Intellectual property issues

Paris Convention

Is your jurisdiction party to the Paris Convention for the Protection of Industrial Property? The Patent Cooperation Treaty (PCT)? The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs)?

Yes. Russia is a party to these treaties. In fact, Russia is a party to many other intellectual property-related conventions and agreements, including:

  • the World Intellectual Property Organization Copyright Treaty 1996;
  • the Berne Convention for the Protection of Literary and Artistic Works 1886;
  • the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations 1961;
  • the Locarno Agreement Establishing an International Classification for Industrial Designs 1968;
  • the Patent Law Treaty 2000;
  • the Strasbourg Agreement Concerning the International Patent Classification 1971;
  • the Madrid Agreement Concerning the International Registration of Marks 1891;
  • the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks 1989;
  • The Patent Cooperation Treaty 1971;
  • The Agreement on Trade-Related Aspects of Intellectual Property Rights 1994;
  • the Trademark Law Treaty 1994; and
  • the Singapore Treaty on the Law of Trademarks 2006.
Contesting validity

Can the licensee be contractually prohibited from contesting the validity of a foreign licensor’s intellectual property rights or registrations in your jurisdiction?

The licensee can be contractually prohibited from contesting the validity of a foreign licensor’s intellectual property rights or registrations in Russia. The ‘no-challenge clause’ is not prohibited by Russian law and is, therefore, usually applied in the Russian licensing practice. And, the licensee’s action to the contrary may be considered as a breach of contract, or even abuse of rights, that may be remedied eventually by the licensor. At the same time, Russian law gives anyone certain freedom for challenging intellectual property protection – hence, allowing any third party to do so. As a result, many practitioners will argue that the licensee may not be estopped by contract from such legal ‘right to challenge’, even in the event of contractual existence of the ‘no-challenge clause’ in the licence agreement, assuming the ‘no-challenge clauses’ are unenforceable. At any rate, the court should take into account all circumstances surrounding such an action (if brought) and render the judgment based on the civil law concepts of ‘good faith’ and ‘fair dealing’.

Invalidity or expiry

What is the effect of the invalidity or expiry of registration of an intellectual property right on a related licence agreement in your jurisdiction? If the licence remains in effect, can royalties continue to be levied? If the licence does not remain in effect, can the licensee freely compete?

In Russia, the invalidity or expiry of registration of an intellectual property right on a related licence agreement leads to automatic termination of the licence agreement. This fact is specifically confirmed by Russian law and relevant court practice. According to the common rule, the licence agreement based on patent or trademark rights, which are subsequently held invalid, shall be terminated immediately (ie, from the date of issuance of the respective decision on the invalidity of the contracted patent or trademark). And, in this regard, the licensee’s claims on the refunding of licence fees – for the period preceding the patent or trademark invalidation – shall be simply dismissed by the court. Similarly, the licensor’s claims on the recovery of non-settled licensed fees – for the period preceding the patent or trademark invalidation – will not be satisfied by the court.

When the licence agreement does not remain in effect, the royalties cannot be levied by the licensor, and the licensee may then start to compete, using different intellectual property assets. Generally, the use of the licensed intellectual property subject matter upon expiration or termination of the licence agreement shall be regarded as infringement (article 1237(3) of the Russian Civil Code).

Requirements specific to foreigners

Is an original registration or evidence of use in the jurisdiction of origin, or any other requirements unique to foreigners, necessary prior to the registration of intellectual property in your jurisdiction?

There are no such requirements set forth to foreigners in Russia. Any foreign investor (legal entity or individual – as applicable) can register its intellectual property in this jurisdiction without having an original intellectual property registration or evidence of use in the jurisdiction of origin. At the same time, to be able to license certain intellectual property in Russia its owner has to register the intellectual property object in this jurisdiction first. For instance, this rule may be applied to trademarks and patents.

Unregistered rights

Can unregistered trademarks, or other intellectual property rights that are not registered, be licensed in your jurisdiction?

Unregistered marks, unless such marks have obtained a special well-known status within the meaning of Russian law, may not be licensed in Russia. In other words, pending national or international marks, as well as regular trademark applications, may not be the subject matter of licence transaction in this jurisdiction. However, if the unregistered mark is officially recognised as a well-known trademark in Russia, it may be licensed in favour of a third party without fail and without trademark registration as an imperative prerequisite. As to other intellectual property rights, which are not subject to registration for the purpose of protection in Russia, such as copyrights and related rights, software and databases, know-how and others, the same may be freely licensed, and the relevant licence transactions do not need to be registered.

Security interests

Are there particular requirements in your jurisdiction to take a security interest in intellectual property?

As a general rule, an intellectual property security interest must be in writing. In other words, it has to represent a written executed instrument (agreement) that clearly shows the will of the contracting parties towards the subject matter of a particular transaction and contains the material terms required by law depending on the nature of the transaction. In addition, to be complete, valid and enforceable against third parties an intellectual property security Interest – made against the registrable objects (eg, trademarks, patents) – must be registered with the competent state authority.

