Proposed bill to cancel IP rights protection gets red light from the Legal Department of the State Duma

On 19 June 2024, a concerning draft bill 651038-8 was introduced to the State Duma by Mikhail Delyagin, a Russian economist and publicist known for his provocative legislative proposals, which often face rejection. The bill aims to cancel the protection of intellectual property (IP) rights for entities classified as “unfriendly” in Russia.

While the bill’s consideration has yet to commence, the Legal Department of the State Duma has issued a preliminary response. They stated that the proposed amendments must align with specific provisions of the Russian Civil Code, particularly Paragraph 2 of Article 1 and Paragraph 5 of Article 1229, which outline the conditions for restricting exclusive rights. Additionally, the bill must comply with Federal Law No. 127-FZ, enacted on 4 June 2018, which addresses countermeasures against actions by the United States and other foreign nations, as well as Federal Law No. 281-FZ from 30 December 2006, governing special economic measures against unfriendly foreign states, their citizens, and legal entities.

The Legal Department emphasized the need to adhere to the principle of reciprocity in regulating foreign trade activities. The procedures for implementing measures affecting foreign trade in IP, including retaliatory measures, are detailed in several sections of Federal Law No. 164-FZ from 8 December 2003.

Crucially, the proposed amendments appear to conflict with international treaties and agreements Russia is a party to. These include the Berne Convention for the Protection of Literary and Artistic Works, the Paris Convention for the Protection of Industrial Property, the Rome Convention for the Protection of Performers and Producers, and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). However, by local rules, the State Duma must still consider the bill before making any final decision.

These developments occur against ongoing geopolitical tensions between Russia and several foreign countries, especially amid sanctions and economic pressures. As Russia faces increasing isolation from the West, the potential effects of this bill may reach beyond domestic legislation, possibly intensifying diplomatic strains and complicating international cooperation in intellectual property matters.

In summary, the response from the Legal Department indicates that the draft bill may not comply with Russia’s international obligations, potentially rendering it illegal or inconsistent with international laws. This development aligns with the current attitude of the government stance toward intellectual property protection. It could be argued that while Russia may be interested in using changes to intellectual property (IP) laws against unfriendly countries as a counteraction to sanctions, it also has a strong incentive to keep the IP system reliable and stable. This stability is essential for many IP Rights holders to continue registering and defending their rights as they have in the past.

At least for now, this situation appears to be favorable for foreign IP rights holders. As discussions continue amid geopolitical instability, IP rights holders will certainly be watching for further developments.

For more information, please contact Riikka Palmos, Director and European Trademark Attorney, at riikka.palmos@papula-nevinpat.com.