27 November 2014Jurisdiction reportsValentina Orlova

The evolving nature of Russian licensing agreements

Naturally, the need for licensing stems primarily from the development of market relationships. After the Russian laws on trademarks and copyright were adopted in 1992 and 1993 respectively, Russian right holders and users observed virtually no interest in entering into licensing agreements. However, the number of agreements shot up as more trademarks became registered and new literary, musical and audiovisual works with interesting characters appeared.

What the statistics show

Statistical data provided by the Russian patent authority, Rospatent, regarding licensing agreements for trademarks shows that the number of agreements is growing slowly but steadily. The only exception was in 2012, when the number of registered licensing and franchising agreements rose sharply.

As with right holders and users, the state has become more interested in licensing agreements, especially those for trademarks. As a result, strict and detailed legal regulation has developed. Not all countries have obligatory state registration for licensing agreements and transactions that involve the right to use trademarks. However, Russia is quite conservative. For example, as early as 1995, the World Intellectual Property Organization developed recommendations in this area that were intended to minimise the requirements for licensing agreements. Russia was categorically against easing any requirements for registering agreements. Only later, after Russia had joined the Trademark Law Treaty and started working on provisions of the future Singapore Treaty, did its legal regulation start to be relaxed in this way.

Notably, the approach to state registration radically changed after Russia joined the Singapore Treaty. Amendments made to part four of the Russian Civil Code on October 1, 2014 mean that a transaction to grant the right to use a trademark has to be registered, rather than the document (licensing agreement) itself. Notably, legislators used the same approach in respect of other IP such as inventions, utility models and industrial designs. The Singapore Treaty and its regulations influence the updated Civil Code, which provides that for state registration purposes and at the discretion of the parties the following will be sufficient: either only the application to register the agreement, signed by both parties; or an application signed by one party, but with a declaration of the will of both parties attached.

"the state has become more interested in licensing agreements, especially those for trademarks. As a result, strict and detailed legal regulation has developed."

The new rules for state registration will undoubtedly make life easier for parties to sign licensing agreements. However, official legal regulation still may not achieve a swift balance between the requirements imposed by the Civil Code for agreements submitted for state registration, and the requirements the federal executive IP authority must check so that the right to use the trademark can be registered.

Moreover, the IP authority’s life will be made more difficult as developing provisions of the Civil Code will require general administrative regulations as well as more detailed rules explaining how the authority will provide this service.

This may give rise to a number of problems:

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