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Per­son­al data: sweep­ing changes in reg­u­la­tion
Please join our we­bin­ar on re­cent im­port­ant changes in the reg­u­la­tion of data pro­tec­tion in Rus­sia. Join our ex­perts Ir­ina Shur­mina and Vladis­lav Eltovskiy to learn about:Ex­tra­ter­rit­ori­al ap­plic­a­tion...
On­line ad­vert­ising: new rules from 1 Septem­ber 2022
On 1 Septem­ber 2022, amend­ments* to Fed­er­al Law No 38 “On Ad­vert­ising” dated 13 March 2006 (the “Law”) will come in­to force. The Law will be sup­ple­men­ted by art­icle 18.1 on on­line ad­vert­ising...
Li­ab­il­ity for non-com­pli­ance with the Land­ing Law
4 Au­gust 2022
Per­son­al data: sweep­ing changes in reg­u­la­tion
On 1 Septem­ber 2022, amend­ments* to Fed­er­al Law No. 152 on Per­son­al Data (the “Per­son­al Data Law”) and amend­ments* to Fed­er­al Law No. 2300-1 on the Pro­tec­tion of Con­sumer Rights (the “Con­sumer Pro­tec­tion Law”) will come in­to force.The ad­op­ted amend­ments sig­ni­fic­antly change the Per­son­al Data Law: new ob­lig­a­tions of data con­trol­lers have been in­tro­duced and ex­ist­ing ones amended, the scope of the Per­son­al Data Law has been ex­pan­ded, new pro­ced­ures for ap­prov­al and no­ti­fic­a­tion of state bod­ies on the pro­cessing of per­son­al data have ap­peared.In its new ver­sion, the Con­sumer Pro­tec­tion Law pro­hib­its re­fus­al to con­clude con­tracts with con­sumers if they re­fuse to provide per­son­al data that is not re­lated to the per­form­ance of such a con­tract.Be­low we provide an ana­lys­is of the main changes to the Per­son­al Data Law and the Con­sumer Pro­tec­tion Law.Scope of the Per­son­al Data Law­Be­fore the amend­ments come in­to force, the ex­tra-ter­rit­ori­al prin­ciple of ap­ply­ing the Per­son­al Data Law (i.e. the ob­lig­a­tion for for­eign com­pan­ies to com­ply with it) form­ally relates only to per­son­al data loc­al­isa­tion re­quire­ments.Un­der the new pro­vi­sions of the Per­son­al Data Law, for­eign leg­al en­tit­ies and in­di­vidu­als are also re­quired to com­ply fully with this law when pro­cessing per­son­al data of Rus­si­an cit­izens on the basis of a con­tract or with the con­sent of such a cit­izen.We re­com­mend that for­eign com­pan­ies whose activ­it­ies are aimed at Rus­si­an cit­izens as­sess the ap­plic­ab­il­ity of the Per­son­al Data Law to their activ­it­ies and bring them in­to com­pli­ance with the Per­son­al Data Law.Pro­cessing of per­son­al data for the per­form­ance of a con­tractThe amend­ments im­pose cer­tain re­stric­tions on the pro­cessing of per­son­al data based on the per­form­ance of a con­tract. Thus, the con­tract to be con­cluded may not con­tain pro­vi­sions which:lim­it the rights and freedoms of the sub­ject;es­tab­lish cases in which the per­son­al data of a minor is pro­cessed (un­less oth­er­wise provided for by law); or­al­low mak­ing the con­clu­sion of the con­tract con­di­tion­al on the in­ac­tion of the sub­ject.The amend­ments are worded quite broadly, so we ex­pect that the cri­ter­ia for clas­si­fy­ing a con­trac­tu­al pro­vi­sion as in­ad­miss­ible will be shaped by law en­force­ment prac­tice or the reg­u­lat­or’s cla­ri­fic­a­tions.Nev­er­the­less, at this stage, we re­com­mend re­view­ing cur­rent con­tracts with in­di­vidu­als to en­sure that they com­ply with the new pro­vi­sions of the Per­son­al Data Law.New du­ties and li­ab­il­ity of “pro­cessors”Changes to the Per­son­al Data Law have tightened the re­quire­ments for so-called “pro­cessors” (i.e. per­sons or en­tit­ies who pro­cess per­son­al data on be­half of a con­trol­ler).Thus, in ad­di­tion to the in­form­a­tion pre­vi­ously re­quired, the op­er­at­or’s in­struc­tions must state the fol­low­ing du­ties of the pro­cessor:loc­al­ising Rus­si­an cit­izens’ per­son­al data in Rus­sia when they are col­lec­ted;tak­ing the meas­ures stip­u­lated by Art­icle 18.1 of the Per­son­al Data Law (e.g. ap­point­ing a data pro­tec­tion of­ficer, pub­lish­ing a policy, tak­ing meas­ures to en­sure the se­cur­ity of per­son­al data);provid­ing the con­trol­ler with proof of com­pli­ance with these meas­ures; andno­ti­fy­ing the con­trol­ler of per­son­al data leaks.We re­com­mend check­ing cur­rent agree­ments with pro­cessors and ad­just­ing them to re­flect the amend­ments.In ad­di­tion, the new ver­sion of the Per­son­al Data Law es­tab­lishes that for­eign pro­cessors are li­able to per­son­al data sub­jects dir­ectly and not only through the con­trol­ler.New rules on cross-bor­der trans­fer of per­son­al dataNew cross-bor­der trans­fer rules will come in­to