In the midst of war, Russia strikes at patents
As US-EU sanctions deepen, Moscow passes law allowing free use of patents held by ‘hostile countries’
The wars launched by the United States and its allies in the North Atlantic Treaty Organization (NATO) have become increasingly vicious in recent decades, worse than the atomic bombings of Hiroshima and Nagasaki or the savage conflict in Vietnam, some would say.
America’s new wars are more gruesome because of their lasting effect on millions of civilians in the countries they chose to attack. Large numbers of people have been killed, millions displaced and entire generations destroyed by the systematic destruction of infrastructure and the use of harsh economic sanctions.
The ongoing conflict in Ukraine, in which both the attacker and the aggressor are European countries, follows a familiar pattern but with certain “refinements”.
Shaken by a challenge to their hegemony, the United States and Europe, along with their allies around the world, have galvanized every multinational forum under their control to act quickly.
These include the United Nations, the Bretton Woods institutions, the International Court of Justice and others, which are working to censor Russia while injecting arms into Ukraine.
With the help of powerful multinationals and international credit institutions, the alliance deploys the most comprehensive range of sanctions to suppress almost all Russian economic activity.
The sanctions cover banks, energy, shipping, commercial entities, state-owned enterprises, businessmen and, oddly enough, Russian officials and their families, including President Vladimir Putin’s daughters and relatives. Foreign Minister Sergei Lavrov.
In addition to imposing a ban on new investment in Russia, Western countries have also frozen the assets of Russia’s central bank, meaning Moscow will not be able to use its $630 billion foreign exchange reserves.
Russia retaliated with a series of sanctions against “hostile countries”, or those who imposed sanctions on it. But as boycotts and sanctions begin to bite, Russia has decided on a crisis measure to counter some of the impact.
It will have to speed up the production of certain essential goods such as medicines and software, which are in short supply. In early March, the Kremlin issued Decree 299, which stated that when the government decides to use an invention, utility model or industrial design without the consent of the patent holder, it would be without any compensation.
This marks a sea change in policy in the way Russia views intellectual property (IP). For example, the repercussions of using pirated software in Russia are severe. Violation of copyright and related rights is punishable by up to six years in prison and fines of up to 500,000 rubles ($6,303).
There are, of course, exceptions to the protection of intellectual property in the public interest. India has several provisions in its patent law to allow the state to override intellectual property rights, for example in the event of a public health emergency, and issue a compulsory license (CL).
Article 1360 of the Russian Civil Code gives the government the right to use intellectual property “in cases of extreme urgency, in order to ensure the defense and security of the state, the protection of life and health persons” without the approval of the patent owner.
But such use, governed by commensurate compensation set by the government, has been rare until now. The first time Moscow issued a CL was in December 2020, to deal with the health crisis caused by the covid-19 pandemic. It was awarded to Russian company Pharmasyntez to manufacture Gilead Sciences’ remdesivir.
Gilead received a royalty. Russia’s second CL was also related to the use of Gilead’s patents. In October 2021, Moscow issued a decree setting compensation for state-authorized use of patents at 0.5% of revenue.
The latest rule appears to supersede this executive order by waiving any compensation for patents held by citizens of hostile countries or by owners of patents registered in those countries. Would this require an amendment to Section 1360 to meet the current requirement?
When the EU opened the intellectual property front in its sanctions war against Russia, it may not have expected such a quick turn of events. EU action to end all cooperation with the Russian patent office (Rospatent) was quickly followed by the US Patent and Trademark Office, which went further by ending its program accelerated Global Patent Prosecution Highway with Rospatent.
Russia passed Decree 299 within days. This may be the first time such actions have been used during a conflict. US and European intellectual property websites are now awash with reports that Russia is planning to engage in large-scale piracy, particularly of software. Such speculation has been spurred by the exit of software giants such as Microsoft, Cisco, Oracle, IBM and Intel from Russia, and their suspension of new licenses.
To counter this, there are fears that Russia may implement a software licensing mechanism to renew expired licenses without the consent of the copyright holder. A draft action plan is certainly under discussion, but as has been widely reported, all the ministries involved in such a policy do not agree on the appropriation of software technologies.
Experts say exceptions to copyright are already established in the Civil Code and are also permitted by the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). ). Article 73 of the TRIPS Agreement allows members to take any action deemed necessary for the protection of their essential security interests, and specifically mentions measures “taken in time of war or other emergency in the relations international”.
By using intellectual property rights as a tool of war, Russia is taking inspiration from the United States‘ book. The most glaring example from Washington is the Trading with the Enemy Act introduced during World War I, which allowed the United States to seize copyrights and patents held by enemy countries.
The law’s best-known victim was the German Bayer, which owned aspirin, the world’s top-selling drug at the time. Aspirin was the brand name of the drug that Bayer synthesized in 1899 and was trademark protected.
After the United States entered the war in 1917, Bayer lost not only its intellectual property rights to aspirin, but also its American company. Its assets, including the brand, were seized and auctioned off to an American company, Sterling. It’s another matter that Sterling couldn’t make aspirin and was forced to bring Bayer back as a partner. Russia could learn from the history of US ownership of the war.
We are a voice for you; you have been a great support to us. Together, we are building independent, credible and fearless journalism. You can still help us by making a donation. It will mean a lot to our ability to bring you news, insights and analysis from the ground up so that we can effect change together.