Russia Reform Of National IP Industry: Royalty Scheme And A New Mega-Regulator

Authors will receive more for their inventions in Russia, as the local government has changed a scheme on the distribution of authors’ royalties. In addition, the government is setting up a new body to draw together the two dozen agencies that deal with aspects of the intellectual property system. 

The recently approved scheme involves distribution of at least 75 percent of remuneration on the basis of actually used content. It is planned that at the initial stage such a scheme will apply to music, and later to other copyrighted items.

As part of this, the Russian Organization for Intellectual Property (ROIP), (a public organization that collects fees for the public performance of music and other content, which is a subject of copyright in Russia), will launch a special online service that will track  the use of such content, according to Andrew Krichevsky, director general of ROIP.

The volume of funds, which is annually collected by ROIP and which will be distributed among the copyright holders, is estimated at more than 6 billion rubles (US$120 million). About 75 percent of this sum will be distributed among the authors.

ROIP will also continue to collect fees for imported electronics, designed for the copy of content for personal purposes in the amount of 1 percent of its value.

According to Andrew Krichevsky, the idea is that the fees are allocated on the basis of a special centralised online resource, instead of third-party charts, statistics and reports, which are formed in accordance with unclear schemes.

According to Krichevsky, the new online service will be filled by content by right holders themselves that will be able to receive data about the use of their content in real time in their personal accounts that will be located on this web resource.

Krichevsky has also added that at the initial stage the new service will include more than 50,000 authored works, with the possibility of significant expansion in due course.

Prices for the use of content in accordance with the new scheme will remain the same and will vary in the range of RUB 3,000-10,000 (US$50-200).

Meanwhile, according to Arseny Nedyak, deputy head of the department of state policy in the field of media of the Russian Ministry of Communications, the government has already approved the new mechanism for the distribution of royalties.

The new web resource in Russia will be similar to its foreign analogues, among which are Pandora, SiriusXM, Spotify Business and others.

Implementation of this initiative will be part of the execution of recent orders of Russian President Vladimir Putin to raise the transparency of the Russian industry of IP protection, which, in addition to a new web resource involves the establishment of a new watchdog in the field of IP in Russia.

New Mega-Regulator

The new body is established on the basis of the Federal Service for the Regulation of Intellectual Property in Russia (Rospatent) and will focus on the regulation of all the issues of IP protection in Russia, which are currently distributed among 24 federal agencies and ministries.

For example, general regulation in the field of copyright in Russia is currently carried out by the Ministry of Education and the Ministry of Economy. The provision of patents in the field of communications is the direct responsibility of the Ministry of Communications, while all the inventions in the field of military and defence are patented with the participation of the Russian Interior Ministry, the Defense Ministry and the Federal Security Service.

Finally, customs registry of intellectual property is currently carried out by the Russian Federal Customs Service.

According to Igor Shuvalov, Russia’s First Deputy Prime Minister, who is responsible for the development of IP industry in the Russian government, the existing scheme of IP management in Russia inevitably leads to a duplication of functions and lack of coordination between the departments, while the establishment of a new watchdog should result in a significant improvement of the current situation with IP protection and regulation.

Shuvalov has also added that as part of these plans, the Rospatent will be shifted out of the jurisdiction of Ministry of Economic Development under the direct leadership of the government and will receive all the needed authority to determine all the policies in the field of copyright from the Russian Ministry of Culture.

For example, Rospatent will have an authority to issue accreditation for the collective management of copyright and regulate these relationships. According to Shuvalov, the new mega-regulator will be comparable with the Russian Central Bank, in terms of powers and functions.

According to data of the Russian Ministry of Culture, the annual budget of Rospatent is estimated at 2.25 billion rubles (US$50 million), however, it is planned that the conduction of the reform will create conditions for its significant expansion.