Russia’s new intellectual property landscape

Since the beginning of the Russo-Ukrainian war in February 2022, intellectual property rights and their protection in the region have been greatly affected. In particular, sanctions against Russia and Russia's countermeasures against unfriendly countries have caused uncertainty and concern among intellectual property rights holders.

In fact, the relevant protection of intellectual property rights is not defined as a sanctionable activity. In the early days of the war, exclusive rights related to intellectual property became a tool of politics and pressure, but things have calmed down a lot now. From a purely legislative perspective, it does not cause much concern.

Russia has a long history of protecting and respecting intellectual property rights. The legislation and practice of Russian intellectual property courts have kept pace with the world. In recent years, Russia has made considerable efforts in the field of intellectual property rights.

In response to sanctions imposed by some countries on Russia, Russia has made decisions and enacted new laws that allow the country to restrict proprietary intellectual property rights in certain circumstances. But this move will not apply to all areas of intellectual property. Under the new legislation, requests for restrictions must be well-founded, such as to ensure the safety, health and well-being of Russian citizens. In practice, this often means ensuring supplies of medicines, food and other vital goods.

Restrictive measures on exclusivity:
At present, Russia’s restrictive measures on intellectual property rights include the following aspects:

• Compulsory licenses may be granted without any compensation to patent holders from countries “unfriendly” to Russia;
• Some goods have been approved for parallel import;
• Although there are many rumors and discussions about nationalizing foreign intellectual property rights, there has not yet been any serious move to interfere with exclusive rights;
• Unfulfilled civil obligations – There are currently a number of laws being revised to address the issue of unfulfilled civil obligations due to sanctions, for example, failure to pay license royalties due to sanctions imposed by other countries will not be considered a license breach protocol.

Parallel export:

• According to Decree No. 506 of March 29, 2022, parallel import refers to the import of original goods without the consent of the right holder. The new law now allows unauthorized dealers to import goods into Russia, bypassing official distribution channels. Previously, parallel imports without the consent of the rights holder were prohibited.
• The reason for allowing parallel imports at this stage is obvious - this approach will ensure normal shipments of goods to Russia at a time when many foreign companies have left Russia or downsized their operations. Russian retailers, who find it difficult to obtain foreign goods under the current circumstances, expressed support for the legalization of parallel imports.
• However, there are also restrictions on the types of goods that can be imported in parallel. In fact, only certain specific goods are allowed to be imported in parallel. The list of goods and companies is published by the Russian Ministry of Industry and Trade. The list will be updated regularly, with new brands constantly being included and new brands being excluded. These goods mainly include company products that have left the Russian market. Practice has shown that the Ministry of Industry and Trade is friendly to IP holders, and some companies have even managed to be removed from the list with good reasons by contacting the Ministry of Industry and Trade.

Can Russian intellectual property rights still be protected and maintained?

• The answer is yes. Both the Russian and Ukrainian patent offices are currently functioning and working normally. Although the intellectual property offices of both parties have been affected by the war, intellectual property disputes and litigation are still proceeding normally. While paying official fees to the Russian Intellectual Property Office (Rospatent) may be problematic, payments can still be made through some unapproved banks. In addition, the martial law currently in force in Ukraine allows for the suspension/restoration of intellectual property rights within 90 days from the date of the abolition of martial law.
• According to statistics from the Russian Intellectual Property Office, from January to July 2022, the number of trademark applications in Russia unexpectedly increased by 5% compared with the same period in 2021. Although the number of applications from Russian domestic companies increased, the number of applications from foreign companies fell by 15.5%. In Ukraine, domestic trademark applications fell by more than 40%, but international trademark applications remained almost unchanged.

Exercise of rights:

• There is a considerable crisis in trust in the Russian judicial system. The most pressing question that the public currently wants to know is whether foreign companies can receive fair intellectual property rights rulings in Russia. During the months of the war, the Russian Intellectual Property Office received hundreds of trademark applications submitted by local Russian companies. The trademarks applied for were all owned by foreign rights holders, and most of them were owned by companies that had left Russia. owned trademarks. The situation caused panic. But soon, Rospatent responded and announced:
  • In accordance with existing laws, all submitted trademarks will be published normally;
  • Submitted application does not mean successful registration;
  • All applications will be thoroughly reviewed;
  • Prior rights will prevent the registration of identical or confusingly similar trademarks;

Although Rospatent will most likely reject these malicious applications, trademark rights holders around the world should be aware of this and actively file objections when necessary. If the trademark rights are not registered in Russia from the beginning, third parties may use these malicious applications to Registration successful.

Maintaining intellectual property rights requires taking various measures, such as paying renewal and annual fees, and using rights correctly in local markets. However, in the context of war, business may also be interrupted, and trademark use requirements may be difficult to meet in Russia. It is therefore worth starting to consider alternative strategies for protecting rights, such as licensing or re-applying for existing rights.

Current legal practice:

Judging from several recent court decisions in Russia, the Russian judicial system still seems to be operating normally. So far, intellectual property rights holders can still trust the Russian court system. Judging from the basis of different court judgments, these judgments are still judgments made normally in accordance with the law.

Although the local parties to the dispute sought to challenge the intellectual property rights of companies from “unfriendly” countries and to revoke existing rights of foreigners in Russia on the grounds of Russian national interests, the court confirmed that the Russian Federation must guarantee Although some countries have been defined as "unfriendly" regarding the equal protection of corporate intellectual property rights, the possibility that companies in these countries can still exercise their intellectual property rights in accordance with the law in Russia does not rule out the possibility.

The person in charge of Rospatent also said that "the legal protection of foreign companies' trademarks is in the interests of Russian consumers. Neither foreign companies in Russia nor Russian companies abroad have faced any politicized decisions."

In recent times, more Asian products are replacing European and American products to occupy the Russian market, and Asian companies have submitted more applications. Judging from current developments, it seems unlikely that Russia intends to undermine the intellectual property system, as it is one of the cornerstones of the commercial operations not only of foreign companies, but also of Russian companies.