Russia plans to legalize software piracy • The Register

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Russia plans to issue licenses to use foreign software, databases and chip design patents, and legalize software copyright violations, in response to sanctions imposed following its invasion of Ukraine.

According to the Russian trade publication Kommersant, a government document drawn up on March 2 outlines possible actions to support the Russian economy, which faces significant trade restrictions from the United States, the United Kingdom and the Europe, and company withdrawals.

With companies like Apple, Oracle, Microsoft and SAP halting sales (but not ending service to existing customers), Russia instituted tax breaks for tech companies and conscription deferrals for IT workers to keep its main resources and talents during the conflict.

The March 2 document, says Kommersant, proposes compulsory licensing for patented software, databases and chip designs, and plans to abolish criminal and administrative liability for software license violations, but only for rights holders from countries that support sanctions against Russia.

Companies inside Russia and companies outside of countries that have not issued an opinion on the invasion and bombing of civilians should be provided with continued legal protection, regardless of value, for their intellectual property.

The compulsory license would be permitted under Article 1360 of the Civil Code of the Russian Federation. As translated algorithmically, it reads as follows:

Our reading of this is that the Kremlin wants to grant organizations licenses to use patented technology, without permission from the patent holders, with some kind of payment offered.

Back to the bad old days

History does not repeat itself but it rhymes. Previously, virtually all software in Russia was pirated or used without a license. It might just be one more time and it might not matter as much. Although the Russian Federation adopted the copyright commitments made by the Soviet Union before its dissolution in 1991, then promulgated its own copyright rules in 1993 and acceded to the Convention of Bern in 1995, software copyrights were largely ignored in the country during the 1990s.

According to a 2000 Duke University School of Law article, the Moscow Times estimated the software piracy rate at 91% in 1996.

In 2004, Russia succeeded in reducing the rate of pirated software to only 87%, according to the Business Software alliance (BSA) [PDF].

Improving intellectual property protection has been slow. In a blog post discussing the Kommersant report, software licensing lawyer Kyle Mitchell recounted his time in Moscow, Russia, from 2008 to 2009, when copyright rules were largely ignored.

“With Larry Lessig doing the rounds of Creative Commons and a thousand voices proclaiming ‘freedom’ to anything we could dig and share online, Russia was a kind of copyright-free demilitarized zone,” he said. -he writes. “It is only at the heavy ends of the economy, or in the organs of the state, that the existing laws, or the impending consequences of possible WTO membership, have really borne fruit. “

In 2010, software piracy rate in Russia fell to 65%, says BSA [PDF]. However, Russian copyright enforcement sometimes served purposes other than international business standards, such as suppressing political opposition.

That year, in response to a New York Times expose, Microsoft wrote a blog post lamenting that Russia’s use of software piracy charges to harass organizations engaged in public advocacy was not exactly what she had in mind as she worked to protect her business interests. In the United States the same year, Public Knowledge published a report [PDF] over baseless copyright claims used to suppress political speech.

In 2013 and 2015, Russia adopted more copyright rules. And by 2017, according to the BSA [PDF]the install rate of unlicensed PC software has reached 62% in Russia, about what it was ten years earlier.

DRM has evolved

Still, even if Russia goes ahead with these latest proposals, the future of software piracy may fall short of the past. With cloud computing, IT companies have found a better business model that, coincidentally, keeps intellectual assets locked away in data centers.

In an email to The registerMitchell said he was reluctant to try to assess the impact of Russian proposals.

“Even if implemented in the strongest proposed form, it could very well be totally swallowed up by events, including official sanctions and voluntary boycotts by private vendors, payment networks, etc.”, did he declare.

“It’s easy to read the proposal primarily as a bit of a soft response, a low-priority mitigation. Businesses walk away from the table. Their Russian customers end up with whatever chips and cards they have in hand.”

Mitchell expressed skepticism about the suggestion that reducing piracy should be seen as a key driver of cloud adoption.

We could see the loss of functional customer-supplier relationships for software with politically significant effects in two ways: widespread disruption of basic business administration and the derailment of more specialized, technology-dependent projects.

“It’s in play, but the causality is unclear: how much and how often as a factor, rather than a ripple effect?” he said. “The ‘cloud’ is a complex and quite contextual phenomenon. There are niches in the United States where installed program license keys remain the norm. At the same time, there has been a long, ongoing business and political conversation and rather public in Russia on self-sufficiency, security and foreign dependence.”

“We could see the loss of functional customer-vendor relationships for software with politically significant effects in two ways: widespread disruption of basic business administration and the derailment of more specialized, technology-dependent projects. references to market studies showing cloud service growth in Russia, as elsewhere. But I’ve also seen reports suggesting that Russian companies aren’t as advanced in their evolution as, say, the United States,” a- he suggested.

If Russia were to revert to gross intellectual property violations, Mitchell said Western companies have always been able to seek redress from Russian companies through arbitration, often in Stockholm or London.

“Many international agreements respect both arbitration commitments and the judgments of arbitrators,” he said. “Western companies have certainly sued Russian companies in front of foreign arbitrators and then sued Russian assets abroad where they can find them.” ®

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