As part of the recent Berkeley Center for Law, Business and the Economy (BCLBE) symposium, “Russian Market: Legal and Business Perspectives,” which took place in San Francisco this past week (see full coverage here), a variety of panelists discussed topics ranging from Russia’s recent accession to the World Trade Organization (WTO) to intellectual property development and protection in Russia and the current opportunities for innovation by Russian entrepreneurs.
The intellectual property panel delivered a mixed message of hope amid cautionary warnings about the state of Russian intellectual property laws in Russia. Mark Chizhenok, a partner and IP practitioner at Moscow-based Ivanov, Makarov & Partners, warned that despite Russia’s ascension to the WTO—which supposedly opened the country more fully to foreign attorneys—the complexity of Russian IP law continues to necessitate competent local counsel assisting in all intellectual property transactions.
Chizhenok noted that the largest difference between the American and Russian systems is that, whereas patents are the dominant form of intellectual property protection in the United States, trademark filings are more prominent in Russia. This reflects a focus on selling rather than inventing, but it also carries into the courtroom. While Russian law does not allow a plaintiff to sue for disclosure of information, it does allow suits for trademark infringement.
Several barriers to widespread intellectual property development certainly remain, with instability in IP laws and difficulty in protecting developmental software topping the list. According to Chizhenok, Russia has experienced three major law changes in the past decade, with another proposed change looming. This instability in the laws has rightfully caused foreign innovators to hesitate before entering the market.
Additionally, fears of ideas being stolen in Russia are very real and can leave the injured party with little recourse. Another panelist, Exigen ExpertMarkets Chief Technology Officer Slava Kritov, added that because Russian developers are paid relatively small sums for their work, it is not unusual for competitors to pay off developers to pass along an idea under development. Servers containing IP source code have even been known to disappear entirely. While winning legal battles to retrieve stolen intellectual property is possible, it is a risk because Russian juries are novices in the field and often have no idea what intellectual property is. Kritov recommended companies develop intellectual property outside of Russia. As panelist and Russian attorney Julia Pogodina opined, paper trails are key. The more precautions a company takes, the better off it will be.
Looking forward, all panelists expressed optimism over the increased level of IP activity in Russia. Although Chizhenok revealed that Russia merely processes 10% as many patent applications and 20% as many trademark applications as the United States yearly, those figures are rising. Most importantly, foreigners are filing an increasing percentage of applications in both categories, showing a growing confidence in the Russian market. As Russia settles into its WTO membership and establishes more effective, stable intellectual property laws, there is reason to believe the country is due for an explosion of activity in the intellectual property field.