force on 1 March 2023.The new ver­sion of the Per­son­al Data Law tight­ens up the rules for cross-bor­der trans­fers and in­tro­duces a man­dat­ory pri­or no­ti­fic­a­tion to the reg­u­lat­or of the in­ten­tion to trans­fer per­son­al data out­side Rus­sia.The con­trol­ler must as­sess the re­cip­i­ent of per­son­al data by ob­tain­ing, be­fore sub­mit­ting the no­ti­fic­a­tion, the fol­low­ing in­form­a­tion about:the per­sons or en­tit­ies to whom per­son­al data will be trans­ferred;the meas­ures to pro­tect the per­son­al data trans­ferred and the con­di­tions un­der which its pro­cessing may be ter­min­ated; an­dthe leg­al reg­u­la­tion of per­son­al data in the re­cip­i­ent coun­try (if the coun­try is not one that provides ad­equate pro­tec­tion of the rights of per­son­al data sub­jects).​The data con­trol­ler must then no­ti­fy Roskomnad­zor of its in­ten­tion to trans­fer per­son­al data across bor­ders and provide de­tailed in­form­a­tion on the planned trans­fer, in­clud­ing the type and con­tent of the data to be trans­ferred, the cat­egor­ies of data sub­jects, coun­tries where such data will be trans­ferred, etc.Upon re­ceipt of a no­ti­fic­a­tion, Roskomnad­zor has the right to pro­hib­it or re­strict the trans­fer of per­son­al data, inter alia, to pro­tect the mor­als, health, rights and le­git­im­ate in­terests of in­di­vidu­als; pro­tect the found­a­tions of the con­sti­tu­tion­al or­der, se­cur­ity and de­fence of the state; or pro­tect Rus­sia’s eco­nom­ic in­terests.Roskomnad­zor has ten work­ing days from the date of re­ceipt of the no­ti­fic­a­tion to make its de­cision. Pending a de­cision, the con­trol­ler may carry out cross-bor­der trans­fer of per­son­al data to coun­tries that are parties to the Coun­cil of Europe Con­ven­tion No. 108 or in­cluded in Roskomnad­zor’s spe­cial list.Per­son­al data may only be trans­ferred to oth­er coun­tries after the dead­line for a de­cision by Roskomnad­zor has ex­pired and in the ab­sence of a de­cision to ban such trans­fer. If cross-bor­der trans­fer is banned or re­stric­ted, the con­trol­ler must en­sure that the data it has pre­vi­ously trans­ferred is des­troyed in the for­eign coun­try.Con­trol­lers that car­ried out cross-bor­der trans­fers be­fore 1 March 2023 and will con­tin­ue to do so after that date are re­quired to sub­mit a no­ti­fic­a­tion to Roskomnad­zor no later than 1 March 2023.In­ter­ac­tion with Gos­SOP­KAThe new ver­sion of the Per­son­al Data Law also re­quires the con­trol­ler to en­sure in­ter­ac­tion with the State Sys­tem of De­tec­tion, Pre­ven­tion and Elim­in­a­tion of Con­sequences of Com­puter At­tacks on In­form­a­tion Re­sources (Gos­SOP­KA). The aim is to in­form Gos­SOP­KA about com­puter in­cid­ents that have led to the un­law­ful trans­fer of per­son­al data.The pro­ced­ure for in­ter­ac­tion has not been de­term­ined yet and will be es­tab­lished by the Fed­er­al Se­cur­ity Ser­vice of Rus­sia in a sep­ar­ate reg­u­la­tion.Ob­lig­a­tion to no­ti­fy per­son­al data leak­ageIn the event of a leak­age (an un­law­ful or ac­ci­dent­al trans­fer of per­son­al data res­ult­ing in the vi­ol­a­tion of the sub­ject’s rights), the con­trol­ler must no­ti­fy Roskomnad­zor:with­in 24 hours of re­veal­ing such an in­cid­ent about the in­cid­ent and its de­tails; andwith­in 72 hours of the in­cid­ent be­ing dis­covered about the res­ults of the in­tern­al in­vest­ig­a­tion in­to said in­cid­ent and provide in­form­a­tion on the per­sons (if any) whose ac­tions led to the in­cid­ent.At present, the new ver­sion of the Per­son­al Data Law does not con­tain ex­cep­tions to the ob­lig­a­tion to no­ti­fy a leak, but per­haps in the fu­ture cri­ter­ia for minor leak­ages will be de­veloped that will ex­empt any minor un­law­ful or ac­ci­dent­al trans­fer of per­son­al data from the need to be no­ti­fied.At this stage, we re­com­mend in­tro­du­cing rules for in­tern­al leak in­vest­ig­a­tions, es­pe­cially giv­en the short time­frame for ful­filling no­ti­fic­a­tion ob­lig­a­tions to Roskomnad­zor.Pro­cessing of per­son­al data un­der the Con­sumer Pro­tec­tion LawAfter 1 Septem­ber 2022, com­pan­ies will not be al­lowed to re­fuse to con­clude, per­form or ter­min­ate a con­tract if a con­sumer re­fuses to provide their per­son­al data.As an ex­cep­tion, there are cases where the ob­lig­a­tion to provide such data is pre­scribed by law or dir­ectly re­lated to the per­form­ance of the con­tract with the con­sumer.In ad­di­tion, con­sumers are giv­en the right to re­quest in­form­a­tion on the spe­cif­ic reas­ons and leg­al grounds mak­ing it