Taking Advantage of IP Protection to Advance Russian Biotech

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April 24, 2008

ITSSD, Inc.

1

Taking Advantage of IP
Protection to Advance
Russian

Hi
-
Technology
©


By

Lawrence A. Kogan, Esq.

April 24, 2008

ITSSD, Inc.

2



Presented at


The 9
th

International Forum


On High Technology of the 21
st

Century


For the


M
i
d
-
A
t
l
a
n
t
i
c
R
u
s
s
i
a
B
u
s
i
n
e
s
s

C
o
u
n
c
i
l


Moscow
Entrepreneurs

Association


Opportunities for

Russian
-
American


Cooperation in the Field of


Science and Technology


24 APRIL, 2008 , MOSCOW, RUSSIA

April 24, 2008

ITSSD, Inc.

3

[Taking Advantage of IP Protection to Advance
Russian

Hi
-
Technology]

I
.

While

Science

&

Technology

Skills

Are

Essential

to

Invent

&

Innovate,

the

Consistent

Protection

of

Private

IP

Rights

is

Necessary

to

Exploit

That

Know
-
How

in

the

Marketplace




Certain

regions

within

the

Russian

Federation

and

their

citizens,

including

small

and

medium
-
sized

enterprises,

possess

the

S&T

knowledge,

technical

skills,

existing

plant

and

equipment,

and

a

well
-
educated

workforce



a

competitive

advantage

in

biotechnology

and

other

areas

of

hi
-
technology

-

to

provide

them

with

a

unique

opportunity

to

embrace

changes

brought

to

Russia

and

the

region

by

globalization
.



Yet,

generating

inventions

is

almost

never

the

main

objective

of

basic

research
.




Rather,

it

is

the

researcher’s

ability

to

see

some

special

relationship

between

his

or

her

scholarly

work

product

and

the

public

need

which

can

convert

a

discovery

or

invention

into

a

valuable

market

innovation
.




Hence,

famous

American

inventor

Thomas

Edison’s

invaluable

insight
:


The

value

of

an

idea

lies

in

the

using

of

it

.


April 24, 2008

ITSSD, Inc.

4

[Taking Advantage of IP Protection to Advance
Russian

Hi
-
Technology]



How

to

realize

this

value??

What

is

the

BEST

MECHANISM?



Experience

has

shown

that

private

property
-
based

patents,

government
-
university

partnerships

and

patent

&

product

commercial

licensing

have

together

enabled

humankind

to

realize

the

greatest

science

&

technological

advances,

and

social

and

economic

benefits

the

world

has

ever

witnessed

during

the

shortest

period

of

time
.



New

products

and

processes

do

not

spring

fully

formed

from

the

basic

research

performed

at

universities
.

They

require

not

only

good

ideas,

but

further

development,

capital,

creative

marketing,

and

manufacturing

capability
.



April 24, 2008

ITSSD, Inc.

5

[Taking Advantage of IP Protection to Advance
Russian

Hi
-
Technology]



Patents

(and

other

forms

of

private

IP),

technology

transfer

arrangements

and

commercial

licensing

contracts

provide

enterprising

individuals

and

companies

with

the

indispensable

economic

incentive

to

seize

the

markets

for

both

the

private

and

public

good
.



Because

patents

&

other

forms

of

IP

ultimately

help

nations

to

attain

sustainable

economic

and

social

development,

and

improve

their

competitiveness,

it

is

necessary

to

create

a

business

‘enabling’

environment

that

provides

protection

to

such

economic

investments
.



Usually,

when

private

property

rights,

including

IP

and

contract

rights

are

protected

and

enforced,

it

is

a

sure

sign

that

‘rule

of

law’,

NOT

‘rule

by

law’

prevails
.




Private

property

right

enforcement

reduces

the

transaction

costs

of

exchange

and

ensures

competitive

markets
.

Private

intellectual

property

(e
.
g
.
,

a

patent)

is

important

precisely

because

knowledge

is

an

intangible

good

that

is

not

readily

susceptible

to

valuation
.



