IP PROTECTION IN RUSSIA

Intellectual property law often serves as the legal backbone supporting technological innovation and artistic creativity.

Intellectual property is the basis for the operation of some of the world’s major industries. More and more businesses each day rely on intangible sources of wealth such as patent rights, trademarks and copyrights.

More than a quarter of the United States’ GNP comes from IP-based activity. The media and entertainment sector – prime examples of IP-driven industries – will be worth

$1.8 trillion world wide by 2009 and account for 5 percent of global GDP, according to analysts at PwC.

Independent sphere of economic relationships

the exchange of scientific and engineering achievements,

the formation and development of a patent system

a condition for integrating of Russia into the international system – the improvement of the national system of legal protection and transfer of intellectual property

Back into the history

existing problems have historical roots this is a market in which Russia, with its proud scientific track

record and rich culture, should be a significant player. the former Soviet Union had an enormous scientific and

engineering potential* IP protection in the USSR has been consistently weak and has

not offered creative people as sound a commercial basis for their work as they would enjoy in other countries.

existing administrative-law system of the former Soviet Union * About one-third of all the inventions in the world were created in the USSR..

With respect to the number of inventions annually registered, the Soviet Union together with the USA were in second place in the world after Japan.

Every year in the USSR there were registered more than 80 thousand inventions and the majority of these 64% were created in the Russian

Federation in respect of other industrial property subject matters, Russia held more than 80%.

Registered Inventions in Former Soviet Union Republics

63,69%21,87%

14%Russia

Ukraine

Other

Organization of Legal Protection of Intellectual Property in USSR

The first Patent law in Russia was adopted in 1812 but this law was anuled in 1919;

in accordance with legislation in force prior to 1991, almost all the inventions were protected by Inventor's Certificates and belong to the State;

beginning with 1985, the number of annually registered inventions is constant and equal to about 82 thousand and almost all them were protected by Inventor's Certificates;

all scientific and technical achievements in the former Soviet Union belonged to the state and any firm could freely use any of them in its production without signing a license agreement.

Inventor's Certificate? – you are the only author. an exclusive right to use the invention belongs to the State. you may not sell it or a license to use your idea because it has become state's property inventor's certificates issued in 1992 are valid up to 2012.

As a result:

The State property in general and inventors' certificates in particular contributed to the notion that new technical solutions were not regarded as anyone's property.

Inventions protected by inventor's certificates could be used free without the inventor's permission.

This knowledge is very essential as here lies one of the main problems of Russian technology transfer.

Capitalist countries portion in the total volume of the USSR license export - 21%

Their main importers were leading industrial countries: Finland, Japan, Germany, Italy, the USA, France, Great Britain,

Switzerland, Sweden.Among licensees of Soviet technologies: "Nippon Steel", "Kawasaki Steel", "Tsukisima Kakai“

(Japan); "Krupp", "Mannesmann", "Ferroschtal", "Zaltsgitter", "Schlemann Zimag", "Aizenbaum

Essen", "Assig" (Germany), "American Home Products", "Diverseafide","McDermott",

Ethyl Corp., Allied Steel and Tractor Cop., Kaiser Aluminum, Ciber Geigy, etc. (USA);

Monvisoimpianty, Snamprodgetty (Italy); Nokia Electronic, "Vyartsilya", "Kemira Oy" (Finland).

The USSR license contacts with developing and socialist countries have become stronger.

The main importers of Soviet technologies were companies from India, Iraq, Yemen, Syria, Turkey, Afghanistan.

Active USSR partners there are Democratic Republic of Germany, Czechoslovakia, Hungary, and Yugoslavia.

The State monopoly on foreigntrade was in force in the USSR up to the end of 1991.

Since the exclusive right of use of inventions and other industrial property rights belonged to the State;

all the procedure for patenting abroad and for trading in licenses was carried out under the State control;

any enterprise that wanted to patent its invention abroad or to sell a license on it to foreign companies, it had to apply to higher organizations;

the only Soviet organization, engaged in foreign patenting was Chamber of Commerce of the USSR.

What technologies did and does Russia export?

machinery construction

; 27%

energy ; 21%

military industries;

11%

metalurgy; 9,40%

chemical/timber complex

; 5,00% other;

machineryconstruction

energy

military industries

metalurgy

chemical/timbercomplex

other

1992 – 1998: a whole complex of laws, decrees and by-laws with respect to intellectual property and generally meeting modern international requirements was adopted, and a state policy in this field was formed.

