Technology Lawyer

In accordance with paragraph 2 of Article 1260 of the Civil Code of the Russian Federation, an Internet site is recognized as an object of copyright, namely, a composite work. In this case, the author owns the copyright to the selection or arrangement of materials (compilation) they have made. Here, it is worth highlighting two points regarding the content of the site as an object of intellectual property:

Firstly, the materials on the site do not necessarily have to be protected by intellectual property rights in themselves — as other examples of composite works, the Civil Code indicates atlases and encyclopedias. In their individual components, as is known, there may not be categories protected by intellectual property rights due to the absence of an element of creative work in them. So, an Internet site will be an object of copyright even if its content consists, for example, of works of folk art or reports of events and facts of an exclusively informational nature — they, in accordance with paragraph 6 of Article 1259, are not subject to copyright protection. In the Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated April 22, 2008, No. 255/08 in case A63−14 046/2006, it was stated that the lower courts, without assessing the site as a whole as a composite work, actually considered only one of the content elements (texts posted on the site), also recognizing them as unprotectable. At the same time, the Supreme Arbitration Court noted that the plaintiff’s site consisted of specially selected and arranged materials (texts, drawings, photographs, blueprints, audiovisual works, etc.), which can be used with the help of a computer program (computer code), which is an element of the site — and it is all this in its totality that makes it possible to present the Internet site as a composite work.

Secondly, the essence of copyright in this case is not in the unity of the object, as it is manifested in all other types of works, but in the multiplicity of elements that have been selected and arranged in a certain way — i.e. we are dealing with the legal protection of configuration and arrangement. An Internet site is an object of copyright as a recording of the cartography of its content.

Sometimes you can come across the opinion that an Internet site is a complex object within the meaning of Article 1240 of the Civil Code of the Russian Federation, but this is, unfortunately, erroneous. Definition of the Judicial Collegium for Civil Cases of the Supreme Court of the Russian Federation dated April 24, 2012 N 45-B12−1highlighted the characteristic of a complex object: "it includes several protected results of intellectual activity, but according to the meaning of the law, it must represent a single complete work, in which the impossibility of using at least one of its constituent parts will lead to the loss of the author’s intent of the creator of the complex object, as a result of which the integrity of the result of intellectual activity will be violated and its further use will become impossible" - and noted the closed list of complex objects: "The list of works that are complex objects is specified in the law. Thus, these include films, other audiovisual works, theatrical and entertainment performances, multimedia products, unified technologies. Choreographic productions and vocal and choreographic works are not complex objects in themselves, but can be part of a complex object." And Resolution of the Plenum of the Supreme Court of the Russian Federation No. 10 of April 23, 2019 "On the application of Part Four of the Civil Code of the Russian Federation" did not make any changes to this issue. In 2014, the list of complex objects simply changed: unified technologies disappeared from it and databases were added.

Some legal experts point out that a website can be considered a multimedia product, but this is not the case — one of the most important features of a multimedia product is interactivity (the user’s ability to be an active participant in the process, and not just a perceiving viewer), which is not inherent in a website as such. At the same time, a multimedia product can be posted on a website as part of a set of posted materials. For example, in case A12−10 588/2021, the Russian Intellectual Property Court identified a virtual tour as a multimedia product — this object, located on a web resource, required interaction from the user. The IP Court did not say that the virtual tour was part of a complex object — a website. Therefore, a complex object in this case could be considered only one of the elements of composition.

At the same time, exclusive rights to works posted on the site can be protected as independent results of intellectual activity without a reservation about their inclusion in the composition — this is obvious. Moving away from the sphere of copyright, it is worth saying that copyright holders can also protect their patent rights to objects involved in the architecture of the site (as an example, we can cite the following patents: a method for integrating a site into a site, an intellectual property management complex — a blockchain platform for intellectual property, systems and methods for authenticating an online user using a secure authorization server ,a method of quick registration for user authentication and payment when using two different communication channels, as well as a system designed for this purpose).

