Priorities and Problems of the Civilized Intellectual Property Market Development as the Precondition for the Innovation-based Evolution

 1. Profile of the Russian Federation scientific and technological potential. Basic tendencies, distinctive features (consistent patterns) and parameters of the present-day development of science and technology in the Russian Federation. Factors constituting a threat and strategic risks in the spheres of fundamental, applied researches, development and innovations.

 The present-day strategy of development of the national science is linked with applied problems of the strategic development of Russia that govern the  transition from the strategy of survival and the strategy based on the “flying geese pattern” to the strategy of independent innovative development on a proactive basis within the limits of the sixth technological mode. This choice of innovative development has three strategic priorities: 1) innovative development for the sake of an individual, community, state and economy; 2) modernization of production, first of all the industry, predominantly, on the basis of national technologies; 3) improvement of the quality of life as it is the key indicator of the realization of the first and the second. The civilized market of intellectual property is a pre-condition for implementation of those selected modes of development.

In spite of the fact that the share of funds directed to science financing in Russia has increased tenfold for the last 10 years (from 46 up to 486 billion rubles) and that we still hold the lead in the world in terms of a number of scientists (annually 30 thousand scientists receive diplomas of doctors and candidates of sciences), at the same time our share in the world trade of high technology products accounts for 0.3 % only[1]

Mass illiteracy, high propensity for corruption in the given sphere, as inside the country while distributing budgetary funds and in external transactions in the course of application of public funds invested into modernization of the national production, as well as the growth of active internal and external counteracting to an entry of Russia into the new market of the international division of labor as a seller of intellectual property are at the bottom of all this. These factors constitute a threat and they represent strategic risks for the innovative future of Russia in the spheres under review. 

 1.1. Legal and economic illiteracy. In Russia, they still try to trade in things, which cannot be sold in fact. According to regulations of the international law and regulations of the Russian legislation as well, inventions, creations, “know-how” and other results of intellectual creative work are not objects of sale and civil law relations. The goods, in which these results are embodied as well as the rights to these results of intellectual creative work, are the subject of trade. The first legal systemic error of all our officials starting from representatives of CIS countries up to those represented at the national or regional level lies in the fact that nowadays we create a market not clearly realizing what can be sold on that market. 

The organization of the scientific researches is materially affected. More than half of all post-graduate students are involved in researches in the field of social and humanitarian sciences, and only 6 % of doctors and candidates of sciences are engaged in this sphere, in particular in economic sciences. In the sphere in question, we are leaders in terms of the number of researchers and scientists against practically zero result. At the same time, researches pertaining to the intellectual property issues, which are carried out in the Institute of Economics of the Russian Academy of Science, for example, are superficial. They tried to develop a model of the intellectual property market by analogy with the real estate market given the fact that the nature of those markets is different including mechanisms of creation of a surplus value.

 1.2. Corruption

For the last 10 years, the sphere of R&D and its allied fields along with such branches of economy as construction and roads became the most corruptogenic one. It may be explained by the following factors, which are behind this phenomenon:

Firstly, unlike the western countries government orders account still for more than 2/3 in the structure of expenses on R&D, more than 40 % thereof  (according to Parliament hearings) - kickback, other funds are distributed, quite often, among affiliated pseudo-scientific organizations the reports thereof based on the results of such works poorly meet interests of science and business. Subsequent to R&D results of research we receive scientific reports with a low level of the economic and scientific importance and high corruptogenic potential minimizing achievements of real sector of the Russian economy and science. It predetermines the highest level of corruption in this sphere (in fact, it is quite possible to disburse budgetary billions with impunity) and insignificant interest of business to co-financing of such works and using of obtained results. More than billion rubles "is disbursed" to create an innovative infrastructure, about half of this sum is allocated for respective investment of innovations through so-called “development institutes”. However, as before there is no anticipated result against the background characterized by the growth of budgetary investments. The gap between a science and production where, certainly, the bridge in the form of the market of intellectual property, centers of intellectual property and respective transfer of technologies is necessary, is not closed until now.

Secondly, the allocation of budgetary financing of civil sector of science through a number of ministries and agencies which are not responsible for industry, resulted in the situation, when against the growth of R&D budgetary financing the obtained results are poor and represent insignificant interest to real sector of economy which upgrades its production on account of its own expenses up to 80 %, including funds attracted from the banks, first of all western ones. In Israel, for example, about 50 % of all expenses on civil science distributes the Ministry of Industry and Labor, the second share falls on the Scientific fund (National Academy of Science) and the Ministry of Science takes part in such financing in the last turn only. Financing and allocating funds for the needs of the real sector of economy is to be effected by those who are responsible for this sector.  In the Russian Federation, it is the Ministry of Industry and Trade, but in no case the Ministry of Education and Science.    

As a whole in Russia, more than 20 ministries and agencies are engaged in problems pertaining to the intellectual property. There were no a uniform service on intellectual property in the past and it is not available nowadays as well despite of the President of Russia Decree of 4.05.2011 on integration of Rospatent and FAPRID (Federal Agency for Legal Protection of the Results of the Intellectual Activity with Military, Special and Dual Purpose) under the aegis of the Government of the Russian Federation. Different departments struggle with each other for this “piece of a pie”, but without any success. This why the rudimentary efforts in sphere of development of market relations on the intellectual property are not comparable to those volumes of financial investments which we invest to this sphere and officials acting in their own self-interest in "developing" those funds .