April 24, 2008

ITSSD, Inc.

6

[Taking Advantage of IP Protection to Advance
Russian

Hi
-
Technology]



The

U
.
S
.

federal

government

(USG)

has

long

held

an

interest

in

securing

the

constant

transference

of

innovation

from

energy,

space,

information

technology,

biotechnology

and

defense

to

that

of

the

private

sector,

and

moreover,

this

process

is

periodically

being

updated
.




Prior

to

1980
,

however,

a

vast

portion

of

taxpayer

funded

USG

research

and

patented

knowledge

that

had

been

developed

with

the

assistance

of

private

industry

and

academia

for

primarily

military

use,

during

and

after

World

War

II,

remained

locked

up

and

unutilized,

and

thus,

did

not

benefit

society
.



Similarly,

in

Russia
,

the

benefits

of

Russian

taxpayer
-
funded

military

know
-
how

have

not

yet

been,

but

are

capable

of

being,

exploited

for

the

private

as

well

as

public

good
.

April 24, 2008

ITSSD, Inc.

7

[Taking Advantage of IP Protection to Advance
Russian

Hi
-
Technology]

II
.

The

American

Experience

in

Innovation

and

Private

‘Negative’

Intellectual

Property

Rights

May

Be

Advantageous

to

Use

in

Russia



Since

the

early

1980
s,

the

USG

has

focused

on

encouraging

the

transfer

from

the

government

of

publicly
-
funded

research

and

development

(R&D)

into

private

hands

within

universities

and

companies

that

can

most

capably

commercialize

such

know
-
how

into

market
-
relevant

end
-
user

products

and

processes

that

benefit

society

as

a

whole
.



The

USG

has

also

recognized

and

enforced

exclusive

private

property

rights

in

inventions

and

commercial

innovations,

and

maintained

free

&

competitive

markets

based

on

‘methodological

individualism’

(MI)
.




MI

=

the

individual

as

the

unit

of

analysis
.

Governments,

think

tanks,

universities

and

other

organizations

do

not

make

decisions
;

only

individuals

can
.

Individuals

conceive

ideas,

invest

time

and

effort

in

formulating

them

and

persuade

others

to

accept

them

.




MI

is

reflected

in

the

concept

of

individual

property

ownership

and

the

rule

of

law
.

“Properly

considered

to

be

a

key

guarantor

of

NEGATIVE

rights,

the

rule

of

law

protects

the

rights

of

individuals

from

potential

predators

including

majority

rule,

decision

makers

in

governments,

labor

unions,

and

other

rent
-
seekers
.

(Svetozar

Pejovich,

Ph
.
D)




April 24, 2008

ITSSD, Inc.

8

[Taking Advantage of IP Protection to Advance
Russian

Hi
-
Technology]



‘NEGATIVE’

(Anglo
-
American)

vs
.

‘POSITIVE’

(EU

Continental)

property

rights






The

concept

of

‘negative’

rights

reflects

a

skepticism

about

rulers’

foresight

and

goodwill
.

Outcomes

are

deemed

fair

&

just

if

they

emerge

from

the

process

of

voluntary

interactions
.




The

concept

of

‘positive’

rights

believes

in

rulers’

foresight

and

goodwill
.




It

does

not

reflect

the

view

of

government

as

a

predator

requiring

the

rule

of

law

to

tame

it
.




Rather,

it

wants

government

to

be

an

active

factor

in

running

the

economy
.




It

is

also

more

concerned

with

the

desired

outcome

of

economic

activities

than

with

the

process

of

voluntary

interactions

leading

to

unanticipated

results
.

Economic

activities

are

justified

only

if

they

serve

the

public

interest

and

social

justice
.



April 24, 2008

ITSSD, Inc.

9

[Taking Advantage of IP Protection to Advance
Russian

Hi
-
Technology]


NEGATIVE

(Anglo
-
American)

vs
.

POSITIVE

(EU

Continental)

property

rights

(cont’d)




German

law

protects

property

rights

only

to

the

extent

that

they

serve

“human

dignity”

and

the

German

welfare

state
.