Different forms of use of intellectual property objects could be forms of involvement into economy cycle:

for inventions, industrial objects, trademarks - manufacture, use, importation, offer for sale, sale and other involvement into economy cycle of a product or good containing patented intellectual property objects;

for selection achievement - manufacture, reproduction, offer for sale or other forms of sale;

for computer programs, databases, science, literature or art works - going out (publication), reproduction (manufacture), distribution (sale, hire, lease etc.) and so on.

IPR IN RUSSIA IN MODERN CONDITIONS

The Decree of the President of Russian Federation No. 863 from 22.05.98 “On state policy of involvement into economy cycle of the results of science and technology activity and intellectual property objects in the area of science and technology”

the Concept of Russian Science Reforming for the period 1998 - 2000.

The Law "On Foreign Investments in the Russia” 1999: "foreign investments shall be all types of material and intellectual values invested by foreign investors in objects of business and other kinds of activities for the purpose of gaining profit (income)."

Russian Agency For Patents and Trademarks (Rospatent) was established.

REASONS FOR IMPROVEMENT

Russia is rapidly moving up to joint the countries with incomes above average

The Russian population and Russian enterprises and the Russian state can and should pay the price for the intellectual property products they want to use

The Russian economy is entering a stage of development that will be underpinned by new investments.

Situation in Russia

The volume of piracy: 812 outlets with$2.4-3 million turnover

Russia’s piracy= 80% in 2004 across different industry sectors

Losses for copyright holders Example: U.S. industrylostover$1.7 billion last year

alone to copyright piracy in Russia, and over $6 billion in the last five years.

The protection of intellectual property is deeply in Russia's self-interest.

The violations are not exclusive only in Russia

Infringement of Intellectual Property Rights

All forms of unauthorized use of intellectual property objects are recognized as an infringement of the rights of a right owner, and any legal entity or natural person using intellectual property objects without sanction is an infringer of such rights.

Such infringements should be stopped on call of the right owner, and the person who has performed the illegal action is obliged to make compensation for damages. Any controversy will be disposed judically.

Intellectual Property Objects

inventions, utility models and industrial designs; trademarks, service marks, names of origin of

goods; computer programs and databases; topographies of integrated microcircuits; manufacture secrets (know-how); selection achievements; science, literature and art works.

The invention is defined as an unknown hitherto knowledge on how to solve (satisfy) a certain social (utilitarian) problem (want).

Utility models include constructive implementation of capital goods and commodities as well as their constituents.

Industrial design is an artistic-constructive solution of a product defining its appearance. Trademarks and service marks are signs capable to distinguish correspondingly goods and

services of some legal entities or natural persons from congenerous goods and services of other legal entities or natural persons

Name of origin of the good is the name of a country, inhabited locality, locality or other geographical object used for denomination of the good whose specific features are exclusively or mainly defined by distinctive for the given geographical object natural conditions or human factors, or both natural conditions and human factors.

Computer program is regarded under the current legislation as an objective form of presentation of set of data and commands destined to functioning of the computer and other computational devices for obtaining a certain result, as well as preparational materials got in course of its development, and audio-visual images created by the program.

Database is an objective form of presentation and organization of set of data (for example, articles, calculations), systematized in such way that they could be found and processed by means of a computer

Topography of integrated microcircuit is a spatial-geometrical layout, fixed on material medium, of a set of integrated microcircuit elements and links among them.

Manufacture secrets (know-how) shall be comprehended as a special type of information - an official or commercial secret not related to state secrets, provided that the information has real or potential commercial value because it is unknown to third parties, there is no free access to it on a legal basis and the information owner take actions for protection its confidentiality.

Rospatent

a federal executive body duly authorized to grant, register, and maintain rights to inventions, utility models, industrial design, trademarks, service marks, appellation of origin, as well as to effect registration of computer programs, databases, and topographies of integrated circuits in the Russian Federation.

is empowered to implement uniform state policies on the legal protection of industrial property rights, computer programs, databases, and topographies of integrated

Legal Framework1. Patent Law of the RF from 23.09.92 №3517-1.

2. Law of the RF “On trademarks, service marks, and names of origin of goods” from 23.09.92 №3520-1.

3. Law of the RF “ On legal protection of computer programs and databases” from 23.09.92 №3523-1.

4. Law of the RF “On legal protection of topography of integrated microcircuits” from 23.09.97 №3526-1.

5. Law of the RF “On selection achievements” from 06.08.93 №5605-1.

6. Law of the RF “On copyright and related rights” from 09.07.93 №5351-1.

Legal Framework (cont.)

