Amended RF Trademark, Criminal and Customs Laws will meet International Standards
Help Pave Russia's Road to WTO

NEW IP PROTECTIONS AND "ZERO TOLERANCE FOR COUNTERFEITERS" PROPOSED TODAY BY RF REGULATORS, DUMA DEPUTIES, TRADEMARK OWNERS, MVD AND CUSTOMS

Moscow - Senior officials of the Russian Federation Government and State Duma Deputies along with representatives of the private sector called today for the swift enactment of a breakthrough package of intellectual property and anti-counterfeiting legislation that will put Russia in line with international standards and norms.

The State Duma is expected in mid-December to approve on first reading the Russian Government's extensive new amendments to the RF Law On Trademarks, Service Marks and Appellations of Origin and, to the RF Patent Law.

These reforms, in combination with groundbreaking anti-counterfeiting measures proposed by a group of Duma Deputies led by Peter Shelisch, and additional IP enforcement amendments to the State Customs Code," are proof positive of Russia's commitment to protect the intellectual property rights of Russian and foreign investors," said Peter Necarsulmer, president of the Coalition for Intellectual Property Rights (CIPR), a public-private partnership helping lead the fight against counterfeiting and other IP abuses in Russia and the former Soviet Union.

"These efforts are bellweather signs that President Putin, the RF Government and the RF State Duma are intent on keeping their promises to bring Russia's IP legislation into compliance with international standards," said Peter Necarsulmer. "There is room for further improvement, of course, but we urge support in the strongest possible terms for the speedy enactment of the proposals of Rospatent, Customs and the group of Deputies led by Peter Shelisch."

Rospatent General Director Dr. Alexander Korchagin, Duma Deputy Shelisch, senior officials of the State Customs Committee, Ministry of Internal Affairs, Ministry of Health, and the Anti-Trust Ministry joined with CIPR leaders today to urge the State Duma's rapid approval of the multi-pronged legislative effort to deal with Russia's multi-billion-dollar IP problem.

CIPR studies show that IP abuse cost government and industry in excess of two billion dollars a year. While some officials stressed that IP violations are major economic barriers to trade and investment, MVD, Customs and other enforcement officials emphasized that piracy and counterfeiting "is a threat to the health and safety of Russian consumers and undermine state security, which is why they must be prosecuted as major crimes."

"Counterfeiting is a dangerous criminal activity often connected with organized crime and even terrorism," said Deputy Shelisch. "The amendments proposed by the group of Duma Deputies will make certain that the Trademark Law, Criminal Code, Criminal Procedure Code, and the Law on Consumers Rights Protection of the Russian Federation reflect the seriousness of IP crime."

Among the punishments to be meted out for large-scale counterfeiters are prison sentences of up to six years, payment of up to 50,000 times minimum monthly salaries as compensation to the abused trademark owner, and confiscation of the income and assets received by the offender from infringing the rights of the trademark owner.

The RF Ministry of Health echoed the concerns over the health and safety threat posed by counterfeits. The Ministry has reported a 10-fold increase of verifiable cases of counterfeit drugs since 1998 and compiled a list of 56 foreign and domestically produced drugs that have been counterfeited, many of which are well-known and widely-used antibiotic, insulin, and cardio-vascular medicines.

The Russian Federation Ministry of Interior reports that between 3% and 7% of all medicines in circulation in Russia today are counterfeit. Robert Rosen, a CIPR member and Executive Director of the Association of International Pharmaceutical Manufacturers said, "The basic criteria must be zero tolerance towards counterfeits in order to protect Russia's most important asset - the health of its people."

According to Alexander Shelemekh, vice president of CIPR, one of the most important provisions in these amendments is the requirement that confiscated counterfeit goods must either be transferred to the legitimate trademark owner for his disposal, or destroyed by the state.

"If adopted, these amendments will bring to a logical and successful conclusion years of effort by the RF Government, international organizations and trademark owners to improve Russia's system of IP protections," said Dr. Korchagin of Rospatent.

"These amendments bring Russia into compliance with the TRIPS Agreement and expand significantly the scope of protections for well-known trademarks," he said. "They provide the basis in Russian law for dealing with unfair competition and the bad faith registration of trademarks."

"I think we have all reasons to say today that the process has moved forward with the introduction of these important amendments," said Necarsulmer of CIPR. "We need to see how quickly these amendments are adopted in the Duma and Council of the Federation and, we must continue intensive public-private cooperation to ensure that all provisions are fully enforced. However, the foundation for meaningful protections of intellectual property rights in Russia has now been established."

CIPR members include a number of the world's most famous trademark owners in the food, beverage, pharmaceutical, fashion, computer and tobacco industries, and enjoys broad support by government trademark regulators and enforcement officials throughout the region.