David Aylen and the IP team at Gowling WLG Russia provide answers to questions about the COVID-19 measures in Russia and their impact on IP enforcement and protection.

COVID-19 restrictions

Keeping in mind its proximity to both Asia and Europe, it was a wonder that the country was able to ward off the threat of the COVID-19 for so long. Now, the inevitable has begun to unfold and Russia is at the bottom of the curve, climbing up at the predictable exponential rate.

President Putin declared that the first week of April would be a non-working week. By the end of that week, more drastic measures were required and the entire month of April was declared a non-working month. Subject to an extension, May 6 is the target date to return to work.

Moscow is on an official High Alert mode, ordered on March 5, and supplemented by the Moscow Mayor’s Decree No. 12-UM on March 14 2020.The restrictions imposed by the Mayor have tightened week by week. As of April 13, the lockdown introduces a pass system and requires that everyone stay at home and not leave for any reason other than for food, medical care or to work in essential roles that cannot be done remotely.

 

1. Did your government invoke any existing provision in law that is likely to affect IP holders and their rights?

No. However, the State has the power to grant special permission to use patented inventions (for example, to ensure the supply of medicines) if it is in the interests of defence and security. Also, there is a personal right to use an invention, utility model or design during an immediate catastrophe. The owner of the IP right is always entitled to remuneration. The legal provisions have never been used since they were first enacted.

Furthermore, because of the President’s announcement and the Mayor’s Decree, it is possible that force majeure under paragraph 3 of Article 401 of the Russian Civil Code may, in some cases, apply to absolve parties of their performance obligations under some civil contracts.

 

2. Did the government introduce or change any IP-related law or has the government announced plans to do so?

No IP laws were changed because of the pandemic. There were, however, a few regulatory changes to note. On March 26 2020, the government passed law no. 67-FZ allowing them to set maximum prices for up to 90 days in relation to medicines and medical devices.  If they detect an unusual trend of price increases, they can force restrictions on these products. Thereafter, by the decree of April 3 2020 (no. 431), the government further introduced some limitations on the trade of some medical devices and the maximum allowable price margin for every stage of the distribution chain.

The government has also authorised the online sale of over-the-counter drugs. If a pharmacy is already licensed to sell these products, it can apply to the regulator for permission to also sell them online.

 

3. How did the COVID-19 measures affect the IP Office?

The Russian Patent Office (ROSPATENT) is currently operating with restrictions, including the following:

  • All April deadlines, including the 31-month national phase entry of a PCT application, and other convention priority filing deadlines have been deferred to May 6;
  • Traditional in person deposit is suspended. Documents can be submitted by email at fips@rupto.ru with confirmation copies via Russian Post within 30 days; and
  • The electronic filing system continues as normal, but critical deadlines are suspended.

The Eurasian Patent Office (EAPO) does not allow visits in person. Most EAPO due dates falling in April are moved to May 6, though some exceptions apply. EAPO’s electronic filing system continues to operate and delivery can also be made via email at info@eapo.org

The Chamber for Patent Disputes is the forum of first instance for applications to cancel registered trade marks or to revoke patents. It also hears appeals for rejected patent and trade mark applications. The Chamber continues to operate, but on a limited basis. There are no in person sessions until at least May 6 2020. Some hearings can be held by conference call, but only by mutual agreement; otherwise, they will be rescheduled

Given the state of global chaos caused by the pandemic, it is worthwhile mentioning that most missed deadlines can be reinstated. Some deadlines, such as responses to provisional refusals or for patent term extension, are not extendable.

It is best to continue working as if it is “business as usual” and to rely on the May 6 2020 or any other available deadline extension dates, only when necessary.

 

 4. How has the pandemic affected IP litigation and enforcement in your jurisdiction?

On March 18, the Presidium of the Supreme Court and the Presidium of the Judges Council initially adjourned most hearings from March 19 until April 10. Upon President Putin’s subsequent declaration that all of April would be a non-working month, it became clear that the courts could not be closed completely for such a long period.

A more viable regime was developed. The courts will hear only time-sensitive matters concerning criminal cases, the protection of the interests of minors, and any other cases having some degree of urgency. Filings can only be made via the online court filing system or by post. When possible, courts may choose to conduct hearings by videoconference, and access to the premises for persons not participating in the hearings is restricted. They will continue to rule on matters where the proceedings do not require the presence of the parties as well as on matters where all parties agree on determination without appearance.The courts also have overriding discretion to hear any other case while being mindful of the COVID-19 restrictions.

