On 19 June 2024, a draft law (https://sozd.duma.gov.ru/bill/651038-8) was submitted to the Russian parliament that aims to abolish intellectual property protection for legal and natural persons from “unfriendly states”. These include practically all Western countries.
The authors of the draft law propose adding a new paragraph № 3 to Article 1231 of the Russian Civil Code, according to which exclusive and other intellectual property rights of legal and natural persons from “unfriendly states” won’t be protected in Russia.
The protection is to be revived three years after the respective state has been excluded from the list of “unfriendly states”.
Intellectual property rights are valid based on territory and can only be enforced within the state which they are acquired in. However, they can also be recognized and protected in another state by a bilateral or multilateral international treaty or law.
Russia is a party to the Berne Convention of 1886 and the Paris Convention of 1883. These international treaties provide for national treatment for holders of intellectual property rights from other contracting states. If a foreign right holder from other contracting state denied protection on the basis of national legislation, this is essentially a breach of the international treaty and a violation of international obligations.
Whether Russia will take this radical step and adopt the law and, as formulated by the authors of this amendment, “won’t comply with the rules of international law that are the most damaging to it”, remains questionable.
Generally, the proposed draft law continues the trend in Russian legislation of limiting the protection of intellectual property of persons from unfriendly states:
- Federal Law of 8 March 2022 No. 46-FZ, Government Decree of 29 March 2022 No. 506 ― allows parallel import of the goods included in the list approved by the Ministry of Industry and Trade;
- Presidential Decree of 27 May 2022 No. 322 ― obligations towards foreign right holders supporting sanctions against Russia may be fulfilled by transferring money to the special account “O”;
- Presidential Decree of 15 February 2024 No. 122, Government Decree of 27 March 2024 No. 380 ― a special subcommittee has been established to grant permission to use an invention, utility model or industrial design without the consent of a foreign right holder. The affected right holder is entitled to compensation in the amount of 0.5 % of the actual proceeds (the compensation shall be transferred to the account “O” to the right holder from an “unfriendly state”);
- Presidential Decree of 20 May 2024 No. 430 ― transactions involving the acquisition of exclusive rights to the results of intellectual activity or means of individualization between acquirers (that are Russian residents) and right holders (that are residents of unfriendly states or persons under their control, including Russian ones) may only be made based on a permission from the Government Sub-commission.
While in the above-mentioned legislative acts the restrictions of the intellectual property rights of foreign rights holders from “unfriendly states” were justified by the sanctions imposed on Russia, the draft law, as stated in the explanatory notes, is intended to cause “considerable damage to the “collective West”. We believe that this draft law will not be adopted; however, it remains to be seen and cannot be ruled out.