Russian Federation: Patent Litigation Comparative Guide

1 Legal framework

1.1 Which laws and regulations govern patent litigation in your jurisdiction?

• The Fourth Part of the Civil Code, which provides fundamental protection for all forms of IP rights in Russia – for example, it defines:
• • the scope of a patent;
  • the types of patent infringement; and
  • exemptions from patent infringement.
• The Arbitrazh Procedural Code, which governs commercial disputes;
• The Civil Procedural Code, which governs disputes involving individuals; and
• Various resolutions of the Plenum of the Supreme Court of Russia, which are binding on lower courts. These resolutions are interpretative and are intended to ensure uniform application of the codified laws.

1.2 Which bilateral and multilateral agreements with relevance to patent litigation have effect in your jurisdiction?

• The Eurasian Patent Convention;
• The Treaty on Eurasian Economic Union;
• The Patent Cooperation Treaty;
• The Paris Convention for the Protection of Industrial Property;
• The Strasbourg Agreement Concerning the International Patent Classification;
• The Patent Law Treaty;
• The Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure;
• The Agreement on Trade-Related Aspects of Intellectual Property Rights; and
• The Hague Agreement (for design patents).

1.3 Which courts and/or agencies are responsible for interpreting and enforcing the patent laws? What is the framework for doing so?

The IP Court – a division within the commercial court system – and the Supreme Court of Russia. The IP Court is a court of cassation appeal for IP disputes – that is, it reviews matters of law and often articulates important legal positions in the field. The Supreme Court may:

• review appeals of IP cases with leave; or
• articulate general practice and policy opinions by way of specially adopted resolutions.

Rospatent, the Russian patent office, also issues various recommendations on prosecution, although these are not considered legally binding and the courts can disregard them if they contradict the law.

2 Forum

2.1 In what forum(s) is patent litigation heard in your jurisdiction? Are patent infringement and validity decided in the same forum or separate forums?

In patent-related matters, there are two independent forums that merge at the appellate level in Russia. Infringement and validity proceedings are independent from each other. The overall process is commonly referred to as a bifurcated patent system.

Patent infringement actions are commenced in the commercial courts and make their way to the IP Court at the second level of appeal. From there, cases can be appealed, with leave, to the Supreme Court.

Proceedings to revoke issued patents are initially filed in the Patent Chamber, a quasi-judicial administrative body within Rospatent. The IP Court hears the first appeal from a decision of the chamber. A further cassation appeal may be heard by the Presidium of the IP Court and from there, with leave, to the Supreme Court.

2.2 Who hears and decides patent disputes (eg, a judge, a panel and/or a jury)?

A single judge hears a patent infringement case at first instance. There is no jury system. A panel of judges hears the case at all further stages of appeal.

Invalidity actions are first heard by a panel of experts at the Patent Chamber and then by a panel of judges at all appeal levels. There is no jury system.

2.3 Are there any opportunities for forum shopping in your jurisdiction? If so, where and how do those opportunities exist?

Yes, there are 85 commercial courts throughout Russia that hear patent litigation infringement actions at first instance. A patent holder can file a patent infringement case with any of these courts, provided that the prospective defendant is engaged in activity within its jurisdiction. Therefore, if several infringers from different regions are involved in the distribution of an infringing product (eg, a manufacturer, a distributor and a retail store), the patent holder can bring a joint civil action against all infringers at the court of domicile of any of them.

3 Parties

3.1 Who has standing to file suit for patent infringement? What requirements and restrictions apply in this regard?

The patent holder or an exclusive licensee, as long as it is recorded as such in the Patent Register.

If there are several patent holders, the suit for patent infringement can be filed:

• jointly by all patent holders; or
• by one of the patent holders with the other patent holders joined to the case as a third party.

3.2 Can a patent infringement suit be brought against a defendant who is a foreign entity with only a residence or place of business outside the jurisdiction?

No, unless the foreign entity operates in Russia directly – for example, through a local duly established representative office. However, in the vast majority of cases, infringement actions are brought against legal entities that are incorporated under Russian law.

3.3 Can a single infringement action be brought against multiple defendants? What requirements and restrictions apply in this regard?

Yes. One of the following requirements must be met:

• The dispute relates to joint rights or obligations of the defendants;
  The rights or obligations of several defendants have a single basis; and
• The subject of the dispute is homogeneous rights and obligations.