The courts regard IP cases as being commercial in nature and thus can be deferred. It is unlikely that a discretionary exception would apply and this means that all new or pending IP disputes will be postponed until May or perhaps June or July.

Preliminary injunction requests have always been heard ex parte with the chances of success being very low, save for domain name and customs cases. Only a scenario involving the pandemic itself would be likely to change those odds.

For appeal and other procedural deadlines expiring in the month of April, it is uncertain that they will be extended automatically. Prudence dictates that one should try to meet any deadlines by filing online and on time. Statutory limitation dates remain an open question.

For copyright owners, the Moscow City Court continues to decide ex parte preliminary injunction requests to block illegal online content. According to the court’s website, the volume of online injunctions granted in second half of March and early April remains constant.

 

5. How are the relevant courts and tribunals dealing with the changes?

The adoption of new technologies was discussed in the past but there was no urgency to drive implementation. If anything positive can come out from this crisis, it is that the courts are now fast-tracking different ways to achieve access to justice.

For example, many courts have implemented online access to court case files. Sixteen arbitration courts out of 114, including the IP Court, now provide online access. The situation at the Chamber for Patent Disputes has been mentioned above.

Some courts are further pushing the envelope when it comes to hearings. For example, a judge in the court of general jurisdiction is said to have recently heard a case via WhatsApp (it concerned the supply of medicine to a sick child).

It seems that when this is over, the Russian society will have succeeded in breaking down all the remaining barriers associated with remote working and the use of electronic means for communication in the judicial process.

 

6. Are there regulatory and/or IP infringement risks that manufacturers (companies or individuals) and IP owners should be aware of?

The crisis has led to a unique situation in the marketplace. Most retail outlets are closed and consumers are at home. With so many closures, jobs are at stake everywhere and reduced income or no income at all are the new reality. This turn of events is a boon to not only legitimate online vendors but also to fraudsters, online counterfeiters, parallel importers and dealers of product lookalikes.

Business activity online, both legitimate and otherwise, has noticeably increased. According to a report from “Business Russia”, online shopping has grown by 20% in the second week of March 2020. The Association of Companies of Online Retail also reported a spike in online retail activity for Russian online retail platforms and retailers such as Ozon, Lamodа, Media Markt, and OTTO Group Russia. With everyone staying at home, online sales of food, household appliances, notebook computers and accessories have also intensified.

The pandemic has already prompted the flow of counterfeits for key products such as medicines, sanitary products and food products. Fake virus tests have already appeared on the market and the first police sting resulted in arrests in the suburbs of Moscow on April 10 2020.

To make matters worse for rightsholders, the courts, the police and Customs officials are operating at a reduced level. Pharmaceutical and food industries still have the attention of law enforcement agencies, the Ministry of Health, and the Federal Service on Surveillance for Consumer Rights Protection and Well-Being.

 

7. What should IP holders do about the risks?

While government agencies are not currently as accessible, the best bet is to focus on the detection of counterfeits and infringements and to work directly with the operators of search engines and e-commerce platforms.

As for the anticipated emergence of more lower-cost lookalikes as an alternative to well known brands, action against these types of infringements will not likely be seen as questions of immediate urgency. Brand owners should seek trade mark registrations now for the graphical images of their overall packaging and designs and industrial design registrations for the design of the container, with a plan to bring enforcement action at a later time.

The film and music industries are also exposed to increased illicit activity online associated with file sharing violations, illegal memes and other forms of copyright infringement. Rights owners should scale up their online surveillance practices and continue to work cooperatively with the operators of the popular social media platforms. Another option is to consider offering some free content.

An increase in parallel importation is also anticipated. The Constitutional Court made it clear in 2018 that a softer stance would be taken in regards to this type of trade mark infringement, especially in cases involving vital products such as medicines and life support equipment. It has also been made clear that the problem of grey goods is one to be resolved in civil proceedings and not criminal or administrative proceedings.

With the world in such a state of flux, the takeaway for IP rights owners is to give a hard look at your existing toolkit, decide on what changes are needed, and act quickly.

 

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, any other of its practitioners, its clients, or any of its or their respective affiliates. This article is for general information purposes only and is not intended to be and should not be taken as legal advice. Please contact the author(s) if you have any questions about this article.

 

Author(s)

David Aylen (Managing partner)