United States halts work with Russian Patent Office, while Russia lessens foreign intellectual property protections

While the humanitarian crisis has received the most attention during the emerging situation in Ukraine, numerous other facets of the world economy, international relations, and daily life have also been affected. One surprising result has been the consequences related to intellectual property (IP) rights. As part of their comprehensive regime of economic and diplomatic sanctions against Russia and its allies, the United States and Europe have taken steps to limit engagement with Russian intellectual property officials. In response to these measures, Russia is now permitting the unauthorized use of foreign intellectual property within its territory and has largely eliminated mechanisms to remedy infringement. In this article, we will detail recent developments in the intellectual property space in the wake of the crisis in Ukraine and provide considerations for intellectual property holders to protect their assets in light of these events.

United States disengages with the Russian intellectual property office

The United States Patent and Trademark Office (USPTO) has announced that it is cutting ties with the Russian and Belarusian intellectual property offices and the Eurasian Patent Organization.¹ In a statement released on March 4, 2022, the USPTO indicated that it will no longer engage with officials from either the Federal Service for Intellectual Property (Russia’s intellectual property office) or the Eurasian Patent Organization in light of the ongoing situation in Ukraine. Based in Moscow, the Eurasian Patent Organization provides services to countries including Belarus and Russia. In an update on March 8, the USPTO announced that it would also stop engaging with the intellectual property office of Belarus. The United States’ decision came days after the European Patent Office similarly announced that it would discontinue working with these three IP offices.²

Additionally, as of March 11, 2022, patent applications originating in Russia will no longer be eligible for processing by the USPTO under the Global Patent Prosecution Highway (GPPH).³ Under the GPPH, patent applications can receive expedited processing in other countries once patent claims are allowed by a participating country’s patent office. The US currently participates with dozens of nations through this program, including China, the European Union, Germany, Norway, Poland, and the United Kingdom. The USPTO’s revocation of participation with Russia in the GPPH affects both current and future patent applications. Pending Russian patent applications that had been identified for fast-tracked processing will be removed from the GPPH queue and returned to the normal processing line. At the same time that the US has withdrawn this status, the China National Intellectual Property Administration has now extended its GPPH pilot program with the Eurasian Patent Office for another year.⁴

Russia permits unauthorized use of intellectual property originating in “unfriendly” countries

In response to economic and diplomatic sanctions imposed by the United States and its allies, Russia has authorized the use of certain foreign patents without compensation or license. On March 6, 2022, Russia issued a decree permitting the use of patents for inventions, industrial designs, and utility models originating in “unfriendly” countries.⁵ These countries identified by Russia include Albania, Andorra, Canada, European Union countries, Iceland, South Korea, Lichtenstein, Macedonia, Micronesia, Monaco, Montenegro, New Zealand, Norway, San Marino, Singapore, Sweden, Taiwan, Ukraine, the United Kingdom, and the United States. This policy applies to patent holders who are nationals of or doing business in one of the identified countries.

The Russian court system has also diluted foreign trademark rights. A Russian court has decided to allow the continued infringement of two Peppa Pig trademarks in response to Western economic sanctions.⁶ Entertainment One UK Limited, a subsidiary of Hasbro Inc., brought a trademark infringement suit against a Russian entrepreneur for use of its “Peppa Pig” and “Daddy Pig” marks. The suit was dismissed by the Arbitration Court of the Kirov Region in a decision published on March 3, 2022. The presiding judge specifically cited the economic sanctions imposed by the United States and other European countries as grounds for ruling the case was an “abuse of right” and thus subject to dismissal.⁷ Following this ruling, trademark applications have already been filed in Russia that clearly copy famous brands like McDonald’s and Starbucks.⁸

Russian officials continue to discuss and implement additional legal measures that further erode protections for foreign intellectual property and other assets. Russia’s president, Vladimir Putin, has declared he will seek authorization for his government to seize assets owned by foreign businesses that leave Russia.⁹ The effects of such seizures could be substantial, particularly in light of the multinational corporations that have temporarily halted operations in Russia, including Disney and Coca Cola. For example, new Russian legislation has authorized the seizure of leased foreign airplanes for domestic use, resulting in the confiscation of over $12 billion in assets.¹⁰ Other Russian officials have discussed authorizing the use of trademarks owned by brands that have limited or depleted supplies in Russia or to seize manufacturing facilities related to key industries, such as automotive giants Ford and General Motors. Further, Russian lawmakers have stated plans to draft legislation authorizing compulsory licensing of software and circuitry technology originating in countries imposing sanctions on Russia, which would result in the de facto legalization of copyright infringement.¹¹

These policies, taken as a whole, present significant risks to the intellectual property rights of owners residing and doing business in the United States, Europe, and other Western nations and may result in the loss of valuable IP assets with no remedy available to rights holders.