im­possible to con­clude, per­form or ter­min­ate a con­tract without provid­ing per­son­al data.Con­sumers may also re­quest the re­mov­al of pro­vi­sions stip­u­lat­ing the con­di­tions of pro­cessing per­son­al data, and the com­pany must, with­in ten days, make a reasoned de­cision and no­ti­fy the con­sumer about it.The new rules will also ap­ply to con­tracts that were con­cluded be­fore 1 Septem­ber 2022. There­fore, the changes will af­fect in­ter­ac­tion with both new and cur­rent cus­tom­ers.If the in­clu­sion of con­di­tions det­ri­ment­al to the con­sumer’s rights in the con­tract has caused losses, they must be com­pensated in full. In ad­di­tion, in­clu­sion of such con­di­tions in a con­tract may res­ult in an ad­min­is­trat­ive fine of up to RUB 20,000 (EUR 350).We re­com­mend that con­tracts with con­sumers should be re­viewed with re­gard to the pro­vi­sions on the pro­cessing of per­son­al data, the scope of data to be col­lec­ted and how to in­ter­act with con­sumers dur­ing the con­tract­ing and en­quiry hand­ling phases.Oth­er changes­In ad­di­tion to the above changes, the new ver­sion of the Per­son­al Data Law also in­tro­duces a sig­ni­fic­ant num­ber of oth­er changes. We sum­mar­ise some of them be­low:From 1 March 2023, the data con­trol­ler will be re­quired to spe­cify in the per­son­al data pro­cessing policy for each pro­cessing pur­pose:the cat­egor­ies and con­tent of pro­cessed data;the cat­egor­ies of sub­jects whose per­son­al data is pro­cessed;the man­ner and terms of data pro­cessing and stor­age;a pro­ced­ure for des­troy­ing per­son­al data when the pur­pose of its pro­cessing has been achieved or when oth­er le­git­im­ate grounds for do­ing so have aris­en.The list of cases when a con­trol­ler may pro­cess per­son­al data without no­ti­fy­ing Roskomnad­zor of its in­ten­tion to pro­cess per­son­al data has been sub­stan­tially re­duced. In par­tic­u­lar, the pro­cessing of per­son­al data in ac­cord­ance with la­bour law and for the per­form­ance of a con­tract is no longer an ex­cep­tion and will now re­quire the sub­mis­sion of a no­ti­fic­a­tion. Thus, vir­tu­ally any per­son­al data con­trol­ler en­gaged in com­mer­cial activ­it­ies is re­quired to sub­mit a no­ti­fic­a­tion to Roskomnad­zor. In ad­di­tion, the list of in­form­a­tion that must be con­tained in the no­ti­fic­a­tion has changed and a re­quire­ment to provide more de­tailed in­form­a­tion on per­son­al data pro­cessing was in­tro­duced.The amend­ments es­tab­lish ad­di­tion­al cri­ter­ia for con­sent to be not only spe­cif­ic, in­formed and con­scious, but also sub­stant­ive and un­am­bigu­ous.  Ex­plan­a­tions of what is meant by sub­stant­ive and un­am­bigu­ous con­sent are not yet avail­able.The pro­vi­sion of bio­met­ric per­son­al data may not be com­puls­ory, ex­cept in the cases laid down in the Per­son­al Data Law. If the pro­cessing does not fall with­in the ex­cep­tions, the con­trol­ler does not have the right to re­fuse to provide a ser­vice to a per­son who re­fuses to provide bio­met­ric data.The dead­line for re­spond­ing to a sub­ject’s re­quests for ac­cess to in­form­a­tion on per­son­al data pro­cessing and its ter­min­a­tion has been re­duced to ten work­ing days from the sub­ject’s re­quest (the dead­line can be ex­ten­ded by an­oth­er five work­ing days).Thus, al­most all as­pects of per­son­al data pro­cessing are af­fected to a great­er or less­er ex­tent by the changes.Re­com­mend­a­tionsGiv­en the scale of the ad­op­ted changes, al­most every Rus­si­an per­son­al data con­trol­ler needs to as­sess its cur­rent per­son­al data pro­cessing pro­ced­ures and, most likely, ad­just them. In ad­di­tion, for­eign con­trol­lers may be in all like­li­hood sub­ject to Rus­si­an per­son­al data le­gis­la­tion and will be re­quired to com­ply fully with it.In light of the changes ad­op­ted, we re­com­mend that:for­eign con­trol­lers check the cur­rent pro­ced­ures for pro­cessing the data of Rus­si­an cit­izens and as­sess wheth­er Rus­si­an le­gis­la­tion is ap­plic­able;Rus­si­an con­trol­lers audit cur­rent per­son­al data pro­cessing pro­ced­ures and make ap­pro­pri­ate ad­just­ments, in­clud­ing to per­son­al data pro­cessing policies, cross-bor­der trans­fer pro­ced­ures, con­sents, con­tracts provid­ing for data pro­cessing man­dates, and oth­er doc­u­ments and pro­cesses.* In Rus­si­anCo-au­thored by Sher­met Kur­b­an­ov, Paralegal in In­tel­lec­tu­al Prop­erty.
Бизнес-завтрак Seam­less & MICE
Визуалы, слоганы, сценарии, не выигравшие в тендере, вдруг реализуются конкурентом… Присвоение контента – давняя...
