Compulsory Patent Licensing in Pharmaceuticals Is Becoming a Systemic Instrument of State Policy
A patent holder can officially supply a medicinal product to Russia and pay taxes without fail. On its own, this does not protect against a compulsory license. In the spring of 2026, the Constitutional Court confirmed: if the state deems supply volumes insufficient or the price excessive, a competitor will be granted the right to manufacture a generic without the originator’s consent.
Article 1360 of the Civil Code of the Russian Federation (hereinafter — the CC RF) codifies the mechanism of compulsory licensing. From the entry into force of Part Four of the CC RF in 2008, the provision existed for more than a decade in theory rather than in practice. The situation shifted in 2020: first the pandemic, followed by sanctions pressure, and subsequently a systemic reform built around a standing subcommittee. In January 2025, a draft law was submitted to the State Duma that could broaden the grounds for compulsory licensing to include «national economic development.» For regulatory managers, this means that the perimeter of patent risk is expanding faster than compliance functions can adapt.
How a Dormant Provision Revived During the Pandemic
Prior to 2020, Article 1360 of the CC RF authorized the Government to use a third party’s invention without the patent holder’s consent solely in the interests of national defense and state security. Throughout the entire period Part Four of the CC RF has been in force, this provision was never once invoked in practice.
On 31 December 2020, the Government issued Directive No. 3718-r, granting JSC Pharmasyntez permission to manufacture the drug under the international nonproprietary name remdesivir (original brand name «Veklury», patent held by Gilead Sciences) without the latter’s consent. The justification: extreme necessity in the context of the COVID-19 pandemic. The price gap was substantial: Gilead priced the drug at around $390 per vial, while Pharmasyntez registered its generic «Remdeform» at 7,400 rubles.
Gilead challenged the directive before the Supreme Court of the Russian Federation. The plaintiff’s core argument: at the time the directive was issued, Article 1360 permitted the use of inventions strictly for defense and security purposes, and supplying the population with medicines did not formally fall under those grounds. On 27 May 2021, the Supreme Court dismissed Gilead’s claim (Decision No. AKPI21-303). The Court linked the protection of citizens’ life and health to the concept of national security and upheld the directive’s legality.
Almost concurrently with this litigation, the statute itself was amended. Federal Law No. 107-FZ of 30 April 2021 explicitly added «protection of citizens’ life and health» to Article 1360 as a ground. The amendment entered into force on 11 May 2021, sixteen days before the Supreme Court’s ruling in the Gilead case. The Court specifically noted that the amendment merely codified an interpretation the norm already carried, without substantively changing its content.
A Standing Subcommittee Replaced One-Off Directives
Until 2024, the Government processed each such decision through a separate directive, with no unified procedure. It reviewed the applicant’s petition, assessed the situation, and issued a final decision on a case-by-case basis.
On 15 February 2024, the President signed Decree No. 122, «On Improving the Procedure for Decision-Making on the Use of Inventions, Utility Models, and Industrial Designs to Ensure the Economic Security of the Russian Federation.» The decree instructed the Government to establish a standing body to review such applications. On 27 March 2024, the Government adopted Resolution No. 380, approving the regulations for the Subcommittee on the Use of Inventions, Utility Models, and Industrial Designs under the Government Commission for Economic Development and Integration. The resolution took effect on 4 April 2024.
Not every Russian legal entity may apply to the subcommittee. The first condition concerns ownership structure: the share of direct or indirect participation of the Russian Federation, its constituent entities, municipalities, and/or Russian citizens in the applicant’s charter capital must exceed 75 percent. Russian subsidiaries of foreign holding companies with substantial foreign ownership formally fail this filter.
The second condition concerns negotiations. The applicant must prove it approached the patent holder with an offer to conclude a license agreement on market terms and received either a refusal or no response within the statutory period. Applications are reviewed together with assessments from the relevant authorities: the Ministry of Industry and Trade, the Ministry of Health, or the Ministry of Defense, depending on the field, as well as the Federal Antimonopoly Service (FAS) and Rospatent. Subcommittee members decide by vote.
Alongside this institutional reform, a compensation methodology was adopted in 2021. Government Resolution No. 1767 of 18 October 2021 set the baseline rate at 0.5 percent of the actual revenue an entity earns from selling goods made using the invention, without the patent holder’s consent.
A few months later, the compensation rate was split along geographic lines. On 5 March 2022, the Government approved a list of foreign states committing unfriendly acts against Russia (Directive No. 430-r). The list currently includes 49 states, including EU member states, the United States, the United Kingdom, and Japan. The following day, 6 March 2022, Resolution No. 299 reduced compensation to zero for patent holders connected to those jurisdictions by citizenship, place of registration, place of business, or place where most of their profit is earned. For patent holders from all other countries, the baseline rate of 0.5 percent remained unchanged.