Property

rights

in

Italy

are

also

attenuated
;

the

Italian

Constitution

allows

protection

of

private

property

insofar

as

it

serves

a

social

function
.




Thus,

property

rights

in

Germany

and

Italy

neither

protect

the

subjective

preferences

of

their

owners

nor

block

legislative

and

regulatory

redistributive

measures
.



The

attenuation

of

private

property

rights

enables

the

government

to

interfere

with

the

right

of

individuals

to

seek

the

best

use

for

the

goods

they

own
.




Rule

of

law

(‘negative’

property

rights)

vs
.

rule

by

law

(‘positive’

property

rights)
:




Rule

of

law

requires

a

well
-
defined,

stable

and

credible

process

by

which

formal

rules

can

be

changed
.




Rule

by

law

allows

changes

in

formal

rules

to

serve

as

a

vehicle

through

which

the

ruling

group

seeks

its

ends
.

(Svetozar

Pejovich,

Ph
.
D)
.


April 24, 2008

ITSSD, Inc.

10

[Taking Advantage of IP Protection to Advance
Russian

Hi
-
Technology]


“One

purpose

of

the

American

Revolution
...
was

to

strengthen

and

protect

the

people’s

fundamental

rights
...
[which]
...
‘could

from

the

very

beginning

be

‘negative

rights’

that

served

primarily

to

protect

individuals

from

the

government”
.




...
In

contrast
...
the

inclusion

of

positive

rights

in

German

law

can

be

traced

to

the

fact

that

European

constitutions,

unlike

the

U
.
S
.

Constitution,

did

not

establish

an

entirely

new

political

entity

because

the

nation
-
state

existed

before

the

constitutions

emerged
...
[‘T]hey

never

changed

the

tradition

of

the

state,’

and

part

of

this

saved

tradition,

especially

in

Germany,

was

that

‘the

state

always

retained

the

role

of

being

the

representative

of

the

higher

aspirations

of

society
.
’”

(Dieter

Grimm,

Ph
.
D)
.




European

citizens

are

deemed

to

enjoy

only

an

implied

conditional

right

to

private

property

that

is

highly

subject

to

‘collective

power’

and

the

‘public

interest’

i
.
e
.
,

the

‘general

will’
.

(Dieter

Grimm

Ph
.
D)

RULE

BY

LAW

.



“[A]

liberal

[U
.
S
.

constitutional



5
th

Amendment/Bill

of

Rights]

conception

of

property

puts

private

interests

in

opposition

to

collective

power

and

the

public

interest
.

‘Collective

forces

[are

considered]
...

clearly

external

to

the

protection

that

property,

as

an

entity,

affords
.
’”

(Tom

Allen,

Ph
.
D
;

Laurence

Tribe,

Ph
.
D)
.




“The

protection

of
...
the

faculties

of

men,

from

which

the

rights

of

property

originate
...
is

the

first

object

of

government


(emphasis

added)
.

(Federalist

Paper

No
.

10
)

(
James

Madison)
.

RULE

OF

LAW



In

addition,

in,

Madison

wrote

that

“Government

is

instituted

no

less

for

protection

of

the

property,

than

of

the

persons,

of

individuals
.


(Federalist

Paper

No
.

54
)

(
James

Madison)
.

RULE

OF

LAW




“In

a

word,

as

a

man

is

said

to

have

a

right

to

his

property,

he

may

be

equally

said

to

have

a

property

in

his

rights


(emphasis

added)
.

(March

29
,

1792

issue

of

the

National

Gazette)

(
James

Madison)
.

-

RULE

OF

LAW



April 24, 2008

ITSSD, Inc.

11

[Taking Advantage of IP Protection to Advance
Russian

Hi
-
Technology]



Important

U
.
S
.

Private

Property

&

Technology

Transfer

Legislation

Giving

Rise

to

American

Market
-
Based

Innovations



Small

Business

Act

(SBA)

of

1958

(Public

Law

85
-
536
)

(as

amended)

to

Provide

Small

&

Medium
-
Sized

Domestic

Businesses

(SMEs)

with

Market

Access

to

Federal

Contracts




SBA

assisted

domestic

small

businesses

in

competing

for

Federal

procurements
.

