27 January 2023

Russian companies are to obtain the rights to use foreign software through the court

An updated version of the draft law on compulsory licensing of objects of copyright and related rights is planned to be submitted to the State Duma in February 2023. Two mechanisms will appear in the bill, namely for former software licensees and for new ones.

At the moment, users who have purchased temporary licenses or subscriptions to foreign software are faced with the inability to renew them. If they continue to use these products, they automatically fall into the category of "pirates", and for this they may face liability, up to criminal liability.

In connection with the ban on cross-border operations and the refusal of foreign suppliers to work in Russia, it became necessary to develop two mechanisms for compulsory licensing.

The simplified mechanism will be intended for those users who already had a license. In this case, the Russian company must apply to the Russian court and report that the copyright holder has left the country, and there is no Russian analogue of its products. Accordingly, the company needs permission to continue using such software without a license.

A more complex mechanism is intended for objects of copyright and related rights that have not been used before and are not available on the territory of Russia. In such a situation, the Russian company must go to court to justify the need to use a foreign product. If the plaintiff wins the dispute, he will be able to use this product without the permission of the copyright holder, and the money will be credited to the special account “O” (ruble accounts in a number of banks, provided by presidential decree for settlements with foreign companies under sanctions pressure. - Vedomosti).

Now there are several types of liability for piracy - from administrative (a fine with confiscation of counterfeit products) and civil law (a fine of up to 5 million rubles with the liquidation of a legal entity) to criminal (up to six years in prison), explains Pavel Katkov, a member of the Russian Chamber of Commerce and Industry Committee on entrepreneurship in the field of media communications. The departure of one of the parties to the dispute from the market does not deprive the court of its powers, the lawyer continues. If this is done by a foreign party, then the transaction concluded in Russia still remains subject to Russian law. The court will need to allow the licensee to continue using the product, which companies will do under the new bill, Katkov notes.

Most likely, in the near future we should expect a huge number of lawsuits, says patent attorney, managing partner of Zuykov and partners Sergey Zuykov. It is worth waiting for a lengthy dispute resolution process. “The courts must notify the foreign right holder through a complex system of notifications that take from 6 to 12 months per session, usually 2-3 sessions, so the process in the usual case can take one and a half to two years,” the lawyer warns.

A number of experts believe that there is no need for a bill, and compulsory licensing only delays import substitution. Thus, Nikolay Komlev, executive director of the Association of Computer and Information Technology Enterprises, notes that if a foreign supplier leaves the Russian market, he will not file lawsuits against a Russian legal entity that continues to illegally use its software, which means that there will be no punishment for a domestic company. Pavel Kalyakin, General Director of MyOffice, believes that such a law leads to negative consequences in the medium and long term. The mechanism can only be considered as a short-term one in the absence of Russian analogues, and only in conjunction with measures to support and prioritize the development of missing technologies.

Source: Vedomosti

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