In yesterday's post we wondered if shops destroyed by bombs in a Kyiv shopping mall may sue Russia for damages, but there may be more suing to do ahead for all sorts of brands and fashion houses.
There has indeed been an increase in trademark applications at the Federal Service for Intellectual Property in Russia (Rospatent) for the names and logos of various Western brands. The trademark filings are unauthorized but the applications are possible as, at the beginning of March, the Russian Ministry of Economic Development announced in a document (entitled "Priority Action Plan for Ensuring the Development of the Russian Economy in the Conditions of External Sanctions Pressure") that it was considering "lifting restrictions on the use of intellectual property contained in certain goods" that at the moment can't be imported after sanctions imposed by Western nations against Russia since the Russian invasion in Ukraine started a month ago. In this way, according to the document, Russia would "smooth out the impact on the market of supply chain breaks, as well as the shortage of goods and services that have arisen due to the new sanctions of Western countries".
When the invasion of Ukraine started at the end of February, several brands and fashion houses shut shops and boutiques in Russia or ceased product/website sales and shipments to the country. Some retailers (such as IKEA) ceased both exports and imports.
What does lifting restrictions on the use of intellectual property mean? That Russian entities would be free to register and use world-famous names. If you go on the Rospatent site you will easily stumble upon the most disparate applications (according to the information on the site, all the following ones were submitted on 17th March 2022) that go from Coca-Cola (application number: 2022716582) to Christian Dior (2022716533), Chanel (2022716514), Givenchy (2022716528), Sisley (2022716519), Guerlain (2022716512), Bobby Brown (2022716587), L'Oréal Paris (2022716593), Lancôme (2022716530), Helena Rubinstein (2022716525) Maybelline New York (2022716590), Biotherm (2022716534), La Prairie (2022716516), Dove (2022716588) and Nivea ( 2022716566), just to mention a few of them.
Most of these applications pertain to the same types of goods/services that these brands traditionally offer, so if you check the application for Coca-Cola, you will see that it is for a carbonated drink; L’Oréal Paris refers to cosmetics and other similar products, even though the applications for Christian Dior and Chanel only seem to mention cosmetics rather than garments.But, the most entrepreneurial ones are also filing applications for similar but not identical trademarks, so we have Uncle Vanya (a reference to Chekhov's eponymous play or a Russian pun on America's Uncle Sam?), an application submitted by Russkoye Pole Logistic LLC (a branch of Ruspole Brands that produces canned vegetables) for food services, represented by a logo reminiscent of McDonald's arch. The changes may actually allow the company applying to avoid eventual refusals by Rospatent (but this would be very unlikely).
On a scarier note, applications proliferate for products and services with the letter "Z", a military marking and a symbol of public support for Russia's invasion of Ukraine. One application for a brand of confectionery products has a "Z" on a digital camouflage pattern (the sort of logo you wouldn't really associate with confectionery products...). Could this be a way to create an autarchic line of products à la Mussolini? We'll see.
The document that mentions lifting restrictions on the use of intellectual property also proposes the possibility of software piracy ceasing to be illegal which would avoid Russia boycotts from various major software brands including Sony and Microsoft, so we may see applications for high-tech and software products as well.
The document also considers the possibility of importing products without the permission of the intellectual property owner. In this case the government would cancel "liability for the parallel import of products" and "exclude such actions from the list of types of infringement of exclusive rights to a trademark". In this way Russia would be able "to import goods sold in foreign jurisdictions… without the consent of the copyright holder".
The proposed implementation date for the document is 28 March 2022, so we will have to wait and see if Russia decides to suspend the trademarks of some Western companies or if Rospatent decides to block the applications (again, this is very unlikely if the Russian government itself issued the document hinting at legalisig infringement).
In other circumstances and if there hadn't been a war, the application scheme to register existing trademarks by powerful Western brands would almost be hilarious and sound like trademark squatting or like one of those complicated illegal schemes that they do in Italy to create legal fakes.
Yet this situation may have rather bizarre consequences in future. The most obvious consequence is that we could see copies of these famous brands flourishing in Russia and the market there may be flooded by legally (for the Russian market) illegal products (bear in mind that these products would not be allowed to be exported in Russia). The targeted brands would suffer damages in Russia and may not recover their presence on the Russian market once the war is over (all the brands that shut their businesses in Russia highlighted that this was a temporary measure, but it remains to be seen if Russia will readmit the Western brands that shut operations in its market at the end of the conflict). What can these brands do? Appealing to Russian courts may not work as they may simply ignore the brands' requests or court judges may be influenced by the current situation and the Kremlin and decide in favour of Russian applicants. Yet, not appealing to the applications submitted on Rospatent would be like telling them it is perfectly legal to use that brand.
At the same time, the entire situation may end up in front of a World Trade Organization ("WTO") court: there are international treaties globally covering these matters and countries must respect them in order to protect businesses against imitators, so damaged brands may take Russia to a WTO court or ask for further sanction. Yet expelling Russia from the WTO would be damaging as it would be like releasing the country from any obligations with the WTO, which would mean it would be able to register all sorts of trademarks.
This is not the first time intellectual property (trademarks, patents and copyrights) turn into a weapon in a war: the Trading with the Enemy Act (TWEA) of 1917, a United States federal law, gave the President of the United States the power to oversee or restrict any and all trade between the United States and its enemies in times of war. Section 10 of the Act permitted US firms to violate enemy-owned patents if they contributed to the war effort. One week before the Armistice in 1918, Congress amended the TWEA to confiscate all enemy-owned patents and, by February 1919, German-owned patents were systematically licensed to US firms.
Obviously at the moment we are still at the early stages of this process and everything depends by what may be decided at the end of the month. Besides, the end of the war in Ukraine may restore things and end the intellectual property battle. Until then though, these brands will have to consider the possible repercussions.
Will this be enough to make these brands more vocal about the war, given that after shutting their operations in Russia or stating they made donations, most companies/brands preferred to remain silent maybe to avoid losing Russian consumers and the favour of Russian oligarchs? Who knows. What we do know, though, is that, while these brands may not be engaged in a physical battle, there may be a legal war ahead for many of them.
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