SBA’s

purpose

was

to

promote

a

high

level

of

entrepreneurship,

free

markets

and

open

competition
.




“It

is

the

declared

policy

of

the

Congress

that

the

Government

should

aid,

counsel,

assist,

and

protect,

insofar

as

is

possible,

the

interests

of

small

business

concerns

in

order

to
:



Preserve

free

competitive

enterprise
;



Ensure

that

a

fair

proportion

of

the

total

purchases

and

contracts

or

subcontracts

for

property

and

services

for

the

Government

(including

but

not

limited

to

contracts

or

subcontracts

for

maintenance,

repair,

and

construction)

be

placed

with

small

business

enterprises
;



Ensure

that

a

fair

proportion

of

the

total

sales

of

Government

property

be

made

to

such

enterprises
;



AND



Maintain

and

strengthen

the

overall

economy

of

the

Nation
.



April 24, 2008

ITSSD, Inc.

12

[Taking Advantage of IP Protection to Advance
Russian

Hi
-
Technology]



Regulatory

Flexibility

Act

of

1980

(as

amended)

to

Further

Ease

Business’

Regulatory

Burden



(
5

U
.
S
.
C
.

§

601
-
612
,

amended

in

1996

[P
.
L
.

104
-
121
]

&

2007

[P
.
L
.

110
-
28
)




The

Act

“establish[ed]

as

a

[general]

principle

of

regulatory

issuance”
.



Federal

agencies,

“consistent

with

the

objectives

of

the

rule

and

applicable

statute

[in

question,

must]

fit

regulatory

and

informational

requirements

to

the

scale

of

the

businesses
...
subject

to

regulation
.




To

achieve

this

principle,

agencies

are

required

to

solicit

and

consider

flexible

regulatory

proposals

and

to

explain

the

rationale

for

their

actions

to

assure

that

such

proposals

[were]

given

serious

consideration
.



April 24, 2008

ITSSD, Inc.

13

[Taking Advantage of IP Protection to Advance
Russian

Hi
-
Technology]


Funding Small Business Innovation
-

The Small Business
Innovation Development Act of 1982 (SBIDA) (, as amended in
2000 [P.L.106
-
554] & 2002 [SBIR PD 2002])




(SBIDA) encouraged, facilitated and harnessed governmental funding
of small company R&D and innovation through establishment of the
Small Business Innovation Research Program (SBIR).



SBIR

“encourages

small

business

to

explore

their

technological

potential

and

provides

the

incentive

to

profit

from

its

commercialization
.

By

including

qualified

small

businesses

in

the

nation’s

R&D

arena,

high
-
tech

innovation

is

stimulated

and

the

United

States

gains

entrepreneurial

spirit

as

it

meets

its

specific

research

and

development

needs
.





SBIDA/

SBIR

goals

-

to


...
use

small

businesses

to

meet

federal

R&D

needs,

foster

and

encourage

participation

in

technological

innovation

by

minority

and

disadvantaged

persons,

and

to

increase

private

sector

commercialization

of

innovations

derived

from

federal

R&D
.


(Charles

W
.

Niessner,

former

USDOT)
.


April 24, 2008

ITSSD, Inc.

14

[Taking Advantage of IP Protection to Advance
Russian

Hi
-
Technology]


Facilitating

Technology

Transfer

From

Government

Laboratories

to

Small

Businesses

-

The

Stevenson
-
Wydler

Technology

Innovation

Act

(
1980
)

(P
.
L
.

96
-
480
)



The

Act

provided

the

foundation

for

enhanced

information

dissemination

and

technology

transfer

from

the

USG

to

private

industry
.

It

required

Federal

laboratories

to

take

a

more

active

role

in

cooperation

with

potential

users

of

Federally
-
developed

technology
.

