The Economist June 4th 2022 Business 59national law. Countries are allowed to
make exemptions to patent rules in a na-
tional emergency. Cumbersome paper-
work and tedious price negotiations can
cause delays. But some compensation, no
matter how paltry, is expected. Under Rus-
sia’s new law, though, patent holders could
get nothing.
Although the law applies only to pat-
ents, which protect inventions, it indirect-
ly gives a free pass for other kinds of intel-
lectual-property (ip) infringement. This is
because the courts will offer little protec-
tion against opportunists, says Maria Os-
troshenko, an ip lawyer at alrud, a Mos-
cow law firm. She notes that some Russian
judges are now asking why the ip of inter-
national companies, including trademarks
and copyright, deserve protection. This
has never before been in question.
Western firms are already feeling the
shift. In early March Entertainment One
uk, the British arm of a Canadian compa-
ny, lost its case against a Russian rival us-
ing a fake Peppa Pig, one of its trademarked
cartoon characters. The case was dis-
missed, says Vladimir Biriulin from Goro-
dissky and Partners, Russia’s biggest ip
firm, because Britain falls into the “un-
friendly” camp. When Entertainment One
asked for compensation, an arbitration
court in Russia ruled that granting such a
demand was “an abuse of right” in light of
British sanctions. In May a higher court re-
jected the firm’s appeal.
Facing isolation from the West and
friendly courts at home, Russians are feel-
ing emboldened to grab foreign ip. More
than 50 applications to register Western
brands such as Coca-Cola and Christian
Dior were made in the last two weeks of
March alone. Patented software and de-
vices whose foreign producers have
stopped selling in Russia are likely to be
next. On May 6th Russia published a 25-
page list of goods that could be imported
without permission from the owner. It in-
cludes Apple phones, Nintendo game con-
soles and parts for Tesla cars, as well as
weapons and ammunition.
William Miles of Briffa, an ip-law firm
in London, reports that all this means his
clients have “zero interest” in introducing
new trademarks or inventions in Rus-
sia. This will chill innovation, predicts
Koen Berden of the European Federation of
Pharmaceutical Industries and Associa-
tions, whose members include Johnson &
Johnson, Novartis and Pfizer. The new law
is already hurting pharmaceutical research
and development, which was starting to
recover from years of underfunding and
neglect. Most foreign drugmakers are re-
fusing to launch new trials in Russia as
long as the war rages on, making it hard for
new medicines to get approved. That is un-
welcome news for a country that imports
nearly 70% of its drugs.
A shake-up at MetaLeaning out
“W
hen i tookthis job in 2008, I
hoped I would be in this role for
five years,” wrote Sheryl Sandberg on her
Facebook page on June 1st. With that the
chief operating officer of Meta, the social
network’s parent company, announced her
resignation. The year she joined Facebook
made $272m in revenue. Last year turnover
reached $118bn. Aside from Mark Zucker-
berg, Meta’s boss, no one has done more to
build the tech behemoth, which boasts
more than 2bn users around the world.
In 2008 Facebook was in its infancy. Mr
Zuckerberg, then 23 years-old, had no con-
crete plans to make it a viable business. Ms
Sandberg had been running Google’s ad-
vertising operation, after stints at McKin-
sey, a consultancy, and America’s Treasury.
A compulsive organiser, she was brought
on to provide adult supervision. She “han-
dles things I don’t want to”, Mr Zuckerberg
once said. That included commercial strat-
egy and staffing, as well as politics.
Ms Sandberg flourished in the role. She
masterminded the firm’s growth as an ad
platform. By 2010 Facebook was profitable.
Last year only Alphabet, Google’s parent,
earned more advertising revenue. One of
her books, “Lean In”, became synonymous
with female empowerment in the board-
room. All this helped cement her place as
Mr Zuckerberg’s second-in-command.
But over the past few years speculation
grew that the relationship was fraying. Mr
Zuckerberg apparently blamed Ms Sand-
berg for a scandal which involved the shar-
ing of Facebook users’ private data withthird parties by Cambridge Analytica, a po-
litical consultancy. Other reports suggest
that the Trump years added extra strain. As
a vocal Democrat she became less effective
at advocating for the firm in Trumpian
Washington. Meta denies there is a pro-
blem. Ms Sandberg says she is leaving to
pursue her philanthropic work.
The departure comes at a tumultuous
time for Meta. Fewer teenagers are signing
up to Facebook. Even Instagram, Meta’s
youth-friendly platform, is losing out to
TikTok, a hipper rival. New privacy rules
introduced by Apple allow users to opt out
of ad-tracking. That makes Facebook less
valuable to advertisers. Meanwhile law-
makers are increasingly concerned about
misinformation on social media.
Mr Zuckerberg wants the firm to go all-
in on the “metaverse”. Over the past year,
the firm has bulked up its virtual-reality
teams, ploughing $10bn into the effort. It
plans to release four new headsets by 2024.
As a digital-ads guru, Ms Sandberg may
have found herself adrift at a firm veering
towards hardware.
The exit of Mr Zuckerberg’s adult super-
visor seems to alarm investors; Meta’s
share price dipped by 3% on the news. And
it leaves his firm looking like a one-man
show. He is the only founder still calling
the shots at one of America’s tech giants.
Reports were already swirling that his
management style had become more iron-
fisted, taking big decisions with less coun-
sel. Without his long-term partner, he may
start to cut an even more solitary figure. SAN FRANCISCO
Sheryl Sandberg, Mark Zuckerberg’s second-in-command, quits Facebook