Navigator Insights

Intellectual Property and a Russian Free Trade Agreement

Emerging trade relations give rise to various concerns the not least of which is the differences in legal systems between trading partners.  In particular, the regimes for intellectual property protection can significantly differ across different countries. With New Zealand reportedly poised to sign a Free Trade Agreement with Russia in 2014 we need to take a closer look into Russian intellectual property law to understand what opportunities or traps it may hold for New Zealand businesses.

Russia’s intellectual property legislation was largely formed in the early nineties. In September 1992 the Federal Law On Trade Marks, Service Marks and Names of Places of Origin of Goods; the Patent Law; and the Law on Legal Protection of Computer Software and Databases; the Law on Legal Protection of Topologies of Integrated Microcircuits were passed. This was followed by adoption of the Law on Author’s and Adjacent Rights in July 1993. These fundamental IP regulations are the basis for recognition and protection of IP in Russia.

The Russian Federation is deemed a signatory to a number of international treaties and conventions that deal with intellectual property rights. These include the Paris Convention on Industrial Property, the Nice Agreement on Classification of Goods, the Budapest Treaty on Micro-organisms and the Patent Co-operation Treaty (Washington), the Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms (Geneva), and the Madrid Agreement on the International Registration of Trade Marks. In 1997 Russia adhered to the Protocol Relating to the Madrid Agreement on the International Registration of Trade Marks.

Intellectual Property Rights is high on the agenda for trading with Russia for many countries. There are high levels of piracy and the sale and use of counterfeit goods are widespread. Overall IPR laws are not as strict as in the European Union, and work is still underway to align Russian Patent and trademark laws more closely with WIPO and TRIPS standards. In this respect Russia established in March 2013 specialised courts for dealing with cases involving IPR.

When considering business in Russia, the protection of IPR should be high on the list of concerns. Ensuring IP ownership in Russian collaborations, conducting freedom to operate searching to avoid potential infringement issues, and protecting key brands against piracy must be addressed to avoid expensive and potentially damaging consequences.

First and foremost, it is necessary to ensure that the company’s means of identification (in particular, its trademarks) are protected against misuse by third parties and potential infringement. In this regard, it should be noted that, in the Russian Federation, protection is only afforded to trademarks that have been registered with the Federal Service for Intellectual Property, Patents and Trademarks (Rospatent) or registered in accordance with Russian international agreements. If a trademark is not registered in Russia and is also not entered in the international register of the International Bureau of the World Intellectual Property Organization (WIPO) with trademark protection extended to Russia, the trademark will not be protected. In this case, the risk arises that any third party may register an identical trademark in Russia and potentially block your product being exported there. For this reason, prior to entering the Russian market, it is necessary to register the trademark with Rospatent or to submit an application to expand the geographical scope of protection of a trademark entered in the international register to include Russia. It is also advisable to check whether the trademark is duly registered with respect to all of the goods and services that are manufactured and/or rendered by the company. Furthermore, given that the Cyrillic alphabet is used in the Russian Federation, for the effective protection of a company’s means of identification, it is also recommended to additionally register a Cyrillic version of the trademark.

Inventions, utility models and designs are also recognized and protected within the Russian Federation if they have been registered with Rospatent or are valid based on international agreements of the Russian Federation. It is recommended for companies who may export to Russia to check whether any pending PCT patent applications can be extended into Russia.

Finally, the company must not forget about the information comprising its trade secrets. This information should be covered by a trade secret regime as contemplated in the law on trade secrets, with all necessary steps being taken in order to ensure the confidentiality of the information. Otherwise, such trade secrets will not be protected in Russia.  Precautions should be taken with potential Russian partners, such as confidentiality agreements and practical secrecy measures, including physical security, visitor log books, restricted access areas, and such like.

When entering a new market, there are so many steps to be taken and so many financial and legal issues to be weighed that intellectual property is very often an afterthought. At the same time, mistakes made in intellectual property management and protection can be very costly, and it is advisable to consider intellectual property rights in advance of entering the Russian market.

Image courtesy of Paul Martin Eldridge / FreeDigitalPhotos.net