RESTRICTIONS ON IP RIGHTS DISPOSAL TRANSACTIONS.

Right holders from «unfriendly countries” assigning exclusive rights worth over 15 million rubles in favor of Russian Federation residents will have to do so on specific terms.

A presidential Decree No. 430 «On the temporary procedure for the acquisition of exclusive rights by certain right Holders and the fulfillment of monetary obligations to certain foreign creditors and their affiliates» came into effect on May 20, 2024.

The Decree establishes a temporary framework for certain IP transactions between Russian residents and individuals or entities from designated “unfriendly countries”. The said legal framework covers the transfer of rights to the results of intellectual activity or to means of individualization, as well as fulfillment and (or) guaranteeing financial obligations related to these transactions. This applies specifically to the assignment of the exclusive IP rights.

Henceforth such transactions shall be done on the basis of the permit issued by the Government Commission for Control over Foreign Investments in the Russian Federation, at the request of the right holder, acquirer or their representatives.

Monetary obligations arising from these transactions shall be fulfilled by transferring funds to a special ruble account of type «O» opened in the name of the right holder.

At the same time, the right holder, acquirer, foreign creditor, their affiliate or their representatives have the right to apply to the Government Commission for Control over Foreign Investments for permission to transfer funds previously deposited in the special type «O» account to another bank account of the right holder, foreign creditor or their affiliate, including those located outside the Russian Federation.

It should be noted that the Decree’s provisions do not apply to transactions involving the acquisition of exclusive rights to works of science, literature and art, performances, phonograms or broadcasts by terrestrial or cable broadcasting organizations.