The

Act

directed

Federal

laboratories

to

establish

Offices

of

Research

and

Technology

Applications

(ORTA)

through

which

to

conduct

technology

transfer

activities
.



The

US

Congress

believed

that

“technology

and

industrial

innovation

[was]

central

to

the

economic,

environmental,

and

social

well
-
being

of

the

citizens

of

the

United

States
.





The Act directed the executive branch to satisfy four specific objectives:



1
)

To

promote

technology

development

through

establishment

of

cooperative

research

centers
;

stimulate

better

use

of

federally
-
funded

technologies

by

state

and

local

governments

and

the

private

sector
;




2
)

To

encourage

technological

development

through

greater

recognition

of

inventors

(both

individuals

and

companies)
;




3
)

To

encourage

the

exchange

of

scientific

and

technical

personnel

among

academia,

industry

and

federal

laboratories
;

and




4
)

To

secure

the

protection

of

IP

rights

in

laboratory

innovations

with

commercial

promise

and

the

management

of

such

innovations

to

benefit

the

competitiveness

of

U
.
S
.

industry
.



April 24, 2008

ITSSD, Inc.

15

[Taking Advantage of IP Protection to Advance
Russian

Hi
-
Technology]


Promote

Technology

Transfer

to

SMEs

-

The

Bayh
-
Dole

Act

(
1980
)

(P
.
L
.

96
-
517

-

Patent

and

Trademark

Act

Amendments

of

1980



The

Act

established

a

uniform

government

patent

policy

AND

allowed

universities

and

other

nonprofit

organizations

to

retain

title

to

federally
-
funded

inventions

and

to

work

with

companies

in

bringing

them

to

market
.




It

provided

USG

agencies

with

the

means

to

shift

(transfer)

legal

title

(ownership)

of

federally

funded

ideas

and

patents

from

the

government

to

the

private

sector



namely,

to

those

private

hands

(approved

universities,

small

businesses

and

nonprofits)

most

capable

of

securing

the

monies

and

expertise

needed

to

commercialize

them
.



Through

enabling

the

negotiation

of

exclusive

licenses

(private

contracts

-

a

form

of

private

property)

for

promising

technologies

(R&D

assets),

the

Act
:




Created

economic

incentives

for

university

researchers

to

consider

the

practical

applications

of

their

discoveries
;



Encouraged

universities

and

non
-
profits

to

become

directly

involved

in

the

commercialization

process

by

searching

out

potential

companies

to

develop

them
.




Encouraged

corporations

to

invest

in

the

additional

research,

development,

and

manufacturing

capabilities

needed

to

bring

new

products

to

market
.



Stimulated

the

economy

to

the

extent

those

businesses

then

manufactured

and

distributed

the

resulting

products

in

America

(This

justification

has

been

subject

to

questioning

where

USG
-
funded

R&D

&

manufacturing

are

‘outsourced’)
.


April 24, 2008

ITSSD, Inc.

16

[Taking Advantage of IP Protection to Advance
Russian

Hi
-
Technology]



Promote

Technology

Transfer

to

SMEs

-

The

Bayh
-
Dole

Act

(
1980
)

(P
.
L
.

96
-
517

-

Patent

and

Trademark

Act

Amendments

of

1980

(cont’d)



The

overwhelming

success

of

the

Bayh
-
Dole

Act

was

acknowledged

by

the

109
th

U
.
S
.

Congress
.




On

December

14
,

2005
,

the

U
.
S
.

House

of

Representatives,

in

concurrence

with

the

U
.
S
.

Senate,

issued

a

“Sense

of

the

Congress

Resolution”
,

recognizing

the

invaluable

contribution

that

the

Bayh
-
Dole

Act

has

made

to

U
.
S
.

innovation

and

technological

advancement

during

the

twenty
-
five

years

since

its

enactment
.




These

pieces

of

U
.
S
.

legislation

largely

succeeded

in

fulfilling

their

policy

objectives

because

they

reflected

the

USG’s

recognition,

via

Rule

of

Law

of

the

fundamental

exclusive

‘negative’

right

to

private

property
.

