14. Intellectual property

General

In August 2020, the Government adopted the Roadmap on Transforming the Business Climate in the Field of Intellectual Property¹ setting legislative goals through 2027, including:
· Introducing tax incentives, including a special “IP sandbox” regime;
· Clarifying how to allocate rights to IP created with state funding (outside state and municipal contracts).

¹ Russian Government Decree No. 2027-r dated 3 August 2020, as further amended.

International standards

Russia has joined the key international IP treaties and conventions, including:
· The Convention Establishing the World Intellectual Property Organisation;
· The Universal Copyright Convention;
· The Berne Convention for the Protection of Literary and Artistic Works;
· The Paris Convention for the Protection of Industrial Property;
· The Madrid Agreement on the International Registration of Marks and the Madrid Protocol;
· The Singapore Treaty on the Law of Trademarks.

EAEU framework

Harmonising EAEU Member States’ IP legislation and building regional protection mechanisms are among the EAEU’s key priorities. The EAEU’s current IP integration agenda includes:
· Launching a regional system of registration of trademarks, service marks and appellations of origin of the EAEU. This initiative aims to protect trademarks and appellations of origin across the entire EAEU customs territory through a single application filed with any national patent office. To this end, the Treaty on Trademarks, Service Marks and Appellations of Origin of Goods of the EAEU was signed in Moscow on 3 February 2020.
· Creating an EAEU mechanism to combat online IP infringement, a problem recognised worldwide that affects businesses, consumers and the wider economy.
· Launching an EAEU online search service for industrial property, to speed up and cut the cost of IP searches for businesses and support their marketing strategies.

Civil Code

Part IV of the Civil Code sets forth the general rules on IP rights. It lists IP rights and the ways to protect them exhaustively, along with general requirements for their use and enforcement.

Regulatory orders

Beyond Part IV of the Civil Code, orders from the Federal Service for Intellectual Property (“Rospatent”) regulate certain IP issues.
Rospatent, which reports to the Ministry of Economic Development, registers IP rights in trademarks, patents, software and databases, and records their assignment and encumbrances.

Specialised court

The Russian Intellectual Property Court (the “IP Court”) has operated since 2013, raising the level of professionalism and legal soundness in judgments, not only in the new court but across the Russian court system as a whole.
The IP Court reviews:
· As a court of first instance – challenges of regulatory and legal acts of Rospatent;
· As a court of first instance – claims to invalidate IP registrations for non-use, and ownership disputes over IP rights; and
· As a court of third instance (i.e. a second appeal or a cassation) – cases concerning the infringement of intellectual property rights between legal entities or individual entrepreneurs.
IP Court cassation rulings may be further appealed to the Supreme Court. Other rulings are appealed within the IP Court.

Resolutions of the Supreme Court

These resolutions provide a uniform interpretation of the law and guide lower courts on IP issues.

Licence agreement

A licence agreement grants the right to use intellectual property within the agreed limits.
Licence agreements must specify:
· The licensed object;
· The duration of the licence;
· The territories for which the licence is granted;
· How the licensed object may be used; and
· The amount of remuneration (i.e. the royalty payments) or its assessment method.
Licences may be exclusive or non-exclusive. Under an exclusive licence, the licensor may not grant further licences to others and, unless the parties agree otherwise, may not use the rights itself. The agreement must expressly allow the licensee to grant sublicences.
Licences are presumed to be for consideration, even if the agreement is silent on remuneration. The parties may fix the amount or set a method to calculate it: as a lump sum, periodic royalties, or a percentage of revenue.
Commercial entities may not enter into worldwide exclusive licence agreements for the full term of IP protection on a free-of-charge basis.
Shrink-wrap licences
Under a shrink-wrap licence, the terms appear on the software’s packaging or in electronic form, and first use by the consumer counts as acceptance. The Civil Code permits this licensing method for software and databases.
Open licences
Russian law recognises open licences to use works of science, literature or art. Since the law treats them as contracts of adhesion, the terms must be freely accessible to anyone who wants to review them.
The licence conditions must define the scope of use. Unless stated otherwise, an open licence is free, worldwide and lasts five years or, for software and databases, for the full term of the exclusive rights.
Compulsory licences
Compulsory licences are an exceptional tool for ensuring national security or supporting the economy.
A court may grant a compulsory licence for:
· Inventions, utility models or industrial designs, and
· Breeding achievements.
Courts grant compulsory licences in three cases:
· The patent holder has not used, or has insufficiently used, the invention, utility model or industrial design for four years (three for a utility model);
· The owner of a dependent invention cannot use it without a licence to the main invention or utility model; and
· Three years have passed since the patent was registered for a breeding achievement (e.g. a plant variety or animal breed).
The patent holder may prove that non-use or insufficient use was due to a valid reason.
The court may terminate the licence, once the justifying circumstances cease to exist.
The Government may also authorise use of an invention, utility model or industrial design without the patent holder’s consent and without court proceedings, where urgently needed for state defence, security or public health. A special subcommittee of the Government Commission on Economic Development and Integration takes this decision, and the patent holder must be notified and compensated.
Compensation is 0.5% of actual revenue from patent use, regardless of the patent holder’s state of registration. For holders from “unfriendly” states, however, it can currently only be paid in RUB into a special type “O” account, opened automatically in their name at a Russian bank; using this money requires the Governmental Commission’s approval².
State registration of contracts
If a trademark, software, database, invention, utility model or design is registered with Rospatent, any related licence, assignment or pledge contract must also be registered there to be valid against third parties.

