Our legal trainee Eeva Tanttula compiled a blog article about intellectual property rights in Russia. Despite the problems, Russia does not seem to be planning the destruction of the IP system. "Therefore, Russia should not be completely excluded from IP strategies, but rather calmly monitor the development,” Jani Kaulo advises brand owners.
The Russian government has started responding to the sanctions coming from Europe and America by infringement of trademarks. Many medias have come forward with Russian “new” brands like the Moscow-based beer and beverage factory Ochakovo’s CoolCola, Street and Fancy, which basically are copies of Coca-Cola, Sprite, and Fanta.
As a concept, this has not been formerly allowed in Russia, and it is absolutely forbidden in international trade politics. The situation started to escalate for the first time in March, when the Russian State Duma decided, that it is not necessary to pay for the intellectual property rights if the owner of the rights is from an “unfriendly country”. At the end of May, the Duma gave its first blessing to a law proposal which enabled Russian organizations to take over property of foreign companies that no longer operate in Russia.
The document that gained its legal force in May includes over 50 categories of products whose intellectual property rights are not a concern for Russia any longer. These categories include products, for example, from the electronics industry, the automotive industry and the chemical industry. Aforementioned include, for example, Nokia, Apple, and Volvo.
The problems with infringement of intellectual property rights
The issue is very problematic from many perspectives. According to the President of the Confederation of Finnish Industries, Petri Raivio, “Russia’s new practices enable parallel imports, weaken the consumer protection, and are harmful for the companies owning intellectual property rights. Allowing parallel imports increases the import of the products that are under the sanctions without the knowledge or the permission of the manufacturer if the trading is taking place in a third country."
The situation is very difficult to forecast from the point of view of the owners of intellectual property rights. According to American senior attorney Carey Kulp, the legal importation of what are considered "gray market" goods - not counterfeit goods, but genuine products that are sold outside of the control of the trademark owners – will help alleviate the shortages of goods in Russia but will further weaken the protection of brands.
According to Kulp, even though every country has their own IP regime, world conflicts can impact IP rights globally. The consequences in the long run are to be seen. However, if Russia’s policies continue to diminish foreign IP rights, it will become necessary for the U.S. businesses to consider new filing tactics and enforcement methods for intellectual property protection. This is naturally true also for the EU countries like Finnish corporations who have business in Russia.
According to the Ukrainian lawyers Anton Kovalin and Valeriya Sokolova from Doubinsky & Osharova, the way in which Russia is fighting back against the sanctions is hardly going to be advantageous for the country, especially in the long run. The counterpunches made by Russia must be fought against as powerful as possible to end the infringement of the international fundamental agreements. However, if Russia still stays on the same course, it will most likely lead to even stricter sanctions, both qualitatively and quantitatively, which will make it more difficult to bypass international agreements and cause even more clear isolation of Russia from the rest of the world.
Eyes on the future
After all, there is still a little light at the end of the tunnel.
In March, the Russian Kirov-court dismissed the UK-based broadcast company Entertainment One UK Limited’s claim, in which they sought compensation for the infringement of IP rights of the Peppa Pig format. The company appealed for the decision, and on June 21st the local Appellate Court reversed the decision made by the Kirov-court.
The arguments of the reverse decision are clear but slightly surprising, taking into consideration Russia’s current attitude of not respecting foreign intellectual property rights.
The Appellate Court states in its decision, respecting the Berne and Madrid Conventions, that foreign companies’ intellectual property rights, including companies from the UK, must enjoy uniform respect and protection in the Russian Federation. The Court even cited the Russian legislation. The Court stated that according to the Russian law, appealing of a decision must not be interpreted as violation of the justice or as a dishonest action.
Notwithstanding the infringements of intellectual property rights, Russia does not seem to be planning the destruction of the IP system, mostly because it is an important part of its foreign and domestic business. The holders of intellectual property rights, at least based on the Peppa Pig decision, do not seem to have cause for deeper concern.
Kaulo & Partners’ managing partner and lawyer Jani Kaulo also encourages companies to remain calm despite the challenging situation. According to Kaulo, holders of IP rights should not make any hasty, permanent decisions, but monitor the development of the situation.
"I would advise companies not to completely exclude Russia from their IP strategies yet, but rather focus on the future, when this war of aggression started by Russia will be over. Hopefully this will happen soon. I just heard from my local contact that a person in a very high position in St. Petersburg had assured him that already next autumn the political relations between the West and Russia will be 'normalized' to the level they were before the start of the war in Ukraine. In the end, it's all about politics and struggle between the great powers, where also Ukraine and Europe are just intermediate pieces," Kaulo comments.
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SOURCES:
IPRinfo: Immateriaalioikeudet uhkaavat heikentyä venäjällä (14.4.2022)
Venäjä kieltää ulkomaiset ohjelmistot ja laitteistot – Laura Halminen, Helsingin Sanomat (31.3.2022)