New EU ban: summary of restrictions on intellectual property rights

Intellectual property offices at both the Union and Member State levels will no longer accept:

• New applications for the registration of trademarks, patents, industrial designs, utility models, protected designations of origin and geographical indications filed by Russian nationals or natural persons residing in Russia, or by legal persons, entities or bodies established in Russia (“Russian persons”), including joint filings by Russian persons and one or more non-Russian natural or legal persons.
• Any requests or submissions filed by Russian persons as part of registration procedures related to any of the aforementioned IP rights.

In line with the 14th package of sanctions, EU Member States and the Union (where applicable) will also use their best efforts to ensure that the European Patent Office, WIPO and national IP offices across EU Member States do not accept new applications for registration of IP rights if filed by Russian persons. Requests from Russian persons for unitary effect of a patent filed under the European Patent Convention will also be refused.

It is of note that IP authorities will not issue formal refusals when implementing the ban.

IP authorities are entitled to request the necessary information from individuals and companies applying for IP registration. While no indication is given as to what will be considered the necessary information,  we expect it to include data and documents typically used to verify the applicants' country of origin and residence as part of sanction compliance.

The new restrictions will not apply to individuals who are citizens or residents of the EU, Norway, Iceland, Liechtenstein and Switzerland. 

Presumably, the restrictions will not affect IP registrations that have already been granted to Russian persons. However, applications filed and pending as of 24 June 2024 may be suspended.

The ban means that new IP rights held by Russian owners will not receive EU protection, posing a risk of third parties exploiting this restriction for unfair competition, such as using the IP without compensation or registering it in their own name.

After 26 December 2024, natural and legal persons, entities and bodies falling under EU law (“EU persons”) will be required to contractually prohibit counterparties to whom they sell, license or otherwise supply IP or trade secrets included in the list of sensitive goods and technology (the so called ‘common high priority items’, e.g., microcircuits, voice transmitters, video and TV cameras, semiconductor devices) from selling, supplying, transferring or exporting such products, directly or indirectly, to Russia or for use in Russia.

Contracts entered into before 25 June 2024 will be exempt from the new ban until the earlier of 26 June 2025 or their expiry date. After the end of this transitional period, contracts entered into before 25 June 2024 will be considered compliant if they contain a general clause prohibiting the use of IP and set out adequate remedies in the event of a breach of that clause.

EU persons will have to ensure that their contracts provide adequate remedies against the counterparty for breaching the prohibition. In the event of a breach, an EU person is expected to report the breach to the competent national authority in the Member State where it is registered or resides.

The 14th round of sanctions further tightens the constraints imposed by the 11th package.

The new restrictions are expected to significantly impact how Russian businesses plan their international operations, compelling them to reconsider their IP strategies and risk management practices. Given the nature of these restrictions, it is likely that the Directorate-General for Financial Stability, Financial Services and Capital Markets Union will soon provide more guidance on implementing the 14th package of sanctions.

The B1 team will be pleased to advise you on all aspects of intellectual property management, including in light of the recent EU restrictions.