Thirdly, the gap between the opportunities arising out of the progress in science in the sphere of technologies of military, special and dual purpose, which are exploited and the needs of the civil sector of the Russian economy still exists. Despite of the decision of the Government of the Russian Federation (2005) legislative regulation of this question in this sphere is at the discretion of an official, and it is one of most corruptogenic factors until now.  As a result, the absolute number of obtained results in sphere of technologies of military, special and dual purpose is not applied in the civil sector of the Russian economy, in spite of the fact that about 90 % of the economic rate of return arising out of their implementation falls on this sector.

Fourthly, the Ministry of Education and Science and the Ministry of Economic Development of Russia allocating a significant part of budgetary funds on these purposes, are engaged in the practice of estimation of efficiency of such works on the base of a number of publications, citations and seminars instead of a number of license and other sale of intellectual property, its share in the structure of the price of innovative produce and volume of such sales. Because of cover and a substantiation of such policy, it had taken place a substitution of a strategy of innovative development of innovative economy for so-called “economy of knowledge”. Generally speaking, it is a watershed, which we should pass. Unlike the economy of knowledge, the innovative economy is focused on the other target-oriented criteria and indicators. 

 For the last five years, the minister of the Education and Science of Russia has been approving by his orders the indicators under which they terminate government contracts on disbursement of budgetary funds in high school, centers of science and other organizations of Russia and outside its boundaries. In this case, as a criterion of such disbursement of cash funds are publications, citing, dissertations, conferences, etc. Unfortunately, in 2011 the Ministry of Economic Development of Russia maintained this tradition, and nowadays, according to the project of the Strategy of innovative development of Russia up to 2020, the number of scientific articles, number of researchers as per one article, a level of citing in scientific magazines and the cost of one publication will be the basic indicators of the Russian science efficiency. According to these indicators we, certainly, will be ahead of the whole planet! We have the most expensive publications and the largest number of scientists as per one publication.

Fifthly, while the Russian scientific researches in the interests of modernization of the national production are not sought-for, the level of import delivery of technologies and equipment has grown up to a critical level in all key branches of the industry.

For example, out of 100 billion rubles, which have been recently allocated as investments into modernization of the industry of Sverdlovsk Oblast’ (mainly to metallurgy and heavy mechanical engineering) 90 % were spent abroad for purchasing of import technologies and equipment. At the same time over 30 thousand scientists and researchers lives and works in the territory of this region.

The similar situation is observed in St.-Petersburg where about 200 thousand research workers, including 55 thousand doctors and candidates of science, lives and works: it is more than in Germany in total. At the same time a significant part out of 90 billion rubles directed in 2010 to modernization of the local industrial enterprises (nearby 700) were spent abroad as well.

At that, quite often foreign companies in their struggle for procuring such orders for deliveries seek for under the table payments and other types of corruption offences.

For the time being similar processes can begin in the sphere of the military-industrial complex where the struggle of foreign manufacturers for disbursement of 20 bln. of budgetary rubles allocated for re-equipment of the Russian army and fleet has already taken place. Today, taking into account the fact that we have the Russian Military Industrial Complex in the creation thereof, including a science, during practically the whole century there have been directed the best forces and enormous funds to the detriment of the full value development of the people and country, we buy French ships for fleet, Israeli planes for aircraft and German tanks for the Russian army. Thereby we lay the foundation of mechanisms of government co-financing of a foreign science and production not only in the civil, but also in the military spheres to the detriment of the development of the own national science and industry.

 In such a way Russia loses its competitive advantages by virtue of illiteracy and propensity for corruption of the officials and active unwillingness of foreign partners to permit us to participate in the world market of intellectual property as sellers.

 1.3.   Innovation imitation instead of innovation development

If we consider the intellectual property market as the competitive edge of the CIS countries, including Russia, in the world division of labor, for the last decade one can witness that we have been systematically deprived of these competitive advantages. The RF Government Decree (dated 2001) that identified the list of threats to innovation development remains still remains virtually the same today, and these threats were again cited in the RF National Security Strategy (2009). By the year 2010 the RF Government Resolution on innovation system development in Russia of 2005 has not been fulfilled in either of its major items, including the issues dealing with legislative and organizational support of this work. In the meantime we have lost half of world-progress macro technologies inherited from The Soviet Union, and we are still losing them. Long ago we have passed the critical level of import dependence in all core sectors of national industry. Regretfully, modern history speaks for itself.

 The year 2003. Ministry of industry, science and technologies of Russia, an integrated body responsible for transforming advanced knowledge into new technologies for their further use in modernization of national industry sectors, as a result of the so-called “administrative reform” was divided, and all issues of technologies and industry were passed over to other agencies, whereas education was merged with science.  At the same time, the RF Ministry of education and science still remains the head structure responsible for development and coordination of innovation policy in the country, which forms the state order for new knowledge having little interest for the real sector of economy and often having nothing to do with the interests of modernization of national industry. As a result, enterprises are not interested in co-financing such research and in acquiring the achieved results for R&D works on their own production, but prefer to purchase ready-made technologies from abroad. Thus, at tenfold growth of internal expenses for our own R&D, we purchase and import foreign technologies and as a consequence the dependence on import in the core sectors of economy has grown to 90%. This critically dangerous situation has become direct hazard to the interests of the national security.

