Innovation syndrome in the Russian way

30.10.2012 — Analysis

American entrepreneurs offered the largest Russian universities to take out promising projects from their filing cabinets and implement them on the Western market. Experts say that the cooperation is not going to be smooth, as Russia is still not able to build up its innovation generation system. A substantial destructive impact comes from the national mentality that was formed over the centuries amidst repressions, economic devastation and famine. However, as the RusBusinessNews columnist has found it out, the tide is turning: Today’s students are much better prepared for capitalist relationships than their teachers.

At the end of September 2012, American lawyers and business people came to Ekaterinburg to share their experience of intellectual property protection and commercialization of university innovative projects in the USA. The representatives of Bastille, Fish & Richardson law firm and the Missouri University of Science and Technology told their Ural colleagues about the mechanics of acquisition of patents and trademarks, the transfer of technology and patent rights.

At first, it might have seemed that the Americans addressed the wrong audience: the patent law is not the most urgent issue in Russia. In the country where very few true scientists remained and inventions are made only for dissertations and scientific degrees, only a small segment of the professional community is interested in patents. The statistics speak for themselves: Foreign inventors patent far more inventions in Russia than its citizens. For instance, over the recent years, the number of applications filed by Russian inventors has increased by 13%, while the number of applications received from foreign inventors has increased 2.8 times. The flurry of activity is demonstrated by the USA, Japan, Korea, Germany, France and Switzerland.

According to Venera Murzakayeva, a patent attorney, most of the recent patents deal with high-technology novel solutions in telecommunications, means of communication, industrial automation, etc. After Russia joined the WTO and cut substantially its fees and import duties, the flow of applications coming from other countries has increased dramatically. The expert thinks that foreign inventors are in haste to gain a foothold in the market and to have an advantage over competitors.

The motivation of Russian applicants is somewhat different: Scientists want to secure their priority and to report their accomplishments to the university administration. Some of them even do not need a patent: They file an application only to receive money for their further research. The commercialization of inventions is still very difficult: V. Murzakayeva says that most of them are put into cold storage. Licenses are sold very rarely due to the absence of the intermediate link between the scientific community and manufacturers who, otherwise, would be able to communicate through transfer companies that can assess technology during its development stage.

Yevgeny Kopelyan, the deputy vice-rector of the Ural Federal University, notes that commercial go-betweens are not in demand in Russia. Upgrading issues are currently central for the oil-and-gas industry and the metallurgical sector, and scientists are willing and ready to participate in this process. However, no one queues up to place orders for research: Why spend money on innovative technologies, if high prices for raw materials and low-added value products cover production costs? Therefore, there are no companies that would hunt patents.

In addition to economic peculiarities, there is an ethical aspect: Technologies in Russia are much more often copied without the permission from the right holder in comparison with the USA. There are cases when, instead of "stealing" an invention, the interested party approaches a target professor who, without the knowledge of the university, sells a new technological solution to the interested company. In the meantime, in the USA, the innovators spotted in doing such things are fired, and business pirates face a legal action. Bradley R. Larschan, the executive director of Bastille LLC, says that most companies admit the claims and pay compensation. Approximately one third of disputes are settled in court, which takes the side of patent holders in 90% of the cases.

In Russia, as V. Murzakayeva points it out, it is very difficult for the university to defend its right to the invention: Judges are not competent in subtleties of the patenting process. It is clear that this discipline should be taught at a higher quality level not only to engineers, but also to lawyers. Yet, there are much more amateurs than professionals among teachers of patent law. There are also not many aforesaid professionals in investment companies that have very poor experience in commercialization due to the totally mistrustful attitude of scientists who are apprehensive about information leakage. All these factors impede significantly the development of the Russian market of innovations.

The lack of manufacturers’ stable demand for innovations stirs interest of Russian scientists in US commercialization experience. Ilyas Paderin, the director of the Ural Regional Technology Transfer Center, thinks that Russian inventions can find demand in other countries. The meeting held in Ekaterinburg demonstrated that the Americans are ready to pay their own money to patent promising inventions and to sell them to interested companies. Both parties will go fifty-fifty on the earnings.

The expert is sure that it is a good solution for the Russian science; however, Russian scientists have very limited possibilities, as many areas of scientific focus were curtailed in Russia due to the degrading military and industrial complex, while small business, if truth be told, did not go far. I. Paderin thinks that the innovation potential of Russia can be restored only over the long term by accumulating intellectual resources and developing technologically advanced production. The country’s government authorities must motivate large companies to work with universities that are upgrading now their resource base. Scientists should be involved in working with specific industrial tasks; then, using services of professional counsels and attorneys, scientists can acquire their patents in the USA, Europe and Asia, while companies can compete on the infinite market, following the example of the world’s leading companies.

According to Yevgeny Kopelyan, only practical activity will show whether Russia will be able to take advantage of the foreign experience that has been gained within the last thirty years. It will also take decades for Russia to develop its own innovation generation system. The experts hope that these decades will not be wasted: The Russian younger generation inspires some optimism, though.

Vladimir Terletsky