Protecting IP in the Face of Russia Sanctions
The US Treasury Department’s Office of Foreign Asset Control (OFAC) has issued two general licenses relevant to intellectual property matters authorizing transactions that would otherwise be prohibited by the sanctions imposed on Russia.
General License 31 dated May 5, 2022 authorizes US persons and entities to file, renew, maintain and oppose patents, trademarks, copyrights and other forms of intellectual property in Russia. General License 14, dated March 2, 2022, authorizes the use of the Central Bank of the Russian Federation (the bank used by Rospatent – the Russian agency handling IP matters) to the extent that bank’s sole function in the transaction is to act as an operator of a clearing and settlement system. This is explained in OFC’s FAQ 999. If, however, the Central Bank charges a fee for its service, the payment of that fee might not be covered by General License 14.
Some US banks may not have yet adapted to these general licenses, and might refuse to process any payments to Rospatent. In that case, it may be possible to transfer funds to a bank in a country that has not adopted sanctions against the Central Bank of Russia for further transfer to Rospatent. This method is authorized with respect to transactions authorized in other general licenses in OFAC’s FAQ 978.
General License 31 does not authorize transactions prohibited by Executive Order 14066 (pertaining to the energy sector) or Executive Order 14068 (pertaining to the importation of Russian fish, alcoholic beverages, luxury goods and non-industrial diamonds; and investment in any sectors of the Russian economy that the Treasury Department may later specify).
Presumably the establishment and maintenance of intellectual property rights in Russia have nothing to do with the importation of good into the United States. Thus, the only portion of EO 14068 that is relevant to General License 31 is the possibility that the Treasury Department will sanction industries other than the energy sector, which is already targeted under EO 14066. The Treasury has not identified any sectors of the Russian economy to be sanctioned under EO 14068. Thus, only the energy sector is now excluded from the authorization of General License 31, but other sectors of the economy may be targeted at a later date.
In summary, it should be possible to establish and maintain intellectual property rights in Russia outside of the energy sector. Payments to Rospatent are now allowed even though it uses the Central Bank of Russia, a bank that is otherwise off-limits to the US banking sector.
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