The year 2004. The Russian Ministry of education and science initiates through the RF Government at the State Duma a statutory bar on creation of small-sized innovation enterprises by higher educational institutions and research centers. Only after five years, due to the Russian President’s firm and insistent position, this bar was abolished. But according to parliamentary hearings, during these years the number of innovative enterprises in the educational sector halved nationwide. We were thrown back by many years in this innovation leap.

 The year 2006. A system package of solutions was adopted in contradiction to Russia’s national interests in the sphere of intellectual property. In the conditions when 90% of our intellectual potential in research institutes, design bureaus, higher educational establishments and corporations is in design, scientific and technical documentation, the information is brought out of the object of civil rights: it cannot be sold and cannot be transferred. Now it is possible to sell the carrier at carrier’s price, the paper at the price of paper. 

At the same time a decision is made about giving to the know-how the same status as any information that constitutes a commercial secret, like, for instance, data on salary, which cannot be assessed or sold, as it is not, by definition, the object of exclusive rights. Today, when know-how rights are the main object of trade at the intellectual property market, we have placed ourselves, at the end of the day, out of competition with such national norms.

Simultaneously, another decision has been taken on exclusion of scientific discoveries as the object of intellectual property from the national legislation (article 1225, Civil Code of the Russian Federation). Previously we developed one third of technologies driving the progress all over the world at the end of XX century. Today laws interdict us to consider it to be intellectual property and do not allow us to protect work of our scientists in the state-own academies of sciences, where a scientific discovery is the outcome of creative efforts in the fundamental science. In 1812, the Emperor Alexander I with his decree equaled the authors of scientific discoveries with the authors of inventions by giving them a special status and certain privileges.  In 1947 the Committee for inventions and discoveries was organized under the Council of Ministers of the USSR, and in 1959 the USSR Council of Ministers approved the first Regulations on discoveries. A special section “Right for discovery” was included into Fundamentals of civil legislation of the USSR and Civil Code of RSFSR. In 1967 we were proud that the world community recognized and supported us by having included scientific discoveries in the article 2 of Stockholm Convention on WIPO into the list of objects of intellectual property. Today scientific discoveries are a weighty factor of world development in the sphere of intellectual property. But in national legislation an idea is “thrown” to us, we pick it up and now exclude scientific discoveries from the objects of intellectual property. So, once again, we are depriving ourselves of competitive advantages and of any possibility to assess, secure, sell and transfer the rights, for the intelligent man to be rich in the sphere of fundamental science.

2005–2007. The Order of RF Education and science minister No. 283/16.10.2007 identified the elaboration of scientific fundamentals for forming up innovative economy as knowledge economics, where the number of publications, monographs, dissertation papers, conferences, etc. are declared as measures of performance,  and proclaimed such elaboration as No.1 target for preparing the departmental special-purpose program “Theoretical basics of innovative economy for 2008-2010” as a continuation of similar program for 2006-2007.

2007-2008. In its definition of the basic tendencies and parameters of Russia’s social and economic development in the medium-term and long-term perspective, the Russian Ministry of economic development did not even mention the market of intellectual property, without which any transition to innovative economy is impossible: it was not cited either among six key factors, the implementation of which defines Russia’s development by one of the three scenarios (inertial development, development by means of energy and resources and innovative development), nor among six basic directions of transition to innovative socially-oriented development, nor among six objectives of realization of innovation scenario in Russia.

The year 2008.  Russia is the only country in the world that implemented mode of counterfeit for all goods produced with infringements of rights for all objects of intellectual property. The entire world considers goods to be counterfeit, if infringement of rights concerns four types of intellectual property (works, phonograms, appellation of origin and trade marks). At the national level, Russia has qualified counterfeit absolutely all goods produced with infringement of rights for all objects of intellectual property, that nowadays permits under Russian laws and by Russian court decision not only confiscate the goods themselves from the turnover, but also the raw materials and relevant equipment, machinery and assets which were used or involved in their production. Taking into account the fact that the main holders of rights in Russia, that is, those who secure their rights and use them competently, are foreigners, who in great numbers came to this market, one can assume that Russia has already all prerequisites to be able under WTO framework, according to Russian laws and by Russian courts, to restructure the property, including not only intellectual, but also corporeal property in someone else’s interests. 

The year 2009.  The Strategy of social and economical development of the CIS by 2020, where the RF Ministry of economic development is the principal developer and coordinator, mentions nothing at allabout market of intellectual property: 

  • No innovation issues were stipulated in common goals and major objectives of economic development;
  • Inter-state innovation cooperation in the CIS is outlined only as one of 13 independent spheres of economic cooperation; 
  • Securing the necessity of inter-state market of products, services, capital and labor in the CIS, the Strategy does not specify the goal, principle, task and condition of innovation development – the market of intellectual property; 
  • Activation of work of specialized agencies for protection and control of intellectual property is attributed to the sphere of technical regulation and metrology;
  • The issue of training of specialists in the sphere of innovation was not raised at all.

