legal entities (61%) compared to natural persons (39%), the reverse occurs in the Central Federal District where natural persons file 54% of total patent applications.

**Table 7: Patents filed** **<u>and</u>** **<u><mark>g</mark></u> ranted in the Russian Federation, 2005–09**

||**2005**|**2006**|**2007**|**2008**|**2009**|
|---|---|---|---|---|---|
|Filed with ROSPATENT, total|32,254|37,691|39,439|41,849|38,564|
|by Russian Applicants|23,644|27,884|27,505|27,712|25,598|
|by Foreign Applicants|8,610|9,807|11,934|14,137|12,966|
|Number Granted, including:|24,916|25,382|28,212|29,903|32,144|
|to Russian Applicants|20,749|20,323|22,066|22,668|23,502|
|to Foreign Applicants|4,167|5,059|6,146|7,235|8,642|

Source: ROSPATENT Annual Report 2009.

Weaknesses in the IPR regime have been cited as a major impediment to commercializing R&D outputs in Russia. In an enterprise survey conducted by the Interdepartmental Analytical Centre in Moscow, 50 percent of respondents cited IPR as a major impediment to bring research results to the marketplace, citing only lack of access to financing (57 percent) more frequently (Gianella and Thompson 2007).

The Russian government has made improvements in the IPR legal framework. However, there is still uncertainty, discouraging both patenting and licensing. Two major pieces of legislation govern IP in Russia: Part IV of the Civil Code from 2008 provides a foundation to treat the IP generated with public funding; and Federal Law 217 (2009) deals exclusively with the use of IP generated with public funds to form start-up companies by universities and research institutes under the RAS. We analyze them one by one.

Part IV of the Civil Code<sup>12</sup> establishes the conditions under which the right to technology belongs to the state. IP belongs to the state in defense-related research and, potentially, any discovery registered in any stage of the innovation process funded by the government. The Civil Code protects most forms of IP (patents, designs, trademarks). The state becomes the owner if a technology is developed for needs of defense or security, and if the state assumed the financing before the development of the technology or later to bring the technology to the stage of practical application. In addition, the right to the technology belongs to the state if after six months of completion of work on creation of the technology; the developer has not made all provisions for all legal actions necessary for recognition of the IPR. In all other cases, the right to the results of intellectual activity must belong to the organization − the R&D executor. The Civil Code language is rather vague, especially when defining IP from publicly funded research that is not defense related. The bottom line is that the state retains rights to the IP generated with public funds in defense-related research and in any other case it deems necessary. In the words of a Russian IP expert, the government’s rights never end.

The benchmark in regulation of IP stemming from public funds is the U.S. Bayh-Dole Act, which standardized IP treatment, assigned clear ownership and transfer rights, and regulated the distribution of gains from commercialization. In the United States, the insignificant commercialization of research by universities motivated the adoption of the Bayh-Dole Act in 1980. The act transfers to the universities the IP rights resulting from publicly funded research, establishes a minimum amount of royalties to be shared with the researcher, and greatly simplifies the process of IP management (which had been subject to more

> 12 Clause 1 of Article 1546 of Chapter 77 “Rights of the Russian Federation and Subjects of the Russian Federation to Technology.”

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