Transactions Involving Intellectual Property May Require Prior Permission of the Government Commission

The Russian Ministry of Industry and Trade has drafted amendments to Presidential decree No. 81 of March 1, 2022 (the "Decree"), which would extend the special procedure for transactions established by the Decree to transactions involving intellectual property. The draft is currently at the stage of anti-corruption expertise.

In accordance with the current version of the Decree, certain types of transactions with persons from "unfriendly" countries may be carried out only on the basis of permits issued by the Government Commission for Monitoring the Implementation of Foreign Investments in the Russian Federation (the "Government Commission").

The Draft proposes to extend the rule on the obligation to obtain such permission to transactions involving the alienation or pledge of exclusive rights to the results of intellectual activity and means of individualization.

In case of adoption of these amendments to the Decree, the right holders will have to take into account the conditions necessary to obtain authorization to carry out these transactions with foreign "unfriendly" persons. In particular, according to extracts from the minutes of the meetings of the subcommittee of the Government Commission1, such conditions are:

  • existence of an independent assessment of the market value of the object of the transaction;
  • sale of the object of the transaction at a discount of at least 50% of its market value;
  • existence of a condition of installment payment under the transaction or payment of a voluntary contribution to the federal budget in the amount of not less than 15% of the market value of the transaction object.

In case of failure to perform the above conditions, the Government Commission may refuse to grant permission for the transaction.

It should be noted that transactions involving the use of intellectual property objects, such as license agreements, are not specified in the draft. Consequently, their performance will not require the permission of the Government Commission.

Thus, the proposed amendments will block transactions involving the alienation and pledge of exclusive rights to trademarks, patents, know-how and copyright objects owned by companies from the EU, the USA and other countries included in the list of "unfriendly" states.

1Extract from the minutes of the meeting of the subcommittee of the Government Commission for Monitoring the Implementation of Foreign Investments in the Russian Federation dated December 22, 2022, No. 118/1 / URL: https://minfin.gov.ru/ru/permission/79-81?id_57=301169-vypiska_iz_protokola_zasedaniya_podkomissii_pravitelstvennoi_komissii_po_kontrolyu_za_osushchestvleniem_inostrannykh_investitsii_v_rossiiskoi_federatsii_ot_22_dekabrya_2022_goda__1181

Extract from the minutes of the meeting of the subcommittee of the Government Commission for Monitoring the Implementation of Foreign Investments in the Russian Federation dated September 26, 2023 No. 193/4 / URL: https://minfin.gov.ru/ru/permission/79-81?id_57=304249-vypiska_iz_protokola_zasedaniya_podkomissii_pravitelstvennoi_komissii_po_kontrolyu_za_osushchestvleniem_inostrannykh_investitsii_v_rossiiskoi_federatsii_ot_26_sentyabrya_2023_goda__1934