IP Sanctions?!

First of all I hope everyone’s exams went well and any exams that are still left will go well too! As we have talked in class a lot about analyzing what is copyrightable/trademarkable, infringements etc., I thought it would be interesting to bring a new angle into IP law and assess how it can be (and has been) used in sanctions.

Introduction

Due to the war in Ukraine, the EU has implemented many sanctions against Russia. One of the lesser-known, and surprising (at least to me), ways in which they have done so is through patent law. To explain how this has been done I will first briefly outline how patent law works in an EU context. Following this I will map out the legal bases for the sanctions within the EU. I will try my best to keep it concise and explain in an understandable way for those that are not familiar with EU law. I also refer to this as EU patent law although the relevant legal instruments for patents are not just restricted to the EU but other European countries too, so this is something to keep in mind throughout.

Outline of EU patent law

Patent law on an EU level is governed by the European Patent Convention (EPC). ¹The EPC establishes a uniform patenting system for all the contracting countries. There are also several implementing regulations corresponding to the different parts of the convention. Currently there are 39 contracting countries to the EPC. ² When applying for a patent, the applicant can choose which of the contracting states they want to designate when filing. If the patent is granted, it will thus be protected under the national law of all the countries that were designated in the application.³ There is also a central authority that is in charge of granting these patents. This is the European Patent Office (EPO). ⁴ As you can see, this offers quite strong protection for patents in the EU, and also streamlines the process and ensures uniformity within the Union. Comparing this to Canada, where a Canadian patent only has Canadian protection, ⁵ the EU regime may be more favorable for entrepreneurs, business owners, innovators etc.

IP Sanctions Against Russia

The EU has a regulation specifically dealing with sanctions against Russia in view of their actions in Ukraine. ⁶ The regulation has quite a long name to it so I will refer to it as the ‘sanctions regulation’. This regulation contains the legal bases for the IP sanctions, that are then subsequently used to amend other relevant legal instruments. Art. 5s of the regulation sets out the guidelines for IP related sanctions. Art. 5s(1)(a)-(b) set out that any IP offices and other competent IP institutions in Member States shall not accept (I have summarized the provisions so in order to see them in full please refer to the legislation):
(a): new applications for registration of trademarks, patents etc filed by Russian nationals or legal entities established in Russia, or if a joint application if one of the people/entities meet this criteria 
(b): essentially the same thing but regarding requests/submissions filed during the registration procedures before a relevant IP office
The other provisions, 5s(2)-(5), set out in essence that the relevant IP offices should fulfill their obligations and take all efforts to ensure that no applications are accepted from the prohibited groups of people.

Patent Sanctions

The administrative council of the EPC decided this December to amend rules 36, 39 and 160 of the implementing regulations. Rule 39 ⁷governs withdrawals and designation fees (refer to above for what a designation is). 39(1) stipulates when the designation fee must be paid. 39(2) stipulates that where the designation fee it not paid on time or the designations of all the contracting states are withdrawn, the European patent application is deemed to be withdrawn. The new rule is that of 29(2a), which states that where the applicant or one of the applicants is a Russian national, a natural person residing in Russia or a legal person, entity or body established in Russia, the designation of those Contracting States that are Member States of the EU shall be deemed to be withdrawn. Nonetheless, they still have to pay the designation fee under 39(1). This effectively means that a person/other legal entity with Russian ties will not get EU protection for their patents. This reflects the sanctions under art. 5s of the sanctions regulation which prohibit registration of Russian related IP. The amendments to rules 36 ⁸ and 160 ⁹apply what is found in rule 29(2a) to more specific scenarios, but the sentiment is the same.

Could The Restriction be Circumvented?

This new restriction might raise the question of whether it would be possible to somehow circumvent it (at least it did for me). This would probably be difficult though in light of the process of applying for a patent. Rule 41¹⁰governs what the request for grant of a European patent must include. Amongst other things Rule 42(2)(c) stipulates that the address and nationality of the applicant and the state in which their residence or principal place of business is located must be included on the application. It could be possible under some company law tricks to perhaps be strategic about principal place of business. However, you cannot be strategic about your nationality unless you straight up lie. If someone would be a dual national with both a Russian nationality and that of a contracting state to the EPC, they would be allowed to just use their contracting state nationality to avoid their patent application being withdrawn. ¹¹ Omitting ones nationality on the application would also lead to the refusal of the patent application. ¹² Thus, it would be difficult if not impossible to circumvent the restrictions.

IP Sanctions in Canada

Out of curiosity I also went and looked at whether Canada also engages with IP sanctions. Canada has a ‘Special Economic Measures’ Act, ¹³ relating to which there are regulations that deal with special economic measures against different countries. One of these regulations is in respect of Russia. ¹⁴ Under s.3(a) of this regulation it is prohibited for any person in Canada or any Canadian national to deal in any property with certain Russian people and entities (listed in Schedule 1, very very long list). The government of Canada has indicated that a dealing in property can also include intellectual property. ¹⁵ Thus, somewhat similar restrictions to exist as in the EU regarding IP sanctions against Russia.

Conclusion/Comments

Considering that states are using sanctions restricting the IP rights, or right to have IP rights, of certain individuals from certain countries to me shows how important IP law has become today. From a financial perspective, it has become an integral part of our society. As sanctions are largely used to either hurt countries financially or cut financial ties with a country, restricting IP rights is a good tactic to use. However, it also begs the question of whether IP related sanctions are really hurting the state and the people in power, or if it is the individuals and ordinary citizens receiving the brunt of it. After all, as we have learned IP is centered around the authors (or not if you ask the court in Theberge), the users and the consumers. However, this seems to be the issue with many sanctions, and might be a question better suited for a politics class. All in all, it was still extremely interesting to read about IP law being utilized in a different way than we have seen in class, and I am excited to see how the law will progress in the years to come.

Thank you for reading!