Without

the

prospect

for

private

IP

ownership,

there

would

have

been

little

incentive

for

small

businesses

/

innovative

companies,

universities

and

nonprofits,

university

researchers

and

small

independent

inventors,

to

participate

in

the

R&D

commercialization

process
.












April 24, 2008

ITSSD, Inc.

17

[Taking Advantage of IP Protection to Advance
Russian

Hi
-
Technology]

III
.

Russia’s

Intellectual

Property

Laws

&

IP

Enforcement

Are

Moving

in

the

Right

Direction
;

But

Will

This

Continue?



The

main

body

of

intellectual

property

law

in

Russia

consists

of
:



The

Russian

Citizens’

Code

of

1964



The

Patent

Law

of

Russia

(
1992
)

and




The

Law

for

the

Rights

of

Innovators
.




Russia

has

recognized

that

these

laws

are

outdated

and

no

longer

serve

the

interests

of

the

Russian

people

or

its

economy
.




The

Russian

government

has

canceled

54

older

laws,

and

has

committed

itself

to

the

preparation

of

a

new

intellectual

property

legal

regime

which

would

include

four

laws

and

sixteen

governmental

decrees
.

April 24, 2008

ITSSD, Inc.

18

[Taking Advantage of IP Protection to Advance
Russian

Hi
-
Technology]


During

July

2001
,

the

Duma

passed

a

package

of

laws

that

brought

about

major

deregulation

of

small

and

medium
-
sized

enterprises,

by

simplifying

their

registration,

licensing,

inspection

and

certification
.

(emphasis

added)
.



A

new

registration

law

reduced

the

number

of

government

agencies

from

which

business

registration

approvals

must

be

obtained
.

A

businessman

need

register

with

only

one

government

agency,

which

sharply

reduced

the

period

for

registration
.



A

new

licensing

law

came

into

effect

in

February

2002
.

It


extended

the

period

of

a

license

from

a

maximum

of

three

years

to

a

minimum

of

five

years
.

It

also

reduced

the

cost

of

a

license

and

the

number

of

business

activities

subject

to

licensing
.



A

new

inspections

law

restricted

the

number

of

planned

government

inspections

to

which

a

firm

could

be

subject,

to

no

more

than

one

every

two

years,

although

this

did

not

limit

the

number

of

different

types

of

inspections
.

It

excluded

law

enforcement

agencies
.






A fourth important law on deregulation tried to simplify
standardization and technical regulation.


April 24, 2008

ITSSD, Inc.

19

[Taking Advantage of IP Protection to Advance
Russian

Hi
-
Technology]


“This

broad

effort

at

deregulation
...
has

proved

sustainable,

although
...
the

amelioration
...
has

been

greater

in

more

developed

and

pluralist

regions
.

Small

enterprises

have

grown

steadily
.

The

number

of

officially

registered

enterprises

has

steadily

increased

by

more

than

7

percent

a

year,

and

by

2006

the

total

number

of

registered

enterprises

in

Russia

had

reached

almost

5

million
...
Still,

the

patriarch

surveillance

system

remains

in

place,

and

more

radical

deregulation

is

needed
.


(Anders

Aslund)
.



A

new

chapter

in

the

Russian

Civil

Code

provided

the

legal

basis

for

private

transactions

of

land,

and

after

a

prolonged

legislative

battle,

a

new

land

code

was

adopted

on

October

25
,

2001
,

but

it

excluded

farmland
.




On

July

24
,

2002
,

the

Duma

finally

legalized

the

sale

of

agricultural

land

as

well
.

It

was

a

compromise

requiring

each

region

to

adopt

a

law

to

make

the

federal

law

effective
.

As

a

consequence,

communist

regions

could

withhold

agricultural

land

from

sale,

while

more

liberal

regions

were

allowed

to

sell

land
.

In

practice,

the

private

ownership

of

agricultural

land

developed

only

gradually,

and

good

connections

with

regional

governors

were

vital

for

land

purchases
.