In­tel­lec­tu­al prop­erty: re­cent de­vel­op­ments
Over the past fort­night, there have been sev­er­al im­port­ant de­vel­op­ments in the field of in­tel­lec­tu­al prop­erty worthy of spe­cial men­tion. They re­late to par­al­lel im­ports and the pro­tec­tion of rights hold­ers from the so-called “un­friendly” states.Change in the reg­u­la­tion of par­al­lel im­portsOn 28 June 2022, the Pres­id­ent signed a law* amend­ing the pro­vi­sions of Fed­er­al Law No. 46 re­lat­ing to the reg­u­la­tion of par­al­lel im­ports.Ini­tially, Fed­er­al Law No. 46 gave the Rus­si­an gov­ern­ment the au­thor­ity to de­term­ine the list of goods al­lowed for par­al­lel im­ports. The gov­ern­ment del­eg­ated the au­thor­ity to is­sue this list to the Min­istry of In­dustry and Trade.In prac­tice, des­pite the ad­op­tion of the list, ques­tions arose about the leg­al pro­tec­tion of those who plan to en­gage in par­al­lel im­ports. Com­pan­ies feared that such meas­ures would not pro­tect them against claims from rights hold­ers.To ad­dress this is­sue, the de­cision was made to in­tro­duce more changes at the le­gis­lat­ive level.The new pro­vi­sions of the law sug­gest that the use of someone else’s in­tel­lec­tu­al prop­erty will not be an in­fringe­ment if the goods con­tain­ing that in­tel­lec­tu­al prop­erty are in the list of goods of the Min­istry of In­dustry and Trade per­mit­ted for par­al­lel im­port­a­tion.However, the ad­op­ted amend­ments leave one im­port­ant ques­tion un­answered: to what ex­tent can this reg­u­la­tion ap­ply to coun­ter­feit goods?If we delve deep­er in­to the mean­ing and pur­pose of the par­al­lel im­port­a­tion pro­vi­sions, it be­comes clear that coun­ter­feit goods should still be pro­hib­ited. It is not in the in­terest of the state to en­cour­age such activ­ity, par­tic­u­larly be­cause the pro­du­cers of coun­ter­feit goods will not be re­spons­ible for their prop­er qual­ity and safety, nor will they en­sure their war­ranty ser­vice. Fur­ther­more, the trans­par­ency of such activ­ity for tax pur­poses is at the very least ques­tion­able.This view is sup­por­ted* by, among oth­ers, of­fi­cials stat­ing that the leg­al­isa­tion of par­al­lel im­ports does not im­ply that coun­ter­feit­ing is al­lowed.Thus, tak­ing in­to ac­count the gen­er­al ap­proach of the le­gis­la­tion on this is­sue and the ob­ject­ives of the par­al­lel im­port­a­tion mech­an­ism, we can con­clude that the le­git­im­ate in­terests of rights hold­ers to re­move coun­ter­feit goods from the mar­ket should be pro­tec­ted, even in light of the ad­op­ted amend­ments. The am­bi­gu­ity of some of the word­ing of the new laws can prob­ably be ex­plained by the le­gis­lat­or’s haste rather than its in­ten­tion to leg­al­ise coun­ter­feit goods.Re­versal of the de­cision in the fam­ous “Peppa Pig” case*On 21 June 2022, the Second Com­mer­cial Court of Ap­peal quashed the de­cision of the Kirov Re­gion­al Court in the “Peppa Pig” case and sat­is­fied the rights hold­er’s claim for com­pens­a­tion for in­fringe­ment of its ex­clus­ive rights to a trade­mark.As a re­fresh­er, on 3 March 2022, the Kirov Re­gion­al Com­mer­cial Court dis­missed the claim of a Brit­ish com­pany for trade­mark in­fringe­ment of the im­age of the Peppa Pig char­ac­ter, stat­ing that the very fact that the plaintiff went to court was an ab­use of rights as the com­pany is re­gistered in a state which im­posed sanc­tions against Rus­sia.This case pro­voked much spec­u­la­tion that the in­tel­lec­tu­al prop­erty of for­eign rights hold­ers is no longer pro­tec­ted in Rus­sia.In a pre­vi­ous alert on the sub­ject, we noted that more re­cent court de­cisions rais­ing the is­sue of the so-called “un­friendly” ori­gin of com­pan­ies did not sup­port the view of the Kirov Re­gion­al Court.The high­er court also dis­agreed and re­viewed the de­cision on ap­peal. In its judg­ment, the court noted that for­eign com­pan­ies, in­clud­ing those re­gistered in the UK, are guar­an­teed to re­ceive equal pro­tec­tion of their in­tel­lec­tu­al prop­erty in Rus­sia.The ap­pel­late court’s find­ings con­firmed that the de­cision in the Peppa Pig case was the ex­cep­tion rather than the rule, and that pro­tec­tion of in­tel­lec­tu­al prop­erty rights could not be denied on the sole ground that the com­pany was re­gistered in a state that had im­posed sanc­tions against Rus­sia.* In Rus­si­anCo-au­thored by Sher­met Kur­b­an­ov, Paralegal in In­tel­lec­tu­al Prop­erty.
The former Mo­scow of­fice of CMS to con­tin­ue work­ing as an in­de­pend­ent law...
On 15 June 2022, the former Mo­scow of­fice of the in­ter­na­tion­al law firm CMS an­nounces the start of work as an in­de­pend­ent law firm un­der the new brand name SEAM­LESS Leg­al.Over 80 col­leagues of the Mo­scow of­fice con­tin­ue work­ing as one team, led by Man­aging Part­ner Jean-Fran­cois Mar­quaire and Seni­or Part­ner Le­onid Zubar­ev.We keep ad­vising our cli­ents across all 23 prac­tices and sec­tors: We lean on 30 years of ex­pert­ise and an im­pec­cable repu­ta­tion as part of an in­ter­na­tion­al law firm. We have al­ways abided by strict pro­fes­sion­al stand­ards and will con­tin­ue provid­ing ser­vices of the highest qual­ity. Jean-Fran­cois Mar­quaire, Man­aging Part­ner: “We are proud of hav­ing been able to cre­ate and pre­serve a united team with a friendly cor­por­ate cul­ture and re­spons­ible at­ti­tude to our busi­ness.”Le­onid Zubar­ev, Seni­or Part­ner: “Our new brand SEAM­LESS Leg­al most ac­cur­ately re­flects the ap­proach to work that has de­veloped over the years in our firm – in­teg­rity and co­her­ence, im­pec­cab­il­ity, con­tinu­ity and un­in­ter­rup­ted sup­port to our cli­ents at any time."
