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Russia says its businesses can steal patents from anyone in ‘unfriendly’ countries

The Grand Kremlin Palace, left, and the Cathedral of the Annunciation in Moscow on Feb. 15, 2022. (Andrey Rudakov/Bloomberg News)
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Russia has effectively legalized patent theft from anyone affiliated with countries “unfriendly” to it, declaring that unauthorized use will not be compensated.

The decree, issued this week, illustrates the economic war waged around Russia’s invasion of Ukraine, as the West levies sanctions and pulls away from Russia’s huge oil and gas industry. Russian officials have also raised the possibility of lifting restrictions on some trademarks, according to state media, which could allow continued use of brands such as McDonald’s that are withdrawing from Russia in droves.

The effect of losing patent protections will vary by company, experts say, depending on whether they have a valuable patent in Russia. The U.S. government has long warned of intellectual property rights violations in the country; last year Russia was among nine nations on a “priority watch list” for alleged failures to protect intellectual property. Now Russian entities could not be sued for damages if they use certain patents without permission.

The patent decree and any further lifting of intellectual property protections could affect Western investment in Russia well beyond any de-escalation of the war in Ukraine, said Josh Gerben, an intellectual property lawyer in Washington. Firms that already saw risks in Russian business would have more reason to worry.

“It’s just another example of how [Putin] has forever changed the relationship that Russia will have with the world,” Gerben said.

A new iron curtain descends on Russia amid its invasion of Ukraine

Russia’s decree removes protections for patent holders who are registered in hostile countries, do business in them or hold their nationality.

The Kremlin has not issued any decree lifting protections on trademarks. But Russia’s Ministry of Economic Development said last week that authorities are considering “removing restrictions on the use of intellectual property contained in certain goods whose supply to Russia is restricted,” according to Russian state news outlet Tass, and that potential measures could affect inventions, computer programs and trademarks.

The ministry said the measures would “mitigate the impact on the market of supply chain breaks, as well as shortages of goods and services that have arisen due to the new sanctions of western countries,” Tass stated.

Gerben said a similar decree on trademarks would pave the way for Russian companies to exploit American brand names that have halted their business in Russia. He gave a hypothetical involving McDonald’s, one of the latest global giants to suspend operations in Russia under public pressure.

McDonald’s, Starbucks and Coca-Cola suspend business in Russia amid mounting public pressure

McDonald’s said Tuesday that it would temporarily close its 850 restaurants in Russia, a significant decision for a company that gets 9 percent of its revenue from Russia and Ukraine. Without trademark protections, Russia could “take those McDonald’s that got shut down and … just let local operators operate the restaurants and call them McDonald’s,” Gerben said.

Russia’s removal of intellectual property protections during wartime is not without precedent. Smithsonian Magazine describes how the German company Bayer lost its American patent on aspirin as the U.S. government seized property from firms associated with its enemies.