.[10]

At the same time, the Federal Law on Trade Secrets (Trade Secrets Law) extends the regime of trade secrecy to information comprising production secrets.[11] However, some Russian scholars have argued that the legal concepts of “production secret” and “trade secret” are not the same in that they play two completely different roles in the process of production and sales, and that a trade secret may consist of much broader information than a production secret.[12]

In order to receive full legal protection, the measures aimed at preserving secrecy must meet minimum requirements established by the Trade Secrets Law. The owner must define the scope of the trade secret, identify the sources of the information to be protected, implement procedures for access to and utilization of this information, and maintain control over the people who have access to the information.[13] If these requirements are not met, the information might not get protection in court should it be divulged.  For example, in a case adjudicated by a district court in one of the Russian provinces in 2011, the plaintiff filed an unjust enrichment lawsuit against the defendant, a limited liability company, claiming that the defendant misappropriated his trade secrets. The court dismissed the claim because the plaintiff had not instituted a secrecy regime against third parties with respect to his trade secrets and, therefore, this information could be considered as “generally known.”[14]

Russian law does not state what information can be classified as a trade secret. It is up to the court to decide whether to qualify certain information as a protected trade secret or generally known information that may not enjoy legal protection.[15]

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III. Liability for Violating the Rights of Trade Secret Owners

The Civil Code and Trade Secrets Law provide the general principles and types of liability for infringing exclusive production rights and/or trade secrets. The Trade Secrets Law states that violating the rights of trade secret owners entails disciplinary, civil, administrative, or criminal liability as provided by legislation.[16] Statutory civil remedies include damages incurred as a result of the trade secret infringement.[17]  Other types of remedies may be established by a contract or other legislative act.[18] Russian case law specifies that public legal entities, including constituent components of the Russian Federation and municipalities, are liable for the infringement of trade secrets as any other individual or legal entity, if the officials of such public entities who had access to the trade secrets unlawfully disclosed these secrets to third parties.[19]

A. General Measures of Civil Protection

General principles of civil liability for violating the exclusive rights of the owners of intellectual property, including trade and production secrets, are established by the Civil Code.The Code states that enforcement of these exclusive rights must be exercised by putting forward a claim

 
  • for the recognition of the right – against the person who denies or in another manner does not recognize the right, thereby infringing the interests of the right holder;
  • seeking injunctive relief (preventing the actions that infringe the right or create a threat of infringement) – against the person taking such actions or preparing to take them;
  • seeking damages – against the person who has unlawfully used a result of intellectual activity or means of individualization without the conclusion of an agreement with the right holder (noncontracted use), or has infringed his exclusive right in another manner and has inflicted damage on him;
  • for seizure of the physical carrier – against its producer, importer, depositor, carrier, seller, other distributor, or bad faith buyer; and
  • for publication of the judicial decision on the infringement committed with an indication of the actual right holder – against the infringer of the exclusive right.[20]

B. Payment of Damages

Unlawful access to and misappropriation of trade secrets give rise to civil liability because of harm caused. In this case, all general provisions on civil remedies for harm are applied.[21] The following provisions of the Civil Code appear to be applicable in such instances:

 
  • Harm caused to the property of an individual or a legal person is subject to compensation in full by the person who has caused the harm.[22]
  • A law or contract may provide for the duty of the offender to pay compensation to the victim in excess of the compensation for harm.[23]
  • A person who has caused harm will be released from compensating for harm if he proves that the harm was not caused through a fault of his own. A law may also provide for compensation for harm in the absence of the offender’s fault.[24]
  • A legal person is to compensate for the harm caused by its employee while performing his or her professional duties.[25]
  • When satisfying a claim for compensation for harm, the court must consider circumstances and obligate the person responsible for causing the harm to compensate for the harm in kind or compensate for the losses incurred.[26]
 

The remedies are limited to direct real damages incurred as the result of the trade secret infringement.[27]  The burden of proof of trade secret protectability and of the unlawfulness of the infringer’s actions rests upon the plaintiff.[28]

C. Injunctive Relief

The owner of a trade secret can require an offender to restore the situation that existed before the violation of the rights and to stop actions that violate the law or may result in the divulging of secrets.[29] Some Russian legal scholars have concluded that this may occur only when the rights of the owner of a trade secret have already been violated but the trade secret itself has not yet been publicly disclosed, i.e., has not lost its ability to be a trade secret.[30]

D. Liability of Employees

Russian law states that an employee who acquired access to information containing a trade secret owing to his or her professional responsibilities upon willful infringement of a trade secret or reckless disregard of secrecy protection measures is subject to disciplinary liability in accordance with the existing legislation,[31] which may include a warning, reprimand, or dismissal.[32]

According to one Russian attorney, “Russian labor law is not flexible enough to ensure effective protection which foreign investors may expect.”[33] The financial liability of employees for trade secret infringement is limited to direct actual damages incurred.[34] This may include losses sustained by an employer as a result of the reduction of his personal property or the deterioration of such property’s condition, as well as expenditures or excess payments by the employer that became necessary in order to purchase the property, restore the property, or compensate for the damage inflicted by the employee on third persons.[35] The loss of profits caused by the infringement of trade secrets by an employee cannot be recovered.[36] Usually, the financial liability of employees is limited to their average monthly wage, unless otherwise provided by law.[37]