7. Civil Code of the RF. Part. I. Federal Law from 30.11.94 №5-FZ.

8. Civil Code of the RF. Part. II. Federal Law from 26.01.96 №15-FZ.

9. Law of the RF “On competition and limitation of monopolistic activity on markets of goods” (version of laws of the RF from 24.06.92 №3119-1, from 15.07.92 №3310-1, FZ from 25.05.95 №83-FZ).

10. Federal Law of the RF “On introduction of amendments and additions into the law of the RF “On education” from 13.01.96 №12-FZ.

11. Federal Law of the RF “On information, informatization and protection of information” from 20.02.95 №24-FZ.

12. Federal Law of the RF “On ratification of patent convention” from 01.06.95 №85-FZ.

Legal Framework (cont.)

13. Law of the RF “On ratification of Bern convention” from 09.03.95 14. Decree of the RF government from 26.06.93 №597 “On approval of

the model constitution of educational institution of higher vocational education (higher educational institution) of the RF” (with amendments from 27.12.94).

15. Order of RF Government from 20.04.95 №540--r “On measures for improvement of the system of creating and protecting scientific and technological achievements and mechanisms of their use in the RF”.

16. Model provision of Subdivision of Intellectual Property of Higher Educational Institution of the Russian Federation (Appendix 1 to the letter of State Committee of the Russian Federation on higher education (from 8.12.95 №13-36-217i/15)

17. Criminal Code. Federal Law of the RF from 13.06.96 №63-FZ. 18. Decree of the RF President from 6.03.97 №188 "On approval of the

confidential specifications”, “Specifications of confidential information”.

Legal Framework (cont.)19. Decree of the RF President from 13.06.96 "On doctrine of

Russian science development”.20. Federal Law of the RF "On science and state science and

technology policy” from 23.08.96 №127-FZ with amendments and additions according to the Federal Law from 19.07.98 № III - FZ.

21. Joint declaration on protection of intellectual property rights in science and technology collaboration. Adopted by Russian-American Commission on collaboration in the field of economy and technology 16.07.96.

22. Establishment of the Supreme Soviet of the USSR from 31.05.91 "On implementation of the law of the USSR "On inventions in the USSR ".

23. Law of the USSR " On inventions in the USSR " from 31.05.91.

24. Law of the USSR "On industrial designs " from 10.06.91.

Legal Framework (cont.)25. Decree of the RF President from 22.07.98 №863 “On state policy of

introduction into economy cycle of the results of science and technology activity and intellectual property objects in the area of science and technology”.

26. Establishment of RF Government from 18.05.98 №453 “On the concept of reforming Russian science for the period 1998-2000”, “The concept of reforming Russian science for the period 1998-2000”.

27. “Plan of actions for realization of the concept of reforming Russian science for the period 1998-2000”.

28. Decree of the RF President from 14.05.98 №556 "On legal protection of the results of R&D, testing, engineering and technological works of military, special and double purpose”.

29. Establishment of the RF Government from 31.03.98 № 374 "On creation of the conditions for encouraging investments into the innovation area”.

30. Agreement on collaboration on restraint of law violations in the area of intellectual property signed 06.03.98 by the governments of 12 countries of CIS.

Legal Framework (cont.)33. Federal Law "On agreements of partition of products" from 30.12.95 №225-

FZ.34. Establishment of Supreme Soviet of the Russian Federation "On

implementation of the law of the RF “On trademarks, service marks and names of origin of goods" from 23.09.93 №3521-1.

36. “Rules of filing and examining the applications on discontinuation on the RF territory of force of author’s certificates of the USSR for inventions, certificates of the USSR of industrial designs as well as USSR patents issued to the State Fund of Inventions of the USSR, and of issue of the Russian Federation patents for the balance of unexpired term”

37. State standard of the RF "System of products development and launching into manufacture. Patent investigations. Procedure and scope". (GOST R 15.011-96), adopted by a decree of Gosstandard of Russia from 30.01.96 № 40.

38. Establishment of Cabinet Council - Government of the RF from 12.07.93 № 648 "On procedure of application of inventions and industrial designs protected by author’s certificates for invention and for industrial design in force on the RF territory, and payment of fee to authors”.