Pay­ment pro­ced­ure changed for use of for­eign in­tel­lec­tu­al prop­erty
On 27 May 2022, the Rus­si­an Pres­id­ent signed De­cree No. 322* (the “De­cree”) that sets up a spe­cial pro­ced­ure for the pay­ment of li­cens­ing and oth­er pay­ments to for­eign right­shold­ers from “un­friendly” states for the use of their in­tel­lec­tu­al prop­erty.Thus, in or­der to duly ful­fil the ob­lig­a­tions to such right­shold­er, the li­censee or oth­er per­son ob­liged to make pay­ment in fa­vour of the right­shold­er (the “Debt­or”) pays the ap­pro­pri­ate amount in roubles to a spe­cial “O” type ac­count opened in an au­thor­ised bank in the name of the for­eign right­shold­er. If the agree­ment provides for pay­ment in for­eign cur­rency, the Debt­or de­pos­its in­to the ac­count an amount in roubles equi­val­ent to the ob­lig­a­tions in for­eign cur­rency at the of­fi­cial ex­change rate of the Cent­ral Bank of the Rus­si­an Fed­er­a­tion.The pro­ced­ure in­tro­duced by the De­cree ap­plies in par­tic­u­lar to right­shold­ers as­so­ci­ated with “un­friendly” states and their con­trolled en­tit­ies (the “Right­shold­er”).However, the doc­u­ment also sets out spe­cif­ic ex­cep­tions. For ex­ample, this pro­ced­ure does not ap­ply to:right­shold­ers from “un­friendly” states if they are con­trolled by Rus­si­an in­di­vidu­als or leg­al en­tit­ies, provided that in­form­a­tion on such con­trol has been dis­closed to the Rus­si­an tax au­thor­it­ies;right­shold­ers from “un­friendly” states who duly ful­fil their con­trac­tu­al ob­lig­a­tions to their Rus­si­an coun­ter­parties;con­tracts re­lated to the im­port­a­tion of medi­cines or med­ic­al devices in­to Rus­sia, the pro­vi­sion of com­mu­nic­a­tion ser­vices, and the cre­ation and/or use of soft­ware in Rus­sia.The pay­ment mech­an­ism es­tab­lished by the De­cree is as fol­lows.A Debt­or sub­mits an ap­plic­a­tion to an au­thor­ised Rus­si­an bank to open a spe­cial “O” type ac­count in the name of the for­eign Right­shold­er. One Right­shold­er may only have one such ac­count.The bank no­ti­fies the Right­shold­er by post, email or tele­phone that an “O” type ac­count has been opened in its name.The Right­shold­er provides the Debt­or with writ­ten con­sent (in­clud­ing elec­tron­ic con­sent) to make pay­ments to the “O” type ac­count. Un­til such con­sent has been giv­en, the Debt­or is not ob­liged to make any pay­ments and no con­trac­tu­al pen­al­ties may arise. The Debt­or makes the pay­ment spe­cified in the agree­ment with the Right­shold­er to the “O” type ac­count and is deemed to have ful­filled its con­trac­tu­al ob­lig­a­tions as of that mo­ment, re­gard­less of wheth­er the Right­shold­er has con­sen­ted.Sub­ject to the pre­scribed pro­ced­ure, Debt­ors may con­tin­ue to use the li­censed in­tel­lec­tu­al prop­erty.The De­cree was ad­op­ted to sta­bil­ise the cur­rent situ­ation where some for­eign com­pan­ies either re­fuse the per­mis­sion pre­vi­ously gran­ted to use their in­tel­lec­tu­al prop­erty or can­not ac­cept pay­ment due to re­stric­tions on in­ter­na­tion­al trans­ac­tions, while Rus­si­an com­pan­ies are will­ing to con­tin­ue us­ing such in­tel­lec­tu­al prop­erty.* In Rus­si­an
US re­moves in­tel­lec­tu­al prop­erty from scope of Rus­sia-re­lated sanc­tions
Since the in­tro­duc­tion of sanc­tions against Rus­sia, US com­pan­ies op­er­at­ing in Rus­sia have faced a num­ber of chal­lenges in con­tinu­ing busi­ness. For ex­ample, in the IP area one of the press­ing prob­lems has been the pay­ment of of­fi­cial fees for re­gis­ter­ing or main­tain­ing in­tel­lec­tu­al prop­erty in Rus­sia. In view of the US sanc­tions, com­pan­ies were con­cerned that US au­thor­it­ies would con­sider these ac­tions as fin­an­cing Rus­sia, with all the neg­at­ive con­sequences that would fol­low.On 5 May 2022, the US De­part­ment of the Treas­ury cla­ri­fied this and oth­er is­sues re­lated to in­tel­lec­tu­al prop­erty. The De­part­ment ad­op­ted Gen­er­al Li­cence No. 31 (the “Gen­er­al Li­cence”), amend­ing in part the Rus­si­an Harm­ful For­eign Activ­it­ies Sanc­tions Reg­u­la­tions.The Gen­er­al Li­cence ex­cluded trans­ac­tions re­lated to copy­rights, trade­marks and pat­ents from the sanc­tions re­gime, es­tab­lish­ing a list of trans­ac­tions that are not sub­ject to re­stric­tions. Such trans­ac­tions in­clude:fil­ing and pro­sec­u­tion of any ap­plic­a­tion to ob­tain a pat­ent, trade­mark, copy­right or oth­er form of in­tel­lec­tu­al prop­erty pro­tec­tion;re­ceipt of a pat­ent, trade­mark, copy­right or oth­er form of in­tel­lec­tu­al prop­erty pro­tec­tion;re­new­al or main­ten­ance of a pat­ent, trade­mark, copy­right or oth­er form of in­tel­lec­tu­al prop­erty pro­tec­tion; and­fil­ing and pro­sec­u­tion of any op­pos­i­tion or in­fringe­ment pro­ceed­ing with re­spect to a pat­ent, trade­mark, copy­right or oth­er form of in­tel­lec­tu­al prop­erty pro­tec­tion, or the en­trance of a de­fence to any such pro­ceed­ing.In