New version of art. 1360 of the Russian Civil Code

The Russian President approved Law No. 107-FZ “On amendments to art. 1360 of the 4th part of the Russian Civil Code”(“Law”) on 30 April 2021.

It should be noted that the draft law on the mentioned amendments was presented to the State Duma in November 2019 and passed in its first reading only on 15 December 2020.

Under the applicable Law the Russian Government is entitled to allow the use of inventions, utility models, and industrial designs without the patentholder consent not just for the purpose of national defense and state security but also for the protection of life and health of the citizens.

In this regard, the Russian Government shall accept a methodology for determining the amount of compensation to the right holder and the procedure for its payment.

The amendments are approved on the basis of art. 31 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which allows the use of a patent without the patentholder authorization if it is enshrined in the law of the member state. The article allows granting of a compulsory license, in particular if the use of the patent under such license is not exclusive, the scope and duration of the patent use are limited with the purposes for which it was issued, and any decision regarding compensation to the patentholder may be challenged.

Under these amendments, the Russian Government may compensate the lack or absence of foreign medicines and medical devices.   

A new edition of art. 1360 of the Russian Civil Code specifies cases when the compulsory licence may be granted. On the other hand, the Russian Government has already had an opportunity to allow an invention’s use without the patentholder consent with compensation. Thus, in 2021 the first and the only compulsory licence was granted to Pharmasyntez JSC under the current edition of art. 1360 of the Russian Civil Code (see our legal update).

The Law does not provide the time for the Russian Government to adopt the methodology. Previously the Federal Antimonopoly Service introduced its own draft methodology. According to the draft, compensation to a right holder may be up to 5 million rubles. However, this draft was negatively reviewed by the Russian Ministry of Economic Development.