Gazeta: “Russia ready to combat the theft of its weapons technologies”
The Ministry of Justice has finalized amendments to the federal law "On the Russian Federation's Military-Technical Cooperation With Foreign States," and from now on, the federal government will protect intellectual property on all weapons being sold abroad. The Federal Service for Military-Technical Cooperation (FSVTS) said the bill was submitted by the Ministry of Justice and that it was not coordinated with it or any other specialized agency. Nonetheless, the FSVTS praised initial work in this direction. "The protection of Russia's intellectual property on military equipment and weapons being manufactured in the country is the Achilles' heel of our system. We are currently unable to settle this issue because the relevant legislative base is lacking. This bill will obviously facilitate its creation," an FSVTS spokesperson told Gazeta.
After being approved by the government, the bill will be submitted to the State Duma for consideration. It can by viewed by the public on the Ministry's website.
Arms traders ordered to become more vigilant
The amendment to the law lists the "protection of the state's rights to the results of intellectual activity as one of the principles of state policy in the sphere of military-technical cooperation with foreign states." The bill expressly forbids "the transfer of the results of intellectual activity to foreign customers without defining specific terms for their use and/or facilitating their legal protection."
The document notes that, from now on, foreign representatives must abide by arms-sale contract terms for using Russian weapons and intellectual property, and if they do not observe these conditions, it will be possible to sue them in national courts. Until now, such contracts usually banned equipment-and-technology transfers to third party nations. A country buying military equipment from Russia was presumed unable to manufacture similar equipment and therefore intellectual property restrictions were overlooked.
Widespread violation of Russian defense-industry copyright
It appears that the ministerial bill comes as a reply to the recent instructions of Prime Minister Vladimir Putin. On February 15, Vladimir Putin met with Minister of Industry and Trade Viktor Khristenko and FSVTS Director Mikhail Dmitriyev, demanding that the problem of illegal weapons replication be solved as soon as possible.
"We must legally protect our interests on global markets. I hope very much that these issues will be tackled effectively not only in this country but also on the international scene," Putin said at the meeting.
In 1996, the Sukhoi Corporation and the Shenyang Aircraft Corporation signed a $2.5 billion contract for the manufacture of 200 Su-27-SK Flanker-B (J-11) fighter aircraft in China. Under the contract, Beijing was required to assemble the aircraft using Russian components. After receiving components for assembling 100 aircraft, however, the Chinese side mastered the production of all systems and units and eventually copied the fighter engine. The Chinese-made Shenyang J-11 is now widely exported, offering tough competition to the Sukhoi warplanes. At the same time, Moscow maintains faithful arms-export relations with India, which currently produces Su-30 MKI Flanker-H fighters under a Russian license. New Delhi has also mastered partial production of aircraft components with Moscow's consent. Nobody suspects the Indian side of trying to independently manufacture such components in the future. Last week, First Deputy FSVTS Director Alexander Fomin visited India and reached an agreement that both countries will jointly manufacture new fifth-generation fighters. This ambitious contract will probably be in the spotlight during Vladimir Putin's visit to New Delhi, scheduled for next week.
Financial losses exaggerated
However, some analysts believe that the Russian defence industry is exaggerating the losses incurred from foreign-partner dumping practices. Konstantin Makiyenko, deputy director of the Moscow-based Center for Analysis of Strategies and Technologies, said that the losses allegedly incurred by the illegal copying of weapons seemed a bit far-fetched.
"Small firearms account for only a small percentage of the arms market, whereas heavy weapons, aircraft, and warship sales net the main profits. Kalashnikov assault rifles, rocket launchers, and other small firearms also make up for a negligible part of the Russian export portfolio. Consequently, it would be hard to speak of tremendous losses incurred because other countries manufacture these components or these weapons without our consent," Makiyenko said.
China's J-11 fighters are another matter. "If we recall our history, Russia sold them a Su-27 production license. They learned how to make their own components and scored a veritable technological breakthrough. To the best of my knowledge, China does not yet sell these aircraft to anyone, including its own Armed Forces. It turns out that Russia has not incurred any commercial losses from this," Makiyenko said.
FSVTS should look for good lawyers
Analysts say the FSVTS will have to hire new employees in order to protect Russia's intellectual property. "The Service should hire experienced lawyers," said Alexei Arbatov, director of the International Security Centre at the Russian Academy of Sciences' Institute of World Economy and International Relations (IMEMO) and former chairman of the Duma's defence committee.
"Specialists should track copyright violations, collect evidence, prepare lawsuits, and represent the interests of Russian developers and the Russian state at international courts of law," Arbatov told the paper.
He said that the recent amendment to the military-technical cooperation law would be only the first step in the war against those who illegally copy Russian weapons. To begin with, in order to enforce full-fledged intellectual-property protection, Russia will need to patent its military inventions abroad not only in those countries to which it sells directly, Arbatov said.
"Of course, international patents are required, but the arms market is a client market," he says. "That's why it's important not to scare away a country that may sign a multi-million dollar contract. If we demand a patent only in some specific country, it will ask questions and start looking for other, more tractable partners."
Arbatov reasoned that due to their universal application, international patents should not cause any misgivings among clients.
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Pirates' favorite
Russia's state arms exporter, Rosoboronexport, reports that over 15 countries, including Bulgaria, Romania, and Egypt are manufacturing Kalashnikov assault rifles under expired licenses or even without Moscow's consent. They also copy Kalashnikov PKS, PKT, and PKB machine-guns. Pirates have also started copying multiple-launch rocket systems, including the Smerch MLRS, tank equipment, aircraft radars, and even entire fighters. For instance, China exports copies of Russia's Su-27 and Mikoyan-Gurevich MiG-29 Fulcrum fighters despite Moscow's reproaches that it violates contractual and license commitments.
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The Kalashnikov on the global black market
Independent arms analyst Maxim Pyadushkin claims that former Warsaw Pact members and countries friendly to the Soviet Union, which at the time received Soviet weapons-production licenses, now manufacture the lion's share of illegally copied weapons. For instance, Poland still manufactures revamped T-72 standard battle tanks utilizing the same platform it had before perestroika. Bulgaria turns out artillery systems. Sixteen other countries received licenses for the production of Kalashnikov assault rifles, and some of them then sold the licenses to third parties. Consequently, even Finland and Israel manufacture Kalashnikov-type small firearms today.
In the chaos of the 1990s, Russian enterprises cared precious little about the legal snags involved in international contracts. China, which received the majority of these weapons contracts, is constantly trying to replicate them. Beijing is currently completing the development of nauticalized S-300 surface-to-air missile (SAM) systems. It is hard to estimate the total losses that Russia incurs from such activities, and sales volumes and contract prices are usually classified. Weapons manufacturer Izhevsk Mechanical Works estimates the global Kalashnikov assault-rifle market at $500 million per year, of which illegal copies account for 90% of trade.
Alexander Sargin, Denis Telmanov, Olesya Shmagun