2007-2011. When preparingand approving 720 new federal educational standards for the institutes of higher education, the Russian Ministry of education and science  completely ignored the foreign experience and proposals of Russia’s university community, legal society and high school community on inclusion of such obligatory qualification disciplines for training innovation specialists in Russia as: intellectual property as new specialization, as well as “information law”, “law, economics and intellectual property management” as new specializations for legal advisers, economists and managers, and failed to stipulate other specialized disciplines, obligatory for all higher schools and all professions – “Fundamentals of intellectual property” and “Fundamentals of information laws” in other standards in order to dispose of law ignorance.

The year 2011. In the Draft of Russia’s Innovation Strategy by 2020, the RF Ministry of education and science suggests as the basic performance criteria for Russia’s scientists to use the following: quantity of scientific articles per total volume of publications; number of researchers per article; level of citing in scientific journals; “cost of one publication.” 

 2. Securing rational scientific and technological sovereignty of the Russian Federation in the conditions of globalization. Comprehensive questions of acquisition (including from abroad) and use of new scientific knowledge and technical (technological) solutions for modernization of the Russian economy, defense and security maintenance. Priorities of scientific and technological development.

In the conditions of globalization in the world market, along with the goods, works and services, rights – intellectual property – are ‘the fourth basket’. Its sale rate in the world trade within the framework of the World Trade Organization amounts to up to 10% of GDP of the countries entering the WTO. In the CIS countries, including Russia, this share is negligible.

The market structure and the structure of economic relations developed for the moment in the conditions of transition to the new sixth technological mode, the market of which will be formed by 2015, is changing in favor of the intellectual property market share growth. Thus, the intellectual property, especially in the scientific and technical area, plays an important role as a mechanism for creation of extra cost as a means of capitalization of enterprises and the organizations assets and as an investment resource.

Today, in the price structure of innovative products in the leading world companies leading in the rating of innovations, the intellectual property share makes up to 10-15 % of the price of sold goods.

Intellectual property is a tool for assets capitalization. At the same time, in the federal treasury, according to the results of audit by the Chamber of Accounts of the Russian Federation in early 2009, the amount of non-material assets created at the expense of budgetary funds did not exceed 5 million rubles; in 2010, this amount made approximately 9 million rubles. Intellectual property is also an investment resource. Abroad, in developed countries, corresponding means – loans, credits, bank guarantees –are granted under intellectual property in the same way as it is done for real estate. All these economic functions of intellectual property successfully work in the world, but not in Russian economy. In this aspect Russia has a potential that needs to be realized promptly in order to settle the problems of the modernization of economy.

The basic market object in the conditions of innovative economy along with traditional goods, works and services is intellectual property as the basis of non-material assets of the main market subjects (enterprises, corporations, organizations, establishments and treasury). It is possible to introduce new technologies into real business economics of enterprises and organizations, including those abroad, on a legal basis, as well as to protect infringed rights to them, only after establishment and protection of these rights as intellectual property.  

Both foreign and international experience speaks for it. In WTO the rules of international trade are established with regard to goods (GATT), services (GATTS) and intellectual property sale (TRIPS).

Intellectual property market is successfully built in the countries that have chosen this tendency as their priority. The example of China can be used as evidence. More than 15 years ago, China declared the strategy of innovative development through the intellectual property market, while we declared the same only a year ago. In China a centralized system of committees managing intellectual property is established; it removes administrative barriers on the way of intellectual property involvement in economic turnover from municipalities to Beijing. In China one Chinese company today has up to one and a half thousand know-hows – the amount that the whole Russia has. One municipal city of China has the same number of patents, as the whole our country annually submits applications for. All this along with other reasons gives China the chance to collect up to 8% of the gross domestic product increase in 2010.

In Russia such examples of success are yet singular, which is frequently defined by the level of competence and progressiveness of managers of these corporations and enterprises. Thus, in Uralvagonzavod corporation intellectual property works both as the mechanism of additional value creation along with the intellectual property sales growth during the last three years (in the structure of the innovative products price – up to 10 %) and as means of assets capitalization (in the beginning of 2011 non-material assets of the corporation have made more than 4 billion rubles, making it the leader in Russia) and as an investment resource against security of these assets. Another example is “Sukhoi Superjet 100” international project where Russia was initially chosen just as a site where planes would be assembled from foreign parts. However, even in this case we managed to find, register, estimate and invest Russian intellectual property into the authorized capital, having proved that Russia was, is and will be the country of ingenious people, and that we have something else to sell except raw materials. 

On the whole in Russia for absolute majority of the intellectual activity results such rights are not attached today in an open way – through licensing, nor in a closed way – through know-how under trade secret. According to Rospatent, out of 100 percent of registrable results of intellectual activity received through budget financing, only up to 7 percent of such results are patented, and only 1-2 percent is in a commercial turnover.  In this regard, in the West, innovatively developed countries patent about 20% of the results of scientific and technical activity and sell the same amount; up to 70% of license trade makes the so-called patent-free sales based on the rights to know-how protected in a mode of a trade secret. Russia has a reserve which can be increased to the western indicators. But unlike foreign countries in Russia the decision on patenting is made without taking into account the commercial realization criterion, the main thing is to report to the customer or to use this patent for dissertation protection.

