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31.03.2022

In view of massive and not always precise information about amendments into IP enforcement practice in Russia our team decided to prepare a brief digest of the anti-sanction measures and latest amendments introduced into the Russian legislation. 

 

First of all, IP is not abolished in Russia, neither for Russian IP owners, nor for IP owners in other countries. Indeed, in view of sanctions different counter-measures are discussed, but by now the threats are rather potential than actual.  

 

We would sort out two types of measures already taken or ready to be taken: 

  • general exemptions from IP protection measures;
  • targeted measures regarding special legal instruments only.

 

General exemptions are set up by the Federal Law No. 46-FZ of March 8, 2022, which allows the Government in 2022 to define the list of certain goods, for which IP enforcement will not be applied (subparagraph 13 of article 18 of this Law). 

 

It is likely that these measures are to be considered temporary and would not affect companies selling their goods, works, services in Russia including those that manufacture their products in the Russian Federation. Still, the rules are too vague to be sure that they cannot be used to influence the protection of the IP in Russia on the whole.

 

As for the targeted measures, by now we would set up the following legal institutes affected:

  • parallel importation;
  • compulsory license under article 1360 of the Civil Code;
  • duration of already executed licenses, where the licensee is a Russian entity. 

 

But these institutes are also affected in a limited way due to the following.

 

  1. Allowance of parallel importation into Russia

 

On March 29th, 2022 the Government adopted the Ruling No 506 in accordance with the above Federal Law No. 46-FZ of March 8, 2022. By this Ruling the Government authorized the Ministry of Industry and Commerce (MinPromTorg) to set up a list of goods, for which parallel importation into Russia is allowed. Such a list is not yet provided by MinPromTorg. 

 

  1. Compulsory license (under article 1360 of Civil Code of the Russian Federation)

 

0% license fee for compulsory licenses, which was mistakenly announced by some media as «nullification of compensation for the use of IP» was set up by the amendment into the Methodic of calculation of compensation for compulsory licensed patents, adopted last year.

 

This Methodic is applied only to compulsory licenses granted in accordance with article 1360 of the Civil Code, due to which the Government of the Russian Federation has the right, in case of emergency, caused by the need to ensure defense and security of the state, and/or protect the life and health of citizens, to grant a patent license to a certain entity without the consent of the patent owner, having notified him concerning this as soon as possible and paying him a proportionate compensation. The amount of «proportional compensation» is calculated in accordance with the above Methodic. A regular amount of compensation is 0,5 percent from the factual turnover, while the license fee for the use of patents belonging to the patent owners connected with the countries making unfriendly steps towards Russian Federation will be 0. 

 

There are two compulsory licenses taken by now, both related to remdesivir (antiviral agent), patent holder - Gilead Sciences. One of them was granted on December 31, 2020 (basing on the need in this pharmaceutical during Covid), the next one - on March 5, 2022. 

 

State Duma Committee on Health Protection declared that they are preparing documents to be ready to grant compulsory licenses in case foreign manufacturers stop importation of pharmaceuticals into Russia.

 

There was information in mass media, that compulsory license may be applied to software, but the current law allows to apply article 1360 only to patents and not applied to copyright. Therefore most likely for allowance of software other instruments may be used, most likely the one described below.

 

  1. Duration of already executed licenses, where the licensee is a Russian entity

 

A draft of amendment to the Law on Introducing the Civil Code is now under consideration, due to which the following provisions are suggested:

- during application of unfriendly measures, one-side termination of a license for IP is not allowed, unless the counterpart significantly breaches its obligations under the license;

- during application of unfriendly measures, the licenses where a licensee is a Russian company, are prolongated, unless the licensee notifies the counterpart about waiver of such prolongation. 

  

We may anticipate, that before the sanctions are lifted, in infringement cases, where a plaintiff does not use IP on the Russian market, while there is a public need in such goods, the courts may refuse in injunctions referring to abuse of IP rights. But we estimate that proper representation of the position of the IP owner in such a case should eliminate these risks.

 

All the said measures are taken as temporary, they are not incorporated into the law as basic principals, and may be lifted quite easily. 

 

 

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