22 March 2022TrademarksAlex Baldwin

Should brands worry about copycat Russian marks?

Western brands can no longer rely on Russia’s legal system to protect their IP, finds Alex Baldwin

Since Russia began its military invasion of Ukraine on February 24, western countries and businesses have ceased dealings with Russia in opposition to the military campaign.

Many international companies have now exited Russia or ceased trading with local companies, effectively disconnecting Russian businesses from the international market. Brands including McDonald's, Starbucks, Ikea and Coca-Cola were among the biggest names to shutter their business in the country.

In an attempt to fire back, the Russian government said it would scrap the IP protections of businesses from “ unfriendly” countries.

This has opened the door to opportunists, resulting in copycat trademarks being filed with the Russian IP office, Rospatent.

Over the past couple of weeks, applicants filed for ownership for Cyrillic marks for “McDonalds” and Latin versions of “Starbucks”, as well as a rotated McDonald’s logo with the name “Uncle Vanya”.

Other examples of Russian trademark squatting could be seen in filings made for the Cyrillic text for “Idea”, styled in the “IKEA” logo branding, “Rustogram”, and “Rossgram”, all of which were unearthed by Josh Gerben of Gerben Law Firm and Ukrainian attorney Maksym Popov of Mentors Law Firm.

The question remains whether international brands need to worry that their brands will be similarly infringed in Russia, while the sanctions as a result of Russia’s invasion of Ukraine continue to mount.

Currently, these marks have only been filed, not granted. So Julia Semeniy, partner at Asters Law recommends keeping an eye on these filings and how they are handled by the examiners.

She said: “Of course, we are yet to see how the examination reacts, and this would be another indicator of whether the authorities would ignore the law completely.

“Although we already saw how Russia may neglect IP rights, as they did in regard to patent holders from so-called ‘unfriendly states’, including the UK and the US, by setting zero royalties for the use of the relevant patents.”

While these applications have yet to be examined, the decree Semeniy refers to gives us an idea of how the Russian legal system will treat IP from Western countries going forward.

Legal precedent

Last month, a decision in Russia also offered a warning to western brands. A Russian court allowed the free use of Hasbro’s “Peppa Pig” trademarks without legal retaliation in the country, claiming an “entrepreneur’s” use of the marks was justified in light of economic sanctions.

Brands from the US, UK and other allied countries will have a hard time enforcing their IP in the country while the war continues.

Yuliya Prokhoda, CEO, attorney, INTELS said: “[Brand owners] can't count on litigation. There is no more law in Russia.”

Russia’s "unfriendly countries" designation means “no protection, no enforcement, and no justice,” warned Prokhoda.

Sztoldman added: “The broader implication of this decision is that trademark owners in countries that voted in favour of sanctions cannot rely on the Russian apparatus to enforce their rights.

“The trademarks were granted protection in Russia based on the international registration designation or national protection and were genuinely used on the Russian territory. This means that neither Madrid rights nor national marks owned by Western countries appear to be enforceable.”

Sztoldman also wondered what may happen to national registrations held by Russian subsidiaries of ‘Western entities’.

Transfer of ownership

As the invasion of Ukraine continues, barriers preventing western companies from enforcing their IP will remain, and more retaliation could be seen from the Russian government as it scrambles to counteract the sanctions.

Sztoldman said: “Even if mark owners (often temporarily) withdraw from the Russian market, I believe Russia’s systematic disregard for Western enterprises’ IP rights would be a major

burden for them. To name a few concerns, there is trademark dilution, tarnishment, and the possibility of a flood of fakes.

“I anticipate that the local business will be transferred into new ownership in a number of instances. This appears to pave the way for split ownership of brand IP and disputes within the Russian market even after politics has returned to normalcy.”

We have already seen foreign IP offices such as the US Patent and Trademark Office and the EU Intellectual Property Office sever ties with Russia, and if the country continues to waive foreign IP rights, these institutions could ramp up further sanctions.

Prokhoda added: “In my view, a response from the world shall be symmetric: if Russia does not respect IP rights anymore, it cannot use the benefits of international treaties, such as Berne Convention, Madrid Agreement, PCT, Hague Agreement and the like.

“Russia shall be excluded from membership in the World Intellectual Property Office and blocked from participation in any events in the sphere of IP.  This is reciprocity in action.”

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More on this story

2 March 2022   The European Patent Office has confirmed that it will cease its cooperation with Russia and Belarusian patent offices after President Vladmir Putin’s forces launched a violent assault on Ukraine last week.
14 March 2022   A Russian court has allowed the free use of Hasbro’s “Peppa Pig” trademarks without legal retaliation in Russia, claiming an “entrepreneur’s” use of the marks was justified in light of the mounting economic sanctions affecting Russia.