A licence agreement was concluded between a German company and a Russian one, under which equipment was produced on Russian territory using technologically simple but important know-how. After some years, however, the royalties stopped coming in, although the Russian company was continuing to manufacture the product. It turned out that it was making exactly the same press-moulds as it had obtained earlier from the German company and was now putting its own logo on the equipment.
The existence of a protected trademark in one of the European countries or America does not necessarily mean that this right will be protected in Russia (or any other country in the world). After its registration in the original country, the trademark must be registered with the World Intellectual Property Organization (WIPO), in accordance with the “Madrid Agreement on the International Registration of Marks”. The Russian Federation is a signatory to this Agreement.
In Russia, business relations are frequently based on personal contacts, There is a saying: “We don’t work with a firm, we work with a person”.
In the absence of WIPO registration, I recommend foreign companies entering the Russian market to register their own trademarks, processes and any other results of intellectual activity in accordance with Russian legislation. If this is not done, then in the event of your exclusive product being used by other companies, it will be difficult, and in many cases impossible, to prove anything. In this case, in response to complaints from the German side, the Russian company sent a message saying it had acquired a Russian patent for this invention. And if the Germans were to manufacture the products in another Russian factory, they would be the ones who would have to pay royalties to their former partners. Apart from this, foreign investors also ought to know that there is in fact no regulation in Russian law forbidding the registration of a company with an identical name. Consequently, there are cases when clone companies or firms with very similar sounding names are set up. To make this impossible, it is also necessary to register your trademark in WIPO or the Russian patent office, Rospatent.
A foreign firm ordered information about a contractor from a law firm. The results obtained included the firm’s own business telephone numbers. It turned out that one of the top managers had set up his own company, and as contacts for it, he had used the firm’s numbers – after all, he was actually located there!
Russian law does not directly forbid anyone from setting up his own business while being a salaried employee at the same time.
One of our services is the provision of credit information, and we have, alas, come across such situations. How can they be avoided? Russian law does not directly forbid anyone from setting up his own business while being a salaried employee at the same time. Even if the employee’s firm is a direct competitor, this is not, according to the Labour Code, grounds for sacking him. Only by means of its internal documents can a company protect itself and give itself means of taking action against such an employee. In the company in question, such documents were only produced as a means of resolving the situation which had been created.Another example: one foreign firm received complaints about the work of its Chief Accountant, a woman who was clearly not coping with her job. They began to look at her more closely, and discovered that she was working on the side. This is not forbidden by law, there is even a special term for it: “sovmestitelstvo” (double job-holding). However, this firm had produced internal documents, including some regulating the use of office equipment and software. It was only permissible to use these for personal ends after submitting a request to the General Manager in writing, and obtaining permission in writing. And the Chief Accountant had been using the program “1S: Bookkeeping”, which was installed on her office computer. This gave grounds for dismissing her; she had breached the corporate ban on the use of office equipment and software for personal ends not connected with her main activity. This case was later considered in a court, which confirmed the legality of the decision taken by the firm’s management.
The employee had breached the corporate ban on the use of office equipment and software for personal ends not connected with the main activity.
A former employee, after being sacked by a foreign company, took a job with another firm specializing in the same line of work, and started using the client base he had built up, and formalized documents.
In Russia, one cannot write a clause into a labour contract preventing an employee, after being dismissed, from entering into a business relationship with competing firms and organizations or sharing confidential information with them. Or to be more precise, one can write it in, but in law, it will be null and void. Furthermore: even in job vacancy advertisements, it can be pointed out that “an accumulated client base is an advantage for the candidate”. This is not surprising, considering that in Russia, business relations are frequently based on personal contacts, There is even a saying: “We don’t work with a firm, we work with a person”.Here is another variation: after gaining experience in a big firm, a key employee sets up his own business, in which he uses what he has learned. And here too, it is impossible to restrict him by law, although this means that the big firm has created a competitor for itself.What can be done to minimize such risks? Observe the practice of commercial secrecy, produce internal corporate rules to limit access to information. This may seem excessively bureaucratic, but such an approach is objectively correct. And it is necessary to make an employee sign an obligation to observe commercial secrecy.
An Italian entrepreneur noticed that his Russian subordinates were acting passively: they were not putting forward any initiatives, they were not correcting him when arguably not the best decisions were taken. This gave rise to bewilderment and alarm: was it unwillingness to help develop the business, or was it a clear sign that corporate spirit was lacking in the company?
The absence of initiatives and critical comments about the management does not at all mean indifference to the company’s successes – it is simply that employees do not consider that they have the right to do this. The feeling of subordination is very well developed in Russia.
Russians do not like asking questions of the management. Even in cases where they do not fully understand something, and questions are quite in order.
It is also worth bearing in mind that many Russians do not like asking questions of the management. Even in cases where they do not fully understand something, and questions are quite in order. This applies not only to rank-and-file workers, but also to middle managers and even top managers: they are afraid to admit that they don’t know something and will look incompetent. As Abraham Lincoln said: “Better to remain silent and be thought a fool than to speak out and remove all doubt”. Therefore the manager should take the initiative himself, and clarify how these various nuances should be explained. One American businesswoman, in the course of explaining tasks at a conference, paused briefly and then asked her subordinates specific questions. During a perfectly friendly dialogue, it became clear to what extent they understood her.There are also many measures capable of changing the situation as regards innovative proposals. As a start, suggestion boxes for anonymous proposals and comments are suitable – this is the form most acceptable to the employees for many initiatives. It is also extremely useful to hold competitions for the best proposal to improve the efficiency of operation of a subdivision or of the company as a whole. And naturally, such innovative proposals must be materially rewarded.