The Civil Code of the Russian Federation allows the government to use inventions, utility models, and industrial designs without the consent of the patent holder when this is justified by needs of national defense and security. In these cases, the patent holder must be notified and paid reasonable compensation. (Civil Code art. 1360.) To implement this provision, on October 17, 2021, the government adopted a regulation that defines the procedure for conducting the payment.
As explained in the commentaries on the regulation published in the government newspaper Rossiiskaia Gazeta, this procedure will be used to ensure mandatory licensing of medicines and medical devices needed to preserve the life and health of people during the pandemic and ensure that the government will be able to produce analogous medicines, even if a pharmaceutical company threatens to leave the market. Under the newly established procedure, the patent holder will receive 0.5% of the proceeds received by the user of the invention during the previous year. (Regulation § 2.) The money must be deposited in a specially created nonrefundable account within one month after the end of the calendar year in which the earnings were received, or the patent user can negotiate the payment procedure with the patent holder and transfer the same amount of 0.5% of annual proceeds within six months after the agreement has been concluded. (Regulation §§ 6, 7.)
So far, one mandatory license has been issued in Russia. Because of the coronavirus pandemic, the Russian pharmaceutical company Farmsintez started producing a generic medicine based on the patented formula for the U.S. drug Remdesivir. According to the adopted regulation, by the end of January 2022, the American company Gilead Sciences, the owner of the patent on this medicine, must receive 0.5% of the receipts earned in 2021 from the sale of the Russian generic drug based on the Remdesivir formula.
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