Proceedings against third parties

Can a foreign owner or licensor of intellectual property institute proceedings against a third party for infringement in your jurisdiction without joining the licensee from your jurisdiction as a party to the proceedings? Can an intellectual property licensee in your jurisdiction institute proceedings against an infringer of the licensed intellectual property without the consent of the owner or licensor? Can the licensee be contractually prohibited from doing so?

A foreign owner or licensor of intellectual property can institute enforcement proceedings against a third party for infringement in Russia without joining the licensee as a party to the proceedings. An exclusive intellectual property licensee may institute the enforcement proceedings against a third-party infringer only where its relevant contractual rights are affected. It is not possible for the intellectual property owner to contractually prohibit the exclusive licensee from doing so, since it is the legal right provided by law, but it is possible for the owner to join the enforcement proceedings as a party. A non-exclusive intellectual property licensee does not have the legal right to commence the infringement proceedings; however, it may be authorised under the owner’s power of attorney to act on behalf of the latter against a third-party infringer.

Sub-licensing

Can a trademark or service mark licensee in your jurisdiction sub-license use of the mark to a third party? If so, does the right to sub-license exist statutorily or must it be granted contractually? If it exists statutorily, can the licensee validly waive its right to sub-license?

A trademark or service mark licensee can sub-license the use of the mark to a third party only under the consent of the trademark or service mark owner (licensor). Such consent must be in writing and may be given expressly in the licence agreement. Otherwise, such written consent may be granted separately by the licensor before the implementation of the sub-licence agreement. If the licence agreement is silent on the issue of sub-licensing, and no separate written consent of the licensor has been granted, the licensee will not be entitled to sub-license the use of the trademark or service mark or other intellectual property subject matter in Russia.

Jointly owned intellectual property

If intellectual property in your jurisdiction is jointly owned, is each co-owner free to deal with that intellectual property as it wishes without the consent of the other co-owners? Are co-owners of intellectual property rights able to change this position in a contract?

If the intellectual property, such as copyrighted or patented subject matter, is jointly owned, co-owners must deal with that intellectual property all together, unless the agreement between co-owners provides otherwise. In other words, the underlying contracts, including licences, assignments and security interests, have to be signed by each and all co-owners, provided there is no co-owner agreement to the contrary. By way of a written agreement, co-owners are free to empower one respective owner to take the disposal of the corresponding intellectual property object on behalf of or in the name of the others. Therefore, the co-owner agreement may allocate the rights and interests of co-owners and state the relevant liabilities of the parties. Trademarks, unless they represent collective marks, may not be registered in the name of two persons and hence be co-owned.

First to file

Is your jurisdiction a ‘first to file’ or ‘first to invent’ jurisdiction? Can a foreign licensor license the use of an invention subject to a patent application but in respect of which the patent has not been issued in your jurisdiction?

Russia is a ‘first to file’ jurisdiction. The intellectual property registration will be granted on a ‘first come, first served’ basis.

With regard to patents, if there is no patent registration in Russia, its owner will not be able to license the use of its invention in favour of a third party. Only Russia-registered and Russia-granted patents may be licensed in this jurisdiction. Pending patents or patent applications cannot be licensed in Russia.

Scope of patent protection

Can the following be protected by patents in your jurisdiction: software; business processes or methods; living organisms?

According to article 1350(5.5) of the Russian Civil Code, software (computer programs) are regarded as non-patentable objects. As a general rule, the subject matter of invention that does not have the technical character is not patentable in Russia. Software (computer programs) ‘as such’ are regarded as subject matters that do not have the technical character, hence software cannot be patented in this jurisdiction. At the same time, a patent may be granted to a new, inventive and industrially applicable software products in conjunction with hardware computer elements. The local practice affirms this fact so far.

On a separate note, software (computer programs) are protected as literary works by operation of copyright law. During the whole period of software protection, its owner has the optional right to apply for registration of its computer program with the competent state authority. Software registration is not a prerequisite for its legal protection in Russia, but it may serve as an additional (documentary) evidence of intellectual property creation, validity and ownership. Also, software registration may have an advantageous effect on the course of enforcement proceedings.

According to article 1350(5.4) of the Russian Civil Code, rules and methods for doing business are not considered as inventions. Hence, business processes or methods are not patentable in Russia.

Living organisms may be patented in Russia, provided that they meet general patentability criteria. At the same time, there are certain exceptions. Under article 1349(4) of the Russian Civil Code, the following shall not be regarded as patented objects:

  • methods of cloning human beings;
  • methods of modifying the genetic integrity of human germline cells; and
  • use of embryos for industrial and commercial purposes.