As for the dismissal of an employee for the infringement of trade secrets, Russian case law should be taken into account. The Supreme Court of the Russian Federation has clarified that an employee can be fired for the infringement of commercial secrets if the employer can prove that the disclosed information was classified as a trade secret or other type of secret protected by law, that the employee had access to information because of his or her professional activities, and that the employee knew that he or she should not disclose this information.[38]

  

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Peter Roudik
Director of Legal Research*
July 2013


* This report was prepared with the assistance of the Law Library intern Svitlana Vodyanyk.
[1] In Russian legislation the phrase kommercheskaia tayna is used to mean “trade secret” or “commercial secret,” with most of the existing translations of Russian legal sources into English translating the phrase as “commercial secret.”
[2] Grazhdanskii Kodeks Rossiiskoi Federatsii [Civil Code of the Russian Federation], Sobranie Zakonodatel’stva Rossiiskoi Federatsii [SZ RF] [Collection of Russian Federation Legislation] (official gazette) 1996, No. 5, Item 410, available at http://base.garant.ru/10164072/ (in Russian). 
[3] Id. Part IV, SZ RF 2006, No. 52(1), Item 5496, available at www.rupto.ru/rupto/nfile/3b05468f-4b25-11e1-36f8-9c8e9921 fb2c/Civil_Code.pdf (in English).
[4] Federal’nyi Zakon Rossiiskoi Federatsii o Kommercheskoi Taine [Federal Law of the Russian Federation on Trade Secrets], SZ RF 2004, No. 32, Item 3283, available at http://base.consultant.ru/cons/cgi/online.cgi?req=doc;base =LAW; n=116684 (in Russian).
[5] Trudovoi Kodeks Rossiiskio Federatsii [Labor Code of the Russian Federation], SZ RF 2002, No. 1(1), Item 3, available at http://www.ilo.org/dyn/natlex/docs/WEBTEXT/60535/65252 /E01RUS01.htm (in English).
[6] D.M. Betrov, Trade Secrets and Production Secrets: New Aspects of Legislation, Vestnik URFO, 2011, No. 2, at 13, available at http://elibrary.ru/item.asp?id=17321314 (in Russian).
[7] The Revival of Private Law in Central and Eastern Europe: Essays in Honor of F.J. Feldbrugge 387 (George Ginsburgs, Donald D. Barry & William B. Simmons eds., The Hague, 1996).
[8] Id.
[9] Civil Code art. 1465.
[10] Id.
[11] Federal Law on Trade Secrets art. 3(1).
[12] Betrov, supra note 6, at 14.
[13] Artem Sirota, On Contributing Know-How in Capital of Russian Company, Russian Law Online, http://www .russianlawonline.com/content/contributing-know-how-capital-russian-company (last visited Aug. 8, 2013).
[14] Mikhail Zinkovsky, If an Employee Misappropriated Production Secrets (Know-How): The Five Most Pressing Issues, Trudovye Spory, 2011, No. 12, at 40–50, available at http://mazinkovsky.ru/sekrety-proizvodstva (in Russian; last visited Aug. 8, 2013).
[15] Id.
[16] Federal Law on Trade Secrets art. 14.
[17] Civil Code art. 1472.
[18] Id.
[19] Joint Resolution of the Plenary Sessions of the Supreme Court of the Russian Federation No. 5 and of the Supreme Arbitration Court of the Russian Federation No. 29 on Selected Issues Related to the Implementation of Part IV of the Russian Federation Civil Code, Mar. 26, 2009, Rossiiskaia Gazeta [Ros. Gaz.] (official publication) No. 70, Apr. 22, 2009, available at http://base.consultant.ru/cons/cgi/online.cgi?req=doc;base =LAW;n=86879 (in Russian).
[20] Civil Code art. 1252.
[21] Eduard Gavrilov, Commentaries on the Federal Law on Trade Secrets, Zona Zakona.ru, http://www.zona zakona.ru/law/comments/159/ (in Russian; last visited Aug. 8, 2013). 
[22] Civil Code art. 1064.1.
[23] Id.
[24] Id.
[25] Id. art. 1068.1.
[26] Id. art. 1082.
[27] Sirota, supra note 13.
[28] M. Rylskaya, Liability for Violating the Rights of the Owner of a Trade Secret, Transportnoe Delo Rossii, 2011, No. 12, at 106, available at http://elibrary.ru/item.asp?id=19052220 (in Russian; last visited Aug. 8, 2013).
[29] Civil Code art. 1252.
[30] Gavrilov, supra note 21.
[31] Federal Law on Trade Secrets art. 14. 2.
[32] Labor Code art. 192.
[33] Sirota, supra note 13.
[34] Labor Code art. 238.
[35] Id. 
[36] Id.
[37] Id. art. 242.
[38] Resolution No. 2 of the Plenary Session of the Supreme Court of the Russian Federation on the Application of the Labor Code of the Russian Federation, Mar. 17, 2004, Ros. Gaz. No. 72, Apr. 8, 2004, available at http://base .consultant.ru/cons/cgi/online.cgi?req=doc;base=LAW;n=105228;fld=134;dst=4294967295;rnd=0.37720617139448254;from=65120-0 (in Russian).

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Last Updated: 06/09/2015