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16 December 2015Trademarks

Pernod Ricard profile: A spirited defence strategy

“Créateurs de convivialité”, a registered trademark, is Pernod Ricard’s group motto. The literal meaning is “creators of conviviality”, or creators of friendliness.

However, intellectual property isn’t always a friendly environment. Counterfeiting of major brands is an increasingly familiar story, and companies have to stop fakes getting into the hands of unwitting customers.

One person who is familiar with counterfeits is Mathieu Prot, group intellectual property director at Pernod Ricard, the French company that owns many well-known alcoholic beverage brands. His role is divided into four parts: prosecution, enforcement, contractual valuation, and the digital world.

The portfolio of the company’s premium and local brands includes Absolut vodka, Beefeater gin, and Jacob’s Creek wine.

The company’s IP prosecution and litigation responsibilities are divided between a ‘global’ and a ‘local’ level.

“We are responsible for managing IP prosecution at our headquarters,” Prot says.

“When it comes to litigation we think that the first port of call should be our brand companies because they are better placed to assess the problem from a commercial point of view.

“When it comes to IP validation and all those elements of IP which we have to look after, such as our relationships with external suppliers and marketing agencies, we feel it’s better done at a local level, closer to the business, and there’s some sort of global coordination overseen by the group.

“This is to make sure we also leverage the size of the group,” he says.

The business, he says, is a “dual model: decentralised when it needs to be, decentralised because the decisions actuate closer to the business, and centralised when efficiency is the name of the game”.

Beating the opportunists

The company faces many IP challenges and counterfeits are the most common type of infringement, Prot says.

“Counterfeiters act as opportunists on the market, so they will tend to copy the most popular brands, the ones that are the most asked for by the local consumer,” he adds.

What counterfeiters typically do, he says, is “collect empty bottles which have been consumed and apply fake stickers, and then put into the bottles a liquid which has absolutely nothing to do with an authentic product”.

“We are offering products which are destined for human consumption, so counterfeits not only bring the question of quality, but also the issue of health risk for consumers; this is a real concern,” he adds.

The company employs a number of measures for monitoring counterfeits, including working with industry professionals and its own dedicated teams.

“The consumer can now scan the bottle; this system will help the consumer assess the authenticity of the bottle, and it’s also a tracking tool.”

“First we rely on our own commercial teams on the ground to detect, identify and report every counterfeit they come across.

“We also have an internal service, which we call Brand Security, so we have an entire team which is dedicated to helping the market to identify and investigate the counterfeits.

“We are also teaming up with other players in the industry through an industry body called the International Federation of Spirits Producers (IFSP); the IFSP’s primary objective is to enforce against piracy and counterfeits.”

Other IFSP brands include Diageo, Moët Hennessy, and Rémy Cointreau.

Chinese puzzle

Pernod Ricard operates offices all over the world, and China seems to be the company’s most troublesome location for the volume of counterfeiting.

“We have issues in Russia and also some difficulties in Malaysia,” Prot says, “but we have made a lot of efforts to improve the situation in China.”

“We are combining a number of joint efforts, not only from a legal standpoint, but also from a lobbying in industry perspective.”

To help fight counterfeiting, the company has launched a “connected device” that is present in every bottle sold in China, and it is an “additional weapon in our artillery”, according to Prot.

“The consumer can now scan the bottle; this system will help the consumer assess the authenticity of the bottle, and it’s also a tracking tool,” Prot adds.

This change in thinking has been “quite positive” for the consumer, because this “connective bottle device is an efficient way to fight counterfeits”, he says.

“It is also an efficient tool because we can rely on our consumers to be the ambassadors and to defend their favourite brand,” Prot explains.

“We are now getting some help from our consumers in detecting counterfeits on the ground. I think this is quite a drastic change to the approach.”

With Pernod Ricard products, counterfeiters usually work in a small-scale organisation.

“It’s not a very complex operation to set up: you collect empty bottles and you re-seal them with some at best generic or dangerous products.

“The internet hasn’t dramatically changed that, especially because it’s quite a simple activity to perform,” Prot says.

Discussing what form of relief Pernod Ricard tries to obtain from counterfeiters, he says that “whenever possible, we would try to get a criminal punishment, which has the most deterrent effect; this is specifically our legal strategy in China”.

On October 19, brand protection company NetNames released a report called “Counting the cost of counterfeiting”, which examined the effect of counterfeiting worldwide.

The report claimed that China-based entities are flooding the EU and US markets with “fake or grey market goods”. It went on to claim that 70% of the counterfeit goods seized worldwide come from China.

Like many other brands, Pernod Ricard faces a constant battle to protect its IP. But if it continues to abide by its motto, “créateurs de convivialité”, its friendliness may pay off as its consumers help with the fight.

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