 

Also, plant varieties, animal breeds and biological methods of obtaining them, except for microbiological methods and products obtained through the use of such methods, are regarded as non-patentable inventions. Nevertheless, plant varieties and animal breeds are regarded as ‘achievements of selection’ that may be protected as intellectual property objects under a special legal regime in Russia.

Trade secrets and know-how

Is there specific legislation in your jurisdiction that governs trade secrets or know-how? If so, is there a legal definition of trade secrets or know-how? In either case, how are trade secrets and know-how treated by the courts?

There is specific legislation that governs trade secrets and know-how in Russia. While trade secrets are governed by the Russian Federal Law on Trade Secrets (No. 98-FZ, dated 29 July 2004 - as amended), know-how (also known as ‘secrets of production’) is regulated by Chapter 75 of the Russian Civil Code. In particular, ‘trade secret’ is defined by law as the regime of confidentiality of information allowing its owner, under the existing or potential circumstances, to increase profits, to avoid unnecessary expenses, to preserve the market standing of the goods, works and services, or to receive other commercial benefits (article 3(1) of the referenced Law on Trade Secrets). Know-how is regarded as information of any kind (industrial, technical, economical, organisational and other) related to the results of intellectual activities in the sphere of science and technology, and information on the means of performance of professional activities that has actual or potential commercial value by virtue of being unknown to third parties, to which third parties have no legitimate access under lawful grounds, and with regard to which, the owner has undertaken reasonable measures to protect the confidentiality of such information, including by implementing the trade secrets regime (article 1465 of the Russian Civil Code). Hence, trade secrets (or the ‘trade secrets regime’) may be the cornerstone of know-how, which is protected as individual intellectual property subject matter in Russia.

The Russian courts traditionally and regularly enforce the intellectual property rights vested in know-how in the event the ‘trade secrets regime’ has been implemented by its owner in due course. Simply, the owner of confidential information must take the following reasonable measures so that such information may acquire know-how protection:

  • to identify the list of information containing trade secrets;
  • to limit the access to the information containing trade secrets by establishing the appropriate procedure for dealings with the same and by exercising control for compliance over such procedure;
  • to keep records of persons who have legitimate access to the information containing trade secrets as well as persons to whom such information has been transferred to;
  • to regulate the relationship in connection with the use of information containing trade secrets by employees (under labour or employment contracts), or by contractors (under civil law contracts); and
  • to record the information containing trade secrets on any material object or tangible medium (document, paper or disc, etc) and affix the notice ‘trade secret’ along with the indication of the owner’s details.

 

If the owner of confidential information ultimately fails to take the above-mentioned measures, the owner of confidential information may undertake other (reasonable) measures that it considers as appropriate to acquire rights in know-how. As a result, the owner is entitled to implement the trade secrets regime or other reasonable measures (as applicable) to receive know-how protection for its confidential information.

Does the law allow a licensor to restrict disclosure or use of trade secrets and know-how by the licensee or third parties in your jurisdiction, both during and after the term of the licence agreement? Is there any distinction to be made with respect to improvements to which the licensee may have contributed?

According to article 1469(3) of the Russian Civil Code, the licensee under the know-how licence agreement shall be obliged to preserve the confidentiality of the licensed know-how up until the termination of effect of the licensor’s exclusive rights to such intellectual property. In other words, in addition to the contractual restriction of disclosure of the licensed confidential information (know-how), the licensor will be automatically (by operation of law) protected, whether during or after the term of the licence agreement. As to the use of trade secrets and know-how by the licensee (or third parties), the same must be clearly and properly regulated under the relevant contract. On the issue of improvements to which the licensee may have contributed to, the parties’ agreement shall basically regulate the parties’ respective rights to the same. If the licensee becomes the valid owner of improvements over the licensed know-how, the licensor will not be able to interfere in the licensee’s relationship with third parties, but it will usually obtain the grant-back licence in order to be able to use such improvements in its business (if necessary).

Copyright

What constitutes copyright in your jurisdiction and how can it be protected?

Copyright subsists in scientific, literary and artistic works fixed in any tangible medium of expression, regardless of benefits, purposes as well as methods of their expression. To be copyrightable, a work of authorship shall satisfy two fundamental requirements. It must be creative (ie, made as a result of the author’s creative activity) and embodied in any material form (ie, fixed in any tangible medium of expression).

According to article 1259(1) of the Russian Civil Code, the following examples of works of authorship can obtain copyright protection:

  • literary works;
  • dramatic works;
  • musical works;
  • choreographic works and pantomimes;
  • audiovisual works;
  • sculptural, graphic and design works;
  • architectural works;
  • pictorial works; and
  • computer programs.

 

Also, copyright law protects compilations (including databases) and derivative works (including translations).

Essentially, copyright vests in a work of authorship from the moment of its creation. There is no need to register or comply with any other formalities to acquire, exercise, transact, license, protect or enforce copyright in Russia.

Law stated date

Correct on

Give the date on which the information above is accurate.

22 January 2021