European Patent Office Refuses Russian Patents

The European Patent Office (EPO) has announced that, as part of the European Union’s latest sanctions against Russia, it will refuse all patent requests filed by Russian nationals or companies with ties to Russia.

All requests filed since July 10, 2024, have been put on hold.

As the BBC explains,

Fighting has raged in Ukraine since Russia launched a full-scale invasion in February 2022. Russian forces have slowly expanded the amount of territory they control over the last year, mostly in the east of Ukraine, but Ukrainian forces have made those advances as slow and difficult as possible and even staged a counter-offensive into Russian territory.

According to Statista,

The Office of the United Nations High Commissioner for Human Rights (OHCHR) verified a total of 35,160 civilian casualties during Russia's invasion of Ukraine as of July 31, 2024. Of them, 23,640 people were reported to have been injured. However, OHCHR specified that the real numbers could be higher.

On June 24, the Council of the European Union (EU) adopted a 14^th package of sanctions against Russia “in view of Russia's actions destabilizing the situation in Ukraine.”

The package now includes an Article 5s on the handling of intellectual property rights:

Article 5s(2) provides that EU Member States, in their capacity as contracting states to the European Patent Convention (EPC) and in fulfilling their international obligations undertaken in the EPC, must use best efforts to ensure that the European Patent Office (EPO) refuses requests for unitary effect within the meaning of Regulation (EU) No 1257/2012 of the European Parliament and of the Council that are filed by Russian nationals or natural persons residing in Russia, or by legal persons, entities or bodies established in Russia, including if jointly filed by a Russian national or natural persons residing in Russia, legal persons, entities or bodies established in Russia with one or more non-Russian natural or legal person resident or established outside of Russia.

According to the Ukrainian National Office for Intellectual Property and Innovations,

In 2022, Russia formally legalized the infringement of IP rights of foreign rights holders from countries that expressed solidarity with Ukraine and levied sanctions and other restrictive measures against Russia. Following the longstanding traditions of the Russian propaganda “newspeak,” a list of so-called “unfriendly” countries was formulated, which included the European Union member states, Canada, Japan, the United Kingdom, the United States, and many others.

After that, Russia imposed a number of restrictions on right holders from these countries in the IP sphere, in particular:

• • allowed Russian legal entities and individuals to avoid paying compensation for the use of inventions, utility models, and industrial designs;

• • limited the ability of foreign rights holders to collect license payments for most types of IP rights;

• • denied judicial protection, etc.

(As of November 8, 2022, the responsibility for IP matters in Ukraine was moved to a newly created national IP authority—the Ukrainian National Office for Intellectual Property and Innovations (UANIPIO). As of that date, the former Ukraine Intellectual Property Institute (Ukrpatent) ceased all activities in relation to the protection of IP in Ukraine.)

Additionally, as reported here,

On 19 June 2024, a bill was introduced to the Russian State Duma to revoke intellectual property (IP) rights held by owners from so-called “unfriendly” states.

The bill proposes the following changes to the Russian Civil Code (CC):

• • Amend Article 1225 of the CC to state that IP is protected by law, except for IP held by owners from “unfriendly” states.
  • Amend Article 1231 of the CC to include a paragraph stating that IP rights held by owners from “unfriendly” states are invalid in Russia.
  • The bill provides the option to restore the IP rights of the original owners if the Russian Government decides to remove their country of origin from the list of “unfriendly” states. Such restoration will take place no sooner than three years following the Russian government’s decision on the removal.

As B1 notes,

The new limitation will … considerably complicate the ongoing operations of the companies that still operate on the Russian market under licenses from foreign IP owners (that will become invalid). This will also likely affect corporate restructuring arrangements where a Russian business owns IP through a special purpose vehicle-based in a foreign “unfriendly” jurisdiction (e.g., Cyprus).

We wrote in a blog back in 2022 how, in the wake of Western sanctions against Russia, as the Washington Post reported,

Russia has effectively legalized patent theft from anyone affiliated with countries “unfriendly” to it, declaring that unauthorized use will not be compensated.

In addition,

According to state media, Russian officials have also raised the possibility of lifting restrictions on some trademarks, which could allow continued use of brands such as McDonald’s that are withdrawing from Russia in droves.

As the Post reported then,

McDonald’s said Tuesday that it would temporarily close its 850 restaurants in Russia, a significant decision for a company that gets 9 percent of its revenue from Russia and Ukraine. Without trademark protections, Russia could “take those McDonald’s that got shut down and … just let local operators operate the restaurants and call them McDonald’s”….

As Sky News reported recently,

Starbucks and McDonald's were among those to pull out as the West unleashed sanctions on Moscow and sought to isolate Russia's economy.

However, in nearly two and half years, more than 2,000 foreign firms have remained in Russia, according to the Kyiv School of Economics.

That is compared to around 1,750 that have either scaled back their operations or left completely.

Even before its invasion of Ukraine, Russia was among nine nations on a “priority watch list” for alleged failures to protect intellectual property.

In Special 301 Report (2024), the Office of the United States Trade Representative (USTR) stated:

The United States is concerned about stakeholder reports that IP enforcement remains inadequate and that Russian authorities continue to lack sufficient staffing, expertise, and, most importantly, the political will to effectively combat IP violations and criminal enterprises.

The Post pointed out that

Russia’s removal of intellectual property protections during wartime is not without precedent. Smithsonian Magazine describes how the German company Bayer lost its American patent on aspirin as the U.S. government seized property from firms associated with its enemies.