INTELLECTUAL PROPERTY AS AN ECONOMIC WEAPON

Intellectual Property as an Economic Weapon: 

Russia Counters International Sanctions

Introduction

In light of Russia’s external aggression on Ukraine, several countries have imposed critical sanctions to condemn and prohibit such actions. To counter these measures, Russia has recently passed a decree (Decree no. 209) by which owners of intellectual property belonging to these ‘unfriendly countries’ would no longer have any remedy in cases of infringement of their rights. 

Intellectual property (hereinafter ‘IP’) discourse has largely delved around the protection of rights of an inventor and the overall growth of innovation in economies. From a general point of view, it would seem that IP bears no effect from external factors such as politics but occasionally, these effects are highlighted through extreme circumstances. For instance, with the growing concerns of global warming, environmental concerns have developed over granted and filed IPs. In quite the peculiar scenario, IP is now being implemented as an economic weapon or tool to defy various economic sanctions. This article aims to examine and summarise the method by which IP is being weaponised by a country in response to similar economic sanctions imposed by others.

Decree 209 – Withdrawal of IP Infringement Rights

Decree no. 209 was issued on 6^th March, 2022 by Russia as a counter-measure to all economic sanctions imposed by those labelled as ‘unfriendly countries’. IP owners belonging to the following nations are subject to the decree – United States, Canada, the EU states, the UK, Ukraine, Montenegro, Switzerland, Albania, Andorra, Iceland, Liechtenstein, Monaco, Norway, San Marino, North Macedonia, and also Japan, South Korea, Australia, Micronesia, New Zealand, Singapore, and Taiwan.

The aim of the decree is to prevent IP owners from the above-mentioned states from exercising their rights in Russian territory. Through the decree, patents, industrial designs and utility models granted to them would bear no value since no compensation would be awarded to these IP owners upon infringement, thereby negating their protection and economic rights. Licenses would be redundant hereinafter as the potential licensees could proceed by infringing on the IP made available in the public domain and would not be subject to paying compensations for their actions of infringement. Some have termed this act as intellectual property piracy and patent theft due to the lack of enforceability against IP infringers. 

It is yet to be seen if these ‘unfriendly countries’ will respond in a similar manner and negate IP protection of Russian proprietors in addition to the current sanctions. While it is highly unlikely due to the action being regarded as a violation of international law (the TRIPS Agreement), no possible outcome can be predicted. 

Uncle Vanya’s, Makdonalds & Makdak – Trademark Lookalikes 

After several brands like Apple, McDonald’s, Coca-Cola, Starbucks, H&M and Ikea announced the discontinuation of their businesses in Russia, another IP issue emerged in the form of trademark counterfeiting. Four trademark applications have been filed to replace McDonalds and Starbucks in Russia. The proposed marks ‘Uncle Vanya’, ‘Starbucks’, ‘Makdonalds’ and ‘Makdak’ have been filed by the same applicant. As is visible from the application form below, the proposed mark is clearly a counterfeit of McDonald’s trademark.

While these applications have not been granted yet, the concern of IP being enforced as an economic weapon arises from the statements made by a speaker in the Russian Parliament. Vyacheslav Volodin suggested, in an open parliament session, that McDonald’s should be replaced with Uncle Vanya in Russia, thereby implying that members of the Russian government are considering the possibility of legalising trademark infringement of brands. 

In a recent copyright and trademark infringement claim brought by a British company that produces ‘Peppa Pig’, Andrei Slavinsky, a Russian judge, dismissed the suit and explicitly stated the unfriendly actions of foreign countries influenced his verdict.

Conclusion

From the above, it is evident that the role of intellectual property has extended further than  conventional assumptions and is now being considered as an economic weapon by some countries. The immediate effect of such action and its repercussions are not evident currently but the intention has been made clear through the above-mentioned strategies. Brands and inventors are most likely to face imminent consequences. However, the effect of the same on countries and economies, as wholes, will only occur in the long run. How will these IP actions influence neutral countries like India? Will these actions be penalised under the TRIPS Agreement? – Until an outcome has been reached regarding the Russia-Ukraine conflict, these questions will remain unanswered.

DISCLAIMER- 

The views are that of author’s own and not necessarily the views of IPTSE Academy. This blog is a platform for academic discussions and hence authors have been given flexibility to convey their thought process.