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Decree No. 299: War Against Russia on the IP Front

Written by: Adena Chen

 

Response Timeline: What’s Going On?

On February 24, 2022, Russia invaded Ukraine in an unprovoked attacked. Western nations were swift to condemn the act and immediately called for sanctions to discourage escalation of the war.

On February 26, the National Association of Patent Attorneys of Ukraine addressed the international intellectual property industry in an open letter to suspend all relationship with members of the Russian Federation. [1]

On March 22, nearly a month after Russia’s invasion of Ukraine, the United States Patent and Trademark Office “USPTO” terminated their engagement with the Federal Service for Intellectual Property “Rospatent.”[2]  Rospatent is Russia’s intellectual property office. The USPTO has also terminated engagement with the Eurasian Patent Organization and the IP Office of Belarus due to both organizations’ cooperation with Russia amidst the invasion of Ukraine.[3]

In response to the sanctions, Russia issued a decree that permitted Russian companies to use IP originating from any “unfriendly” countries without monetary punishment; the decree declared a monetary compensation of 0% in patent infringement cases against entities of “unfriendly” origin.[4] This means that any Russian company or individual can use formerly protected patents, utility models, or designs without fear of discipline so long as the patent originates from a county labeled hostile to Russia. The list of forty-eight “unfriendly” countries include the United States, Great Britain, members of the European Union, and other countries that have criticized Russia.[5]

 

What are the Implications for International IP?

The long term effects of the decree have yet to been due to its recent implementation. However, international patent attorneys have expressed that this will likely have lasting effects for the Russian market’s relationship with international businesses. This decree has violated the trust and security that international IP rights are grounded upon. Even if Russia rescinds this decree, the lack of trust in their IP protection will deter foreign businesses from expanding into the Russian market in the future. In 2020, about a third of patent applications filed with Rospatent originated from non-residents.[6]

 

In a recent case, Rospatent ruled against the owners of the Peppa Pig trademarks because the owners were based in the UK; the UK is on the list of “unfriendly” countries.[7] The Russian judge cited to the unfriendly actions of the US and UK as grounds for this decision.[8] Although Decree No. 209 only implicates patents, Rospatent’s decision to allow infringement of the Peppa Pig trademark suggests that the decree will extend into trademark and copyrights.

 

Precedent: The United States are the Original Thieves!

Russia’s removal of IP protections during war time is not unprecedented.[9] During WWII, the United States authorized the government to seize enemy property, including patents and copyrights for the duration of the war.[10] This authorization empowered the US government to seize the German company Bayer’s assets. [11] Bayer created and patented aspirin, the most common household drug of its time. Two years after the seizure, the US government auctioned off Bayer’s trademark rights to an American pharmaceutical company.[12]

 

What Can IP Owners Do Right Now?

It is unclear how long this conflict will last and how the rest of the world will respond. Some attorneys suggest careful monitoring and documenting of infringing activity in hopes that remedies will be available again once the war comes to an end.[13] Other attorneys have suggested the possibility of assigning IP rights to a representative in a “friendly” country so that they may enforce the rights in Russia.[14] This is risky because the U.S. may view this action as an intentional evasion of sanctions; this is subject to prosecution.[15]  Much remains to be seen as the conflict continues. However, there is no question that this will substantially damage trust in Russian intellectual property and deter foreign investments in the future.

 

[1] Eileen McDermott, IP In The Crosshairs: Government Agencies Terminate Relationships With Russian IP Entities as Kremlin Sanctions IP Theft, IP Watchdog (Mar. 13, 2022), https://www.ipwatchdog.com/2022/03/13/ip-crosshairs-government-agencies-terminate-relationships-russian-ip-entities-kremlin-sanctions-ip-theft/id=147454/ [https://perma.cc/Q2RJ-XK9Y].

[2] USPTO, USPTO Statement On Engagement With Russia, the Eurasian Patent Organization, and Belarus, United States Patent and Trademark Office (Mar. 22, 2022).https://www.uspto.gov/about-us/news-updates/uspto-statement-engagement-russia-and-eurasian-patent-organization [https://perma.cc/DWV9-FBAV].

[3] McDermott, supra note 1.

[4] James A. Shimota, Adrian Gonzalez Cerrilolo, The Kremlin’s Intellectual Property Cold War: Legalizing Patent Theft With Decree 299, The National Law Review (Mar. 28, 2022), https://www.natlawreview.com/article/kremlin-s-intellectual-property-cold-war-legalizing-patent-theft-decree-299 [https://perma.cc/REW7-5DC4].

[5] Id.

[6] Id.

[7] Kyle Jahner, Russian IP Animus Fuels Risk, Uncertainty as Firms Recalibrate, Bloomberg Law (March 21, 2022, 1:45AM), https://news.bloomberglaw.com/ip-law/russian-ip-animus-fuels-risk-uncertainty-as-firms-recalibrate [https://perma.cc/JVH2-LRES].

[8] Jessiva Sanderson, Michael Volkov, Putin’s Puppets Pick on Peppa Pig: Intellectual Property Rights Are Collateral Damage in the Economic War Between Russia and the Nations Supporting Ukraine, JD Supra (April 1, 2022), https://www.jdsupra.com/legalnews/putin-s-puppets-pick-on-peppa-pig-7156614/ [https://perma.cc/C66G-5MR5].

[9] Hannah Knowles, Zina Pozen, Russia Says its Businesses Can steal Patents From Anyone in ‘Unfriendly’ Countries, The Washington Post (Mar. 9, 2022, 8:19 PM), https://www.washingtonpost.com/business/2022/03/09/russia-allows-patent-theft/ [https://perma.cc/LL2A-EA34].

[10] Thomas V. DiBacco, Aspirin’s Long Record Began With Germany, World War I, The Washington Post (Jan. 12, 1993), https://www.washingtonpost.com/archive/lifestyle/wellness/1993/01/12/aspirins-long-record-began-with-germany-world-war-i/248b0a5e-6950-488b-ae6e-9be78c45d9c8/ [https://perma.cc/FA9G-H42F].

[11]Id.

[12] Id.

[13] Pozen, supra note 9.

[14] Id.

[15] Id.

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