3.4 Can a third party seek a declaration of non-infringement or invalidity in your jurisdiction? If so, how?

It is not possible to obtain a declaration of non-infringement. As regards invalidity, any third party can commence an invalidation action at any time against a patent before the Chamber for Patent Disputes at Rospatent.

4 Patent infringement

4.1 What constitutes patent infringement in your jurisdiction?

The patent holder has the exclusive right to use the invention set out in the claims. An invention or utility model is deemed to be used by parties that:

• import, manufacture, use, offer for sale, sell, otherwise introduce into civil circulation or store for such purposes:
• • a product in which an invention or utility model is used;
  • a product obtained directly through a patented method;
  • a device through whose operation, in accordance with its purpose, a patented method is automatically carried out; or
  • a product intended for use in accordance with the purpose specified in the claims, while protecting the invention in the form of using the product for a specific purpose; or
• implement a method in which the invention is used, including by applying that method.

4.2 How is infringement determined?

The scope of legal protection is determined by the claims. A patent is deemed infringed if the product contains each feature (or an equivalent feature) set forth in an independent claim of the asserted patent. In other words, the invention is deemed to be used if the infringing product contains each feature (or an equivalent feature) of at least one independent claim of the asserted patent.

Only independent claims (not dependent) are relevant in the infringement analysis, because validity is not addressed by the court in an infringement action.

4.3 Does your jurisdiction apply the doctrine of equivalents?

Yes. The patent is deemed infringed if the product contains each feature or an equivalent feature, which must be known as such in the art prior to the priority date of the invention.

4.4 Is wilful infringement recognised? If so, what is the applicable standard?

In part. There are no statutory provisions relating to wilful infringement. The general rule is that the infringer is liable regardless of knowledge or intent. If the infringement is wilful, the patent holder may be able to obtain a higher amount of statutory compensation.

5 Bringing a claim

5.1 What measures can a patent holder take to enforce its rights in your jurisdiction? Are interim measures available before receiving a ruling on the merits?

By and large, the civil action is the most common option.

Alternatively, a patent holder can file a complaint with the police, who in turn can institute administrative or criminal proceedings. In general, this is not effective against patent infringement, since the police mainly handle straightforward IP infringement cases (eg, those involving direct counterfeits).

A patent holder may also file a complaint with the Federal Anti-monopoly Service (FAS) based on unfair competition. However, the FAS seldom proceeds with such complaints.

An ex parte interim injunction is theoretically available before obtaining a ruling on the merits, but it is rarely granted in practice.

5.2 What is the limitation period for patent infringement in your jurisdiction?

Three years. However, this applies mainly when damages or statutory compensation is sought. A permanent injunction can be sought even if the infringement started more than three years ago if the infringing acts remain ongoing.

5.3 Must the alleged infringer be notified in advance before a claim is brought?

In June 2016, it became necessary for a prospective plaintiff to issue a demand letter at least 30 days before any action for infringement could be instituted. This obligation was modified in 2017 such that a demand letter is required only where monetary compensation is sought and not where, for example, only a preliminary or permanent injunction is sought.

5.4 What are the procedural and substantive requirements for bringing a claim for patent infringement? How much detail must be presented in the complaint?

The complaint must contain:

• an outline of the facts of the matter;
• references to applicable legislation; and
• a list of evidence supporting the patent holder's allegations.

A foreign patent holder must submit:

• an apostilled extract from the Commercial Register, a certificate of good standing or a similar document which confirms its legal existence;
• a notarised and apostilled power of attorney; and
• a notarised and apostilled document confirming the right of the signatory to sign the power of attorney in the name of the patent holder.

Before being filed at the court:

• all of these documents must be translated into Russian; and
• the translation must be certified by a Russian notary.

This is an onerous procedural step.

5.5 Are interim remedies available in patent litigation in your jurisdiction? If so, how are they obtained and what form do they take?

A court may grant a preliminary injunction:

• before the statement of claim is filed; or
• while the infringement case is pending.

The law does not provide for any specific type of evidence to support a request for a preliminary injunction.

The court must consider an application for the preliminary injunction the day after filing ex parte. The decision on grant or refusal of a preliminary injunction can be appealed at the Court of Appeal within one month of the date of the decision on the preliminary injunction. The appeal is examined inter partes.

The chances of a preliminary injunction being granted are extremely low. There is no obligation for the court to grant a preliminary injunction; this is a discretionary remedy that judges are generally reluctant to grant. This is especially true in non-material disputes – for example, in patent infringement cases, where the purpose of the preliminary injunction is to stop infringement of the asserted patent.