Interestingly, the design of a website can also be protected: for example, in case A45−3288/2022, the question was raised as to whether the design of a website in this particular case is an independent object of copyright or whether it is part of the plaintiff’s composite work — the disputed resource (taking into account the circumstances of the case) could be regarded as an independent composite work consisting of specially selected and arranged materials (texts, drawings, photographs, blueprints, audiovisual works, etc.), which can be used with the help of a computer program (computer code), which is an element of the website.

That is, the task at hand in the case was as follows: "Is it possible to independently use the design of the plaintiff’s website as a work, or is this design part of the website and can be used exclusively for the functioning of the website?" We see that even the website design can potentially be considered as an independent copyright object regardless of the fact that it is located on a resource. In this case, a forensic examination was ordered, the results of which revealed that the design of the plaintiff’s website was a composite work, since the selection and arrangement of the website’s content components was made to create it; and the design itself was presented as a result of intellectual creative work in which the author demonstrated his creative abilities.

In the research part, the expert indicated that the website design is a creative arrangement of the website’s components, the totality of which includes: selection of a font family, layout, text design, selection and use of a color scheme, creation of various plates, lines, graphic elements that give the website a unique distinctive style, processing, cropping, design of photographic works, work with the composition and scale of all website elements. After questioning the expert, the court came to the conclusion that from a technical point of view, the design as a single composite object (the entire object) cannot be transferred, used on other sites when creating another work, but can be used as an example or inspiration. Having mentioned that if only certain design elements are found to match, it is possible to talk about the reworking of the work, which is also its use, the implementation of which is unacceptable without the consent of the copyright holder, the arbitration court satisfied the plaintiff’s demands and protected his interests in relation to the composite work.

In 2020, Article 141.1 "Digital Rights" appeared in Chapter 6 of the Civil Code. According to this article, digital rights are understood as obligatory and other rights named as such in the law, the content and conditions for the exercise of which are determined in accordance with the rules of the information system that meets the characteristics established by law (it is worth noting right away that this definition is in many ways similar to the definition of a security — in general, the legal regulation of digital rights largely duplicates the legal regulation of uncertificated securities). What characteristics of digital rights can we identify:

● First and foremost, the law must explicitly indicate that a certain object is a digital right. Without this, we cannot talk about any legal phenomenon as a digital right;
● Digital rights are obligatory rights, that is, corporate rights, property rights, including exclusive rights to intellectual property, rights to provide services and perform work, the transfer of which to another person on the basis of a transaction does not require the consent of the person obligated under this obligatory right;
● The content and terms of these rights are determined by the rules of the information system within which they are circulated;
● The general subject of digital law is the holder of a digital right. This is recognized as a person who, in accordance with the rules of the information system, has the opportunity to dispose of this right. At the same time, the law may provide for another person as the holder of a digital right.

The first example of a digital right that comes to mind is a digital financial asset (DFA) from the Federal Law of July 31, 2020 N 259-FZ "On Digital Financial Assets, Digital Currency and Amendments to Certain Legislative Acts of the Russian Federation ." In paragraph 2 of Art. 1 of this regulatory legal act, a digital financial asset is directly called a digital right, and then the obligatory rights that are the content of this digital right are listed. It is also indicated that the issue, accounting and circulation of digital financial assets are only by entering (changing) records in information systems.

Another good example of digital law — utilitarian digital law (UDL) — is given by Federal Law of 02.08.2019 N 259-FZ "On attracting investments using investment platforms and on amendments to certain legislative acts of the Russian Federation", popularly known as the "crowdfunding law". It is worth noting right away that, according to this law, the information system whose rules (the requirements for them are established in Art. 4 of the law) determine the terms and content of digital rights and in which the circulation of these rights occurs, is recognized as an investment platform — an information system in the information and telecommunications network "Internet", used to conclude investment agreements with the help of information technologies and technical means of this information system, access to which is provided by the operator of the investment platform. The emergence of the UTF, its implementation, disposal of it or restriction of disposal of this right are possible only in the investment platform.

