Intellectual Piracy in Russia

Intellectual Piracy in Russia

On 6th of March 2022, the world was stunned by a decree issued by the Russian Federation stating that Russian companies are no longer under any obligation to compensate owners of intellectual property (IP) rights from “unfriendly” countries. These unfriendly countries are all countries that imposed crippling economic sanctions on Russia for invading Ukraine. These economic sanctions included the prohibition on the supply, export and transfer of goods and services from Russia. In retaliation, Russia issued the above-mentioned decree thereby appropriating intellectual property belonging to owners from these unfriendly countries without any compensation. A major implication of the decree is that companies in Russia are able to use intellectual property belonging to owners from European Union and USA without the consent of these owners. To explain the effect of this decree below, patent and trademarks (types of intellectual property) were used as an example.

When a patent is granted, it gives the owner the exclusive right to exclude others from making, using, exercising, disposing, offer to dispose or importing the patented article. When a pharmaceutical vaccine is to be made, different compounds are considered. Factors such as the immunogenicity and toxicity of the compound determines if it is included or excluded from the vaccine. Once a vaccine has been made, clinical trials take place to determine the efficacy of the vaccine in humans and this could last for years. All these processes take significant amount of time and are expensive. In order to recover the cost expended as well as obtain maximum benefits from a vaccine, an inventor/owner would protect their intellectual property (IP) right. Thus, it is logical that any inventor would seek to protect their invention in order to enjoy the full benefits that may accrue from it. Following the decree, a Russian-based company is permitted to manufacture the same pharmaceutical vaccine that is patented by an owner from an unfriendly country using exactly the same process without seeking consent, obtaining any license, or paying any form of royalties/compensation to the owner.

Trademark is a core means for companies to protect their brands from imitations and uphold their reputation. A registered trademark gives the owners the exclusivity to use the trademark to their benefits. Trademark enables a company to build their market share and expand their brand, goods, and services without the constant worry of imitations and counterfeiting from competitors. In the event of imitation occurring, an owner could take legal steps to prevent the imitation from continuing as well as seek royalties.

It is important to emphasize that patents and trademarks are territorial in nature. This means that there is no “Worldwide patent” or “Worldwide trademark.” In order to obtain protection, an owner must file for patent or trademark in countries where they seek protection. The Madrid protocol and Patent Cooperation Treaty has made it easier for owners to file a single trademark and patent respectively designating countries that are members of these treaties.

Due to the territorial nature of intellectual property such as trademark and patent, an IP owner must file an application in Russia to obtain protection for their brands, goods, and services. It is much easier to copy intellectual property than to create one. It may take an IP-owner months or even years as well as financial resources to create a product or service. With the latest high end designing and manufacturing technology, the product or service could be copied or duplicated in days to the detriment of the IP owner. The decree in Russia will encourage imitation, counterfeiting and intellectual piracy. An outcome of this is that affected IP owners have no recourse in Russia and would be unable to prevent the abuse of their IP rights in Russia. It is of concern that some of the counterfeited goods may eventually find their way to developing countries where the piracy would perpetuate to the detriment of IP owners.

The act by the Russian Federation has opened up the pertinent question on how IP owners can enforce their rights in countries where IP rights are not recognized and/or strictly enforced by the Government.

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