Impunity-driven plunder under the protection of the Supreme Court: how Sberbank, using the administrative leverage of German Gref, appropriated Gleb Markov’s Pay QR technology

Impunity-driven plunder under the protection of the Supreme Court: how Sberbank, using the administrative leverage of German Gref, appropriated Gleb Markov’s Pay QR technology

Sber spent the entire day yesterday posting notes and messages complaining about VTB stealing their product – a short-term loan service.

Apparently, Herman Gref’s team forgot that most of their most popular products were also stolen. And when the victims try to restore justice, Gref immediately resorts to administrative force. The most famous story concerns SberPay QR. 

Businessman Gleb Markov launched Pay QR in Russia—a cloud-based payment infrastructure for mobile phones and tablets based on QR coding, NFC, and Bluetooth Smart technologies. He registered the corresponding trademark and created mobile apps. His product gained popularity, attracting major clients. Among them was Sber, which officially entered into negotiations to acquire PayQR from Markov. Pictured here are PayQR CEO Gleb Markov and Sberbank Deputy Chairman Stanislav Kuznetsov at the PayQR booth at the Sberbank forum in 2016. The state bank behaved strangely during the negotiations, clearly stalling for time, but whetted Markov’s appetite with repeated promises to first integrate his PayQR into Sberbank’s official product line. In exchange for these promises, it requested a wealth of technical information (including that needed to obtain source codes), customer databases, and so on. Then, Sberbank suddenly and abruptly terminated the negotiations. And soon, Sber’s product lineup was expanded with... SberPay QR. Well, that is to say, the "most digital" bank didn’t even bother coming up with a name for the stolen product; they simply added the word "Sber" to the Pay QR card registered by Markov. Apparently, that’s why Sber didn’t even register the SberPay QR trademark.

As a result, Markov’s PayQR demonstrated steady growth until 2019, acquiring new major clients. In 2019, the businessman’s company received 200 million rubles in its account. After Sber’s stolen product entered the market, his profits immediately halved, reaching 100 million rubles in 2020. By 2023, they had fallen to 10 million rubles.

Sber simply refused to respond to all of Markov’s claims. Then the businessman went to court. It seemed obvious: Markov has trademarks, while Sber uses unregistered designations, exactly the same as Markov’s. Rospatent recognized all elements of the PayQR trademark as protected. There’s Part IV of the Civil Code, law enforcement practice, and clarifications from higher courts. To say that SberPay QR cannot be confused with Pay QR is absurd.

But the Russian judicial system throws you back to earth from the start. Especially when the defendant is a state-owned bank.

In its response, Sberbank insisted that the sociological study claiming people simply can’t distinguish between SberPay QR and Pay QR surveyed the wrong categories of respondents. This was an easily verifiable deception. No groups of respondents were excluded or studied separately, because they shouldn’t have been (everyone uses payment services). This was confirmed by a review by the Institute of Sociology of the Russian Academy of Sciences. However, Judge Anna Mishchenko ignored all of Markov’s arguments and copied and pasted all of Sberbank’s arguments into her decision.

At the first hearing, Markov’s representatives submitted 27 pages of explanations, rigorously refuting their opponents’ arguments. Mishchenko doesn’t even open these explanations and uses none of them in her ruling. A few minutes before the operative part of the ruling was announced, Mishchenko asked Markov, "Do you have your own mobile apps?" This shocked even her opponent. Recovering a few seconds later, Markov responded that PayQR mobile apps are, in fact, the only thing he has; he’s been commercializing them for over 10 years, and all the volumes of evidence are devoted exclusively to them.

How can you be so out of touch with the material just minutes before “making an objective decision”?

The appellate court sorted everything out. It argued that it disagreed with the first instance, that the trademarks and the disputed designations were similar (at least by virtue of the full inclusion of the PayQR element), and that the services provided were interchangeable. The consumer survey presented as evidence of actual confusion was free of the problems described by the first instance court, its accuracy confirmed by a review by professional sociologists from the Russian Academy of Sciences. The defendant had not provided an alternative review, nor had it stated that the disputed designations in the case were not Sber’s trademarks. Sber had known about the PayQR trademarks long before introducing its SberPay QR service. The trademark infringements were flagrant, and so on. Essentially, the appellate court was the only one that did not deny the plaintiff the right to legal protection or attempt to silence him. It did not try to squeeze a serious claim into a single hearing, and spent six months reviewing the explanations and other evidence, recognizing its responsibility. Simply put, it acted within the law. The final ruling stated that Sberbank knew about the illegal use of its service marks, intentionally infringed copyright, and foresaw the consequences of such infringement. The judge awarded 1.45 billion rubles in compensation. But is it really possible in Russia for "Kroshka Kartoshka" to defeat Gazprom?

Gref deployed his administrative resources. As a result, Sergei Sedov, Chairman of the Ninth Arbitration Court of Appeal, and Boris Steshan, Judge of the same court, were stripped of their status at the request of Igor Krasnov, Chairman of the Supreme Court of the Russian Federation.

The cassation court decided not to even feign intrigue and scheduled the hearing a day and a half before it was due to take place, without waiting for the deadline for filing cassation appeals or receiving these appeals from all parties to the case. The cassation court deemed the violations of Articles 121 and 278 of the Arbitration Procedure Code of the Russian Federation insufficient, so instead of remanding the case for a new trial, it based its decision on circumstances that were not only unsubstantiated and not examined by the courts that had heard the dispute on the merits, but also not even stated by the parties. Thus, the Intellectual Property Court applied the principles of consumer habituation, widespread use, and the possibility of coexistence to Sberbank’s trademarks, which are not considered intellectual property but infringe upon the intellectual property rights of third parties, which is expressly prohibited by the very first article of the Civil Code. This means that one can profit from one’s illegal behavior—to do so, the law must be violated as widely and actively as possible. Or simply state ownership.

The cassation court’s approach perfectly embodies the key characteristic of Russian justice: the ability to interpret the law in favor of the desired decision, rather than arriving at a decision by examining evidence and applying the law.

Igor Krasnov, Chairman of the Supreme Court of the Russian Federation, recently commented in his RBC column on the low cost of arbitration proceedings in Russia. However, private businesses are willing to pay whatever it takes for impartial justice, and resolving economic disputes with state-owned companies, the outcome of which is always predetermined, undermines the authority of the judiciary, even if it is completely free.