During

October

2002
,

a

new

bankruptcy

law

was

added

to

the

Russian

Civil

Code

because

the

old

law

had

become

a

tool

of

corporate

raiding

of

companies

merely

in

a

liquidity

squeeze
.


April 24, 2008

ITSSD, Inc.

20

[Taking Advantage of IP Protection to Advance
Russian

Hi
-
Technology]


Russia has tried to send more positive signals concerning its
recognition and protection/enforcement of IP rights.



“Little

progress

has

been

made

in

the

area

of

IPR
.

As

in

many

instances

throughout

the

economy,

it

is

a

matter

not

so

much

of

laws

on

the

books

but

of

implementation

and

enforcement
.


(US
-
Russia

Business

Council

2005
)

.



“[A]

mixed

bag

of

successes

and

failures

in

the

Russian

Government's

efforts

to

improve

protection

and

enforcement

of

trademarks,

copyrights

and

patents’[
.
]

The

baseline

CIPR

survey

of

102

rightsholders

was

conducted

during

the

first

quarter

of

2006

prior

to

the
...

announcement

of

the

RF

Presidential

Administration's

proposed

new

comprehensive

IP

law

commonly

known

as

Part

Four

of

the

Civil

Code
.

(Coalition

for

Intellectual

Property

Rights,

May

2006
)
.




During

November

2006
,

the

Duma

passed

into

law

new

Part

Four

to

the

Russia

Civil

Code
.




As

proposed,

it

contained

a

provision

dealing

with

invention,

design

or

utility
.

Indeed,

as

one

group

noted,

that

provision

contained

“the

term

‘exclusive

right’
,

[which]

is

understood

to

refer

only

to

the

right

of

the

patent

owner

to

use

the

invention,

design

or

utility

model
.


But,

it

did

not

contain

any

more

specific

“right

to

forbid

others

to

use

the

invention,

etc
.

It

is

not

even

stated

that

nobody

can

use

an

invention,

design

or

utility

model

without

the

permission

of

the

patent

owner”
.

(The

Coalition

for

Intellectual

Property

Rights

Press

Release

(May

24
,

2006
)
.



April 24, 2008

ITSSD, Inc.

21

[Taking Advantage of IP Protection to Advance
Russian

Hi
-
Technology]


Some

legal

commentators

believe

new

Part

4

of

the

Russian

Civil

Code

intentionally

refers

to

the

notion

of

IP

rights

as

‘the

products

of

intellectual

activity

that

give

rise

to

commercial

value’,

not

merely

to

some

abstract

‘bundle

of

(limited)

positive

rights’

(or

entitlements)
.





“[A]

new

term

‘intellectual

rights’

has

been

introduced

which

means

the

total

of

exclusive

(property),

personal

non
-
property

and

open

list

of

some

other

rights

под

(the

article

only

mentions

the

right

of

resale

and

right

of

access)
.

An

important

change

is

the

opportunity

to

conclude

a

contract

on

irrevocable

assignment

of

all

author’s

exclusive

rights,

according

to

which

the

author

may

forfeit

all

his/her

author’s

exclusive

rights

forever
...
[T]he

protected

result

of

intellectual

activity

is

the

secret

of

production

(know
-
how)
.

According

to

the

Code,

the

secret

of

production

(know
-
how)

is

any

data

(production,

technical,

economic,

administrative

and

other),

including

data

about

the

results

of

intellectual

activity

in

scientific

and

technical

sphere
,

as

well

as

data

about

methods

of

performing

professional

activities

having

actual

or

potential

commercial

value

by

reason

of

their

being

unknown

to

third

persons
,

to

which

third

persons

have

no

free

legal

access,

and

which

are

officially

considered

as

a

commercial

secret

by

the

holder

of

such

data
.


(emphasis

added)
.

(Norman

DL

Associates

Law

Firm

(
2008
)

.



April 24, 2008

ITSSD, Inc.

