The current Russian legislation in the sphere of IP in many ways does not correspond to the real needs of economy and society, it is especially hard for small innovative companies – development of IP is especially of great importance for innovations. In June the situation was discussed at the press center RIA “Novosti” where journalists got acquainted with collective studies dedicated to the influence of intellectual property on social development and stimulation of innovations.
A complex interdisciplinary study, first of its kind in Russia, combining political and legal, economical and sociological analysis was conducted by the Skolkovo Foundation together with the National Research University “Higher School of Economics” and experts from leading world universities – University College of London and New York University. Research began in autumn 2012 and was for the first time presented at the St. Petersburg International Legal Forum to the participants of Skolkovo session “Defense of Competition and Protection of Intellectual Property: unity and fight of opposites”.
The name of the research speaks for itself: “Intellectual Property and Society Development: Time for Pragmatism”. As marked by Alexey Ivanov, director of the Department of legal policy and social development of the Skolkovo Foundation, today’s issues of intellectual property are among one of the most important ones for the functioning of knowledge economy, while changes in the legislation in this sphere must be entered after a pragmatic assessment of which economic consequences new norms will bring to the national economics and social development.
Svetlana Avdasheva, deputy director of Institute for analysis of industries and markets of the Higher School of Economics, marked that for various spheres of the economy intellectual property protection must be conducted with consideration of the various specifics of each sector. Besides, from the legal point of view, the notion of “protection of intellectual property” is extremely wide: it includes, for example, both the rights protection of inventors and brand owners. There are also many ways for legal protection – patenting is definitely not the only and not the most popular one among small companies in high technology sector.
Andrei Shastitko, director of the Center for competition research and economic regulation of Russian Presidential Academy of National Economy and Public Administration (RANEPA), professor of the M.V. Lomonosov Moscow State University, focused on the field of contradictions, arising on the junction of intellectual property and anti-monopoly legislation. These issues have been on the minds of the professional community for several years and are a puzzle for the law-makers: on the one hand, intellectual property rights protection defends inventors and investors, on the other hand – according to anti-monopoly logic, society must be protected from abuse of rights owners who receive excess profits due to their unique stand on the market and block innovative developments. So what must prevail – anti-monopoly legislation or legislation on intellectual rights? Andrei Shastitko marked that abuse is possible from both sides, that’s why a “road map” is needed providing balance.
Nikolay Kartashov, head of the advertising control and unfair competition department of Federal Antimonopoly Service expressed his confidence that norms on protection of competition must get priority over norms of intellectual rights protection. An acute and clear example of collision of interests of large rights owners on the one hand and consumers on the other in the modern Russian reality is the problem of parallel import. Since 2002 our country exercises an active prohibition on import of original goods by-passing official sale channels of foreign producers. Nikolay Kartashov marked that FAS consequently works on the legalization of the parallel import and that this measure will become a necessary support for the innovation market.” On the whole, according to Nikolay, there are practically no arguments left for the support of prohibition of parallel goods import, especially after the widely known decision of the Supreme Court of the USA as of March 19 on the case Kirtsaeng vs. John Wiley & Sons, Inc.
In this case the court recognized the right of the defendant – a citizen of Thailand – to import to the USA with the aim of re-sale of educational literature published by John Wiley & Sons, purchased in Thailand at lower prices. Indignantly commenting on the decision of the court, judge Ruth Ginzburg speaks practically openly about the interest of US producers in market zoning: “ While our government convinces our trading partners to refuse to accept the international regime of depletion of the exclusive rights [at which parallel goods import is legal – editor], which benefit consumers in those countries, but significantly undermines the interests of producers of intellectual property in the United States, the Supreme Court establishes an international depletive regime of exclusive rights. "
Nikolay Kartashov also said that startups feel an especially strong dependency on official dealers. His words were confirmed by Alexey Ivanov, who reported about a complex research of the Skolkovo Foundation including participant companies of the project and innovative startups of other development institutions. High technology companies actively use foreign production in their work; often it is impossible to normally function without it.
Poll results: 54% of interviewed firmly admitted that their companies will gain from legalization of parallel import. Prohibition of parallel import makes Russian innovators uncompetitive on the global market: it is sometimes not profitable for official distributors to provide lab equipment, reagents and other production in small batches (and sometimes only one copy of the goods is needed). Prices for imported hi-tech goods are often unnecessarily overstated at local dealers. At the same time foreign producers re-direct all requests to the Russian distributor, while it is possible to purchase goods abroad and import them independently, although with a whole number of difficulties. Price can differ considerably (81% of respondents reported that they are forced to purchase imported goods at overstated prices).
Long delivery terms (76% of respondents) and limitation of available assortment (65% of respondents) are another two acute issues which decrease the efficiency of work of entrepreneurs and bring down the hope for the successful commercialization of projects on the international market practically to zero. According to some participants of the sociological research, there is often a situation when the whole staff together with the general director for several months do nothing else than being involved in the purchase process and registration of the necessary goods. Thus, in this sphere of intellectual property rights regulation, Russian economy lives according to the law corresponding in the large part to the interests of large Western players, and the prohibition of parallel import of goods active since 2002 is a limiting factor for development of innovation sector of the country. It is of special concern that reasons for the described misbalances are often not understood by the entrepreneurs in full.
According to the participants of the press conference which was moderated by Roman Shcherbakov, head of the press service of Skolkovo Foundation, it is necessary to review norms of the intellectual property both in Russia, and in global context. As marked in the introduction of the research leaders, Senior Vice President on legal and administrative issues of Skolkovo Foundation Igor Drozdov and Alexey Ivanov: “We expect that this research will become a starting point for the next thoughtful development of the Russian national view on the strategy in the field of intellectual property – one of the most important spheres of global world order.”