Intellectual Property Rights in
Russia:
COMMERCIAL USE and
ENFORCEMENT
Aleksey Zalesov, Ph.D.
Russian and Eurasian patent attorney
Deputy Director
Sojuzpatent Ltd, Russia
IPR: Commercial USE in Russia
critical for business success
Main IPR objects
ƒ Trademarks:
ƒ Patents
inventions, utility
models, industrial
designs
protection is regulated
now by the Russian
Patent Law of 1992 with
amendments of 2003
to be replaced by Part IV
of the Russian Civil Code
on January 01, 2008
word designation (in
any language), device
mark, combined,
volume mark
protection is regulated
now by the Russian
Trademark Law of 1992
with amendments of 2002
to be replaced by Part IV
Civil Code on January 01,
2008
Patents
ƒ Invention patents, duration: 20 years from
filing (pharmaceutical and agrochemical
invention patents 20 years + term to get
permission if more than 5 years);
ƒ Utility models (for device only), duration 8
years from filing (5+3 years);
ƒ Industrial design patents, duration 15
years from filing (10+5 years)
Annuities due every year to maintain patents
Utility Model (UM) patents – sharp
weapon in competition struggle
ƒ UM patents are issued fast and without
substantive examination (no patentability check)
ƒ Novelty criterion for UM is “relative world wide
novelty” i.e. facts of open use and/or
advertising/corporate publications outside
Russia does nor affect novelty
ƒ Opposition against UM patent is a difficult
process in comparison with the easy way to
receive UM patent
USE of Patents
ƒ Scope of exclusive right for patent, utility
model and industrial design
ƒ Transfer (assignment) and Licensing
ƒ Obligation to use patented objects and
compulsory licensing provisions
ƒ Joint use (co-ownership of patents)
ƒ Patent rights abuse (patent racketeers)
Scope of exclusive right for patent,
utility model and industrial design
ƒ The right to use invention, utility model or
industrial design, to provide licenses and
to prohibit the use to third parties
ƒ The exhaustion of exclusive right for
patent is at the moment of the first sales
(introduction into commercial circulation)
the goods which use the patent in Russia,
i.e. grey or parallel import is prohibited in
the Russian Federation
Transfer of patents (assignment)
and Licensing
ƒ Obligatory official registration with the
Russian Patent Office (contract is void
otherwise) –it takes 2-4 months or more
ƒ Comprehensive check of contract during
the official registration process, strict
formal requirements, power to reject
ƒ Official publication of registered patent
assignments and licenses
Obligatory use of patent
compulsory licensing
ƒ The patented object shall be commercially
used by patent owner or licensee to satisfy
the needs of the Russian market
ƒ If invention is not used or insufficiently
used during 4 years – it is subject of
compulsory licensing
ƒ The royalty payments on such compulsory
license to be agreed or set by Court
ƒ Compulsory licensing is very rare now
Joint use (co-owners of patent)
ƒ Patent can be owned by more than one
party (co-owners)
ƒ Co-owners may stipulate in an agreement
the way they shall use the patent
ƒ If no such agreement exists every coowner can use patented object in any
scale without co-owner’s consent
ƒ Licensing is permitted only with the
consents of all co-owners
Protection of Trademarks in
RUSSIA
ƒ Registered trademarks (national
trademarks) duration- 10 years with renewals
ƒ International registered trademarks
(according to Madrid System)
ƒ Well-known trademarks (recognized as
well-known by the Russian Patent and
Trademark Office) no term limitations
Russia: USE of Trademark
1.The scope of exclusive right for
the registered trademark
2.Obligation to use a trademark
(by the owner or the licensee)
3.Licensing and assignment
4.Trademark registration renewal
5. Trademark squattering practice
The scope of exclusive right
for the trademark
ƒ The right to use a trademark, to provide a
license (exclusive or non-exclusive) and to
prohibit the use of a trademark to other
ƒ EXHAUSTION of exclusive rights for trademark
- grey or parallel import is prohibited in Russia
- the use of a trademark during the advertising of goods\services by
distributor is permitted
ƒ The right to sue against the infringer (to
compensate damages, to prohibit sales, import,
manufacturing, etc.)