Table 1. Compulsory Licensing Under Article 1360 of the CC RF Before and After the 2021–2024 Reform
| Parameter | Before 2021 | 2024–2026 |
|---|---|---|
| Grounds for the decision | State defense and security only | + protection of citizens’ life and health |
| Decision-making body | Government of the Russian Federation, one-off directive | Subcommittee under the Government Commission for Economic Development and Integration, standing procedure |
| Applicant requirements | Not set out in a dedicated act | Over 75% Russian ownership, documented attempt to negotiate |
| Compensation for a patent holder from a friendly country | Determined case by case | 0.5% of actual revenue (Resolution No. 1767) |
| Compensation for a patent holder from an unfriendly country | Not applied | 0% (Resolution No. 299) |
Zeroing out compensation for patent holders from unfriendly countries creates friction with Russia’s international obligations. Article 31 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (hereinafter — TRIPS) permits use of a patent without the right holder’s authorization, provided remuneration is paid that is proportionate to the economic value of that authorization, while Article 3 prohibits discrimination based on country of origin. Challenging the zero rate through World Trade Organization (WTO) arbitration is difficult in practice: the organization’s Appellate Body has not been able to hear new appeals since 11 December 2019, because the United States has blocked the appointment of new arbitrators, and trade disputes between member states are effectively left without a final ruling. For compliance functions, this means the standard international channel of protection offers little help, leaving Russian courts and subcommittee-level negotiations as the main venues for dispute.
The Semaglutide Case Shows Articles 1360 and 1362 Working in Tandem
In 2023, Danish manufacturer Novo Nordisk announced it would discontinue supplies to Russia of drugs containing the international nonproprietary name semaglutide (brand names «Ozempic» and «Rybelsus»). By March 2023, remaining stock had completely disappeared from pharmacy shelves.
In December 2023, the Government issued one-year compulsory licenses under Article 1360 to two Russian companies, Geropharm and Promomed, to use Novo Nordisk’s inventions. Both companies were already running their own development programs: Geropharm received approval for Phase I clinical trials in June 2023, and Promomed registered its own drug, «Kvinsenta,» in October of the same year.
The two companies’ paths then diverged. Promomed has kept renewing its license through the Government under Article 1360 every year since: in 2024, in 2025, and, as far as is known, through the end of 2027. Geropharm, in 2024, chose the judicial route under Article 1362 of the CC RF instead, bypassing both the Government and the subcommittee. The company won at first instance in September 2024, and the appellate court upheld the decision in November.
On 14 May 2025, the Intellectual Property Rights Court partially overturned the lower courts’ rulings. At Geropharm’s request, the hearings were held in closed session, and the details of the changes were not made public. Similar semaglutide claims were filed in parallel by Izvarino Pharma and Promomed Rus, as well as by the Russian entities of Slovenia’s KRKA and India’s Jodas Expoim.
In the spring of 2026, compulsory licensing practice was affirmed at an even higher level, by the Constitutional Court of the Russian Federation, though on a different point of patent law. On 12 March 2026, the Court issued Ruling No. 13-P in response to complaints from JSC Sanofi Russia and Vertex Pharmaceuticals concerning paragraph 1 of Article 1362 of the CC RF. The dispute concerned the orphan drug Trikafta: a Russian company had obtained a compulsory license through the courts, and the patent holder tried to have the underlying provision itself declared unconstitutional. The Constitutional Court held the provision constitutional and ruled that, when assessing whether use of a patent is adequate, a court may weigh supply volumes, the drug’s affordability for patients, and the patent holder’s ties to an unfriendly jurisdiction together.
For pharmaceutical companies, the practical takeaway from these two cases is this: Article 1360 and Article 1362 function as two routes to the same outcome. The government route is faster but requires clearing the subcommittee and its 75% Russian-ownership filter. The judicial route takes longer but does not depend on the subcommittee’s composition. Meanwhile, the Constitutional Court’s position broadens the range of factors courts may weigh when they hear such disputes.
What Changes If the National Economic Development Bill Passes
Draft Law No. 818556-8, «On Amending Part Four of the Civil Code of the Russian Federation,» was submitted to the State Duma on 15 January 2025. The bill proposes adding a new ground to Article 1360: national economic development. Unlike defense, security, or health protection, this wording has no clear boundaries and could potentially cover any technology considered significant for import substitution.
