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MIL OSI Translation. Region: Russian Federation –

Source: Ministry of Economic Development (Russia) – An important disclaimer is located at the bottom of this article.

The Government of the Russian Federation has created a subcommittee on the use of inventions, utility models and industrial designs to ensure the economic security of the state. The corresponding resolution was developed by the Ministry of Economic Development of Russia at the direction of the President of Russia and the Deputy Chairman of the Security Council of Russia, as well as to increase the efficiency of application of Article 1360 of the Civil Code of the Russian Federation. The Civil Code and the main treaties in the field of intellectual property – the Agreement on Trade-Related Aspects of Intellectual Property (TRIPS), the Paris Convention for the Protection of Industrial Property – provide for the possibility of using intellectual property for national security purposes. Decisions aimed at protecting Russian citizens from unfair actions of foreign copyright holders have been made repeatedly over the past 3 years. The created mechanism optimizes the possibility of applying the norms of the Civil Code. The subcommission will operate on a “one-stop shop” principle for Russian companies that have been unreasonably denied the right to use inventions, utility models, and industrial designs by foreign patent holders. The resolution also makes changes to the methodology for determining the amount of compensation paid to the patent holder when deciding to use an invention, utility model or industrial design without his consent, and the procedure for its payment. The payment will be 0.5% of the actual revenue from the use of the corresponding technical solution and, in accordance with Decree of the President of Russia No. 122, will be carried out through special ruble accounts of type “O”. They are opened by the applicant to transfer funds for the use of a particular patent. “International treaties in the field of intellectual property provide a certain set of tools for limiting rights to intellectual property. And in exceptional cases they allow their use without the consent of the copyright holder. This is a worldwide practice. Fine-tuning this mechanism in domestic law makes it possible to achieve socially significant goals without compromising the normal application of the law, to maintain a balance of interests and at the same time fulfill one’s obligations under interstate agreements,” noted the head of Rospatent, Yuri Zubov. As part of the general procedure, the Russian Government makes decisions on the use of technologies for national security needs without the consent of the copyright holder in accordance with Government regulations. However, the federal center may not have local information about the country’s urgent need for technologies covered by patents of copyright holders from unfriendly states. At the same time, such rights holders stop supplying their products to Russia, on which the economy and ordinary citizens depend, and refuse bona fide Russian companies that request licenses from them and are capable of producing scarce goods based on in-demand technologies. For such cases, the resolution creates a special procedure that is understandable and transparent for Russian organizations. “A simple and understandable mechanism will be created for Russian manufacturers to protect themselves from the risks of cessation of supplies and denial of licenses by foreign copyright holders. In such cases, the subcommittee will be able to grant rights to use an invention, utility model or industrial design without the consent of the patent owner, with his notification and payment of proportionate compensation. This will become another important mechanism for ensuring technological sovereignty,” emphasized Vasily Osmakov, Deputy Head of the Russian Ministry of Industry and Trade. In general, the mechanism for obtaining the right to use someone’s patent looks like this. A company in the authorized capital of which the share of direct or indirect (through third parties) participation of the Russian Federation, constituent entities of the Russian Federation, municipalities and (or) citizens of the Russian Federation exceeds 75%, turns to the copyright holder with a request to grant it the right to use the invention, utility model or industrial design. In case of refusal or lack of response, the entrepreneur applies to the subcommittee to obtain the relevant rights of use without the consent of the patent holder, notifying him of this as soon as possible and paying him proportionate compensation. In the process of preparing the decision, the economic and production capabilities of the applicant to use the requested technology are checked. In addition, a conclusion is made about the presence on the Russian market of goods in which such an invention, utility model or industrial design has already been used, as well as substitute goods. In addition, the correctness of the requested patents for the production of the proposed products, the state of competition and, in some cases, pricing in the relevant product market are analyzed. Particular attention is paid to the significance of the technology for the relevant industry. If, during a collegial review of the appeal, half or more of the authorities support the proposed decision, it is submitted to the subcommittee for consideration. According to the Resolution, a correctly completed application submitted to the Ministry of Economic Development of Russia in compliance with all necessary requirements and supported by more than half of the authorities involved in the consideration will be submitted to the subcommittee within 40 working days (this period can be extended by no more than 30 days if received special request from one of the authorities). The work of the subcommittee will help restore the balance of interests in the relationship between copyright holders and users of technologies, which was disrupted by the actions of unfriendly states. The relevance of the decision was noted by Ildar Shaikhutdinov, a member of the General Council of Business Russia, founder of the Institute for Financial Development of Business JSC. According to him, the need to implement this decision has been long overdue. “The time has definitely come to resolve this issue. Over the past two years, Russian manufacturers have not received the opportunity to use patents, and therefore the proposal of the Ministry of Economic Development is timely and necessary. But at the same time, it would be important to provide for a certain mechanism for protecting against abuse. Ideally, a Russian interested party, in order to appeal to the subcommittee, would have to have a letter addressed to the patent holder with better terms than those proposed by the Government, for example, 1-3% royalty, to which there was no response for at least one month. Ideally, only if there is evidence that the foreign patent holder is not ready to enter into correspondence, the subcommittee would have the right to consider the application. A royalty rate of 0.5% seems low to us, since on the market the rate on really in-demand patents goes up to 5%, but this is obviously a decision in favor of Russian manufacturers, and this is an understandable proposal from the Ministry of Economic Development. Also, we must remember the risk that our patent authors may face mirror measures abroad,” commented Ildar Shaikhutdinov.

Note; This information is raw content directly from the source of the information. This is exactly what the source states and does not reflect the position of MIL-OSI or its clients.

Please note; This information is raw content directly from the information source. It is accurate to what the source is stating and does not reflect the position of MIL-OSI or its clients.

EDITOR’S NOTE: This article is a translation. Apologies should the grammar and or sentence structure not be perfect.

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