The National Law Review – The Kremlin’s Intellectual Property Cold War: Legalizing Patent Theft with Decree 299

Russia’s bold response to Western economic sanctions following its invasion of Ukraine now includes what amounts to legalizing patent theft against “unfriendly countries.” On March 5, 2022, the Kremlin issued Decree 299, which states that Russian companies and individuals can use inventions, utility models and industrial designs without owner permission or compensation, if the patent hails from a list of “unfriendly countries.”1 Specifically, the decree sets compensation for patent infringement at “0%” if the patent holder is a citizen of, is registered in, or has a primary place of business or profit in any of the 48 countries Russia previously designated as “unfriendly.”2 Unsurprisingly, the list includes the United States, Great Britain, European Union members, Australia, and other critics of Russia’s actions against Ukraine.

Russia’s alienating move comes after weeks of swift responses from the global intellectual property community after it invaded Ukraine. First, on March 1st, the European Patent Office (EPO) stopped all cooperation with the Russian patent office (Rospatent), the national IP office of Belarus, and the Moscow-based Euroasian Patent Organization (EAPO).3 Then, on March 4th, the U.S. Patent and Trademark Office (USPTO) followed by cutting its ties with the same offices.As an additional blow to Russia, on March 11th the USPTO ended its fast-track Global Patent Prosecution Highway (GPPH) relationship with the Rospatent, removing Russia from its list of participating countries and returning any GPHH applications based on Rospatent work back into the regular examination queue.5 As a contrast, patent agencies around the world, including the European Union, have rallied behind Ukraine, sending letters of support to the Ukrainian Institute of Intellectual Property (Ukrpatent).6

                The implications of the Kremlin’s Decree 299 are broad and will likely have lasting effects. By setting compensation at 0% in cases of patent infringement, the Russian government is openly allowing patent theft. This decision will likely deter patent holders and related stakeholders from conducting business in Russia. Decree 299 also has the potential to open a pandora’s box when it comes to the protection and enforcement of intellectual property rights in Russia. In fact, there have been rumblings that the Kremlin will soon follow with a similar decree on trademarks.7 Such a decree would be a legal nightmare for global brands like H&M, McDonald’s or Starbucks, who have all pulled their operations out of Russia in response to the country’s actions in Ukraine.8 If the Kremlin issues a decree on trademarks similar to Decree 299, Russian companies or individuals would be able to exploit brand name recognition without consequence. In an alarming preview of what can happen, on March 3rd a Russian district court used Western economic sanctions as its reasoning to rule that a man could use Hasbro Inc.’s “Peppa Pig” trademarks without permission or payment.9

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James A. Shimota IP Lawyer K&L Gates

James Shimota is a partner at the firm’s Chicago office. He is first chair litigator and a member of the IP litigation practice group. Prior to joining the firm, James served as a partner at an international corporate law firm where he concentrated in post-issuance patent practice. He has worked with a myriad of technologies including medical devices, automotive safety systems, LED lighting, financial services products, multiple aspects of cellular and smartphone technology, semiconductors including memory products, fiber optic amplifiers, DNA arrays, HIV drugs, alkaline batteries, and…

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Adrian Gonzalez Cerrillo Chicago Illinois IP Law K&L Gates LLP

Adrian Gonzalez Cerrillo is an associate at the firm’s Chicago office. He is a member of the IP Procurement and Portfolio Management practice group.