The Effects of U.S. Sanctions and Russia Response on Intellectual Property Assets

The Russian invasion of Ukraine has resulted in serious consequences, which affect U.S.-owned intellectual property assets in Russia. In response to the invasion, the U.S. government has imposed sanctions on Russia, many of which are already in effect. Russia’s response was to announce a decree that patents owned by U.S. entities are now essentially unenforceable.

Although the situation is fluid and difficult to predict, here is what we know to-date:

  • U.S. businesses can no longer conduct financial transactions with Russian agencies, such as the Russian Patent Office (“Rospatent”). At this time, it is unclear whether this sanction is already in effect, or whether it goes into effect starting June 24, 2022.
  • The Central Bank of the Russian Federation is among the institutions targeted by U.S. sanctions, and because all payments to Rospatent and the Eurasian Patent Organization (EAPO) must go through the Central Bank of the Russian Federation, no transactions are possible, including:
    • Filing Fees for new applications either directly or through a PCT National Phase
    • Maintenance fees on patents granted by Rospatent or the EAPO
    • Search Fees to Rospatent
  • The USPTO has severed all ties to Russian IP officials, Rospatent and the EAPO. Additional guidance, released on March 22, 2022, cautioning the selection of Rospatent as an International Searching Authority (ISA) or International Preliminary Examining Authority (IPEA) for PCT applications.
  • Attempts to evade the sanctions by making payments through a third party, e.g. a Foreign Associate, are also expressly prohibited.
  • The Russian government issued a decree that there will be 0% compensation for patent infringement on patents owned by entities from “unfriendly countries”. The U.S. is one of 47 countries listed as “unfriendly”.
  • It remains to be seen how the U.S. deals with violations of the sanctions (even inadvertent violations).

These factors should be seriously considered when evaluating how to manage IP assets in Russia. We are monitoring the situation as changes affecting IP arise.

Please contact us if you would like further details or require further guidance.

Hoffmann & Baron, LLP is a full-service law firm specializing in all areas of intellectual property, both domestically and internationally, since 1984. We safeguard intellectual property assets through procurement, litigation, counseling, opinions and licensing. What sets us apart is our personalized attention and ability to customize our services to fit the requirements of each client. Hoffmann & Baron, LLP has offices in New York, New Jersey and Washington D.C.