In the current situation, sanctions imposed by foreign states against Russia inevitably affect intellectual property or IP.

Here is a list of the main EU, US and UK sanctions imposed against Russian entities and individuals that affect intellectual property issues:

 

 

 See below a summary of EU, US and UK sanctions.

 

EUROPEAN UNION

 

US

 

UK

 

See below a more detailed summary of the sanctions regimes in the said countries.

 

EUROPEAN UNION

Document imposing sanctions:

Council Regulation (EU) No.269/2014 of 17.03.2014 (hereinafter “Council Regulation (EU) No.269/2014”) providing for freezing of all funds and economic resources (including intellectual property) belonging to persons or entities listed in Annex I to the Regulation.

 

Who is subject to sanctions?

Sanctions apply only to persons and entities listed in Annex I, which includes over 1,000 persons and 80 organizations, which, as the EU alleges, are involved in “undermining the territorial integrity, sovereignty and independence of Ukraine,” including those financing such actions.

There is also the presumption that if a sanctioned person owns or controls a legal entity not listed in the Annex, then such a legal entity must be subject to sanctions.

What is fully restricted:

Key operations related to IP of sanctioned individuals and entities must be suspended:

·       Public bodies maintaining IP registers must suspend registration of new IP of sanctioned persons and registration of the granting of IP use rights, if one of the parties to such granting is under sanctions;

·     EU citizens and companies that use IP of sanctioned persons are not allowed to make payments for using IP of persons that are subject to EU sanctions;

These restrictions apply to all IP assets protected in the EU and owned by persons listed in Annex I. Besides trademarks registered under the laws of the EU Member State, they also apply to trademarks registered under the Madrid Agreement, the Madrid Protocol and the Directive of the European Parliament and of the Council relating to trademarks.

What is allowed with restrictions:

·    Sanctioned persons can defend their intellectual property rights in EU courts. However, courts must take into account the restrictions on freezing of assets and the ban on deriving benefit from their use.

It is likely that in the event of a claim for damages or compensation, a court will either leave it without consideration, or will grant compensation, but with such compensation also being frozen like the rest of the sanctioned person’s assets.

·     Sanctioned persons may pay fees to EU lawyers for IP-related services, as well as charges to public authorities of EU member states.

As a general rule, sanctions do not allow the EU individuals and companies to receive any benefit from sanctioned persons, unless it is an exceptional case, e.g. when an agreement had been entered into with a sanctioned person before such a person was included in Annex I. The final decision on waiving or deviating from sanctions is adopted by the relevant national authority, a list of which is published on the European Council web site.

What is left unrestricted:

·     Maintaining the validity of IP assets, i.e. sanctioned persons may take all actions required to extend the validity of their IP assets (e.g. pay the necessary fees).

·      Designation does not entail automatic termination of IP rights, i.e. EU bodies keeping public registers are not entitled to delete information on intellectual property of designated persons from registers; they may only mark such IP as belonging to sanctioned persons.

·   EU companies and persons may continue to interact with the Russian Federal Service for Intellectual Property (Rospatent), including paying fees for registration actions.

 

US

Document imposing sanctions:

Sanctions against Russia were originally imposed by Executive orders 13660, 13661 and 13662, and were later expanded by the US Department of the Treasury and its Office of Foreign Assets Control (OFAC). See a summary of these documents in the material prepared by OFAC.

Who is subject to sanctions?

Sanctions can be divided into three broad categories:

·      Blocking sanctions that prohibit any transactions with persons and companies included in the SDN List. Most of the Russian individuals and companies on the SDN List are tied to activities in Crimea and Russia’s special military operation.

·     Sectoral sanctions are imposed on individuals and companies involved in a particular sector of the economy (they are named in the SSI List). Mainly, the list includes companies of the banking, technology and defense sectors of the economy.

·       Ban on investments and trade embargo due to the Crimea situation.

What is fully restricted:

·       Transactions with IP assets of persons included in the SDN List;

·    Interagency cooperation with IP bodies of Russia and Belarus and the Eurasian Patent Organization and the US Patent and Trademark Office.

What is allowed:

In certain cases, the US allows transactions with sanctioned companies and persons, for which the OFAC issues relevant licenses either for an indefinite circle of persons (“General License”) or a person whose application the OFAC approved (“Specific License”).

By General License No.31 dated 05.05.2022 the OFAC expressly permits the following transactions:

·      Submission and processing of any application for a patent, trademark or other IP assets;

·      Obtaining a patent, trademark certificate or any exclusive rights to newly created IP assets;

·       Renewal or maintenance of a patent, trademark or other intellectual property;

·     Submission of and participation in consideration of any objection or claim against a patent, trademark, copyright or other IP assets, including participation as a defendant in such cases.

Thus, this document allows US companies to take registration actions in Russia, and Russian companies to take similar actions in the US.

 

UK

Document imposing sanctions: The Russia (Sanctions) (EU Exit) Regulations 2019.

Who is subject to sanctions?

Sanctions apply either to individuals or to certain sectors of the economy. The list of sanctioned persons and entities (largely similar to the EU list) is posted on the official web site of the UK Government.

What is restricted:

·            Transactions and deriving benefit from IP assets of sanctioned persons.

What is allowed:

·            Paying fees and maintaining IP assets registered in Russia.

Some time ago, the UK imposed sanctions on the Russian Central Bank, and now UK persons are no longer able to pay fees to Rospatent on their own. This raises the obvious question: if I pay to a Russian person or entity not under sanctions to pay fees to Rospatent, and this payment ends up in the Russian Central Bank, will the sanctions be violated?

However, as the Chartered Institute of Trade Mark Attorneys notes, UK laws do not establish any significant restrictions on payment of fees to Rospatent, i.e. such fees may be paid, unless they are paid by or on behalf of any of the persons included in the UK sanctions list. In other words, the relevant sanctions prohibitions deal with the provision of financial services, rather than submission of applications for and maintenance of intellectual property.

We hope this material helps you understand the sanctions imposed on intellectual property in foreign jurisdictions.