Re: The Russian Government's New IP Structure and Decision Makers

Dear CIPR Members and Friends:

Russian President Vladimir Putin's major government reorganization, which was announced on 9 March 2004, has had a direct impact on Russia's ministries and agencies responsible for intellectual property (IP) reform, protection and dispute resolution.

• Dr. Alexander Korchagin was replaced by Boris Simonov as Russia's top IP decision-maker.

• Rospatent, formerly an independent state agency, has been restructured and renamed the "Federal Service on Intellectual Property, Patents and Trademarks" and subordinated to the new Ministry of Education & Science.

• The draft statute defining the new Federal Service should be issued by 1 April.

• Delays are possible for IP owners with existing proceedings involving the Chamber of Patent Disputes.

• The RF Government IP Commission under former Prime Minister Kasyanov is suspended.

• While IP enforcement structures at the Ministry of Interior are unchanged, the renamed Federal Customs Service has been subordinated to the Ministry of Economy and Trade.

• Draft IP legislation pending in the State Duma on issues ranging from copyrights and commercial secrets to criminal penalties for counterfeiters is unaffected.

Expanded Functions for new Federal Service. Under the President's decree, the historic functions of Rospatent will be expanded under the Federal Service on Intellectual Property, Patents and Trademarks, including regulating the commercialization of innovative activity, the use of secret innovations, and other areas not yet announced. 

Boris Simonov. On 20 March 2004, new Prime Minister Mikhail Fradkov announced that Rospatent General Director Alexander Korchagin has been replaced by Boris Simonov as head of the newly established Federal Service on Intellectual Property, Patents and Trademarks.

Mr. Simonov previously served as the head of the Department of Innovative Development of the former Ministry of Industry and Science to which he was appointed in September 2003. Mr. Simonov graduated from the Moscow Energy Institute, where he worked until 1991. He worked in the private sector as general director of the thermal energy company ENTEK until 1998. From 1998 until 2003, Mr. Simonov was General Director of the non-profit Innovative Agency, an organization that developed an exchange network for Russian inventors.

Mr. Simonov's name and views are fairly new to both the domestic and international IP community, leaving most experts uncertain about what to expect from the new IP czar of Russia. At the same time, Mr. Simonov is not a complete unknown to Rospatent officials given their previous interaction with him on a variety of matters. For example, Mr. Simonov participated with Rospatent in the CIPR-organized visit of a Rospatent-State Duma delegation to the United States in 2002.

Personnel. Based on our sources, Mr. Simonov's appointment will not result in significant personnel changes. It is possible that Dr. Korchagin will be appointed First Deputy Director of the new Federal Service. Also, many former Rospatent department heads are expected to be reappointed, including Valentina Orlova of Rospatent's legal department. 

Chamber of Patent Disputes. Any matters currently pending before the Chamber, including "well-known trademark" applications, may experience delays due to the transition. Clarifications are expected soon, including the appointment of the Chairman of the Chamber of Patent Disputes. 

IP Commission. The reorganization has suspended the activities of the RF Government Commission to Counter Violations in the Area of Intellectual Property, headed by former Prime Minister Mikhail Kasyanov. Reactivation of the Commission and a restructuring will be an important indication of the new government's commitment to continued improvement of both trademark and copyright reform. 

The CIPR Moscow team will continue monitoring and assessing political and legislative developments in Russia related to intellectual property protection and enforcement matters, and update you as appropriate. Below you will find a brief status report on pending legislation on criminal penalties for counterfeiting; commercial secrets; copyrights; and, technical regulation. We look forward to receiving your comments and questions on this report. Please contact us at our CIPR offices in Moscow at +7(095)775-0077 or other CIPR representatives as listed below. Visit the CIPR website at www.cipr.org.
 

Sincerely,

The CIPR Moscow Team
 

CIPR continues its advocacy efforts to further reform Russia's IP legislation. Among our priorities are several legislative initiatives under consideration by the State Duma.

In December 2002, the State Duma adopted amendments to the law "On Trademarks, Service Marks and Appellations of Origin of Goods." Immediately following, a group of State Duma deputies under the leadership of Peter B. Shelisch and in coordination with CIPR introduced the draft law "On Changes and Additions to Certain Legislative Acts of the Russian Federation." The draft law provides for amendments to article 180 of the RF Criminal Code, article 150 and 151 of the RF Criminal Procedural Code, and article 14.10 of the RF Administrative Code. The objective of the draft is to increase administrative and criminal penalties for trademark infringements and to provide for physical destruction of the equipment and materials used for production of counterfeit goods. The proposed draft has received positive expert opinion from the RF Government and is currently under review by the State Duma Committee on Civil, Criminal, Arbitration and Procedural Legislation. We expect that the State Duma will adopt the proposed draft in the first reading before the end of its spring session.

On 26 November 2003, the Council of the Federation vetoed the law "On Commercial Secrets," which had been approved by the State Duma a week earlier. A Conference Commission was established to settle differences and develop a compromise. The Conference Commission is expected to start its work shortly.

The law "On Technical Regulations" came into force on 1 July 2003 and provides for adoption of several hundred technical regulations on a wide variety of products. These laws will establish safety criteria for both production processes and goods, and therefore will be instrumental in fighting counterfeiting. CIPR is actively involved in the continuing process of public hearings on the draft laws and is working closely with private-sector companies to assist them in influencing the decision-making process.

Amendments to the law "On Copyright and Neighboring Rights" is still pending a second reading two years after their introduction into the State Duma. We do not expect enactment until late 2004 at the earliest.