Today, we are going to tell you about the background to the introduction of IP sanctions, how the provisions of the new package of sanctions against russia are being implemented in the context of intellectual property and national measures to oppose the aggressor in the IP sphere. 

 

Background to IP-related sanctions against russia 

 

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.

 

The whole world has seen a number of flagrant examples of expropriation of world-famous brands and their business practices, illegal distribution and camcording of cinematic works from “unfriendly” countries, etc.

 

It is worth mentioning that even before 2022, the state of IP rights protection was a matter of reasonable concern in the context of continuing copyright infringement, the spread of counterfeit goods and piracy.

 

In Special 301 Report (2024) 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”.

 

Official comments by stakeholders from around the world to the public hearings of the Special 301 Report indicate that the disregard for IP rights in Russia has become a global problem.

 

International AntiCounterfeiting Coalition (IACC) in its appellation to the USTR noted:

 

“The sort of targeted retaliatory actions described by rights-holders during this year’s consultations, along with the general de-prioritization of IP enforcement by the Russian government have resulted in a more permissive environment for counterfeiting and piracy that is likely to adversely impact rights-holders for years to come, and even after the war with Ukraine has concluded”.

 

At the same time, the IACC, commenting on the situation with the protection of IP rights in Ukraine, noted: “While there is yet much work to be done to address long-standing issues that pre-date the ongoing war, rights-holders expressed their admiration for the commitment shown by Ukrainian authorities over the past year.”

 

How the provisions of the new package of sanctions against russia are implemented in practice in the context of IP

 

In June of this year, the Council of the European Union adopted the 14th package of economic and individual restrictive measures aimed at responding to the legalization of IP rights infringements in russia and reducing the competitive advantages for the russian industry and, accordingly, further reducing its revenues, which russia uses for its illegal, unprovoked and unjustified war of aggression against Ukraine.

 

These restrictive measures target high-value sectors of the russian economy, like energy, finance and trade, and those that make it difficult to circumvent EU sanctions.

 

The new package of sanctions also imposes restrictions on the acceptance of applications for registration of intellectual property in the EU from russian nationals, natural persons resident in russia and legal entities (russian companies) and institutions in order to compensate for the actions of the russian government and courts that unlawfully deprive owners of EU intellectual property rights of their protection in russia.

 

“Our sanctions have already significantly weakened the Russian economy and prevented Putin from accomplishing his plans to destroy Ukraine, although he still continues the illegal aggression targeting civilians and civilian infrastructure. The 14th package of sanctions demonstrates our unity in supporting Ukraine and seeking to limit Russia’s criminal activities against Ukrainians, including efforts to circumvent EU measures”, – noted Josep Borrell, High Representative for Foreign Affairs and Security Policy.

 

Council Regulation (EU) 2024/1745 of 24 June 2024 provides, in particular:

 

• a restrictions for the IP offices of the EU Member States and regional offices and other competent institutions to accept applications for registration from the above-mentioned persons, as well as where such persons are only one of the applicants; the institutions should not issue formal decisions on refusal of acceptance or registration;

 

• a prohibition on accepting any requests or submission during the registration procedures related to any of the IP rights;

 

• allowing EU institutions to request the necessary information from applicants.

 

The Member States and the European Union also decided to use best effort to ensure that the World Intellectual Property Organisation (WIPO) does not accept new applications from such persons.

 

According to the First Deputy Director of the IP Office Bogdan Paduchak, the national intellectual property offices of the EU countries are already reporting on the sanctions in force.

 

For example, the German Patent and Trademark Office (DPMA) has announced on its official website that it does not accept new applications for registration of trademarks, patents, designs, utility models, protected designations of origin and geographical indications filed by russian nationals or natural persons residing in russia or by legal persons, entities or bodies established in russia.

 

The Austrian Patent Office announced the same sanctions, noting that the restriction applies even if the applications are filed jointly with one or more non-Russian natural or legal person(s) resident or established outside of Russia.

 

The European Patent Office (EPO) announced in its communication dated 10 July 2024 that, by decision of the President of the EPO, in addition to the above restrictions, it has suspended ex officio proceedings for registration of unitary effect under the patents of the above persons. This precautionary stay will apply in connection with the discussion of further measures by the member states of the European Patent Convention and the potential impact of possible registrations for these applicants.