² Please see the Restrictive measures (countersanctions) section.

Copyright rights

Copyright covers scientific, literary and artistic works regardless of their value, type or form, protecting both published and unpublished works. Protection arises automatically on creation, with no registration required.
Chapter 70 of the Civil Code sets out an author’s exclusive property rights and moral rights over their work.
These exclusive rights include the:
· Right of reproduction;
· Right of distribution;
· Right of demonstration to the public;
· Right to import or export originals; and
· Right to provide access to the work by any means of telecommunication (including the internet).
Moral rights include:
· Right of authorship;
· Right to the name;
· Right to preserve the integrity of the work; and
· Right of publication.
The exclusive rights last for the author’s lifetime plus 70 years.
Copyright infringement may lead to civil, criminal or administrative liability.

Neighbouring rights

Neighbouring rights cover performances, phonograms, broadcasts, cable distribution, databases, and publishers’ rights in works of science, literature and art.
Owners of neighbouring rights include performers, phonogram producers, database creators, broadcasters and publishers.
Performers, phonogram producers and publishers hold both exclusive property rights and moral rights, while broadcasters and database creators hold only exclusive property rights.
The holding and the exercise of neighbouring rights are not subject to mandatory registration formalities.
Owners may grant neighbouring rights under a licence agreement or an exclusive assignment contract.

Patents

Patent protection covers:
· Inventions, which are a technical solution in any field related to a product or a process;
· Utility models – devices resulting from intellectual activity in the scientific and technical spheres; and
· Industrial designs – the result of intellectual activity relating to a product’s appearance.
The conditions for patent protection vary by type of object.
An invention can be protected only if it:
· Is new;
· Has an inventive step; and
· Is capable of industrial application.
A utility model can be protected only if it is:
· New; and
· Capable of industrial application.
An industrial design can be protected only if it is:
· New; and
· Original.
The Civil Code defines dependent inventions, utility models and industrial designs. Using any of them requires the patent holder’s authorisation. Unlike copyright, which protects a work from creation, a patent takes effect only on registration with Rospatent. The right to a patent belongs to the inventor, their employer (for an employee’s invention), or an assignee, who files the application; Rospatent grants the patent once the criteria are met.
Maximum patent protection lasts:
· 20 years from filing for an invention, extendable by up to five years for pharmaceuticals, pesticides and agrochemicals;
· ten years from filing for a utility model; and
· five years from filing for an industrial design, extendable and renewable up to a total of 25 years.
Inventions and industrial designs enjoy temporary protection during registration; once granted, the patent owner may claim remuneration for the use of an invention during that period.
Patent licence and assignment agreements must be registered with Rospatent, which also registers open patent licences at the owner’s election. A compulsory licence remains available by court decision.
International and regional registration
Inventions can also be protected at international and regional levels.
According to the Patent Cooperation Treaty (PCT), a single international application can protect an invention in all 158 PCT Contracting States.
Russia has been party to the Hague Agreement on the International Registration of Industrial Designs since 28 February 2018, enabling faster, cheaper protection in Russia and many other countries than the standard international route.
Alternatively, a single Eurasian patent provides regional protection in the eight EAPC Member States.