Therefore there are examples when on 1500 patents in one of technical colleges (the leader in patenting) during 10 years only 7 license sales fall. At the Southern Federal University, which today is one of the champions among higher colleges in the country in fundraising - attraction of funds for scientific researches (during the last five years more than three billion rubles), the target is put: to allocate in some years for financing of science up to 50 % of consolidated budget of university expenses. However out of 260 patents received during this period, one third does not work any more; not a sale is carried out under these patents, not an international request is submitted, not an international or foreign patent or know-how is available. And accordingly commercial importance of such work when it is patented just for a report, instead of commercialization is close to zero on the output.

The majority of registrable results of intellectual activity received at budget financing, are included in  scientific and technical documentation, the rights for which are not protected in any way (either in an open way (through patenting) or closed - through know-how protection in the trade secret mode), and hence are not involved in the legal civil turnover, and, according to audits are frequently used in a “grey” turnover, what brings serious damage to interests of the enterprises, establishments and treasury.

3. Proposals on improvement of government scientific and technical, educational, technological and industrial innovative policy. Urgent measures in strengthening the role of the state and perfection of the state-private partnership in science and technologies increase of the budget expenses efficiency in this area. Mechanisms of strategic high- tech initiatives implementation in Russia

1.   The Target program. It is necessary to develop and implement the federal target program, industrial and regional target programs of creation of national, industrial and regional intellectual property markets as a precondition for innovative development  of national, industrial and regional economy, providing introduction of the single  legal regime in formation of intellectual property as the market object with subsequent standardization of the rules, mechanisms of innovative motivation from author to investor through commercialization of intellectual property, specialized divisions in the innovative infrastructure and specially trained authorized  officials in innovative departments. 

            The initiative of public authorities of the Republic of Tatarstan in the development and approval of the “Intellectual property market development in the Republic of Tatarstan by 2020” first long-term regional target program in Russia and the CIS countries deserves support.

In preparation and implementation of the intellectual property national, industrial  and regional markets development programs as a part of the intellectual property world market in the conditions of entering WTO and a necessary basic precondition of carrying out technological modernization of national industry it is expedient to use the following indicators:

-  the share of protected results from intellectual activity received in the total amount of research and development;

-         intellectual property use in economic activities of the organization / enterprise: the number of signed license contracts and alienation contracts in the national market; the number of licenses sold to foreign countries; the number of licenses acquired from foreign countries; a share of contracts of intellectual property commercial use to the total amount;

- the share of non-material assets from all assets of the innovative sector;

- the share of intellectual property in the price structure of innovative products;

- the share of counterfeit products sold in home market, including products received from abroad;

- staffing with qualified personnel in the intellectual property area (on 1000 inhabitants).

In the development of innovative development national strategy for the period till 2020 and corresponding programs, use of the purposes, principles and indicators of the so-called “economy of knowledge” is inadmissible as contradicting to the purposes and principles of actually innovative development.

In our opinion, it is thus important to apply the rule, which can be conditionally called “rule 10”, which includes the following conditions for the success in the development of the intellectual property market:

 n    Not less than 10 % of expenses on research and development - on attachment of the rights to the results of intellectual activity;

n    Not less than 10 % - an intellectual property share in the innovative products structure;

n    Not less than 10% - the share of specialists – agents between sellers and buyers in the in intellectual property market;

n    Not less than 10% - the intellectual property share as the basis of non-material assets in the assets of the enterprise;

n    Not less than 10% - the intellectual property share in the gross domestic product.

1.   Laws. Development and approval of the legal acts package providing effective and qualitative legal regulation in interests of innovative development through the intellectual property market for creation of conditions for non-material assets formation and their subsequent commercialization through introduction of efficient legal regime for the market objects (regarding the rights to know-how, the scientific and technical documentation and single technology in the first place) and the legal status for its main entities, including innovative motivation in the following basic trends and private investors’ growth of activity:

A. Formation of the market object (legal regime)

  • “On non-material assets”;
  • “On amendments to the Civil Code of the Russian Federation” (provision 128 – restoration of information in the structure of objects of civil rights, chapter 75 – on know-how and chapter 77 – on single technology);
  • “On amendments to the Federal Law “On Trade Secret” ;
  • “On amendments to the Federal Law “On Transfer of Rights to Single Technologies”;

B. Distribution of intellectual rights at budget financing (legal status of subjects)

  • “On turnover of intellectual rights in the sphere of technologies of military, special and double purpose»;
  • “On exercising of the rights of the state in the sphere of intellectual property”;

C. Development of national innovative system (innovative motivation)

  • “On innovative activity”;
  • “On innovative infrastructure”;
  • “On venture investments in innovative activity”;
  • · “On amendments to the Tax Code of the Russian Federation, the Customs Code of the Russian Federation and the Budget Code of the Russian Federation” (regarding stimulation of innovative activity and private investments in research and development, including granting of intellectual property as securing at crediting and state guarantees);
  • “On amendments to legal acts in view of adoption of laws on innovative activity arrangement”.