gen­er­al, the US au­thor­it­ies have answered two ba­sic ques­tions:Wheth­er Rus­si­an com­pan­ies can re­gister, main­tain and pro­tect in­tel­lec­tu­al prop­erty in the US.Wheth­er US com­pan­ies can do the same in Rus­sia. Ef­fect on Rus­si­an com­pan­ies Both in Rus­sia and the US, the ter­rit­ori­al prin­ciple of in­tel­lec­tu­al prop­erty pro­tec­tion, es­tab­lished by a num­ber of in­ter­na­tion­al agree­ments, ap­plies. This means that these rights are lim­ited to the coun­try in which the in­tel­lec­tu­al prop­erty was cre­ated.There­fore, un­der cur­rent cir­cum­stances, Gen­er­al Li­cence ap­provals are cru­cial for the pro­tec­tion of pat­ent rights and trade­marks in the US be­cause their pro­tec­tion is dir­ectly linked to the re­gis­tra­tion of in­tel­lec­tu­al prop­erty in the coun­try.The situ­ation is slightly dif­fer­ent with copy­right. Ac­cord­ing to the pro­vi­sions of the Berne Con­ven­tion, each mem­ber coun­try grants to cit­izens of oth­er mem­ber coun­tries the same copy­rights as it grants to its own cit­izens. In oth­er words, we can say that the in­ter­na­tion­al prin­ciple of pro­tec­tion was es­tab­lished for copy­right, but with­in the coun­tries that signed the con­ven­tion (cur­rently, there are 181 sig­nat­or­ies, in­clud­ing Rus­sia and the US).However, the copy­right pro­vi­sions of the Gen­er­al Li­cence do not lose their rel­ev­ance.Thus, the US Treas­ury De­part­ment’s Gen­er­al Li­cence fa­vours the pro­tec­tion of in­tel­lec­tu­al prop­erty of Rus­si­an right­shold­ers in the US. Ef­fect on US com­pan­ies As men­tioned above, US com­pan­ies have faced un­cer­tainty about what to do with in­tel­lec­tu­al prop­erty re­gistered in Rus­sia. Com­pan­ies were con­cerned that con­tinu­ing to main­tain in­ven­tions or trade­marks through the pay­ment of of­fi­cial fees would be seen as fin­an­cing Rus­sia.To ad­dress this is­sue, in March 2022, the US De­part­ment of the Treas­ury is­sued Gen­er­al Li­cence No. 13, which spe­cifies that US com­pan­ies are al­lowed to pay taxes, fees or im­port du­ties, provided such trans­ac­tions are nor­mal and ne­ces­sary for their day-to-day op­er­a­tions. The li­cence is val­id un­til 23 June 2022.The is­su­ance of Gen­er­al Li­cence No. 13 did not an­swer oth­er ques­tions re­lated to the use of in­tel­lec­tu­al prop­erty in Rus­sia, nor did it an­swer the ques­tion of wheth­er it is pos­sible to pay state fees after 23 June 2022.These ques­tions were answered in the Gen­er­al Li­cence. Giv­en the per­mis­sions set forth in the Gen­er­al Li­cence, it is safe to say that the re­gis­tra­tion, main­ten­ance and pro­tec­tion of in­tel­lec­tu­al prop­erty, in­clud­ing the pay­ment of of­fi­cial fees for such ac­tions, is not pro­hib­ited in Rus­sia for Amer­ic­an com­pan­ies.Moreover, through these ac­tions, the US gov­ern­ment is ba­sic­ally re­com­mend­ing that US com­pan­ies keep con­trol of their in­tel­lec­tu­al prop­erty in Rus­sia. Dif­fi­cult times will even­tu­ally pass while in­tel­lec­tu­al prop­erty will con­tin­ue to play an im­port­ant role in busi­ness de­vel­op­ment.Con­versely, the loss of in­tel­lec­tu­al prop­erty in Rus­sia would be ac­com­pan­ied only by neg­at­ive con­sequences such as:loss of pri­or­ity to in­tel­lec­tu­al prop­erty;loss of brand in Rus­sia;cap­ture of the brand’s tar­get audi­ence by oth­er com­pan­ies that have con­tin­ued to op­er­ate in Rus­sia;gradu­al ob­li­vi­on of the brand by Rus­si­an con­sumers;loss of mar­ket­ing in­vest­ment that has been spent on pop­ular­ising the brand, etc.Clearly, re­gis­ter­ing and main­tain­ing in­tel­lec­tu­al prop­erty is a per­miss­ible and, in fact, re­com­men­ded busi­ness activ­ity in both Rus­sia and the US.Co-au­thored by Sher­met Kur­b­an­ov, Paralegal in In­tel­lec­tu­al Prop­erty
The In­tel­lec­tu­al Prop­erty Law Re­view 2022
The coronavir­us pan­dem­ic has con­tin­ued to im­pact all as­pects of life over the past year, re­quir­ing gov­ern­ments, busi­nesses and in­di­vidu­als to ad­just and ad­apt. Now that bor­der re­stric­tions and shut­downs due to the vir­us are lessen­ing and in­ter­na­tion­al trade re­mains high, the need to main­tain the world’s in­ter­con­nec­ted­ness and re­li­ance on in­ter­na­tion­al trade is en­hanced and, at the same time, the stakes in­volved with that trade have in­creased con­sid­er­ably. Against this back­drop, in­tel­lec­tu­al prop­erty prac­ti­tion­ers must nav­ig­ate a vari­ety of leg­al sys­tems and in­tel­lec­tu­al prop­erty laws in which many dif­fer­ences re­main, des­pite some move­ments to­ward har­mon­isa­tion. Read the Rus­sia chapter in the In­tel­lec­tu­al Prop­erty Law Re­view 2022, pre­pared by Ant­on Bankovskiy in early Feb­ru­ary 2022. The chapter provides an over­view of the Rus­si­an reg­u­la­tions in the in­tel­lec­tu­al prop­erty in­dustry.This art­icle was pre­pared for and first pub­lished by The Law Re­views in April 2022. 
What will hap­pen to for­eign in­tel­lec­tu­al prop­erty in Rus­sia?