The mechanism would change too. The bill proposes a system of registries: relevant ministries would compile lists of patents they judge to be insufficiently used for the needs of the economy, and Rospatent would keep a nationwide registry of such items. A Russian legal entity meeting the set criteria could then apply to use a patent directly from the registry.
The logic of compensation would also change. Instead of a fixed percentage of revenue, the bill introduces the term «remuneration,» the amount of which is set taking into account the positions of both parties: the former and the new patent holder. A patent holder would gain the right to request removal of a technology from the registry by proving it ensures adequate market availability of its own product.
As of the date of publication, the bill is still under review in the State Duma, and neither the adoption date nor the final wording of the provisions has been settled. It is premature to build specific effective dates into compliance planning. The direction of the reform matters more than the exact date: the grounds for compulsory licensing are widening, and patent holders should start preparing for this logic now, rather than waiting for the law to pass.
Action Plan
Audit revenue exposure tied to exclusive rights. Identify which patents in the portfolio account for a meaningful share of revenue in the Russian market, and assess whether they already fall under the grounds in Article 1360: defense, security, or health protection.
Document supply volumes and product availability. Keep annual records covering supply volumes, regional coverage, price accessibility, and participation in clinical trials in Russia. Article 1362 of the CC RF treats a four-year gap from the date of grant as insufficient use for an invention or industrial design, and three years for a utility model. Formally, this threshold applies to the judicial route, but the Article 1360 subcommittee assesses use on similar grounds. The Constitutional Court’s March 2026 ruling directly links the risk of a compulsory license to inadequate supply in the market.
Do not issue a blanket refusal to voluntary licensing requests. The subcommittee accepts an application only after a documented attempt at negotiation. A counteroffer, such as contract manufacturing or partial localization, reduces the likelihood that an applicant will clear the subcommittee’s filter.
Keep patent protection and brand protection separate. Article 1360 covers only inventions, utility models, and industrial designs. Trademarks fall outside this provision, so original packaging and brand elements are worth registering separately, as trademarks, independent of the patent protection on the underlying technology. This matters especially for vial shape, color scheme, and packaging graphics, which a patent competitor will try to reproduce when launching a generic.
Assign someone to track Draft Law No. 818556-8. Monitor the bill’s progress on the State Duma’s website and in industry coverage. Extending the grounds to national economic development would change the rules for patents that are formally protected under the current wording of Article 1360 today.
Compulsory patent licensing in Russia has gone from a provision that sat unused for more than a decade to a standing mechanism backed by its own subcommittee and a growing body of case law. Holding a registration and a patent no longer guarantees control over a technology if the state considers it significant for public health or the economy. Companies operating in the Russian pharmaceutical market should treat their patent portfolios as something that needs to be regularly backed up with evidence of real, ongoing use in the market.
Regulatory Framework:
1. Draft Law No. 818556-8, «On Amending Part Four of the Civil Code of the Russian Federation» (pending in the State Duma)
2. Civil Code of the Russian Federation, Part Four, Article 1360
3. Federal Law No. 107-FZ of 30 April 2021, «On Amending Article 1360 of Part Four of the Civil Code of the Russian Federation»
4. Decree of the President of the Russian Federation No. 122 of 15 February 2024, «On Improving the Procedure for Decision-Making on the Use of Inventions, Utility Models, and Industrial Designs to Ensure the Economic Security of the Russian Federation»
5. Resolution of the Government of the Russian Federation No. 380 of 27 March 2024, «On the Subcommittee on the Use of Inventions, Utility Models, and Industrial Designs to Ensure the Economic Security of the Russian Federation under the Government Commission for Economic Development and Integration»
6. Resolution of the Government of the Russian Federation No. 1767 of 18 October 2021, «On Approving the Methodology for Determining the Amount of Compensation Payable to a Patent Holder When a Decision Is Made to Use an Invention, Utility Model, or Industrial Design Without Its Consent, and the Procedure for Its Payment»
7. Resolution of the Government of the Russian Federation No. 299 of 6 March 2022, «On Amending Clause 2 of the Methodology for Determining the Amount of Compensation Payable to a Patent Holder When a Decision Is Made to Use an Invention, Utility Model, or Industrial Design Without Its Consent»
8. Directive of the Government of the Russian Federation No. 430-r of 5 March 2022, «On Approving the List of Foreign States and Territories Committing Unfriendly Acts Against the Russian Federation, Russian Legal Entities, and Individuals»
9. Decision of the Supreme Court of the Russian Federation No. AKPI21-303 of 27 May 2021
10. Ruling of the Constitutional Court of the Russian Federation No. 13-P of 12 March 2026, on the constitutionality of paragraph 1 of Article 1362 of the CC RF