The law specifies just two criteria that must be taken into account by the court in deciding whether to grant a preliminary injunction – the patent holder must show that:

• it will suffer considerable damage; and
• it would be very difficult or impossible to enforce the court decision if the preliminary injunction were not granted.

It is possible to provide additional arguments when seeking a preliminary injunction – for example, to strengthen the infringement arguments – but the court is not obliged to consider them.

5.6 Under what circumstances must security for costs and/or damages incurred by the other party be provided?

This may, but will not always, be required in preliminary injunction cases. The defendant or the court can demand that the claimant issue a bond. The bond must be issued no later than 15 days after a respective court ruling has been delivered in writing. The amount of the bond is usually equal to the amount sought by the claimant. As for non-material claims, the bond should correspond to damages that the defendant might suffer due to the preliminary injunction.

6 Disclosure and privilege

6.1 What rules on disclosure apply in your jurisdiction? Do any exceptions apply?

In practice, the concept of discovery of documents and witnesses is essentially not provided for and is not required or permitted. In some cases, it is possible to ask the court to request the defendant or other parties to present evidence to the court; however, the court is not obliged to grant such motions.

6.2 What rules on third-party disclosure apply in your jurisdiction? Do any exceptions apply?

See question 6.1.

6.3 What rules on privilege apply in your jurisdiction? Do any exceptions apply?

See question 6.1. The concept of lawyer-client privilege exists in only limited circumstances and mostly in criminal cases. Typically, the work product and communications between a lawyer and a client are neither relevant in litigation nor compellable for production.

7 Evidence

7.1 What procedure(s) exist for collecting and presenting evidence in patent infringement litigation?

The plaintiff in an infringement action bears the burden of proving the allegations put forward in the statement of claim by way of admissible evidence. This evidence is almost entirely documentary in nature and should accompany the filing of a statement of claim or defence.

In view of this, the plaintiff's burden of proof is a very onerous one. The plaintiff must make out its case almost entirely from documents that it has assembled from various sources and in respect of which the defendant cannot be directly asked any questions.

In certain cases, it is possible to ask the court to request the defendant or other parties to present evidence to the court; however, the court is not obliged to grant such motions.

7.2 What types of evidence are permissible in your jurisdiction? Is expert evidence accepted?

In infringement cases, trials at first instance are by judge alone, without a jury. The record before the judge will typically include:

• a copy of the patent;
• a certificate of good standing relating to the patent holder;
• documents confirming the authority to sign the power of attorney in the name of the patent holder;
• samples of the allegedly infringing product, along with any publicly available support materials (eg, user manuals and published specifications);
• documentary proof regarding the availability of the product in Russia;
• any third-party documents that are officially obtainable and that tend to prove infringement; and
• an expert report of the plaintiff showing the salient features of the allegedly infringed product (and possibly a patent attorney's expert opinion showing that the product fell within the claims).

Witnesses are not commonly called or required to testify in patent-related disputes, save for court-appointed experts who file reports and can be questioned thereon.

7.3 What are the applicable standards of proof?

There is no clearly articulated standard of proof for patent infringement cases, although many judges tend to apply a standard that can be placed somewhere between clear and convincing evidence and proof beyond reasonable doubt.

7.4 On whom does the burden of proof rest?

On the patent holder.

8 Claim construction

8.1 Is there a procedure for construing claims during a patent infringement action? If so, when and how is it performed?

There is no distinct procedure for construing claims in an action. Claim construction forms part of the overall court procedure and the judge is aided by the opinion(s) of court-appointed experts. There is no structured approach for carrying out the process.

8.2 What is the legal standard used to define disputed claim terms?

There is no specific standard for this purpose.

8.3 What evidence does the court consider in defining the claim terms?

In establishing infringement, the court usually relies heavily on the opinion of a court-appointed expert, especially in complicated matters involving knowledge in the field of chemistry or electronics.

8.4 Can the claims of a patent be amended in the course of the proceedings?

Eurasian patents can be voluntarily restricted at any time during their term. It is possible:

• to exclude one or more claims or alternatives therefrom; or
• to restrict the scope of an independent claim with the features of dependent claims and arguably with the features supported by the specification.

It is not possible to seek post-grant amendments for the Eurasian patent if an opposition against the patent is pending before:

• the Eurasian Patent Organization; or
• a patent office of the contracting state if there is a pending invalidation action filed against the patent under the national procedure.

