Draft Law Amending Civil Code to Impact IP Regulations in Russia

A draft law amending Russia’s Civil Code passed the first reading in April 2012 and has since been substantially revised ahead of the second reading, expected to take place soon.

The main IP-related amendments concern:

1. IP rights protection on the Internet
2. Patent and trademark registration process
3. Transfer of IP rights

IP rights Protection on the Internet

According to the draft law, the ‘information intermediary’, i.e. an entity transmitting the content directly or providing an opportunity to place the content online, such as the Internet service provider, may be liable for the violation of IP rights.

An intermediary transmitting the information directly may escape liability if it:

• Does not initiate the transmission and does not choose the recipient; and
• Does not edit the content except for the technical changes necessary for the transmission.

An intermediary providing an opportunity to place the content online may escape liability if it:

• Is not aware and should not be aware that the transmitted information violates the IP rights; and
• Has taken the necessary and sufficient measures to terminate the infringement upon the receipt of a written notice from the rights holder.

Patent and Trademark Registration Process

Under the draft law, trademarks similar or identical to registered trademarks cannot be registered. The PTO will continue to accept the letters of consent, which might increase the chances of obtaining the registration, but are not binding on the PTO, that is, the PTO can still decide that the marks cannot coexist.

A very important novelty is the introduction of an opposition procedure in Russia. The applications will be published and the third parties may oppose them before the decision on the registration is made.

Transfer of IP Rights

The proposed amendments aim to improve the procedure of mandatory registration. The assignment and license agreements should be executed in writing and pass the mandatory registration. At the same time, the applicant will be required to provide the authorized body with certain information about the agreement, but will no longer need to disclose the full text of the agreement.

Another amendment relates to the payment terms. Free of charge agreements between two business entities are mostly forbidden, with a limited number of exceptions.

Additionally, once the IP rights are transferred, the licensor cannot use the same rights in the same territory and in the same way, unless it is foreseen by the agreement.

The licensee should provide the licensor with the reports proving the use of IP rights in compliance with the agreement, and, in case it is not mentioned in the agreement, report upon the licensor’s request.

If the payment terms are violated, the licensor can unilaterally terminate the agreement by sending the official notification. In case the licensee does not fulfill his financial obligations within 30 days, the agreement is terminated automatically.

By: Tetiana Shulga

For more information, please contact Tetiana Shulga at our Belgium office.