Modern World’s Dirty Uncle Sal: Suspension of IP Rights in Russia

Fence painted as Ukrainian flag
Photo by Tina Hartung (Unsplash)

Pankhuri Malik is an IPilogue Writer and an LL.M Candidate at Osgoode Hall Law School.

As Andrew Masson recently discussed, Russia is now responding to sanctions by removing the protection of IP rights in its territory for owners from “unfriendly” countries. On March 08, 2022, Russia released an executive order acknowledging the unfriendly actions of the United States of America and its allies, including Canada, the UK, and all EU states.

Russia’s invasion of Ukraine elicited a show of solidarity from the western world. As several countries imposed political and economic sanctions on Russia, the United States of America and its allies banned the export of luxury goods into Russia. Various USA-based companies like McDonald’s, Burger King, Coca Cola and Starbucks also responded by winding down their operations in Russia. The value of the Russian ruble dropped to an all-time low,. In retaliation, starting with the list of “unfriendly” countries, Russia proceeded to seize billions of dollars’ worth of property from sanctioning states.

Suspension of Association with Russian Patent Offices

On March 04, 2022, the United States Patent and Trademark Office announced that it would no longer associate with the Russian and Belarusian Patent Offices. This announcement closely followed a similar one from the EU patent office.

President Putin responded by suspending the operation of IP rights in Russia for owners either residing in or operating in “unfriendly” countries. As a result, US-based companies can no longer enforce their IP rights in Russia. Included in the scope of these rights are protections flowing from patents, trademarks, and copyright.

Putin announced compulsory licensing, without any remuneration, of patents held by sanctioning states. Following this order, a Russian Court refused to enforce the trademark rights of Hasbro Inc. in its “Peppa Pig” and “Daddy Pig” marks, stating that the sanctions imposed on Russia “prejudice” the dispute. Russia has also suspended the operation of IP rights for “certain goods”, the ambit of which is unclear.

Russia has been accused of spotty enforcement of IP rights in the past. Unsurprisingly, Russia’s suspension of IP rights has only aggravated the situation. Trademark applications for various deceptive  marks have emerged, bearing similarity to renowned MNCs such as McDonald’s, Starbucks, Instagram, and Ikea. Russian entities will be able to continue operations of companies like McDonald’s, Ford, and General Motors at their existing manufacturing facilities in Russia.

Going Forward

With the events in Russia and Ukraine still unfolding, it is difficult to say if we can expect IP rights to be restored in Russia anytime soon. Even if they are, Putin’s actions appear to have changed Russia’s relationship with the rest of the world. US and Canadian companies do not have any way to enforce their IP rights in Russia. In this situation, the best move may be to restrict Russian-made infringing goods in foreign markets through customs laws and rules.

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