Government-Authorized Use of Patents in Russia

Government Decree No. 299 attracted significant media attention in early March 2022. Many commentators portrayed the Decree as signaling the end of patent protection in Russia. Below we explain what is actually new and what to expect.

The Decree implements Article 1360 of the Russian Civil Code. Article 1360 has been in force for many years and provides for the possible use of certain IP in situations involving national security needs (see the link regarding the recent changes).

Under Article 1360, the Russian Government may authorize the use of a patented invention, utility model, or industrial design (i.e., not a trade mark) “in the case of an extreme need related to ensuring the defense and security of the state and protecting the life and health of citizens,” subject to payment of compensation to the right holder. The amount of compensation is effectively set by the Government in a separate Government Instruction adopted in 2021, at 0.5% of the relevant sales revenue.

On 6 March 2022, by Decree No. 299, the Government amended the above Instruction and provided that right holders from countries that commit “unfriendly actions” against the Russian Federation shall, in the relevant cases, receive 0% compensation (instead of 0.5%).

As before, under Article 1360 the Government may issue decisions authorizing the use of inventions, utility models, and industrial designs. Also as before, the use of any specific IP object requires a separate Government decision. We are not aware of any recent Government decisions authorizing such use (apart from the 2020 remdesivir case referenced in the article mentioned above).

In our view, Decree No. 299, in and of itself, does not increase the likelihood that Article 1360 will be applied. Whether Article 1360 is invoked will depend on specific market conditions, and such decisions are inherently difficult to predict.