The Russian President has issued a decree on the temporary procedure for the acquisition of the exclusive rights of certain right holders and the fulfillment of monetary obligations to certain foreign creditors and persons controlled by them ("Decree").
The Decree applies to assignment of IP rights to Russian residents from owners that meet any of the following criteria:
· Foreign right owners related to "unfriendly" jurisdictions (i.e. having a registered address or a main place of business in such jurisdiction); and
· Right owners (even Russian entities) under the control of foreign companies related to "unfriendly" jurisdictions.
According to the Decree, respective IP assignment transactions are subject to approval by the Governmental Commission for control over foreign investments and all amounts of remuneration for the IP assignment shall be transferred to special ruble Type "O" accounts. At request of a party to the transaction, the Governmental Commission may also grant a permission to transfer the remuneration to a foreign right holder.
The Decree is effective as of May 20, 2024 and applies retroactively with regard to unfulfilled monetary obligations. Even if an IP assignment transaction was executed before May 20, 2024, but the Russian entity has not yet paid the remuneration in violation of the agreement, it would be necessary to pay the assignment remuneration through a Type "O" account.
The Decree does not apply to:
· license agreements;
· IP assignment agreements in respect of certain copyright and almost all neighboring rights (performances, phonograms, broadcasting);
· IP assignment agreements providing for the amount of remuneration less than 15 million rubles or its currency equivalent.
The Government is expected to shortly adopt the procedure for granting approvals provided for by the Decree.
Contacts:
Denis Khabarov, partner, Moscow
Margarita Divina, partner, Moscow
Maxim Kalinin, partner, Saint Petersburg