For Russian national patents, it is only possible to request full or partial renunciation of the granted patent. The procedure for full renunciation of a granted patent is straightforward, but there is no guidance on how the patent can be partially renounced – whether by:

• deleting independent claims;
• deleting alternatives from independent claims; and/or
• restricting independent claims with the elements of the dependent claims.

Rospatent may allow the deletion of independent claims from the patent register. Requests for the renunciation of a Russian patent, whether full or partial, are extremely rare.

9 Defences and counterclaims

9.1 What defences are typically available in patent litigation?

Non-infringement is a defence to infringement, but invalidity is not.

In an infringement action, the defendant can also claim non-infringement by reason of the fact that:

• the product or process does not fall within the scope of any of the asserted claims; or
• there is a licence.

A defendant can also claim that:

• its activities fall within the prior and continuing right to use exception;

• the plaintiff does not have title to the patent;
• the national exhaustion of rights applies;
• the patent has been abandoned;
• a compulsory licence should be awarded; or
• the limitation period has expired.

Procedurally speaking, the defendant may also question, in the early stages of the proceedings, the validity of the power of attorney under which the plaintiff's lawyer professes to have authority to bring the action.

There are no legal defences of:

• laches;
• equitable estoppel; or
• inequitable conduct.

However, the defendant may try to raise an abuse of rights argument if, for example, obtaining a patent was not a bona fide act. This approach seldom succeeds.

9.2 Can the defendant counterclaim for revocation or invalidation of the patent? If so, on what grounds and what is the process for doing so?

Invalidity may only be raised in a separate and independent proceeding. In Russia, the institution of a parallel revocation proceeding is the most common response to being served with a patent infringement suit. According to Article 1398 of the Civil Code: "Issued patents may be opposed by any party by filing an action with ROSPATENT on the basis that they are not in compliance with patentability requirements ..." A patent revocation proceeding must be initiated in the Chamber for Patent Disputes and will proceed independently from any patent infringement action that may have been commenced in the commercial court. The burden of establishing the invalidity of a patent or any claim in a patent falls on the party asserting invalidity.

9.3 Are there any grounds on which an otherwise valid patent may be deemed unenforceable against a defendant?

If the court recognises that the patent holder has abused its rights against the defendant – although this approach seldom succeeds.

10 Settlement

10.1 Are mediation and/or other forms of settlement discussions required by the court in your jurisdiction or merely optional to the parties?

While this is encouraged, it is merely optional at the discretion of the parties.

10.2 Can the proceedings be stayed or discontinued in view of settlement discussions?

No. However, the court can adjourn the proceedings for this purpose.

10.3 Is it necessary to report the results of settlement discussions to the court? If so, how; and what are the implications?

Yes. The proceedings are terminated after the court approves the settlement agreement. The settlement agreement then becomes publicly available.

11 Court proceedings for infringement and validity

11.1 Are court proceedings in your jurisdiction public or private? If public, are any options available to the parties to keep the proceedings or related information confidential?

The proceedings are public. It is theoretically possible to keep the proceedings or related information confidential by requesting the court to hear the case in camera; however, the Russian courts almost never do so in patent infringement cases.

11.2 Procedurally, what are the main steps in patent infringement proceedings in your jurisdiction? Is patent validity handled in the same proceedings as infringement or is it handled separately? If separate validity proceedings are available, what are the main steps in those proceedings?

Patent infringement actions informally comprise three stages:

• formalities;
• pre-trial; and
• trial.

At the formalities stage, the claim submitted to the court is reviewed for general compliance with formalities. If it does not comply with those formalities, it is rejected. If it complies with the formalities, it is accepted and officially filed and served on the defendant. The formalities review stage takes about five days.

In the pre-trial stage, there may be one or more hearings before a judge is assigned to the case. At this stage, issues such as the following are addressed:

• adjournments;
• production of documents;
• appointment of experts; and
• statements of issues for trial.

At the trial stage, the parties appear either in person or represented by their counsel. Evidence that is on the record is reviewed and submissions from the parties are made. The judge must pronounce a decision within one month of the start of the trial and a full written decision must then follow.

As outlined in questions 2.1, 2.2, 9.1, 9.2 and 13.1, invalidity must be raised in a separate and independent proceeding.