In re­sponse to in­ter­na­tion­al sanc­tions, Rus­sia is­sued a series of reg­u­la­tions in the area of in­tel­lec­tu­al prop­erty.Dur­ing the last two months, there have been alarm­ing sig­nals that the in­tel­lec­tu­al prop­erty of for­eign right­shold­ers could be threatened or lose pro­tec­tion in Rus­sia. However, these con­clu­sions ap­pear pre­ma­ture.In re­sponse to the cur­rent de­vel­op­ments, the at­ten­tion of vari­ous mar­ket play­ers and stake­hold­ers has been drawn to the fol­low­ing is­sues:• Can Rus­si­an com­pan­ies use for­eign pat­en­ted in­ven­tions, util­ity mod­els or in­dus­tri­al designs without ob­tain­ing con­sent or without the need to pay the right­shold­ers?• Do the same rules ap­ply to oth­er types of in­tel­lec­tu­al prop­erty?• What does the in­tro­duc­tion of par­al­lel im­port­a­tion in Rus­sia mean for for­eign com­pan­ies?• Is trade­mark squat­ting now al­lowed in Rus­sia?• Fol­low­ing the so-called “Peppa Pig” case, will the rights of for­eign com­pan­ies be pro­tec­ted be­fore the Rus­si­an courts?Based on ex­ist­ing le­gis­la­tion and case-law, the fol­low­ing an­swers to these ques­tions con­firm that in­tel­lec­tu­al prop­erty will re­main pro­tec­ted in Rus­sia.Use of for­eign pat­en­ted in­ven­tions or in­dus­tri­al design­sOn 6 March 2022, the Rus­si­an Gov­ern­ment (the “Gov­ern­ment”) is­sued De­cree No. 299*, which amended the meth­od for de­term­in­ing the amount of com­pens­a­tion to a right­shold­er for the use of its pat­ent-pro­tec­ted ob­ject without con­sent (“Com­puls­ory Li­cens­ing”). For pat­enthold­ers from for­eign states that com­mit “un­friendly acts” against Rus­sia (“Un­friendly States”), this com­pens­a­tion was re­duced to zero.It is im­port­ant to note that this pro­ced­ure only ap­plies when the Gov­ern­ment trig­gers the mech­an­ism of Com­puls­ory Li­cens­ing set out in Art­icle 1360 of the Rus­si­an Civil Code.The art­icle al­lows for the use of an in­ven­tion, util­ity mod­el or in­dus­tri­al design without the con­sent of the pat­entee, sub­ject to the fol­low­ing lim­it­a­tions:•  the pro­vi­sions may only be ap­plied in the lim­ited cases strictly laid down in the art­icle;•  this de­cision is taken by a sep­ar­ate Gov­ern­ment de­cree and ex­tends solely to the spe­cif­ic pat­ent held by a par­tic­u­lar right­shold­er for a lim­ited peri­od of time;•  such a de­cision gives this pat­ent use to a spe­cified com­pany, not to any per­son or en­tity;•  the pat­entee must be provided with the com­pens­a­tion es­tab­lished by Gov­ern­ment de­cree (for com­pan­ies from “Un­friendly States” – zero, for com­pan­ies from oth­er coun­tries – a 0.5% roy­alty, as has been the case since 2021);•  this de­cision does not lim­it the right­shold­er’s abil­ity to ex­er­cise its rights with­in the Rus­si­an Fed­er­a­tion or to li­cense these rights to someone else.An­swer­ing the ques­tion of wheth­er Rus­si­an com­pan­ies are ob­liged to pay com­pens­a­tion to pat­ent own­ers from “Un­friendly States” when us­ing their pat­ent-pro­tec­ted ob­jects, the an­swer is yes, they do. The Gov­ern­ment can make ex­cep­tions for a par­tic­u­lar Rus­si­an com­pany and a par­tic­u­lar pat­ent.As for ex­cep­tions, Art­icle 1360 of the Rus­si­an Civil Code has been used only twice for the peri­od of its ex­ist­ence since 2008, and in both cases it was re­lated to vi­tal drugs.In ad­di­tion, it should be re­called that Art­icle 1360 of the Rus­si­an Civil Code was ad­op­ted in ac­cord­ance with the pro­vi­sions of Art­icle 31 of the TRIPS Agree­ment and it is sim­il­ar to the same leg­al pro­vi­sions in oth­er coun­tries.Can Com­puls­ory Li­cens­ing be ap­plied to oth­er types of in­tel­lec­tu­al prop­erty?Art­icle 1360 of the Rus­si­an Civil Code (the rule on Com­puls­ory Li­cens­ing) ap­plies only to in­ven­tions, util­ity mod­els or in­dus­tri­al designs and can­not be ap­plied to oth­er in­tel­lec­tu­al prop­erty, in­clud­ing soft­ware or trade­marks.Fur­ther­more, there is no oth­er sim­il­ar reg­u­la­tion for oth­er in­tel­lec­tu­al prop­erty ob­jects in Rus­sia.Par­al­lel im­port­a­tion in Rus­siaOn 29 March 2022, the Gov­ern­ment is­sued De­cree No. 506*, which partly leg­al­ised par­al­lel im­port­a­tion, by es­tab­lish­ing the in­ter­na­tion­al prin­ciple of ex­haus­tion of rights to in­ven­tions, util­ity mod­els, in­dus­tri­al designs and trade­marks.This means that if genu­ine goods have been leg­ally put on the mar­ket by the right­shold­er in any part of the world, these goods can then be freely sold in the ter­rit­ory of Rus­sia without the ad­di­tion­al con­sent of the right­shold­er. This prin­ciple will not ap­ply to all goods, but only to those lis­ted in a spe­cial list* pre­pared by the Rus­si­an Min­istry of In­dustry and Trade. The De­cree is meant for products of com­pan­ies that de­clared their exit from the Rus­si­an mar­ket and do not