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23 May 2018 IPC Puts off Double Data vs. Vkontakte Hearings until 17 July

On 22 May 2018, after hearing both parties, the Intellectual Property Court (IPC) adjourned until 17 July 2018 the hearing of the dispute between Skolkovo resident OOO Double (Double Data) and VKontakte over use of public data from the social network in a search engine manner.

In this high-profile dispute, Bryan Cave Leighton Paisner (Russia) LLP is acting for OOO Double, which developed the Double Data software in question. 

This dispute is ground-breaking in Russian case history since, for the first time ever, the IPC is examining whether publicly accessible data about social media users comprise a database and whether their use by both universal and single-purpose search engines constitutes a breach of intellectual property rights. 

The first instance court dismissed VKontakte’s claims, holding that Double Data’s operations were lawful. Yet the second instance court sided with VKontakte and recognised our Client’s activities as violating the claimant’s IP rights to the social network as a database. Double Data then applied for the IPC to uphold the first instance court decision to the effect that VKontakte had no exclusive rights to the user database and that Double Data did not break the law by extracting and utilising the user data. 

On 17 July, the IPC is expected to pass its final resolution on the case, which might be pivotal for the rapidly growing big data industry and, equally, for search engines, such as Yandex and Google, also using open Web data in their search operations. 

Maxim Ginzhuk, OOO Double founder and CEO: “We hail the court’s decision, before drawing any legal conclusions, to engage experts in order to gain an in-depth understanding of the high-tech solutions, search and data mining methods used by Double Data. The court’s judgement will determine whether data search and big data remain in the ‘grey zone’ or become core components of Russia’s evolving Digital Economy; whether the green light is given to innovation and openness or the focus will be on market monopolisation; who will define the country's future – dynamic innovative companies or only major corporations.”

Elena Trusova, Dispute Resolution and IP Partner at Bryan Cave Leighton Paisner (Russia) LLP comments: “For Russian case history, this dispute is evidently of greater significance than just a database rights case, since the judgement might decide whether open data analysis on the Internet will, in fact, be permissible. The IPC decision will effectively determine whether user data is treated as the unconditional property of social media, to deal with at their discretion without asking what the users themselves think, or whether users may decide who is allowed to analyse their data. Foreign case law favours the principle that private companies may not ban access to information posted publicly on their websites, as this might seriously jeopardise the guaranteed right to free information exchange on the Internet, and so does not tolerate big data monopolisation on the Web.”

Evgeny Oreshin, Counsel, Dispute Resolution and IP, Bryan Cave Leighton Paisner (Russia) LLP, comments on the dispute: “According to the Russian Civil Code, prominent Russian and foreign scholars and foreign and international case law, rights to a database only arise when it is a product of focused investments rather than an incidental by-product. In addition, the functioning of search engines, including the Double Data software (archiving data from websites, indexing the archived data for search purposes, returning hyperlinks with bits of data from the websites in response to searches) must not be treated as unlawful extraction and use of website content or we will have no Web search.” 

Natalia Belomestnova, Counsel, Dispute Resolution and IP, Bryan Cave Leighton Paisner (Russia) LLP: “This case is particularly notable because, for the first time in Russian judicial practice, the balance between exclusive rights and the rights of personal data subjects is under scrutiny, that is, whether a social network that can prove its exclusive rights to a database may, on these grounds, consider itself the owner of user personal data, which are intrinsically inalienable and non-transferable and may only be owned by the data subjects themselves. An equally exciting aspect of the case is the extent of exclusive rights protection when exercise of such rights manifestly serves to restrict competition on the market.”

The hearing will take place on 17 July 2018, at 2 p.m. at the IPC building: 5 Ogorodny Proezd, Bldg. 2, Courtroom 4.

Double Data (OOO Double) was set up in 2012 and is now one of the big data market leaders in Russia. The company designs solutions for making marketing work more effective, customising proposals, promoting cross-sales and reducing fraud and risk levels. 30% of Russian B2C companies in Finance magazine’s Top-500 list, including banks, insurers, retail chains, FMCG brands, pharmaceutical companies, telecoms operators and airlines, use Double Data products. Double Data business partners include major international advertising groups and consulting companies. In 2017, Double Data was named a Top 10 start-up in Russia by Deloitte and started contracting customers beyond the CIS: from Europe, South-East Asia and the Middle East. Double Data prioritises security for its clients, designing each of its technologies for autonomous operation by clients and partners with no need for outwards transfer of personal data. www.doubledata.ru

The Russian practice of Bryan Cave Leighton Paisner (before the merger – GBLP) was established in 2009 as a result of a merger between one of the biggest teams of Russian lawyers and the major UK law firm Berwin Leighton Paisner (BLP). The highly respected Moscow team of over 100 lawyers, qualified under Russian and English law, has over 20 years of experience in providing legal support for major Russian businesses, as well as multinationals implementing large-scale investment projects in Russia. Clients include over 1700 companies, among them major multinational investors operating in Russia (including 130 Forbes Global clients), Russian and international banks and financial institutions and Russian industry-leading companies. 5 times winner of Law Firm of the Year in Russia since 2009, including Chambers Europe Awards 2010, 2014 and 2015; The Legal Business Awards (Legal 500) 2010; The Lawyer European Awards 2014. #2 by revenue in the top-50 law firm ranking by revenue in Russia (according to the leading national ranking Pravo.Ru 2017). Top-ranked by The Legal500 and Chambers & Partners in core practice areas: corporate/M&A, real estate & construction, dispute resolution, competition/antitrust, tax/customs, IP. www.gblplaw.com



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