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14.03.2022

Some foreign IP right holders' compensation claims against Russian infringers set to nil by the Russian Government

In the context of the Ukraine conflict, some foreign right holders of Russian patent, utility model and design rights have had their compensation claim against Russian infringers set to nil. In the statement of the Government of the Russian Federation of 6 March 2022, it is noted that: “For property right holders of patents, utility models and designs belonging to foreign states that commit unfriendly acts against Russian legal and natural persons (including those who are citizens of these states, whose registered office, place of economic activity or place of profit derived from their activity is located in these states), the amount of compensation to be paid by the person who infringes the right to the patent, utility model or design by manufacturing, supplying goods, performing works, rendering services in which the protected right is used without the consent of the property right holder is 0%.” (Announcement in the original Russian language: http://publication.pravo.gov.ru/Document/View/0001202203070005?index=0&rangeSize=1)

The affected IP right holders who are alleged to have committed said "unfriendly acts" and are thus covered by this provision are – as of March 5, 2022 - the following countries: Australia, Albania, Andorra, UK, all EU countries, Iceland, Canada, Liechtenstein, Micronesia, Monaco, New Zealand, Norway, South Korea, San Marino, Northern Macedonia, Singapore, USA, Taiwan, Ukraine, Montenegro, Switzerland and Japan.  (Announcement of March 5, 2022 in the original Russian language: http://publication.pravo.gov.ru/Document/View/0001202203070001?index=0&rangeSize=1)

This approach, which overrides Article 62 (Part 3) of the Constitution of the Russian Federation, according to which foreigners should have the same rights as Russians, is also already reflected in Russian trademark case law. For example, a trademark infringement claim brought by a UK-based company before the Kirov Region Court seeking compensation for trademark infringement was dismissed on the following grounds:

"Taking into account the restrictive measures against the Russian Federation and the status of the plaintiff (the plaintiff is a resident of the United Kingdom), the court considers the plaintiff's actions to be abusive of the law, which constitutes an independent ground for dismissal of the action." (Decision in original Russian language: https://kad.arbitr.ru/Document/Pdf/a45fa186-05bb-43b5-87d9-1f0d3b640142/bb9af9d9-9daf-4994-9b37-02510206c18e/A28-11930-2021_20220303_Reshenie.pdf?isAddStamp=True)

It is not clear which effects this provision may have beyond the compensation claim concerning further legal claims (e.g. claim to injunctive relief) stemming from the IP right, likewise whether this provision shall be valid permanently or just temporarily in consideration of the current special situation. 
Not affected by the present provision appears to be the legal validity of the IP right as such.

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