The main steps in invalidity proceedings from the patent holder's perspective are:

• assessment of weak claims and preparation of possible amendments to the claims to be filed during the invalidity proceedings;
• review of similar invalidity actions resolved in other jurisdictions; and
• preparation of major arguments and evidence in advance.

11.3 What is the typical timeframe for patent infringement proceedings? If separate patent validity proceedings are available, with is the typical timeframe for those proceedings?

• First-instance court: Six to 12 months from filing of the infringement action to a court decision.
• Separate validity proceedings: Three to eight months from filing of the opposition to a written decision of the Chamber for Patent Disputes.

11.4 To what extent do the decisions of national or foreign courts or bodies influence the court's decision?

Foreign decisions are not regarded as relevant.

12 Remedies

12.1 What remedies for infringement are available to a patent holder in your jurisdiction?

Damages: There are no specific rules on the calculation of damages for patent infringement. General rules of practice apply, which means that the patent holder must prove issues such as:

• the amount of damages with a sufficient level of certainty; and
• the causal relationship between the calculated damages and the infringement committed.

There is little case law on seeking damages for patent infringement and the chances of securing reimbursement of a considerable amount are low.

It is possible to claim lost profits based on the amount of income that the infringer received as a result of the infringement (disgorgement of profits). However, recent case law suggests that the courts set an extremely high standard of proof for this type of relief. In seeking to claim lost profits, the claimant must prove that it budgeted in advance for the receipt of a comparable amount of income, which is very difficult to do in practice.

Statutory compensation: Two types of statutory compensation are available to patent holders, as follows:

• Compensation of between RUB 10,000 and RUB 5 million: This is determined at the court's discretion based on the calculations and evidence provided by both parties. When deciding on the amount of compensation, the court will take into account:
• • the amount of possible damages suffered by the patent holder;
  • the period of infringement;
  • the infringer's fault (intent); and
  • other factors.
• Compensation of twice the royalty for using the invention: This is based on a royalty paid under similar circumstances for the legal use of the invention. This kind of statutory compensation is seldom sought by patent holders, since they often do not license their inventions and thus have difficulty calculating the hypothetical royalty that would be paid under similar circumstances.

12.2 Are punitive or enhanced damages available in your jurisdiction? If so, how are they determined?

There is no concept of punitive or enhanced damages in Russia.

12.3 What factors will the courts consider when deciding on the quantum of damages?

This applies only to statutory compensation of between RUB 10,000 and RUB 5 million, which is defined at the court's discretion. In this case, the court will consider factors such as:

• the circumstances related to the invention (eg, its fame among the public);
• the nature of the infringement;
• the duration of the infringement;
• the existence and degree of guilt (eg, whether the infringement was a gross violation and whether it was committed repeatedly); and
• probable property losses.

These factors usually do not apply in relation to statutory compensation of twice the royalty for using the invention or damages; in such cases, the court will mainly consider the correctness of the calculation basis.

13 Appeals

13.1 Can the decision of a first instance court or body be appealed? If so, on what grounds and what is the process for doing so? Please also describe the availability and process for additional levels of appeal.

There are 85 commercial courts that hear patent litigation infringement actions at first instance. The commercial courts of first instance are courts of general jurisdiction for all commercial matters; they do not specialise in IP matters. A single judge hears a patent infringement case at first instance. There is no jury system. Statistically, the majority (as much as 80%) of patent-related disputes are tried in the Moscow City Commercial Court, because qualified IP professionals and the parties themselves are most commonly located in the region.

There are 21 commercial courts of appeal. Three judges of the commercial courts of appeal hear appeals of first-instance commercial court decisions in infringement cases. The panel of judges is empowered to review the record and render what it deems to be the correct decision both in fact and in law. There is then a second right of appeal to the IP Court. The appeal to the IP Court is a cassation appeal. In a cassation appeal, the presiding cassation court does not review the case de novo, as the lower courts did; its jurisdiction is confined to reviewing the lower-court decision for legal correctness.

The Supreme Court may hear an additional appeal against the ruling of the IP Court, acting as a cassation court, if leave to appeal is granted by three judges of the Supreme Court. The Supreme Court will hear a case only if the decision severely violates an applicant's rights due to the wrongful application or violation of a material or procedural law by a lower court. In practice, the Supreme Court will hear a case only if the lower-court ruling is inconsistent with or negatively affects the established court practice.

Patent revocation proceedings are initiated and tried at the Chamber for Patent Disputes, a quasi-judicial administrative body associated with Rospatent, headquartered in Moscow. Appeals of decisions of the chamber are heard by the IP Court.