39. Establishment of Cabinet Council - Government of the RF from 14.08.93 №822 " On procedure of application on the RF territory of some provisions of legislation of the former USSR on inventions and industrial designs".

The major effect: to give new inventors and authors the opportunity to control their work, including the right to contract its use to others. Russia is a signatory to several international treaties covering IP issues, such as the Berne Convention (1971) and the Rome Convention (1961).

To comply with TRIPS (1994) and the WIPO Treaties (1996).

The Book IV of the Civil Code has been rushed through the Duma - falls far short of the obligations these treaties impose.

The Code failed to offer the key rights necessary to help legitimate Russian firms engage in the online marketplace, and offers little protection for the technology that drives the legal online music sector.

PatentsAn invention is defined as a technical solution in any field related

to a product (which may include devices, substances, microbial strains, cell cultures of plants and animals) or a process.

An invention if it is novel, inventive and industrially applicable. maximum duration of patent protection for an invention is 20 years

from the date of the application, for inventions relating to a medicine, pesticide or agrochemical (the use of which is subject to obtaining special permission) may be extended at the request of the patent owner for a period not exceeding five years.

A patent application is filed with the Federal Service for Intellectual Property, Patents and Trademarks (Rospatent).

it is possible to assign or license an invention, utility model and industrial design protected by a patent, to another person. Such assignment and license agreements must be registered with Rospatent

Trademarks, Service Marks, and Appellation of Origin of Goods

Designations identifying the goods or services of legal persons and individual entrepreneurs.

Legal protection is granted by virtue of their registration with Rospatent or by virtue of international agreements to which the Russian Federation is a party.

A mark may be represented by a word or words, pictures, three-dimensional signs and other designations or combinations thereof, and may be registered in any color or color combination.

Trademark and service mark protection is granted for a period of 10 years from the date of filing the application, and may be renewed during the last year of its validity for subsequent 10 year periods.

The appellation of origin of goods is a name which refers to a current or historical denomination of a country or other locality or a derivative of such denomination, which has become known as a result of its use with respect to goods specific to such locality.

The use of any designation which, through representing or containing the name of a locality, has entered into the public domain or become generic as a result of such usage but which does not, in fact, relate to the place of manufacture of such goods, is not deemed to be the appellation of the origin of such goods.

Is protected for 10 years from the date of the application and may be renewed for subsequent 10 year periods.

Trade Names

Trade names are designations that identify or distinguish different legal entities in the fulfillment of their commercial

activities.

Legal protection is provided under the Civil Code and legislation arising from this, as well as under the Paris Convention for the Protection of Industrial Property.

An owner of a trade name is empowered to use its trade name, whether registered or not, and to prohibit

the unauthorized use of a trade name.

Copyrights and Neighboring Rights

works of science, literature and the arts (copyright), and grants protection to the rights of performers, record and other media producers and

organizations engaged in on-air or cable broadcasting (neighboring rights).

Copyright is protected for the lifetime of the author and a further 70 years following death.

Proprietary rights to the use of a copyrighted object may be granted by virtue of an exclusive or non-exclusive copyright agreement.

Infringement of copyright entails civil, criminal and/or administrative liability.

Software Programs and Databases.

Software programs enjoy protection as literary works, while databases are protected as anthologies. Although registration is not mandatory for protection, an author may voluntarily register its software or database with Rospatent.

A software program or a database is protected for the lifetime of the author and a further 50 years following

death.

Topologies of Integrated Microcircuits.

original topology of an integrated microcircuit, developed as the result of an author‘s original work.

An author enjoys the exclusive right to use the topology as he/she sees fit, including the right of prohibition of unauthorized use. Property rights in a topology may be transferred fully or partially to others under a written contract,

the registration of a topology is not mandatory for its protection, an author may voluntarily register with the appropriate agency.

The exclusive right to the use of a topology is effective for 10 years from the date of its initial use or from the date of the topology‘s registration, whichever is earlier.

Trade Secrets and Know-How

Civil Code: information is regarded as an official or a trade secret if it is deemed to present an actual or a potential commercial value being unknown to third parties, if there is no free access to it on legal grounds, or if its owner takes active measures to protect its confidentiality.

Domain Names

Domain names are registered in Russia on a first-come, first-served basis, by several registrars

Researching a particular issue in Russian intellectual property law

the researcher should formulate in a sufficiently narrow way what is it he is looking for and consult an appropriate secondary source to get an overview of the topic.

the researcher can go directly to the primary sources on the topic, such as statutes, court decisions, and administrative regulations on the topic.