im­port their products to Rus­sia.The Rus­si­an Min­is­ter of In­dustry and Trade noted* that the list of goods al­lowed for par­al­lel im­ports will be nar­rowed (goods will be ex­cluded from the list) if for­eign com­pan­ies de­cide to con­tin­ue op­er­at­ing in Rus­sia and sup­ply their products to the Rus­si­an mar­ket.A sim­il­ar sys­tem with cer­tain spe­cif­ic fea­tures also ap­plies in the US.Is trade­mark squat­ting now al­lowed in Rus­sia?Over the past few weeks, amid news of for­eign com­pan­ies leav­ing the coun­try, sev­er­al dozen trade­mark ap­plic­a­tions have been sub­mit­ted to the Rus­si­an Trade­mark Of­fice, “Rospat­ent”, that were identic­al or con­fus­ingly sim­il­ar to well-known for­eign brands.However, the pro­ced­ure for re­gis­ter­ing a trade­mark at Rospat­ent, as in any oth­er pat­ent of­fice around the world, gen­er­ally con­sists of the fol­low­ing steps:•  sub­mis­sion of a trade­mark ap­plic­a­tion to the pat­ent of­fice for re­gis­tra­tion;•  a trade­mark ex­am­in­a­tion (in­clud­ing check­ing wheth­er the re­gis­tra­tion in­fringes someone else’s rights on their trade­marks);•  a trade­mark re­gis­tra­tion.Any­one is en­titled to ap­ply for the re­gis­tra­tion of a trade­mark, but this does not mean that any mark will be re­gistered. In fact, Rospat­ent has con­sist­ently denied re­gis­ter­ing des­ig­na­tions even dis­tantly re­sem­bling re­gistered trade­marks.Moreover, on 1 April 2022, as the is­sue be­came highly pub­li­cised, Rospat­ent re­leased its po­s­i­tion* re­gard­ing trade­marks sim­il­ar to well-known for­eign brands, not­ing that a pre­vi­ously re­gistered identic­al or sim­il­ar trade­mark known in Rus­sia pre­vents the re­gis­tra­tion of the trade­mark in ques­tion.Will the rights of for­eign com­pan­ies be pro­tec­ted be­fore Rus­si­an courts?The dis­cus­sion about the in­ab­il­ity of for­eign com­pan­ies to de­fend their rights be­fore Rus­si­an courts began with the “Peppa Pig” case*.On 3 March 2022, the Com­mer­cial Court of the Kirov Re­gion dis­missed the law­suit of a UK com­pany for the trade­mark in­fringe­ment of the Peppa Pig char­ac­ters, call­ing the very fact of go­ing to court an ab­use of rights, be­cause the com­pany is re­gistered in a state that has im­posed sanc­tions against Rus­sia.The case has been strongly cri­ti­cised by the Rus­si­an busi­ness com­munity. The de­cision is not cur­rently in force and is be­ing re­viewed by the court of ap­peal.In oth­er words, as of today, no judg­ments in Rus­sia have been fi­nal­ised that would deny a for­eign com­pany pro­tec­tion of its rights on the grounds that it is re­gistered in an “Un­friendly State”.Moreover, later judg­ments rais­ing the is­sue of the “un­friendly” ori­gin of com­pan­ies have not fol­lowed this ap­proach. The courts reasoned that the ori­gin of an en­tity does not in it­self in­dic­ate an ab­use of rights by that en­tity. This reas­on­ing has been re­flec­ted in the fol­low­ing judg­ments:•  De­cision* of the Com­mer­cial Court of the Chelyab­insk Re­gion dated 29 March 2022 in case No. A76-42835/2021;•  De­cision* of the Com­mer­cial Court of Mo­scow dated 31 March 2022 in case No. A40-162262/2020;•  De­cision* of the Fifth Com­mer­cial Court of Ap­peal dated 1 April 2022 in case No. A51-20464/2021;•  De­cision* of the Com­mer­cial Court of the Krasnodar Ter­rit­ory dated 4 April 2022 in case No. A32-4335/2022;•  De­cision* of the Com­mer­cial Court of the Re­pub­lic of Al­tai dated 4 April 2022 in case No. A02-31/2022;•  De­cision* of the Com­mer­cial Court of the Re­pub­lic of Ud­mur­tia dated 8 April 2022 in case No. A71-16168/2021.Con­clu­sion­Due to re­cent events, Rus­si­an in­tel­lec­tu­al prop­erty law has un­der­gone changes, but these al­ter­a­tions have not un­der­mined the pro­tec­tion of in­tel­lec­tu­al prop­erty rights for for­eign com­pan­ies. Mean­while, many fea­tures of the new laws have been taken out of con­text and mis­rep­res­en­ted.In es­sence, all counter-sanc­tions taken by the Gov­ern­ment are primar­ily eco­nom­ic in nature, aimed at sup­port­ing the eco­nomy (e.g. lim­it­ing the with­draw­al of cur­rency) and de­liv­er­ing prop­er coun­ter­meas­ures (e.g. re­stric­tions on flights or trans­port). Meas­ures in the area of in­tel­lec­tu­al prop­erty are pin­pointed and aimed at pro­tect­ing spe­cif­ic in­terests as is the case with Com­puls­ory Li­cens­ing, which was only used in the past in cases of vi­tally needed drugs.Thus, in­tel­lec­tu­al prop­erty is still pro­tec­ted by law and leg­al prac­tices, both for Rus­si­an and for­eign com­pan­ies.* In Rus­si­an
The Mo­scow of­fice of CMS to con­tin­ue as an in­de­pend­ent law firm
Dear FriendsWe have been through a lot dur­ing 30 years in Rus­sia. Now a dif­fi­cult de­cision has been taken by CMS to leave the Rus­si­an mar­ket. We are grate­ful to our in­ter­na­tion­al col­leagues for their...