Only a piglet in Russia’s war on patents

The story of Peppa Pig, a high-profile case involving copyright infringement, is as absurd as it can get in the time of war.

Peppa Pig is not well-known in India but is a very popular cartoon character in British television and books for children. The anthropomorphised pink porcine delights the very young and their parents.

One such parent is Boris Johnson, who till a few days ago was Prime Minister of the United Kingdom. And thereby hangs this tale of trademark infringement permitted by Russia, the only such case since the onset of its conflict with Ukraine.

The popular piglet appears to have become the unlikely victim of Moscow’s decree aimed at punishing unfriendly countries, that is, countries which have imposed crippling sanctions on Russia.

Peppa Pig is the only one penalised so far, making it clear that Moscow does not intend to use appropriation of intellectual property (IP) as a tool of war.

The case, however, has provided grist to the vast propaganda machinery of the West which has been putting out alarmist reports that Russia intends to steal IP wholesale and that a law Moscow enacted in the wake of its war with Ukraine was a free pass for piracy and IP theft in the country.

The law in question is Decree 299 issued by the Kremlin in early March. It states that when the government decides on the use of an invention, a utility model, or an industrial design without the patent holder’s consent, it would pay no compensation to the owner.

Although the infringement suit was instituted before the Ukraine war, the judgement was governed by the sentiment of Decree 299.

When Ivan Kozhevnikov, a Russian entrepreneur, created his own version of the cartoon character he was sued for trademark violation and copyright infringement by One Entertainment, the British company that owns Peppa Pig, in 2021, several months before Russia launched its attack on Ukraine.

But while rejecting One Entertainment’s claim for compensation of 40,000 roubles (around £400), Judge Andrei Slavinsky said his decision was influenced by the “unfriendly actions of the US and affiliated foreign countries”. That ruling means Kozhevnikov is at liberty to continue with his copyright infringement.

Too bad for Russia’s image because the piglet has become a cause celebre. There has even been speculation that the Slavinsky’s ruling was a way of getting back at Johnson who has been slapping tranche upon tranche of sanctions on Russia.

Johnson has two young children and the family has been to Peppa Pig World, a children’s entertainment park, which he said was “very much my kind of place” — much to the consternation of a Confederation of British Industry conference where he made the disclosure. He had praised Peppa as the “power of UK creativity”.

One doesn’t know if the court ruling upset Johnson but it certainly had Western media in full war cry. Peppa Pig it said was an indication that the floodgates to IP theft had started.

Some commentators pointed to a subsequent development where US pharma major Pfizer’s patent on tofacitinib, a drug used for treatment of rheumatoid arthritis, was cancelled by the Russian patent office.

The cancellation came after Russian generics manufacturer PSK Pharma challenged Pfizer’s patent claims on the grounds that it did not meet the requirement of novelty, inventive step and industrial applicability.

While it is easy to view this as another example of Moscow’s way of retaliating against the NATO allies who are pouring money and arms into Ukraine, the fact is Pfizer’s patent on tofacitinib has been successfully challenged elsewhere. India rejected the patent in 2015 after a four-year legal challenge at the patent office.

Tofacitinib, it said, did not enhance the efficacy of the earlier version of the drug. In its final order, the Patent Office stated that the claims on the new version of the drug cannot be considered an invention under the provisions of the law. The wonder is that it has taken Moscow almost nine years to get the patent revoked on the same grounds.

What is clear is that Russia’s history of protecting IP is standing it in good stead with the global pharma industry. A western IP lawyer points out that patent cancellation is very rare in Russia and the tofacitinib case cannot be used to fuel further propaganda against the Vladimir Putin regime.

The irony is that the sanctions hawks in the West have been complaining about Big Pharma’s refusal to pull out of Russia. While McDonalds, Starbucks, Samsung and Coca-Cola have quit Russia, and done it with fanfare, the pharma industry has not followed suit.

While aiding Ukraine through various humanitarian platforms they have refused to stop doing business with Russia. Pfizer CEO Albert Bourla said no further investments would be made in Russia but there was no question of halting all business with the country.

The industry appears to be more circumspect on the issue of boycotts and exits.

While Russia has the power to suspend patent rights, it is quite aware that in the end it is a losing proposition. And the US should not forget its own brutal history on IP seizures in the time of conflict.

During World War II, the US government is reported to have “seized tens of thousands of foreign-owned patents and other forms of IP”, said an academic study, while recent article by IE University recalls that “internment and confiscation of enemies’ assets resulted in more than 100,000 Japanese-Americans in camps and millions in seized assets”.

In a timely reminder to both sides, the paper noted that taking a moral stand entails a heavy price. It says that western corporations who have exited Russia “will suffer losses not only in revenue but also in the value of their industrial property within the territory.

In the current scenario, they have limited options to protect their patents and trademarks in Russia.” At the same time if Putin chooses to go in for nationalisation, “the Russian awardees of the patent rights, would also need engineering knowledge on how to exploit said rights, without which, they will not be able to optimize its value.”

In short, there are no clear winners in an IP war.

This was first published in Down To Earth’s print edition (dated 16-31 July, 2022)