Russia could legalize software piracy in response to the withdrawal of Western companies

The measure could benefit from the support of at least part of the population and companies that, although they have already paid for licenses to use products and software developed by Western companies, are now unable to benefit from them. However, in many cases the mere return to software piracy may not work, with some companies that have faced this problem over time now offering their products on the software-as-a-service principle, essential elements of functionality requiring internet connection and server communication to that developer.

As Russia’s sanctions begin to turn the country into a new Venezuela, the Kremlin is looking at ways to keep business and government afloat, as key aspects of its business depend on Western software and technology. Disguised as a measure of nationalization of essential assets, software piracy at the institutional level is just the continuation in the virtual space of the same measures already prepared for the assets of private companies that have announced their exit from Russia. But instead of forcing the government to take over IKEA warehouses, Shell gas stations or oil refineries, it will “take over” software technologies that it cannot access by other means.

Interestingly, Russian law already allows the government to authorize “without the consent of the patent holder” the use of any intellectual property “in the event of an emergency related to ensuring the defense and security of the state.” The government has not yet taken that step, but it may soon do so, according to a report by Russian business newspaper Kommersant, which was discovered and translated by Kyle Mitchell, a technology lawyer. In other words, Russia could even surpass China in stealing Western patents and technology, duplicating almost any product considered strategically important to the Kremlin behind the modern version of the Iron Curtain.

It will be officially called the “mandatory licensing mechanism for software, databases and technology for integrated microcircuits”. It would only apply to companies in countries that have imposed sanctions. Although the material in the Russian press does not explicitly mention the names of companies, we can assume that they are primarily targeted by large Westerners, such as Microsoft, Apple and Samsung, which have drastically reduced their trade ties with Russia. So far, Microsoft has suspended sales of new products and services in Russia, Apple has stopped selling devices, and Samsung has stopped selling both devices and chips.

At the same time, it is appreciated that any move by the Kremlin to “seize” intellectual property rights is to be construed as an implicit “exemption” for Chinese friends, who could use their existing production capacity to duplicate the Western technologies they covet. , but do not have access.

Smartphone makers such as Huawei, Xiaomi and Honor would immediately win, as would Chinese carmakers. However, no gains are guaranteed, as business in Russia has become problematic, covering everything from logistics to financing. Nor should the prospect of extending the international sanctions already imposed on Russia to China be neglected, virtually cutting off China’s access to the most profitable non-Asian markets.

Although China has intensified its criticism of US policies, the Communist Party is likely to be reluctant to undermine its profitable stakes in global trade. “Chinese companies have much more to lose than to gain by violating sanctions,” Gavekal Dragonomics analysts said in a research report quoted by The Wall Street Journal. “For most Chinese companies, Russia is too small a market for the business to be at risk of being cut off from developed markets or sanctioned.”

Software piracy in Russia is nothing new. A 2019 ESET poll found that 91% of Russians preferred pirated content, with almost 20% admitting to using software crackers. The most commonly cited reason – 75 percent of respondents – was that the official versions cost too much money.