3. Standards. Under the conditions of active development of globalization and increasing competition, the need for application of single internationally recognized approaches and standards to creation, accounting and use of the results of intellectual activity, protection of rights, commercialization and defense of rights to them grows. Development, approval and country-wide application of standards of creation, management and protection of intellectual property on corporate, regional and branch levels are necessary.

For example, with view of provision of real protection of interests of the right holder  (design documentation developer) by the state at conclusion of contracts with foreign customers in the context of military-technical cooperation (including deliveries of the design documentation for manufacture and repair of products through "Rosoboroneksport") a national and subsequently international standard “Intellectual property protection for export of products  of military, special and double purpose” is necessary. Another example may be the situation when in the absence of a single normative document defining the order of the rights distribution by the results of intellectual activity of the state customer, the head executor and research and development executors it is necessary to develop and approve the standard “Distribution of intellectual rights between the customer, the executor and the author by protected results of intellectual activity created and/or used during performance of research and development”.  Support of the bank sector, first of all in drawing attention to the  problem of development of standards in intellectual property management in the bank capital so that the bank capital could be used as a mean  of investments on the security of intellectual property (in the form of loans, credits, bank guarantees etc.).

Today enterprises and corporations are compelled to seek means and ways to protect their legitimate interests independently. Under these conditions the Ministry of industry and trade of Russia has to use the potential of the “Intellectual Property” National Technical Committee on Standardization (TK-481) with secretariat on the basis of RNIIIS for the development of intellectual property market technical regulation at Russia joining the WTO. 

 4. Management. There is virtually no sign of any effective government management in the sphere of intellectual property, even though there are more than twenty Federal State structures dealing with this filed. It is difficult to count on the State’s effective participation in managing this sphere despite the fact that the following institutions are fully operational: four commissions, i.e. coordination centres for the development and implementation of top-level innovative policies, two ministries, i.e. coordination centres for the preparation and monitoring of long-term forecasts: a forecast for scientific and technological development in the Russian Federation in a long-term perspective (Russian Ministry of Education and Science), and a forecast for social and economic development (Russian Ministry of Economic Development), and more than five departments in the Government in charge of organizing and maintaining this process. Countless reorganizations of the ministry in charge of all innovative cycles (Ministry of Industry, Science and Technologies – Ministry of Education and Science) at the federal level have created a gulf between declarative powers and actual functions, which were transferred to other departments. Due to administrative reforms, industry and science have been handed to different departments, thus splitting up a uniform administrative cycle. Furthermore, in March, 2011, all the agencies responsible for science and industry were liquidated and their powers were transferred to relevant ministries, which, in fact, lost practically all their professional staff and an effective system of management in the space of seven years of “norm-creating” activities. It is interesting to note that, unlike the Federal Center, executive authorities of constituent subjects of the Russian Federation placed questions related to innovative policies within the terms of reference of departments responsible for industry.

The fact that there is no clear system for managing intellectual property in the country has led to extremely negative consequences; in particular, it has encouraged irresponsibility, duplication of work in different bodies, absence of necessary cooperation, numerous declarative norms and legal collisions in the legislation, etc.

     It follows that connections required for a uniform innovative cycle, whereby new knowledge is transformed into a real new product, have been broken off, and highly significant central issues have remained unresolved. It is logical to expect that, within the framework of Russia’s entry into the WTO, the uniform Federal Service for Intellectual Property working closely with the Ministry of Industry and Trade under conditions of upgrading Russian industries will be responsible for implementing a State policy in the sphere of security, use, and protection of intellectual property under the auspices of the RF Government. In the meantime, the question of creating a uniform Federal executive authority in the sphere of intellectual property has been unreasonably delayed. It is advisable to provide for the following measures in view of developing and approving competent administrative decisions:

 

creating four databases (DB): DB of results of intellectual activities of specific institutions, enterprises, and treasuries (regional and national), taking into account expert examinations conducted according to commercialization criteria, DB of applications for innovative technologies, DB of technological platforms for creating small innovative companies, and DB of innovative cycle experts;

developing and introducing uniform criteria and indicators of parameters for  forming and managing intangible assets when innovative activities and economic efficiency are evaluated in higher educational institutions, scientific centres, enterprises, organizations, the Federal treasury, State treasuries of constituent subjects of the Russian Federation, and municipal treasuries of municipal formations;

working out procedures for State audits in the sphere of intellectual property and innovations, and training employees, working in RF regulating and accounting bodies and in RF constituent subjects, to use these procedures;

introducing a model for managing intellectual property in a system of technoparks and regional technopolises, and special economic zones focusing on innovative technologies and industrial production;

activating work operations in regulating and law enforcement bodies with regard to the protection of State interests and laws, and limiting corruption when budgetary funds are allocated for scientific research studies, as well as providing effective protection for holders of rights in the field of inventions, utility models, design, and manufacturing secrets (know-how);

conducting complex and universal studies of new legislation through seminars and advanced training courses for law enforcement officials, and developing legal awareness among holders of rights and civil society as a whole;

monitoring the growth of the intellectual property market and problems related to creating innovative activities within the framework of preparations and discussions of the annual State report – “On the status of legal security and protection of intellectual property in the Russian Federation”, with the participation of Federal authorities and non-government organizations, and events held at the annual International Forum – Innovative Development Through the Intellectual Property Market.