Although Russia now has the basic legal framework

to protect intellectual property, enforcement remains very weak.

Few enforcement mechanisms exist, and civil and criminal penalties are absent or too weak to be effective.

The Administrative code has no IPR provisions and the Criminal Code is still before the Russian Parliament.

There are no special courts for resolution of IPR disputes, and judges lack adequate IPR training.

Finally, IPR is still an unfamiliar concept to many Russian companies and is still viewed negatively by some.

Copyright infringement, particularly in computer software and electronic media

The good news:

The protection of intellectual property will receive increasing support from Russia's growing private sector, as local companies develop a stake in protecting their own proprietary ideas and technology.

Recommendation:

Until effective enforcement becomes a reality, strong presence in the marketplace is often the best alternative

LAST DEVELOPMENT

2004 - the Interior Ministry exposed 486 crimes punished under Article 180 - illegal use of trademark, in 2005 - 60 percent bigger

The investigation of 1,763 criminal cases was completed.

A total of 1,050 people faced criminal charges. 12 licensed enterprises had to stop their operation. A nation-wide operation codenamed Kontrafakt

(Counterfeit) The Federal Customs Service continued compiling a

customs registers of intellectual property products.

December 2006

The Russian Federation Council (higher Chamber of the Russian Parliament) adopted Part IV “Rights for intellectual activity’s results and means of individualization” of the Civil Code.

The Law will be in force on January 1, 2008 and replace all current special IP laws.

IP PROTECTION AS A MATTER OF THE WTO ACCESSION

NEGOTIATIONS

progress on IPR will be necessary to complete the accession progress

Special 301 provision of U.S. trade law

authorizes measures against U.S. trade partners for failing to protect U.S. patents, copyrights and other

intellectual property. Sanctions have been applied against Ukraine,

which has been identified as a Priority Foreign Country, the ranking reserved for the worst situations.

Fourteen U.S. trading partners, including Russia, are on the 2005 Priority Watch List of countries meriting close attention to IPR problems.

Main Problems:

Lack of knowledge (lack of professional training) for lawyers and judicial structures in this area;

Bad or wrong understanding of the content of the issue;

Inaccuracy of the legal texts or contradictions in the legislation;

Lack of coordination between agencies and state bodies and commercial structures involved;

Problems with the identification of the ownership of the IP

Enforcement efforts in Russia must increase dramatically

enforcement of Russia's criminal law against piracy, improved enforcement at the border, better administrative and civil procedures such as providing

for ex parte procedures in civil cases or provisional measures amend the Customs Code with the purpose of expanding the

authority of customs offices in suspension of issue of the goods suspicious in terms of counterfeiting, on the initiative of customs authorities without an application from possessors of a right (“ex officio” principle);

amend the Code of Administrative Violations of the RF in part of destruction of the items of violations, related to illegal use of brands, by similar to the requirements on destruction of the confiscated copies of art and audio records ( Part 3 Article 32.4).

At least nine of the 34 factories that replicate CDs and DVDs and possibly considerably more are located on government-owned property in Russia, the so-called restricted access regime enterprises,

excess optical-media (CDs and DVDs) capacity in Russia, and about Russia's lack of a comprehensive regulatory regime to control illegal optical-media operations,

U.S. industry lost over $1.7 billion last year alone to copyright piracy in Russia, and over $6 billion in the last five years.

Marat Terterov. Doing Business with Russia. London: Kogan Page, 2001.This book from the "Doing Business with …" series provides a good overview of

current Russian political, economic and legal climates from the businessman’s perspective. It compiles a large number of articles written by experts on subjects ranging from "direct investment in Russia" to "the property regime in Russia". The book has a few nice chapters in Part 1 outlining the political realities in modern day Russia.

G.M. Danilenko and William Burnham. Law and Legal System of the Russian Federation. Yonkers, NY: Juris, 2000.

This book covers all aspects of Russian law, including excerpts from court cases and study questions. The depth of coverage at times is sacrificed for a broader overview of Russian law. A recommended approach is to use this book as a starting point of enquiry when necessary to answer general broad questions dealing with Russian law. For a more detailed review of particular practice areas one would be better served by a topical treatise dealing with the specific area of law. As a side note, this book is sometimes used in academia as the basic textbook for an introductory course on Russian law.