Unfortunately, the economic sanctions currently imposed on Russia are not impacting just Russia. They are also impacting nationals of the western countries that levied them, such as the U.S. As a result, it can be difficult for a U.S. national to obtain and maintain intellectual property (IP) rights in Russia. The sanctions are also on track to increase the minimum upfront cost required to file an international patent application (a PCT application) in the U.S.
On May 5, 2022, the Office of Foreign Assets Control, a branch of the U.S. Department of Treasury, released its General License No. 31, (“GL31”). GL31 specifically authorizes the following activities in the Russian Federation:
(1) The filing and prosecution of any application to obtain a patent, trademark, copyright,
or other form of intellectual property protection;
(2) The receipt of a patent, trademark, copyright, or other form of intellectual property
(3) The renewal or maintenance of a patent, trademark, copyright, or other form of
intellectual property protection; and
(4) The filing and prosecution of any opposition or infringement proceeding with respect
to a patent, trademark, copyright, or other form of intellectual property protection, or the
entrance of a defense to any such proceeding.
While GL31 clarifies that the aforementioned acts can be legally performed in Russia, the difficulty in actually doing so stems from the question of whether one can legally send money to Russia for such purpose. This is so because the provisions of several other U.S. Executive Orders that are currently in place, prohibiting monetary transactions with certain Russian entities and individuals, still apply.
The process of parsing through the applicable Executive Orders and other laws banning monetary transactions with Russian entities and individuals – for the purpose of determining a legal way to send money to a Russian law firm to handle the work there – is quite complex. To be safe, a proper understanding of the sanctions will most likely require hiring a law firm that specializes in working through the sanctions.
Many IP owners and applicants may not be able or willing to bear the cost of hiring a legal team just for the purpose of determining whether money can be legally sent to Russia. Even if these entities proceed with hiring a specialized law firm just for this purpose, and presuming that the law firm determines that a legal way to do so exists, it is unlikely that such money-transferring method will be easy or straightforward. Moreover, it will be necessary to find a party willing to facilitate the transaction, even if it is permitted under the sanctions— indeed, some entities will not even process any payments to Russian parties.
Therefore, even though IP rights can still be sought, obtained and maintained in Russia, the difficulty associated with sending money there for such purposes will likely prevent numerous U.S. entities and individuals from seeking, obtaining and maintaining IP rights in Russia, at least at this juncture.
In addition, the sanctions on Russia will likely increase the minimum fees required to file international patent applications in the U.S. (i.e., a PCT application). The U.S. Patent and Trademark Office announced on June 1, 2022, that it intends to exclude an applicant’s option to utilize the Russian Patent Office for conducting patentability searches in international PCT (“Patent Cooperation Treaty”) patent applications that are filed with the U.S. Receiving Office from December 1, 2022, onwards.
An international PCT application must be accompanied by a significant government filing fee. The filing fee is comprised of several components, and one of them relates to conducting a patentability search for the claimed invention. PCT rules allow for the applicant to select the Patent Office of one of several PCT member states for the purpose of conducting the required patentability search. Not surprisingly, different Patent Offices have different costs for performing this task; as it turns out, the Russian Patent Office’s cost is the lowest of them all. For this reason, applicants seeking to pay the lowest possible upfront cost to obtain a filing date for their invention have, in the past, often selected the Russian Patent Office to conduct the search.
However, this change will not affect applicants who prefer to utilize the Patent Offices of other countries for conducting the PCT patentability search. In addition, this change will not affect the process or fees for filing a “regular” U.S. national patent application.