As part of its deadly attack on Ukraine, Russia has taken the rare step of using intellectual property rights as a war tactic. In early March, the Russian government issued a decree according to which Russian companies are no longer obliged to compensate owners of patents, service models and industrial designs from "unfriendly" countries. Intellectual property experts explain what the decision means
By Enrico Bondio Expert in Intellectual Property Law, City, University of London and Alina Trepova, Assistant Professor of Law and Autonomous Systems, University of Nottingham
As part of its deadly attack on Ukraine, Russia has taken the rare step of using intellectual property rights as a war tactic. In early March, the Russian government issued a decree according to which Russian companies are no longer obliged to compensate owners of patents, service models and industrial designs from "unfriendly" countries. These are the Western countries that have imposed sanctions against Russia, including Great Britain and the United States.
This means that Russian businesses can use intellectual property, such as patented inventions or fashion designs, without paying or seeking the consent of the rights holders. Affected companies cannot enforce their patents and designs against Russian copycats.
This provision makes intellectual property piracy legal in a country already known for failing to adequately protect intangible assets. Last year, Russia was added to the US government's "priority watch list" of countries that do not adequately protect the intellectual property of American companies.
Vladimir Putin's move is clearly a response to Western economic sanctions and the suspension of Russia's trade rights. It is also a response to the decisions of many multinational companies to stop doing business with Russian companies.
The sanctions and boycott have massively affected the Russian economy to the point where the country is now on the brink of bankruptcy, interest rates have doubled, the stock market has remained closed for weeks and the ruble has dropped dramatically.
An unprecedented attack on intellectual property
The suspension of intellectual property rights as an economic weapon in the context of a conflict is unprecedented, at least in recent decades. Historical examples date back to World War I, when the US introduced the Trading with the Enemy Act. This law seized copyrights and patents owned by enemy nations, including the patent for aspirin, which was a German invention. After the war, the trademark Aspirin owned by the German pharmaceutical company Bayer was handed over to the USA, France, Great Britain and Russia, as part of Germany's war reparations agreed upon in the Treaty of Versailles.
Russian officials have hinted that other intellectual property rights owned by Western countries may soon be restricted, including software and trademarks. This could allow local entrepreneurs to adapt and use - without permission and for free - brands like McDonald's. One Russian restaurant chain even recently adopted, applying to register locally a logo that closely resembles the famous golden arches.
The sanctions also led a Russian judge to dismiss a copyright and trademark infringement lawsuit filed by the British company that produces the Peppa Pig animated series. Judge Andrei Slavinsky wrote in his ruling that "the unfriendly actions of the United States of America and foreign countries associated with it" influenced his decision.
Ukraine, for its part, was not inactive in this intellectual property struggle. Her Defense Department was recently hacked and leaked classified documents it claimed were taken from a Russian nuclear power plant.
Does this regulation violate international law?
The suspension of patents and other intellectual property rights owned by Western companies could violate international treaties that protect these assets at the global level. All World Trade Organization (WTO) countries should respect these laws and ensure that foreign businesses can enforce intellectual property rights against imitators.
Countries affected by the Russian move may bring Russia to a court of the World Trade Organization and request the imposition of additional sanctions. This move will again hurt Russian businesses, especially those that rely on brands and patented technology, as well as the creative industry sector.
The only way Russia could justify the move would be to rely on a security exception that appears in the WTO treaty itself. This exception allows states to take any action they deem appropriate to protect their vital security interests in times of war. But this exception has never been invoked by any country in any dispute since the organization's inception, and thus has never been tested before WTO judges.
If Russia is expelled from the WTO club, as has already been proposed, paradoxically the expulsion will isolate it from global intellectual property challenges. No country will be able to prosecute Russia before a court of an organization of which it is no longer a member.
These are predictions about what might happen if the war continues. It goes without saying that an immediate end to the conflict may instead calm the tension between the West and Russia, and put an end to the current intellectual property struggle.
For an article in The Conversation
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Russia circumvents the boycott of the brands by importing everything through Turkey. All American brands are sold to Turkey, changes hands and is sent to Russia.