Trade secrets and know-how

Information or professional methods with actual or potential commercial value can qualify as a trade secret or know-how if certain criteria are met: third parties must have no free access to it, and the owner must actively protect it, in particular, by implementing a “trade secrecy regime”.
The Law on Trade Secrets³ defines what constitutes a trade secret and the measures owners must take to protect know-how, and provides for civil, administrative and criminal liability for breaches.

³ Federal Law “On Trade Secrets” No. 98-FZ dated 29 July 2004.

Employees’ work and employees’ inventions

The Civil Code regulates employees’ work, covering copyrighted works and patented objects that employees create as part of their duties or employer instructions.
As a general rule, exclusive rights to the results of an employee’s intellectual activities belong to the employer.
However, if the employer does not use, license or assign the work within the prescribed period, or fails to notify the employee that it will keep the work secret, the exclusive rights pass to the employee. This does not apply to know-how.
If the employer uses, assigns or decides to keep the work secret, the employee is entitled to remuneration as agreed, or as determined by a court if the parties disagree. Specific rules⁴ set minimum remuneration for employee inventors of patentable inventions, industrial designs or utility models (“IP Objects”), covering: (i) creating a patentable IP Object; (ii) the employer’s use of it; and (iii) its licensing or assignment by the employer.

⁴ Russian Government Decree No. 1848 dated 16 November 2020.

Company names

A company name appears in the company’s corporate documents and the Unified State Register of Legal Entities, and is protected in Russia once the company registers with the tax authorities.
The exclusive right to a company name cannot be transferred or licensed. It lets the owner use the name freely on signs, letterheads, official documents, advertising, products, packaging and the internet.
Additionally, the company name may be protected as a trademark or commercial name (a trade name).

Trade names/commercial names

Legal entities may use a trade name separately from their company name. It need not appear in corporate documents or the Unified State Register, can distinguish different enterprises, and each entity may hold only one. A trade name may not be confusingly similar to another’s company name or trademark, or mislead consumers, and its protection extends throughout Russia.
The right ceases if the owner does not use the trade name for one year. Protection is independent of the company name or trademarks, and the right may transfer under a franchise agreement or an enterprise lease contract.

Trademarks/service marks

A trademark distinguishes companies’ goods or services, and can be a word, figure, three-dimensional designation, or a combination of these. The Civil Code lists words and designations that cannot be used as trademarks.
A trademark must be registered with Rospatent in the Register of Trademarks to be protected in Russia, or protected there via the Madrid System of the International Registration of Marks.
Trademark protection lasts ten years from the Rospatent filing date, and is renewable on application and payment of a renewal fee.
Exclusive trademark rights are generally transferable, unless the assignment would mislead consumers, and may be licensed to third parties subject to the licensor’s quality requirements.
Protection may end early if the owner does not sufficiently use the trademark for three consecutive years after registration; any interested person may apply to Rospatent’s Chamber of Patent Disputes for non-use cancellation.
Information on applications for trademark registration is to be published in Rospatent’s official gazette and in Rospatent’s online database. Any person may object to a particular trademark once this information has been officially published.
Eurasian trademark
In November 2020, Russia ratified the Treaty on Trademarks, Service Marks and Appellations of Origin of Goods of the EAEU (the “Treaty”), which introduced a regional system for the registration of trademarks and appellations of origin. The Treaty allows applicants to obtain protection for means of individualisation on the entire territory of the EAEU by filing a single application with a national patent and trademark office (the “PTO”) of an EAEU Member State.
Under this procedure, a national PTO formally examines an application, then forwards it to the PTOs of the other EAEU Member States for independent review. A Eurasian trademark registers only if all five countries approve, a process expected to take about eight months, longer if third parties object or other obstacles arise. Currently, only graphic trademarks qualify.
National applications may be converted into Eurasian applications and vice versa. Existing national registrations in all EAEU Member States may also be replaced by a single Eurasian trademark.
Once registered in the EAEU, the right holder can enforce its exclusive rights across all Member States – attractive for companies operating throughout the EAEU or facing counterfeiting and parallel imports there.
The Treaty entered into force in 2021 after being ratified by all EAEU Member States.