Obligation to use trademark
ƒ Registered trademark MUST be used on the territory of
the Russian Federation by the owner or the registered
licensee
ƒ Trademark is subject for cancellation for non-use
continuously in 3 years
ƒ The Cancellation action is to be filed with the Chamber
for Patent Disputes of the Russian Patent and
Trademark Office)
-
-
The Decision of Chamber can be appealed in the Court
The facts of preparing to use the registered trademark MAY be considered
as the grounds for non-cancellation BUT also MAY be rejected
The cancelled trademark may be registered in the name of other parties
Licensing and Assignment
ƒ To be registered with the Russian Patent and
Trademark Office
-
void without registration
Strict registration requirement (check of agreement)
It takes 2-4 months
If licensee involves commercial designation or
firm’s trade name (franchising agreement) – also
to be registered with the Local Tax Inspectorate Office of
the trademark (trade name) owner or licensee (if
trademark owner is a foreign entity)
Trademark registration renewal
ƒ Trademark registration shall be renewed
every 10 years
ƒ Official trademark renewal fee of 15000
Russian Roubles (approx.450 EUR)
ƒ Additional grace period of 6 months is
provided to pay the renewal fee with fine
ƒ Foreign entities shall use services of
Russian trademark attorneys
Enforcement of IPR in Russia
ƒ Russian Law provides CIVIL, ADMINISTRATIVE
and CRIMINAL liability for IPR infringement
ƒ Russia is often being criticized for lack of
adequate enforcement of IPR. It is not just since:
- Russian legislation has all the measures against infringer of IPR
including civil, administrative and criminal sanctions (it is tougher
in comparison with the western IPR law standard)
- Lack of adequate court practice may be explained by relatively
small amount of cases which can be explained by low activity of
the IPR owners
- The court procedures are fast (in comparison with European) and
efficient
Civil IPR enforcement procedure
ƒ Two branches of the Government Court
-
system in Russia:
courts of general jurisdiction (resolve
disputes involving physical persons)
Arbitration courts (resolve disputes
between legal entities)
Dispute to be considered in the court at
the district (region) where defendant is
located
System of Arbitration Courts in
Russia
Supreme
Arbitration Court
(supervising)
Regional
Arbitration Courts
(first instance)
Appellation
Arbitration Courts
(second instance)
Federal District
Arbitration Courts
(third instance)
Arbitration courts in IPR
ƒ Absolute majority of the IPR infringement cases
ƒ
ƒ
are considered in arbitration courts
Some arbitration courts (Moscow City Arbitration
Court) have special panel of judges on IP issues
Arbitration procedure is rather fast:
Decision of the first instance to be taken in 3 months
Decision of the second instance - in 2 months
Decision of the third instance – in 2 months
The Decision enters into legal force (is to be enforced by the Court
Executive Officers) in one month after the date of decision in first
instance. If it is appealed – immediately with the decision of appeal
court (second instance). Preliminary injunction before the
consideration is available but now rare to be taken by the judges.
Criminal procedure of IPR
enforcement
ƒ Article 180 of the Russia Criminal Code provides
for trademark infringement the punishment up to
6 years of imprisonment (if infringement is in
large scale committed by organized group)
ƒ Article 147 of the Russian Criminal Code
provides maximum punishment of 5 years of
imprisonment (also involves large fine) for patent
infringement –invention, UM, industrial design (if
committed in large scale by organized group)
Trademark squattering practice
ƒ Squattering 1-Since trademark registration started in
Russia in 1992 many famous Western brands have been
registered as trademarks in Russia in the names of other
parties (not brand owner) based on first-to-file principle
ƒ Squattering 2- Squatters watch the Russian market and
see what western brand is registered but not properly
used in Russia. Filing a cancellation action and a new
trademark application in the name of squatter is a risk.
ƒ The squatters -“trademark owners” “ask for benefits”:
1) use to try to sell back the registration
2) sell their own goods under the known brand
3) demand status of exclusive dealers/distributors
ƒ The “trademark owners” may initiate infringement cases
(including criminal prosecution) against brand owners if
they do not satisfy the demands of squatters
Trademark squattering – legal
remedies
ƒ The easiest remedy – to register all brands to be
used in Russia as a trademark (in Russia or
internationally designating Russia)
ƒ If brand is squattered – the squattered
registration can be opposed in the Chamber for
Patent disputes (further -in the Court of Law)
based on the following:
- Existing right for company name (trade name) which is protected in
Russia based on Paris Convention
- Fact of confusing of customers which are aware of known western
brand (based on Article 6.3 of the Russian Trademark Law)
- Unauthorized registration of a trademark in the name of agent
without principal's authorization (based on Paris Convention)
“Patent racketeers”-abuse of patent
rights practice
ƒ Patents (especially UM patents) often are used to press
the competitors (often-foreign firms) since it is easy-toreceive-hard-to-oppose right
ƒ Sometimes the patent owners involve criminal procedure
against competitor (managers of the company) to be
very persuasive
ƒ Criminal sentence is a threat to persuade competitors to
give up (or pay the “license fee”)
ƒ Can be prevented by patenting of new goods or effective
opposition practice against such racketeers patents.
Patenting is cheaper then opposing. It is recommendable
to collect all evidence of open use of goods in Russia
(abroad) for opposition purposes.
License as a tool of success
ƒ Many Russian companies are eager for readyƒ
ƒ
ƒ
to-use-in-business technologies and marketing
solutions (branded business)
Franchising is rapidly developing business
License fees are subject for government taxation
at competitive rate (very effective for foreign
companies if double taxation is not a case)
Cross-licenses is developing as market sharing
phenomenon (the only market sharing
agreement free from antimonopoly regulation)
Expectations of IP professionals
ƒ We expect significant growth of patenting activity
ƒ
ƒ
ƒ
after Russia joining WTO (i.e. very soon)
The best positions will belong to companies
(Foreign and Russian) traditionally giving large
attention to their IP portfolio in Russia
The growth of IP litigation will result in stable
case practice (after ruling of Supreme Courts)
The IP squattering, racketeering will decrease
although it will be still a problem for a while