The Ministry of Industry and Trade proposes to coordinate the sale of foreign brands in pharmaceuticals

As follows from the draft presidential decree prepared by the Ministry of Industry and Trade, pharmaceutical companies from “unfriendly” countries, already forced to receive payments for the use of their intellectual property in special “O” type accounts with the Bank of Russia, may be required to coordinate the sale with the government commission for control of foreign investments owners of their trademarks in the Russian Federation. It is also proposed to accumulate settlement funds for such transactions in special accounts. The Ministry of Industry and Trade previously proposed extending the same approach to consumer goods in order to prevent companies from “unfriendly” countries from withdrawing funds from the Russian Federation.

Pharmaceutical companies from “unfriendly” countries, which are already forced to receive payments as part of payments for the use of their intellectual property in the Russian Federation in special “O” type accounts with the Bank of Russia, will in the future be required to coordinate transactions for the sale of trademarks and means of individualization in the pharmaceutical market for Russian legal entities, follows from the amendments to Presidential Decree No. 322, published by the Ministry of Industry and Trade on regulation.gov.ru. The goal is to close a loophole in the legislation, thanks to which foreign pharmaceutical manufacturers could include unreceived funds from license payments for the production of certain drugs in the price of the brand under which they are produced, and sell it to the Russian manufacturer without restrictions on the withdrawal of funds, a source familiar confirmed to Kommersant with a discussion of the issue in the Ministry of Industry and Trade.

Let us recall that initially the approval of the legal commission for control of foreign investments was required only for transactions for the sale of shares or shares of companies (as well as their real estate), as well as intellectual property (IP). At the end of 2023, the Ministry of Industry and Trade prepared draft amendments to the decree of the President of the Russian Federation “On additional temporary economic measures to ensure the financial stability of the Russian Federation.” It provides for the extension of a special procedure for transactions of foreign companies from “unfriendly” countries to the alienation or pledge of exclusive rights to the results of intellectual activity and means of individualization. IP includes not only brands, but also technologies (in the form of patents and computer programs), as well as copyrights. As experts told Kommersant at the time, the new norm was a reaction to the lawsuit surrounding the transfer of rights to produce products under trademarks owned by the Carlsberg Group, after the company terminated licensing agreements for its brands – this step was a reaction to the transfer of the enterprise to the temporary management of the Federal Property Management Agency (Rosimushchestvo (Rosimushchestvo). see “Kommersant” dated December 11, 2023).

As follows from the new draft decree prepared by the Ministry of Industry and Trade, similar requirements will be provided for pharmaceutical companies from “unfriendly” countries seeking to sell their own trademarks for drugs. As Alexey Fedoryaka, partner at Sapozhnikov and Partners, explains, the disposal of money in a special ruble account of type “O” is strictly limited. “This measure will allow us to establish additional control over funds received by foreign companies from the sale of intellectual property in pharmaceuticals. The decree will also make it possible to stop unfair actions of foreign copyright holders in the alienation of intellectual property in this important area,” he says.

Initially, reminds MEF LEGAL advisor Alexandra Ambrasovskaya, the decree was introduced so that Russian users of the results of intellectual activity and means of individualization of certain categories of copyright holders, including foreign ones, “could continue to enjoy the rights under agreements already concluded with copyright holders and avoid the refusal of copyright holders from contracts due to the impossibility of payment to a foreign bank account from Russia.” It is possible, she notes, that similar logic was used in this case.

Anastasia Manuilova, Tatiana Edovina, Oleg Sapozhkov