On appeal of a patent revocation decision of the chamber, the IP Court is entitled to appoint an expert to review the case and provide an opinion regarding validity based on his or her own expertise, without regard to the chamber's decision. The IP Court may then review the chamber's decision in the context of the expert opinion it commissioned and decide on the proper outcome. That decision may be further reviewed for legal correctness by the Presidium of the IP Court, acting as a cassation court.

The IP Court may also act as a court of first instance with competence over the following patent-related subject matter:

• cases contesting legislative acts of federal executive authorities that affect a claimant's rights and legitimate interests in relation to the protection of patents;
• cases to determine issues regarding the proper inventor and holder of a patent; and
• cases contesting non-normative legal acts, reviewing decisions and reviewing refusals to take action by Rospatent.

13.2 What is the average time for each level of appeal in your jurisdiction?

• First-instance court: Six to 12 months from filing of the infringement action to the court decision.
• First appeal before the court of appeal: Two to three months from the first-instance court decision (decision becomes enforceable).
• Second appeal (cassation) before the IP Court: Three to four months from the court of appeal decision.
• Third and fourth appeal (only with leave) before the Supreme Court: Three to four months.

14 Costs, fees and funding

14.1 What costs and fees are incurred when litigating in your jurisdiction? Can the winning party recover its costs?

Yes. The successful party is entitled to reimbursement of expenses, which usually comprise:

• court fees; and
• expert expenses.

These are nominal.

To be eligible for an award of reasonable attorneys' fees, a party must provide documents showing actual payment of the fees. The award of attorneys' fees is a discretionary determination by the court. The courts are increasingly exercising this discretion more liberally. The average award usually falls within the range of $5,000-$10,000 for the successful party but may be lower.

14.2 Are contingency fee and/or other alternative fee arrangements permitted in your jurisdiction?

These exist in practice but are almost never applied in patent infringement cases, as the awards are very small.

14.3 Is third-party litigation funding permitted in your jurisdiction?

Yes, but it is not usually used in patent disputes.

15 Trends and predictions

15.1 How would you describe the current patent litigation landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

Russia has operated as an independent state since the breakup of the Soviet Union in the early 1990s. While a new Patent Law was enacted shortly after the establishment of the Russian state, it was not until 2008 that the patent regime was fully modernised with the enactment of Part IV of the Civil Code.

During this period of transition, the patent office and the court system were also established. On 3 July 2013, the Plenum of the Supreme Arbitration Court approved the establishment of the new IP Court, located in Moscow. With the amendment of Russian Federal Constitutional Law No. 4-FKZ of 6 December 2011, a new, specialised court, the IP Court, was introduced into the Russian judicial system.

Since the establishment of the IP Court, there have been noticeable improvements in the quality of decisions relating to trademarks and domain names in particular, as the court appears to be more comfortable with these matters. A large proportion of the patent infringement cases and appeals from the Chamber of Patent Disputes that have come before the court concern pharmaceuticals. The IP Court tends to show substantial deference to decisions of the Chamber of Patent Disputes on validity and most appeals from the chamber have thus been denied. It is also clear that the court does not yet have the same depth of experience it needs to comprehend the intricacies of patent law; although this situation has improved in the last couple of years, as patent law has become a sphere of special interest for Vice Presiding Judge Korneev.

In 2014, Part IV of the Civil Code was amended to introduce several new substantive improvements to:

• the rules on patentability, infringement and compensation; and
• the scope of protection to be accorded to utility models.

In April 2019, the Plenum of the Supreme Court issued a detailed resolution on the application of Part IV of the Civil Code. Although there is no doctrine of stare decisis, from time to time the Supreme Court issues resolutions that are intended to clarify procedural and substantive uncertainties relating to the application of its laws – in this case, IP laws. This resolution is comprehensive and touches upon most fields of intellectual property, including patents.

Since the conflict with Ukraine began in February 2022, there have been concerns that both Rospatent and the courts would adopt a pro-Russian political stance in prosecution, litigation and invalidity proceedings. To date, however, this has not been the case. Rather, the courts and Rospatent have demonstrated by their conduct that they are continuing to apply the letter of the law even-handedly in each case.

16 Tips and traps

16.1 What would be your recommendations to parties facing patent litigation in your jurisdiction and what potential pitfalls would you highlight?