22

[Taking Advantage of IP Protection to Advance
Russian

Hi
-
Technology]


New

Part

4

of

the

RF

Civil

Code

was

largely

intended

to

implement

Russia’s

obligations

under

the

WTO

TRIPS

Agreement

as

concerns

patents

and

trade

secrets,

and

to

strengthen

IP

protection

against

piracy

&

counterfeiting,

especially

of

optical

media
.




The

changes

brought

by

new

Part

4

of

the

RF

Civil

Code

were

hailed

by

“US

industry

groups

concerned

with

intellectual

property

rights,

including

film,

music,

pharmaceuticals,

and

manufacturing
.


(Intellectual

Property

Watch

(Nov
.

24
,

2006
)

.



The

new

Part

4

provisions

were

scheduled

to

take

effect

on

January

1
,

2008
.

However,

this

was

made

impossible

by

the

law’s

unanticipated

[??]

impact

on

accompanying

regulations
:





The

new

law

“abrogated

all

regulations

governing

[the]

activities”

of

Russia’s

Federal

Service

for

Intellectual

Property,

Patents

and

Trademarks

(Rospatent)
.

Without

working

regulations

in

place,

the

Federal

Service

for

Intellectual

Property,

Patents

and

Trademarks

(Rospatent)

has

been

unable

to

do

its

job,

i
.
e
.
,

it

“could

no

longer

examine

patent

claims,

trademarks,

or

industrial

models

and

make

the

relevant

decisions,

and
...
was

also

unable

to

schedule

meetings

of

the

Chamber

of

Patent

Disputes
...


(Young

&

Wasserman

(
2007
)
;
Kommersant

-

Jan
.

11
,

1008
)
.




Consequently,

the

government
...
will

prove

unable

to

fight

piracy,

an

important

pre
-
condition

of

Russia's

accession

to

the

World

Trade

Organization
.


(Novosti



April

14
,

2008
)

.

April 24, 2008

ITSSD, Inc.

23

[Taking Advantage of IP Protection to Advance
Russian

Hi
-
Technology]


Despite

These

Important

Improvements,

More

Can

Still

Be

Done
:



The

World

Bank

and

International

Finance

Corporation

(IFC)

Doing

Business

Index

(
2006
)

ranks

Russia

as

96
th

among

175

countries
...
Russia

receive[d]

its

best

rankings

for

enforcing

contracts

(
25
),

starting

a

business

(
33
),

and

registering

property

(
44
),

which

all

concern

property

rights
.

Yet,

Russia’s

regulatory

environment

is

still

considered

bad
.



The

World

Bank

and

IFC

Doing

Business

Index

(
2008
)

index

ranks

Russia

106
th

among

178

countries
.

Russia

slipped

from

certain

of

these

2006

rankings

and

rose

in

others
:

starting

a

business

(
50
),

enforcing

contracts

(
19
),

and

registering

property

(
45
)
.



The

2007

International

Property

Rights

Index

ranks

Russia

63
rd

out

of

70

countries

overall,

with

a

3
.
2
/
10

on

a

0
-
10

scale,

with

the

Average

2007

IPRI

Rank

being

5
.
7
.

This

was

further

broken

down

into

three

elements
:

legal

and

political

environment

(LP),

physical

property

rights

(PPR)

and

intellectual

property

rights

(IPR)
.

Russia

ranked

62
nd

out

of

70

countries

or

1
.
9
/
10

(LP)
;

4
.
2
/
10

(PPR)
;

and

3
.
7
/
10

(IPR)
.




In

the

2008

International

Property

Rights

Index

Russia’s

relative

overall

ranking

dropped

to

93
rd

out

of

115

countries
,

though

it

achieved

an

overall

higher

IPRI

ranking

of

4
.
0
/
10
.

Similarly,

Russia’s

rankings

in

the

elemental

indices

also

improved
:

3
.
2
/
10

or

102
nd

out

of

115

countries

(LP)
;

4
.
9
/
10

or

92
nd

out

of

115

countries

(PPR)
;

and

3
.
9
/
10

or

83
rd

out

of

115

countries

(IPR)
.

The

Average

IPRI

for

2008

was

5
.
5
.


April 24, 2008

ITSSD, Inc.

24

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