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On February 24, 2022, the world watched in horror at Russia’s unprovoked invasion of Ukraine.<a href="#_ftn1" id="_ftnref1">[1]</a> Lost in the destruction and devastation inflicted on Ukraine and her people, is Russia’s effective nationalization of patents in Russia with owners in foreign countries that Russia deems to be unfriendly.

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About one year ago, Russia amended its Civil Code Article 1360 to ostensibly address the Covid crisis by allowing a forced license for use without consent of the patent holder of certain patent monopolies relating to the national security and protecting the life and health of the Russian citizens. In that iteration, the patent holder was to be notified of the “taking” and offered proper compensation. The justification was the need to defeat the disease, and during the pandemic mindset, the taking of those rights by Russia was given little press. However, on March 5, 2022, the Russian government went much further and marched toward far-reaching patent nationalization of non-Russian patent holders. The Russian government issued a decree allowing local companies in Russia to freely use the inventions, utility models and design patents present within Russia from a list of 47 “unfriendly countries.”

In plain speak, the Russian government ostensibly used its invasion of Ukraine to declare war on patents from the 47 “unfriendly” countries, including the United States. It is unclear whether the decree will apply to all fields or industries. What is clear is that the Russian government has now decided that any patent held by an “unfriendly” will be entitled to 0% compensation for violation of the monopoly under the emergency circumstances, which are the direct result of the Russian government’s actions. In light of the disregard for international law shown in Ukraine by the Russian government, it seems unlikely that patent owners will receive any notification prior to compulsory free licensing.

The decree effectively opens non-Russian patents to forced <strong>nationalization. </strong>This decree has the potential to directly impact industries, such as the pharmaceutical industry, that hold sizeable portfolios extending into Russia.<a href="#_ftn2" id="_ftnref2">[2]</a> We continue to watch these developments closely, including the expectation that a similar decree will issue in the coming days regarding trademarks.

The Russian decree should be subject to scrutiny by the WIPO (World Intellectual Property Office), which is an organization of the United Nations, in conjunction with other UN groups, such as the World Trade Organization, which have the power to review and arrange for mediation between member countries. However, this is an unprecedented situation in which a member state has openly codified violations of the very treaties they are signatories to. It suggests that effective mediation through the United Nations is unlikely.

The actions of the Russian Government permitting Russian nationals to use patented inventions with zero compensation to the “unfriendly” holder of the right has the potential to break the Patent Cooperation Treaty. This is truly a clarion call to strengthen the hand of WIPO and for the global intellectual property community to stand together and condemn this blatant disregard for international law.&nbsp; BakerHostetler will continue to provide updates and assist our clients to help navigate this global challenge.

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<a href="#_ftnref1" id="_ftn1">[1]</a> Although some may say that the invasion began on March 18, 2014, when Russia illegally seized and annexed Crimea.

<a href="#_ftnref2" id="_ftn2">[2]</a> As a practice note, if you have Russian patent applications pending or granted, we are looking at possible options for alternative means of paying annuities to maintain the patents in Russia. Annuities are not due during the pendency of a Russian application and have a six-month grace period for payment. Additionally, the majority of Russian Office Actions have 10 months’ worth of extensions available. As an option, applications may take advantage of these extensions and be reevaluated at a later date as the situation evolves and these issues are addressed in the international intellectual property community.

Forced Nationalization of Patent Monopolies Held by “Unfriendlies” in Russia