 

No. item

Government body

Authority in the sphere of intellectual property

1

Ministry of Education and Science

developing State policy and normative legal regulations in the sphere of education, and academic, scientific, technical, and innovative activities, nanotechnologies, and intellectual property;

coordinating research and development in the sphere of nanotechnologies; forming the national nanotechnological network and information-analytical system; monitoring scientific, technical, and industrial potentials in the sphere of nanotechnologies;

organizing, methodically managing, and coordinating work on formation, updating, and implementation of priority directions for scientific development, technologies, techniques (preparing long-term forecasts for scientific and technological development), and lists of critical technologies in the Russian Federation. 

2

Ministry of Culture

developing State policy and normative legal regulations in the field of copyright and related rights.

3

Ministry of Economic Development

developing State policy and normative legal regulations in the sphere of analyzing and forecasting social and economic development, property relations, insolvency (bankruptcy), financial improvements of organizations, valuation activities, State statistical activities, investments, State investments, and formation of intergovernmental programs, the Federal Target Program, and the All-Russian Production Center; Special Economic Zone;

preparing forecasts for social and economic development;

approving Federal valuation standards.

4

Ministry of Industry and Trade

developing State policy and normative legal regulations in the sphere of industrial and defense complexes, as well as in the field of development of aviation engineering, technical regulations and maintenance of unity in measurements, science, and technology in the interests of national defense and State security, foreign and domestic trade, and national arts and crafts;

vesting the rights to items of intellectual property and other R&D results in the Russian Federation; exercising such rights and bringing them to the stage of commercial application and the production of finished goods;

ensuring work operations at the Government Commission for Economic Development and Integration.

5

Ministry of Defense

developing and implementing State policy in the field of cooperation on international military technologies.

disposing of, on behalf of the RF, results of intellectual activities, acquired when fulfilling State defense orders;

issuing patents for classified inventions related to armament and defense technologies.

6

Ministry of Agriculture

providing normative legal regulations in the sphere of selection achievements;

ensuring State registration and patents of selection achievements;

issuing conclusions on granting exclusive rights to the name of the place of origin of the goods.

7

Ministry of Communications and Mass Media

protecting State interests in the field of copyright and related rights for mass communications, the mass media, and information technologies;

developing principles to form and use Federal funds for completed and aired television programs, broadcasts, soundtracks, as well as other audiovisual work (excluding films);

8

Ministry of Internal Affairs

performing a complex of organizational and practical actions, directed towards preventing, revealing, and suppressing crimes related to intellectual property.

9

Ministry of Finance

developing State policy and normative legal regulations in the sphere of the budget, taxes, insurance, banking, auditing, accounting, book-keeping reports, Customs payments, and definitions of Customs costs.

10

Federal Service for Intellectual Property

controlling and supervising legal protection and use of intellectual property items, patents, trademarks, and results of intellectual activities circulating legally in the economic and civil sphere, compliance with interests of the RF, individuals and legal entities when rights to results of intellectual activities are granted, including those developed within the framework of international scientific and technical collaboration;

receiving applications for intellectual property items; registering and examining thereof; issuing RF patents for inventions, utility models, designs, RF  certificates for trademarks, service marks, the right to use the name of the place of origin of the goods, a commonly known trademark in the RF, certificates for formal voluntary registration of computer programs, databases, and topologies of integrated microcircuits;

registering contracts on the above intellectual property items;

certifying and registering RF patent attorneys;

verifying activities of organizations exercising the rights to intellectual property items and results of intellectual activities in compliance with RF laws;

providing legal protection to State interests when R&D results and technological processes for military, special and dual purposes are legally put into circulation in the economic and civil sphere.

11

Russian Federal Surveillance Service for Compliance with the Law in Mass Communications and Cultural Heritage Protection

controlling, supervising, and providing normative legal regulations for the protection of national cultural heritage, copyrights, and related rights;

ensuring legal regulations and State accreditation of organizations, which administer collective management of copyrights and related rights; controlling and supervising their activities.

12

Federal Education and Science Supervision Agency

controlling and supervising the field of education and science and activities of councils for defending Doctoral and Candidate of Science theses.

13

Federal Supervision Agency for Information Technologies and Mass

controlling and supervising mass media, including electronic media, mass communications, and information technologies and communications;

issuing licenses for producing copies of audiovisual work, computer programs, databases, and soundtracks, recorded on any kind of media.

14.

Federal Customs Service

providing Customs protection for intellectual property rights;

maintaining a Customs Registry of intellectual property items.

15

Federal Antimonopoly Service

ensuring normative legal regulations when placing orders for the delivery of goods, work operations, and services; controlling compliance with antimonopoly laws.

16

Federal Service for Defense Contracts

maintaining a registry of R&D results obtained under orders placed by the State Service for Defense Contracts, as well as the results of intellectual activities obtained when such orders are implemented.

17

Federal Tax Service

registering contracts on commercial concessions.