The content and conditions of utilitarian digital rights, as well as the features of their circulation in information systems are spelled out in Art. 8 of the "Crowdfunding Law" - this article is currently the most understandable example-explanation of digital law. The subject of utilitarian digital law is the owner of the digital certificate, who is issued a digital certificate — a non-emission, non-documentary security that has no par value and certifies that the digital certificate belongs to the owner of the digital certificate.

Thus, digital law is an electronic form of existence of the right of claim, specified in the law as such. As a result, Article 128 does not distinguish digital rights as a separate object of civil rights, but only mentions them as a type of property rights.

Therefore, very roughly and very simply speaking, digital law is a claim existing on an information platform, which Russian law calls digital law. It will be said that on some electronic service for concluding contracts, the right to demand the fulfillment of an obligation from this contract is recognized as digital law — so it will be. Even if this is some marketplace for the retail sale and purchase of potatoes: within its virtual framework, the claim for the transfer of potatoes will be recognized as digital law. At the street market, the same demand would be a normal property demand without the entourage of digitalization.

Russian legislation does not contain an imperative obligation for the owner of digital currency to disclose information about their crypto assets to the state, as is the case with foreign accounts in accordance with Part 2 of Article 12 and Part 10 of Article 28 of the Federal Law of 10.12.2003 No. 173-FL "On Currency Regulation and Currency Control" (with the exception of civil servants — they are required to disclose such information). But Russian law establishes certain mechanisms, the action of which encourages the need to notify about the fact of the presence of digital currency.

In accordance with paragraph 6 of Article 14 of the Federal Law "On Digital Financial Assets, Digital Currency …", legal entities and individuals have the right to defend their rights to own cryptocurrency in court only if these persons have informed the tax authorities about the fact of their ownership of cryptocurrency or the execution of civil law transactions with cryptocurrency. That is, a person who has not notified the tax authorities of the fact that he has cryptocurrency will be denied judicial protection of his rights to cryptocurrency. Thus, by soft power, the state policy of identifying cryptocurrency owners is being implemented. This is not a direct requirement to designate oneself as the owner of "crypto", but this does not change the fact that such regulation puts the owner of digital currency before a certain choice, where one of the options is sharply condemned by the legal system.

At the same time, one cannot fail to mention the controversial nature of this provision. "Property that has not been reported to the tax authorities is not subject to protection in court" is a new and very controversial concept in Russian legislation. Clause 6 of Article 14 of the Federal Law "On Digital Financial Assets, Digital Currency …" raises reasonable doubts from the point of view of contradiction with the Constitution of the Russian Federation — an act that has the highest legal force on the territory of the Russian Federation and to which the Federal Law must comply. On the one hand, paragraph 2 of Article 45 of the Constitution states that everyone has the right to protect their rights and freedoms by all means not prohibited by law. As we can see, the law prohibits judicial protection of "undeclared" cryptocurrency. But Article 46 of the Constitution proclaims that everyone is guaranteed judicial protection of their rights and freedoms. At the same time, this article of the Constitution does not contain any exceptions or provisions that "restrictions on judicial protection are regulated in accordance with federal law." That is, the right to judicial protection cannot be limited, including by federal law.

This state of affairs has created a conflict in the Russian legal regulation of cryptocurrencies. At the moment, the Constitutional Court of the Russian Federation has not received any complaints about paragraph 6 of Article 14 of the Federal Law "On Digital Financial Assets, Digital Currency…", so this regulation is still legal. But if such a complaint suddenly appears, then there is a tangible chance that the Constitutional Court of the Russian Federation may recognize paragraph 6 of Article 14 of the Federal Law "On Digital Financial Assets, Digital Currency…" unconstitutional, and the legislator will have to look for another way to force cryptocurrency owners to identify themselves. And, perhaps, they will introduce the same strict requirement as for civil servants.

In accordance with paragraph 5 of Article 14 of the Federal Law of July 31, 2020 N 259-FZ "On Digital Financial Assets, Digital Currency and Amendments to Certain Legislative Acts of the Russian Federation", legal entities, international organizations and individuals who are tax residents of the Russian Federation do not have the right to accept digital currency as consideration for goods transferred by them, work performed by them, services rendered by them or any other method that allows for payment of goods (works, services) in digital currency. That is why there is a demand to find loopholes that still allow payment in cryptocurrency in legal relations.