Domain names and trademarks

In Russia, domain names do not qualify as intellectual property and cannot be licensed or assigned; they can only be transferred via a registrar.
Domain names are registered and delegated to an organisation or an individual under an agreement with the relevant registrar.
Domain names and trademarks are both registered on a first-to-file basis. A domain name does not preclude registration of an identical or similar trademark, and vice versa.
Bad-faith registration of a trademark or domain name to harm a competitor may constitute unfair competition.
Earlier trademark registration alone does not bar use of a later domain name.
Domain name disputes
Despite not being IP objects, domain name disputes form a substantial part of IP litigation in Russia.
Russia is not party to the Uniform Domain Name Dispute Resolution Policy (UDRP), and there is no equivalent domestic ADR procedure; domain name disputes are resolved by commercial courts.

Appellations of origin of goods

An appellation of origin is the name of a place a product comes from: a country, city, or any geographical area.
Once registered with Rospatent, an appellation of origin is protected throughout Russia. Any producer in the relevant area may use it after obtaining a Rospatent certificate, or register it if not yet registered.

Geographical indications

The geographical indication is a fairly new form of intellectual property which co-exists with appellations of origin of goods.
A geographical indication is a designation for products with a specific geographical origin and unique qualities or reputation tied to that origin; at least one stage of production must occur in the specified territory.
In 2022, Russia acceded to the Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications. This gave Russian producers access to international registration of their geographical indications and appellations of origin through a unified WIPO procedure.

Intellectual property rights infringements

Protection through customs
When counterfeit or pirated goods enter Russia, customs officers can help right owners stop the infringement, provided the owner has entered the relevant rights in a special Customs IP Register; officials can sometimes also act on their own initiative. Their powers cover copyrights, trademark rights, and rights to appellations of origin and geographical indications, but not inventions, utility models or designs. Registered rights are protected for up to three years, renewable on request.
Parallel imports
Parallel importation means importing genuine products without the IP holder’s consent, where those products were legally placed on the market elsewhere by or with the IP holder’s consent.
Since the spring of 2022, many foreign companies have left Russia or suspended operations there.
To avoid shortages, the Government partially legalised parallel imports, aiming to protect consumers and restore supplies from companies that had left the market.
Specifics of parallel importation:
· Parallel importation is partially legalised.
· Parallel importation is allowed only for products specified in a special list administered and regularly updated by the Ministry of Industry and Trade.
· Products legally imported under parallel importation cannot be subject to the IP right holder’s claims.
· Parallel importation concerns copyright, patent law, trademarks and other IP.
When updating the list, the Ministry mainly considers:
· Importance of the product for the Russian market.
· “Need” for the product, i.e. the demand which cannot be satisfied by internal supply.
At the same time, to incentivise Russian manufacturers, the list will get gradually narrowed.
Civil penalties
A trademark owner may bring the following civil claims:
· Termination of the infringement;
· Seizure/destruction of the counterfeit goods (or removal of counterfeit signs or labels); and
· Payment of damages or compensation:

• in a fixed sum in an amount of RUB 10,000 – RUB 10m, or
• twice the value of counterfeit product, or
• twice the value of the right to use the trademark.

The Anti-piracy Law gives copyright and neighbouring rights owners an efficient enforcement tool – web blocking injunctions – covering all works except photographs.
Administrative and criminal liability
The trademark infringer is administratively liable if the damage caused by the infringement is less than RUB 400,000.
Different sanctions apply to different infringements. For example, fines for producing fake products depend on the value of the counterfeit goods seized.
The harshest sanctions apply to legal entities producing or selling counterfeit goods: a fine of up to five times the value of goods seized, at least RUB 100,000, plus confiscation of the goods.
If the damage caused by the infringement exceeds RUB 400,000 or the offender repeats the offence, they may be held criminally liable.
The unlawful use of a trademark that has caused significant harm may, along with other punishments, result in up to two years of imprisonment.
When the offender is a legal entity, criminal sanctions apply to its general director or other responsible officials.
IP Court
The IP Court resolves disputes related to IP. The court is part of the Russian commercial (“arbitrazh”) court system and sits in Moscow.