Considerations for intellectual property owners

As Russia takes steps to weaken intellectual property rights and eliminate enforcement mechanisms within its borders, piracy of patented technology, brand names and logos, and copyrighted works is likely to be on the rise. Although intellectual property owners have little recourse against infringement occurring within Russian territory, individuals and businesses may have other avenues to protect their intellectual property assets and mitigate the harms caused by these new and potential Russian policies.

Monitor imports of goods.
While trademark owners may be unable to address infringement of their intellectual property within Russian borders, companies may be able to control the entry of infringing goods into other foreign markets. Many countries allow owners to register their trademarks and copyrights with customs offices. This registration allows customs officials to monitor goods entering the country and to detain, seize, or exclude goods that infringe a registered trademark or copyright. By filing for registration with a customs office, copyright and trademark owners can limit the proliferation of unauthorized goods into global streams of commerce.

Apply for additional IP protection.
Individuals and businesses can strengthen their intellectual property portfolios by applying for additional registrations in key countries and markets. In particular, intellectual property holders may consider applying for IP protection in countries that border Russia or are important Russian trading partners. These additional patents and trademark and copyright registrations provide more robust enforcement of IP rights and may mitigate the movement of infringing products originating in Russia from entering other foreign markets.

Consider the sanctions landscape before paying fees to maintain intellectual property in Russia.
Due to the current economic sanctions and restrictions on funds to Russian government and business entities imposed by numerous countries around the world, intellectual property owners should be wary of paying fees related to their patent, copyright, and trademark applications or registrations in Russia. IP holders may want to consult with legal counsel or other advisors who follow the evolving sanctions regime to evaluate the legality and feasibility of such payments.

Carefully evaluate current and future investments in Russia.
Entities and individuals with tangible and intangible property assets in Russia should carefully monitor their holdings and any developments in Russian law and policy regarding property rights and ownership. Multinational and non-Russian companies should formulate plans to respond to possible piracy of their intellectual property and potential government confiscation of real estate or manufacturing and equipment assets. Looking ahead, businesses and individuals should thoroughly evaluate the costs and benefits of continued or new investments in Russian markets in light of the ongoing legal and economic environment.

Monitor developments.
As this situation evolves, intellectual property owners should continue monitoring trusted news sources and government communications to keep abreast of legal and economic developments that may affect their assets and investments.

Conclusion

The future of intellectual property rights in Russia remains uncertain. The costs associated with these new policies and the threat these measures pose to established brands and valuable technology is yet to be determined. In light of this evolving crisis, intellectual property owners should evaluate their risks and work to strengthen their IP portfolios.

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¹ https://www.uspto.gov/about-us/news-updates/uspto-statement-engagement-russia-and-eurasian-patent-organization

² https://www.epo.org/news-events/news/2022/20220301a.html

³ https://www.uspto.gov/patents/basics/international-protection/patent-prosecution-highway-pph-fast-track

⁴ https://www.natlawreview.com/article/uspto-cuts-ties-eurasian-patent-organization-china-national-intellectual-property

⁵ http://publication.pravo.gov.ru/Document/View/0001202203070005?index=0&rangeSize=1

⁶ https://www.law360.com/articles/1473286/attachments/0

⁷ https://www.law360.com/articles/1473286/russia-oks-use-of-peppa-pig-tm-as-sanctions-retaliation

⁸ https://www.law360.com/ip/articles/1474611/mcdonald-s-starbucks-already-facing-russian-tm-copycats

⁹ https://thehill.com/policy/finance/economy/597923-russias-efforts-to-salvage-economy-could-have-devastating-impacts

¹⁰ https://www.cnn.com/2022/03/16/business/russia-aircraft-seizure/index.html

¹¹ https://arstechnica.com/tech-policy/2022/03/russia-mulls-legalizing-software-piracy-as-its-cut-off-from-western-tech/

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