Russia’s
recent accession to the WTO has obligated it sign and ratify the Trade Related
Aspects of Intellectual Property agreement (TRIPS). This will provide for great
intellectual property protection within Russia for both foreigners and locals
alike. According to the Intellectual Property Rights Index Russia currently,
ranks 97 out of 130 countries ranked. This is an astonishingly low number for an economy
that ranks as the ninth largest in the world – even though much of the economy
runs on the extraction of natural resource. Russia’s adopting of the TRIPS
agreement will obligate the country to set minimum standards for it IP
protections such as ensuring that copyrights and patents are protected for at
least 20 years and impose more effective enforcement mechanism such as preliminary
injunctions. Recently I have been evaluating the correlation between foreign
direct investment in a country and the IP protections that are in place.
High
levels of FDI in a particular country will help a country to grow economically
since the inflow of capital will increase the marginal productivity of labor in
the sector the money is invested. An increase in efficiency and output will
typically result in higher wages for the workers of a specific sector, putting
pressure on the other sectors to increase wages as well. In turn this will be positive
for both income and output. The increase in FDI is one of the forces that bring
new and existing technologies to developing countries. As I have discussed in
previous posts one of Russia’s biggest challenges is the lack of productivity in
many of its key sectors. For example the steel sectors – one of Russia most
products areas – operates at a mere 30% of American productivity in that
sectors. As such, it is imperative that Russia be able to attract new investors
to make its productivity more efficient.
In
order to attract new FDI it is necessary to give investors the confidence that
its technologies will be protected. Russia has taken some serious stride to implementing
stronger protections. This year the United States will work closely with Russia
to enhance bilateral coordination on IPR enforcement and protection. This will
include the organization of the United States – Russian Intellectual Property
Working Group according to the USTR. We can already see evidence of Russia’s
commitment to enforce IPR in the VKontakte v. Gala Records case; there the 13th
Commercial Court of Appeals affirmed the decision of the Arbza Court of St. Petersburg.
They ruled that Russia’s leading social networking web site, VKontaket – translated
it means you are in contract – was liable for copyright infringement for the
distribution of unlicensed music through its web site.
While
this is only a small example of the commitment to enforce IP rights there are many
more examples that can be found. One of the important commitments Russia made
when it joined the WTO was to ensure that its government and courts would be
more transparent. This can already be seen as the Supreme Arbitration Court of
the Russian Federation makes all of their rulings available of their web site.
As I continue to stress throughout my posts, Russia has a long way to go in
order to ensure its future growth and raise investor confidence, but they are constantly
taking strides in the right direction. I will continue to examine the correlation
between IPR and FDI and perhaps take a look at a few other countries to provide
some survey analysis and see how it will apply to Russia.
http://www.arbitr.ru/_upimg/80C5637EBBAE1E070A7CCD321A7A3733_dec.pdf
Tim Felix A. Bruecher, Development of Foreign Direct
Investment and Intellectual Property Protection, 5th September 2008,
Winterbach, Germany.
No comments:
Post a Comment