18

Treasury

maintaining a registry of State contracts, concluded on behalf of the Russian Federation, based on  results of placed orders; maintaining a consolidated registry of chief managers, managers, and recipients of Federal budgetary funds.

19

Federal State Statistics Service

developing and approving an official statistical methodology for conducting Federal statistical observations, and drawing up official statistical information.

20

Federal Service of State Registration, Cadastre and Cartography

creating and maintaining State catalogues of geographic names; creating and updating State topographical maps.

21

Federal Agency for State Property Management

accounting for, maintaining a registry and an assessment of Federal property

22

Federal Agency for Press and Mass Communications

deciding on the management of funds of completed and aired television and radio programs, broadcasts, soundtracks, as well as other audiovisual work (excluding films);

providing State registration of mass media; controlling compliance with laws governing registered corporate names and trademarks.

23

Government Commission for Economic Development and Integration

implementing State policy in the sphere of technical regulations, and in the field of protecting intellectual property rights.

 

5. The following measures are required in the interests of innovative demands of scientific research results:

- considerably updating registration policies for intellectual activities and rights thereto (from three to sixteen items) at universities and scientific centres, when inventories of initiatives are conducted, and final results are recorded;

- conducting mandatory preliminary assessments when types of legal protection are selected and exclusive (proprietary) rights are allocated and assigned with regard to results of intellectual activities in order to reduce unjustified expenses and ensure effective commercial use of such rights;

- adopting local normative acts in higher educational institutions and scientific centres involved in defining the structure of authors of works made for hire, including those in scientific, technical, and engineering documentation, resolving questions related to payment procedures, compensation payments, and remunerations in order to encourage further innovations, and reduce risks during State or international audits, and legal protection;

- working out a typical package of educational and methodological complex documents on organizing activities at intellectual property centres in higher educational institutions and scientific centres;

- abrogating norm FZ-94 concerning research and scientific work related to technical, technological, and scientific fields, executed within the framework of State contracts or reduced cost parameters; establishing mandatory specifications for deductions from State contract funds intended for patents and licenses, and project support at a 10% rate;

- restoring State rank awards – “Honoured Inventor of the Russian Federation”, and “Honoured Innovator of the Russian Federation”;

- reconstructing the Russian Institute of “Chief Industrial Designers”;

- providing State support for foreign patenting of perspective inventions, or at least for those generated by State scientific and academic institutions;

- encouraging and strictly tracking observance of State interests in relation to results of intellectual activities, obtained within the framework of State contracts;

- toughening up measures to prevent premature disclosure of results of intellectual activities by organizations, especially those conducting R&D under State contracts, including improvements to work operations carried out by expert commissions, which are charged with drawing up conclusions as to openly publishing these materials (mandatory presence in their structures of representatives from one department, from the Export Control Commission, and from services responsible for preserving results of intellectual activities as a commercial secret);  

- restoring the “list of topics” system (i.e. lists of technical and technological problems requiring solutions).

 6. Personnel.  The American corporation IBM provides a vivid example illustrating this urgent issue. Three thousand scientists employed at this corporation produce results, which are then processed by 330 intellectual property specialists (250 lawyers, and 80 economists and managers), who assign, allocate, and evaluate the rights in order to increase sales volumes. Annual sales of intellectual property in this corporation amount to two billion US dollars.

The Russian market needs at least fifty thousand such professional intermediary specialists. Only 150 students graduate from the Russian State Academy of Intellectual Property annually.

Further indispensable measures include:      

 - monitoring patent and teaching personnel in the sphere of intellectual property;

- approving and introducing uniform educational standards for a new major – “Intellectual Property”, and a new specialization for lawyers – “Intellectual Property Rights” and “Information Law”, for economists – “Economics of Intellectual Property”, and for managers – “Management of Intellectual Property”; introducing disciplines such as “Basic Rights Related to Intellectual Property”, and “Basic Laws Related to Information” in all higher educational institutions and for all specializations;

- restoring the centralized system of professional training in the sphere of intellectual property as it was done formerly by the State Committee on Inventions and Discoveries for introducing patents (at least in peripheral Federal districts and higher educational institutions);

- introducing target training courses for patent attorneys working in Federal districts (without the Central Federal District and the North Eastern Federal District);

- providing long-term crediting (one to two years) for young scientists and their directors, who plan to visit leading foreign research centres, but under strict conditions – after their business trip, they must return to a profile institute and work under a contract for at least three to five years.

 A civilized market for intellectual property is required if Russia wishes to implement the country’s competitive advantages given its high scientific and educational potentials for innovative development within the framework of the sixth technological structure and the new international market of labour distribution.

V.N. Lopatin

Director,  National (Republican) Scientific Research Institute of Intellectual Property, Doctor of Legal Sciences, Professor

 

[1] О состоянии правовой охраны и защиты интеллектуальной собственности в Российской Федерации в 2010 году.  Государственный доклад / под редакцией доктора юридических наук Лопатина В.Н., М., Издание Совета Федерации, 2011, С.14

 

2012 Priorities and Problems of the Civilized Intellectual Property Market Development as the Precondition for the Innovation-based Evolution - Republican Scientific Research Institute of Intellectual Property (RSRIIP). © RSRIP
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