590 



in 1965 of the Paris Convention for the Protection of Industrial 

 Property. The terms of the Paris Convention require signatories to 

 extend to individuals and companies of other signatories the same 

 degree of protection as the country provides its own citizens. 



Soviet law provides protection for both foreign patents and foreign 

 trademarks. Trademarks may be registered in the Soviet Union and 

 are protected for a specified period of time, in much the same manner 

 as in Western countries. Soviet patent law, however, is quite different 

 from Western laws. Under Soviet law, an inventor is given the option 

 of receiving a patent or an inventor's certificate for his innovation. 

 The foreign inventor who submits an application to the Soviet Union 

 is given the same choice. The certificate gives the inventor recogni- 

 tion for his achievement and assures him of a predetermined financial 

 reward, but vests in the state all rights to use, develop, and exploit 

 the invention. The Soviet patent is similar to its Western counterpart ; 

 the patentee gains the right to exploit his invention for his own per- 

 sonal profit, up to a ceiling established by law. As an innovation by a 

 Soviet citizen can generally be exploited only by a state enterprise, the 

 incentive to own a patent is reduced. Moreover, legal requirements 

 for obtaining a patent and various tax benefits and compensation ad- 

 vantages for certificate holders induce most Soviet inventors to apply 

 for certificates. 



Most foreign inventors prefer the Soviet patent; they generally 

 consider the certificate's scale of remuneration too small. However, the 

 Soviet patent does not provide the foreigner the same protection as 

 most Western patents. A patented invention can be exploited only 

 by a state enterprise. If the patentee is dissatisfied with the way it is 

 to be used, or with the state enterprise's terms of compensation, he 

 cannot go to a competitor. Furthermore, Soviet enterprises generally 

 have inadequate provisions for the kind of inspection and reporting 

 that could insure the patent-holder's compensation rights. For ex- 

 ample, there is often no way for the patent-holder to insure that he is 

 being compensated according to volume of output or the savings his 

 innovation generates. There is also no independent judicial authority 

 to handle disputes involving patents; the} 7 are handled by the Soviet 

 Chamber of Commerce. These and other problems involving patents 

 have not been resolved in U.S.-Soviet trade negotiations. 



The problem of copyrights was also examined by the Joint U.S.- 

 U.S.S.R. Commercial Commission. Until 1973, the Soviet Union did 

 not belong to the Universal Copyright Convention and had few bi- 

 lateral treaties dealing with copyrights. Nor did Soviet law provide 

 for protection of copyrights of materials first published outside the 

 Soviet Union. Many U.S. books and articles, especially in the scientific 

 and technical fields, have been published in the Soviet Union without 

 compensation for U.S. authors. The Soviet decision to adhere to the 

 Universal Copyright Convention on May 27, \»7:\ should help to 

 solve this longstanding problem. 



SOVIET STATE TRADING 



Some of the barriers to expanded U.S.-Soviet trade arise from the 

 natun of Soviet state trading itself. The essence of the Soviet state 

 trading monopoly is State control over all Soviet foreign business 



