Vladimir Putin's move to harm companies in enemy countries

In the context of its deadly assault on Ukraine, Russia has taken the rare step of using intellectual property rights as a tactic of war. In early March, the Russian government issued a decree that Russian companies are no longer obliged to compensate owners of patents, utility models and industrial designs from “non-friendly” countries. These are the Western states that have issued sanctions against Russia, including the United Kingdom and the United States.

This means that Russian companies can use intellectual property, such as patented inventions or fashion designs, without having to pay or seek the consent of rights holders. Affected companies cannot assert their patents and designs against Russian imitators.

This actually legalizes intellectual piracy in a country already known for failing to adequately protect intangible assets. Last year, Russia was placed on a US government “priority watch list” of countries that do not sufficiently protect America's intellectual property.

Vladimir Putin's move is clearly a reaction to Western economic sanctions and Russia's suspension of trade privileges. It is also a response to the decision of many multinational companies to stop doing business with Russian companies.

Sanctions and boycotts have massively affected the Russian economy, to the point that the country is now on the verge of bankruptcy and interest rates have doubled. The stock market has been closed for weeks and the ruble has fallen sharply.

Unprecedented attack on intellectual property

The suspension of intellectual property rights as an economic weapon in the context of conflict is unprecedented, at least in recent decades. Historical examples date back to World War I, when the United States introduced the Trade with the Enemy Act. This law confiscated the copyrights and patents of enemy countries, including the patent on aspirin, famous for being a German invention.

After the war, the Aspirin brand, owned by the German pharmaceutical company Bayer, was ceded to the United States, France, the United Kingdom and Russia, as part of the war reparations agreed by Germany in the Treaty of Versailles.

Russian officials have hinted that other intellectual property rights owned by Western countries, including computer software and trademarks, could soon be restricted. This could allow local entrepreneurs to appropriate and exploit - without permission and for free - brands such as McDonald's. A Russian restaurant chain has even recently adopted, and applied for registration locally, a logo very similar to the famous golden arches.

The sanctions have also led a Russian judge to dismiss a copyright and trademark infringement lawsuit filed by the British company that produces the animated series Peppa Pig. Andrei Slavinsky said in court that the “unfriendly actions of the United States of America and affiliated foreign countries” influenced his decision.

Ukraine, for its part, has not remained idle in this intellectual property battle. Its Ministry of Defense recently hacked and leaked confidential documents it claimed to have taken from a Russian nuclear power plant.

Does it violate international law?

Russia's suspension of patents and other intellectual property rights of Western companies may violate international treaties that protect these assets globally. All countries of the World Trade Organization (WTO) must respect these laws and ensure that foreign companies can assert their intellectual property rights against imitators.

Countries harmed by the Russian measure can take Russia before a WTO court and demand additional sanctions. This would again affect Russian companies, especially those that rely on brands and patented technology, as well as the creative industry sector.

The only way Russia could justify the measure would be by relying on a security exception that the WTO itself makes available to it. This exception allows countries to take whatever action they deem necessary to protect their essential security interests in times of war. But it has never been invoked by any State in the context of an armed conflict and has therefore never been tested before WTO judges.

If Russia is expelled from the WTO club, as proposed, that would paradoxically isolate it from global intellectual property challenges. No country could bring Russia before a court of an organization of which it is no longer a member.

These are predictions of what could happen if the war continues. It goes without saying that a rapid end to the conflict could instead ease tension between the West and Russia, and end the current intellectual property battle.

Article originally published by The Conversation, by Enrico Bonadio, specialist in Intellectual Property Law, City, University of London; and Alina Trapova, Associate Professor of Law and Autonomous Systems, University of Nottingham

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