Any Risks for GM Patents in Russia?

Though a number of concerns have been raised following the sale of a stake in Opel to an alliance of Magna and Sberbank, it is unlikely that this will lead to any misuse of GM patents in Russia.

First. Let's differentiate between the patents of GM and those of Opel. in fact GAZ or any other Russian automotive producers will not have a direct recourse to them unless it will be agreed in separate license agreements. Moreover, it is GM that has been using (and benefiting from) Opel patents engineering for all these years! And to some extent it will continue to use and/or benefit (receive royalties) form them. Second. To the concerns about lack of IP rights protection in Russia. Starting from 2008 we have a new modern legislation in this area and the courts are getting sufficiently experienced in using it. If properly organized, both Opel and GM patents will have due protection in Russia based both on its internal legislation and international conventions.  Third. The current state of Russian automotive industry is indeed very poor. Despite a number of new cars launched recently by AvtoVAZ it is still way behind leading world manufacturers. This gives a strong argument that even if there would be a chance to use GM-Opel patents illegally, no one in Russia would be able to afford that. Consider that we have already a number of foreign carmakers working in the country both on their own and in alliances (AZLK-Renault, KIA-Avtotor, AvtoVAZ-GM itself, etc.) and there has been not a single attempt to make an illegal "copy" of any foreign car model locally (as opposed to the Chinese market). Quite to the contrary GAZ has proved itself to be a good faith partner when acquiring the license for Chrysler's Sebring to be assembled on its facilities and under its brand. Finally, apart from the legal side of the matter, obviously Opel will be now competing with GM in Russia. Actually the competition has always been in place, however now, as these brands no more belong to one company the competition will be much higher. As it is precisely put in the discussed article, this is something GM had to trade in order to close the deal.

Andrey Zelenin consults with leading institutions through GLG