I would say that there are really no ways. To be more precise, any of the ways to circumvent the ban on payment for goods, works and services with "crypto" under the close legal gaze appears to be either a gratuitous (which is bad for business entities) or fictitious (which is bad for everyone) transaction — this is if we are talking about cases of concluding agreements without any documentary reflection of them; or a sham transaction — this risk exists in all schemes reflected on "paper". Any adequate and sane lawyer will immediately see an invalid transaction.

I am also skeptical about the often-mentioned way to circumvent the ban through collateral: the parties enter into a standard civil law contract (often a sale and purchase agreement), in which they prescribe a condition on the collateral of cryptocurrency, which the creditor has the right to recover in the event of the debtor’s failure to fulfill his main obligation. The collateral can be recovered in court and out of court.

In the first case, the parties who decided to "legalize" themselves through a court decision will face a refusal to satisfy their claims based on actions discovered by the court that were committed in circumvention of the law — the court will in any case be interested not only in the real possibility of fulfilling the main obligation, but also in the original intention of the parties when concluding the contract. As a result, the court will uncover a null and void transaction and issue a decision that will kill all hopes of the parties to the transaction.

The collection of pledged cryptocurrency out of court can be considered in two forms: in the first, there is a notary who will definitely not put an executive signature and will suspect a violation of the law, i.e. the assessment of this entire scheme will be similar to the judicial one. And in the second form — where there is no notary — the case of extrajudicial collection of collateral contains a problem that is characteristic of all relationships built around circumventing the ban on payment in cryptocurrency — if in such a transaction there is no factor of probable intervention of a third party (often a public authority), then the completed exchange of the subject of the contract for "crypto" will simply not be disputed by anyone.

For example, Rosreestr will not register the transfer of rights under a real estate purchase and sale transaction with a "crypto-collateral" if it has been collected. No tax audit will "miss" such a transaction. Tax authorities and Rosfinmonitoring will predictably be interested in a transaction for the purchase and sale of a vehicle for a "crypto-collateral". In general, the main thing here is what are the chances of running into public authorities.

Purchase and sale of some electronics between individuals? Some services not related to entrepreneurial activity? The fact that the transaction may "fail" does not cancel its legal invalidity. No one will simply challenge the transaction — although we will immediately stipulate that such an issue can very seriously arise in a bankruptcy case of a citizen, but it seems that such a phenomenon will not be perceived by the "crypto payer" as negatively as in the case of a tax or anti-money laundering dispute.

So the most positive outcome when bypassing the ban on paying for goods, work and services with digital currency is to pay and hope that no one finds out about this transaction. A reliable approach to building a scheme?

Clause 1 of Article 807 of the Civil Code of the Russian Federation establishes that under a loan agreement, one party transfers or undertakes to transfer to the ownership of the other party money, things defined by generic characteristics, or securities, and the borrower undertakes to return to the lender the same amount of money (the loan amount) or an equal number of things received by him of the same kind and quality or the same securities. As we can see, digital currency does not appear among the mentioned objects. But on the other hand, Article 14 of the Federal Law "On Digital Financial Assets …" does not prohibit such a legal relationship, and the provisions of Article 6 of the Civil Code of the Russian Federation on the analogy of law still allow lending cryptocurrency. Therefore, we will say that it is possible to lend cryptocurrency. Problems arise in two cases: when this loan is actually a fictitious or sham transaction covering real relations of payment for goods, works and services with cryptocurrency; or when the parties do not properly formalize the contractual relations for the loan, i.e. simply do not conclude an agreement in writing.

The first case mainly pertains to public law — it is present in tax disputes, as well as in disputes with banks and Rosfinmonitoring in cases on the application of the norms of Federal Law 115. Of course, a similar problem may also arise in bankruptcy cases: creditors who have discovered the fact of withdrawal of money through "crypto" will insist on replenishing the bankruptcy estate and will challenge transactions for the acquisition of digital currency for fiat money. This situation, in principle, is quite usually within the framework of existing law with one exception — the need to prove the ownership of the cryptocurrency to a specific person. But the same problem arises in the second case, when the parties do not formalize the agreement.