Patent filing strategy: Most countries have not forbidden their citizens and companies from filing new applications in Russia or from continuing to pay maintenance fees. However, there is a wave of abandonments already on record and the number of national phase entries today is about half of what it was previously. On the other hand, industrialisation in Russia has reached the point where many Russian entities can readily pick up where foreign companies have left off. By not continuing to build portfolios in Russia, foreign innovators are effectively granting free licences to Russian companies to use innovative technologies and to continue on a path of improving them. This initial strategy may be worth reconsidering.

Compulsory licences: One of the main challenges that foreign patent holders may face in Russia concerns compulsory licensing.

A compulsory licence is available to applicants which can demonstrate that either:

• the patent holder is not practising the invention in Russia; or
• the holder of a second patent cannot practise the second invention without infringing an earlier patent. This is often referred to as a compulsory licence for a second dependent invention.

In 2019, the first compulsory licence for a dependent invention was granted in Russia in the field of pharmaceuticals. In an 8 February 2019 decision, which was subsequently upheld by all upper courts, a first-instance court obliged the patent holder to grant a non-exclusive compulsory licence to the holder of the dependent patent (a generic company). The court set out the terms and conditions according to which the licensee under the compulsory licence could use the invention – which comprised an active ingredient – in any volume, including through manufacture, use, offer for sale, sale and storage for medicinal purposes. The royalty rate was set at 10% of the net profits from the sale of the original product, excluding value-added tax and manufacturer's direct expenses (eg, expenses for the purchase of raw materials).

The court held that the dependent invention represented an important technical achievement and had considerably greater economic significance than the earlier invention due to its cheaper price.

However, after several rounds of parallel invalidation litigation, the dependent patent was revoked due to lack of novelty and inventive step, after which the compulsory licence was cancelled by court based on new facts. Despite this outcome, there is still considerable doubt within the legal community as to the correctness of the initial decision to grant the compulsory licence, as this was not reversed; it was rather reviewed in reopened proceedings based on new facts. This means that the dubious conclusions of the first-instance court, which were upheld by the appellate court and the IP Court, may still be applied in future cases where a dependent patent is not revoked. Thus, it is not yet clear whether this decision has set a precedent in Russia such that the same approach will be adopted in future decisions.

On 31 December 2020, through Decree 3718-р, the Russian government granted the first compulsory licence to be issued on the grounds of protection of the public interest. A Russian generic company was permitted to use three Eurasian patents owned by the same patent holder within one year. According to the decree, the purpose of the licence was to secure adequate supply for Russian patients of medicines containing the active ingredient remdesivir. The amount of the licence fee was not specified.

The patent holder appealed the decree before the Supreme Court, which acts as a court of first instance in reviewing judicial acts of the government. The patent holder argued, among other things, that the compulsory licence prevented it from:

• selecting entities to authorise to use its invention;
• controlling the quality of products produced under licence;
• imposing limits on production; and
• setting a licence fee.

The Supreme Court dismissed the appeal with reference to:

• international treaties (eg, Article 31 of the Agreement on Trade-Related Aspects of Intellectual Property Rights);
• the Russian Constitution; and
• decisions of the Constitutional Court of Russia.

Essentially, the Supreme Court held that the patent holder's exclusive rights could be limited in order to ensure the health of Russian citizens. However, the court did not explain why this limitation was necessary in this particular case.

The procedure for granting a compulsory licence on the grounds of protection of public interest seems to be very unpredictable. It is not clear when and on what conditions the Russian government can issue a compulsory licence.

Finally, in 2023, medical research company MIK sought a compulsory licence from Vertex for Trikafta, arguing as follows:

• Vertex had not obtained marketing authorisation for the product in Russia;
• Vertex did not manufacture the product in Russia;
• Vertex imported the product to Russia in limited amounts on a named patient basis;
• There was a high likelihood that supplies of the product would cease completely due to sanctions and logistics problems; and
• While a pack of Trikafta was sold for $20,000, the generic company was ready to supply it for $8,500.

The court of first instance dismissed MIK's claim in May 2023 on the following grounds:

• Vertex provided supplies of Trikafta through state tenders and charity organisations;
• It presented evidence of sufficient supply of the product;
• There was no evidence that Vertex or its Russian affiliate had refused to supply the product;
• The claimant did not prove that it was ready to use relevant inventions;
• Vertex had never announced its plans to cease supplying the product to Russia; and
• The four-year grace period for some patents covering the product had not yet expired.

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