The Effect of US Imposed Sanctions on Patents in Russia

Hi everyone, as we were studying about patents and due to the current climate, I feel it is only relevant to talk about the situation occurring between Russia, Ukraine and wider global involvement. I came across this article by Mark Mathison (Kilpatrick Townsend & Stockton LLP) which spoke about the western sanctions imposed on Russia due to their devastating invasion of Ukraine. https://www.lexology.com/library/detail.aspx?g=d1b870a9-f150-47e9-9694-e2cde7812c6b

The article mentions how the intention of the transnational sanctions was to punish Russia for its actions, but it has had side-effects on other US entities who hold patent interests within Russia.Under the directive, a US person is specifically prohibited from engaging in any transaction involving the listed financial institutions (unless otherwise excepted or licenced), including any transfer of assets to such entities or any foreign exchange transaction for or on behalf of such entities.

As the Russian patent office (Rospatent) gets paid via the Central Bank of the Russian Federation, which is targeted by the prohibitions placed by the US treasury [1] financial exchanges with said banks results in the prevention of the Rospatent getting paid. Thus  international entities who are engaged in patent transactions with the office must decide on their future activities within the nation. While it is unlikely that US entities pursuing patent interests in Russia will  pay fees that are processed through the prohibited bank, the directive also makes it clear that attempting to route payments through neutral countries to the sanction is also precluded. Nevertheless, a license was issued which enabled entities with everyday operations regarding intellectual property within Russia to complete any activities without violating the directive. This license runs until June 2022 [2].

Therefore, entities with significant patent interests in Russia are now having to decide their strategies for moving forward. They will either choose to close their file on Russian patents/applications or choose to sacrifice their future enforcement rights within the nation.

[1] https://home.treasury.gov/system/files/126/eo14024_directive_4_02282022.pdf

[2] Mathison’s Article (linked above)