The courts may even reject the claims if the plaintiff cannot prove his ownership of the digital currency. The Supreme Court of the Russian Federation paid special attention to this in its Ruling No. of April 16, 2024 in case No. 69-KG24−3-K7. However, no court in this dispute has stated that cryptocurrency cannot be the subject of a loan agreement.

There is also an example of a dispute over relations on the transfer of cryptocurrency into trust management (case No. 02−2888/2021): here, too, there was no problem with formally recognizing the relations that arose as a property trust agreement. However, in this case, the plaintiff faced the traditional problem of proving the existence of contractual relations — there was no document or other evidence confirming the obligatory legal relations. Therefore, the court refused to satisfy his claims.

In accordance with paragraph 9 of clause 2 of Article 1270 of the Civil Code of the Russian Federation, processing (modification) of a computer program or database means any changes thereof, including the translation of such a program or database from one language to another language, with the exception of adaptation, i.e. changes made solely for the purpose of functioning of a computer program or database on specific technical means of the user or under the control of specific user programs. Unfortunately, legislative definitions do not provide a sufficient understanding of the difference between the two above-mentioned processes, so we will consider each of them separately.

Modification is the creation of an autonomous program capable of solving the problems conceived by the author according to the algorithms specified by the author. An indicator of the implementation of processing (modification) of a computer program is recognized, among other things, as functional changes, i.e. the addition of new or improvement of existing software functions that follow from the processing of the code; the degree and purposes of the correction made are also taken into account. Processing of a program (modification) may be accompanied by its translation from one programming language to another. A change in a program is recognized as a reconfiguration of both the source and executable/object code (A56−10 049/2019).

Therefore, introducing any new functionality with new algorithms for solving various (both "new" and "old") problems into a program is recognized as a modification. Also, for example, the actions of a person to eliminate software protection tools for a computer program are a reworking (modification) of this program (A60−54 040/2016). Adding new modules (including another computer program or database) to a program is its modification and leads to the emergence of a derivative computer program (A40−45 539/2013), therefore, the creation of a new software product based on an existing one is a modification of the "original" program — "increasing functionality" and writing code specifically for these purposes, as established by judicial practice, is not an adaptation (A40−272 094/2021).

Here it is worth paying attention to the legal criterion for the difference and identity of computer programs in the chain of change (modification): factors of the functions of the computer program and the steps (algorithm, sequence) of deployment and implementation of these functions (A59−3910/2015). If there is significant similarity in the source texts of programs, we can talk about the reworking of a computer program and the emergence of a derivative work (including in the case of unauthorized use of software to create a modified program; in this case, even such factors as similar style, identical comments and names, as well as a common approach to programming in combination may indicate the presence of a fact of modification — A40−161 684/2018). If the code does not contain any borrowings or analogies (or such borrowings are generally applicable — A40−8863/2021), and the number of similar elements is not significant at all, then this circumstance allows us to speak about the absence of circumstances of creation of a derivative work.

Adaptation is the introduction of changes carried out solely for the purpose of functioning of a computer program or database on specific technical means of the user or under the control of specific user programs. As Airapetov N.A. and Shevelev I.V. clearly note, adaptation does not represent any value separately from the product, it simply "repairs", "tunes it up" — modification is aimed at creating another object that is related to the original product by its origin from it. Adaptation does not create competition of goods (the concept of antitrust/competition law is vulgarly applicable here), while modification leads to the emergence (or the possibility of the emergence) of a state of competition between two results. That is, the result of adaptation of a computer program is legally absent — it is simply a circumstance of exercising rights, but not the creation of an object of intellectual property (from the point of view of law, it does not undergo any changes).

Adaptation appears to be a solution to the current technical problem of trivial functioning of a computer program "on something", i.e. here the question arises of ensuring compatibility of software with the corresponding "hardware" or "software".