 

National measures to counter the aggressor in the IP sphere

 

The IP Office immediately responded to the russian armed aggression by suspending the examination of applications, registration and disposal of rights. Simultaneously with these practical measures, the work on formation of the legal framework to prevent the acquisition and disposal of russian IP rights in Ukraine began.

 

“The Ministry of Economy and the Government of Ukraine supported the proposals of the IP Office to include provisions in the draft bylaws that regulate the aspects of identifying the facts of IP rights belonging to sanctioned persons and persons associated with the russian federation, as well as establish the grounds for refusal to take actions to protect IP rights in respect of persons of the aggressor state and sanctioned persons,” emphasized Olena Orliuk, Director of the IP Office. 

 

The relevant provisions are contained in the following bylaws:

 

• Procedure for state registration of copyright and contracts relating to the author’s copyright;
• Procedure for acquiring and losing the status of orphan works, phonograms, videograms and performances recorded therein, conditions of their permitted use and maintaining a register;
• Procedure for protection of moral rights of authors in respect of works passed into the public domain in the absence of heirs;
• Regulations on the Commission for granting permission to use the official name and international alphabetic code of the State of Ukraine in a trademark and/or to include an imitation of the Small State Emblem of Ukraine in a trademark;
• Regulations on intellectual property representatives (patent attorneys) and acts on certification and maintenance of the state register of intellectual property representatives (patent attorneys);
• Rules for the preparation and filing of an industrial design application and examination of an industrial design application and international registration of an industrial design.

 

Currently, the Ministry of Justice of Ukraine is preparing for state registration the rules for drafting and filing applications for trademarks, geographical indications, inventions and utility models, which will contain similar provisions on the IP rights of the aggressor state.

 

Furthermore, the Decision of the National Security and Defence Council of Ukraine dated 20 November 2023 “On the Application of Sectoral Special Economic and Other Restrictive Measures (Sanctions) to the russian federation and the Republic of Belarus in the Defence Industry” (enacted by the Decree of the President of Ukraine dated 20.11.2023 No. 762/2023 and approved by the Resolution of the Verkhovna Rada of Ukraine dated 22.11.2023 No. 3489-IX) prohibits:

 

• transfer of intellectual property rights to residents of the russian federation and the Republic of Belarus 

 

• the performance by residents of the russian federation and the Republic of Belarus of actions to obtain titles of protection, other actions related to the protection of intellectual property rights (inventions, utility models, industrial designs, semiconductor product layouts, trademarks, geographical indications, plant varieties, copyright and related rights), except for actions to extend the term of validity of intellectual property rights and to extend the term of validity of titles of protection 

 

• registration and accreditation of collective management organizations founded by residents of the russian federation and the Republic of Belarus

 

Ukraine also systematically counteracts russian propaganda and attempts to legitimize the illegal temporary occupation of part of Ukraine’s territory on international platforms, including WIPO. Since 2014, the issue of indicating the addresses of applicants from the temporarily occupied territories of Ukraine as applicants from the territory of the russian federation in international IP registration systems (PCT, Madrid and Hague systems) has been acute.

 

Significant progress has recently been made in this regard due to the decision of the WIPO Assembly at the 65th series of meetings of Member States on 15 July 2024, which, among other things, requested the WIPO International Bureau to take measures to ensure that publications on WIPO resources and platforms comply with the principles of sovereignty, independence and territorial integrity of Ukraine within its internationally recognised borders.

 

Another aspect of opposition in the international arena was the blocking of the introduction of the russian language in WIPO’s international IP registration systems, in particular the Madrid and Hague systems, and the reduction of funding for WIPO projects in russia and the call for the closure of WIPO’s external office in moscow.

 

Read also:

 

The Ukrainian government delegation appeals to the WIPO General Assembly for theft by russia of the geographical indication “Melitopol Cherry”

 

The Decision of the General Assembly: WIPO will continue to support Ukraine in restoring and rebuilding the IP ecosystem, innovation and creative sectors