Big-name American brands became internationally known mainly due to the name recognition of their trademarked logos. Russian businesses are mimicking those logos of iconic brands like McDonald’s, Starbucks, and others who have stopped doing business with the Russian federation – and there is nothing they can do about it!
Since Vladimir Putin’s unprovoked invasion of Ukraine, McDonald’s, Starbucks, and Coca-Cola are just a few of the hundreds of US-based corporations that have ceased operations in Russia. However, Putin has just issued a decree that for all intents and purposes legalizes intellectual property (IP) theft, leaving brands like McDonald’s and Starbucks with no legal recourse if copycat businesses use the brands as their own – as already happening within the Russian Federation.
Over the past two weeks, Russian officials have stripped away IP rights from US companies doing business in Russia, along with foreign companies from 23 other “unfriendly” territories.
As a result, companies like McDonald’s and Starbucks that have left Russia to protest its invasion of Ukraine can do little when Russian businesses steal their trademarks. In fact, trademark attorney Josh Gerben said that trademark applications were filed in Russia this week that bore a striking resemblance to trademarked logos and fonts belonging to Ikea, Instagram, McDonald’s, and Starbucks. These companies can’t immediately fight back because challenges for unauthorized use are largely limited to Russian courts, Gerben told Yahoo Finance.
Gerben expects Russian lawyers to avoid any appearance of sympathy to Western interests.
“The fact is that the courts are going to be stacked against you,” Gerben said. “And the fact is you might not have a willing counsel over there to help you because they fear for their own safety.”
Russia’s decision to upend its IP rules — in direct response to sanctions from the West — puts company executives in a tough position.
On the one hand, companies might protect corporate assets by staying put, at least temporarily. But if a company yields to that kind of pressure to stay in Russia to avoid having its IP ripped off and misused, it could face significant political and consumer backlash at home. For its part, McDonald’s still has some presence in Russia, as certain franchised stores remain open.
Just whose and how much IP is in jeopardy is unclear.
This week’s trademark applications add to separate violations condoned in Russian court earlier in March. In one case, a Russian judge denied compensation to a Hasbro subsidiary, even though an entrepreneur used its “Peppa Pig” and “Daddy Pig” trademarks. The judge acknowledged denying the relief because of Western sanctions, Law360 reported.
In theory, the World Trade Organization can settle IP disputes between the US and Russia under the Agreement on Trade-Related Aspects of Intellectual Property Rights, according to Justin Hughes, an intellectual property law professor with Loyola Law School. However, even though the US and Russia both signed onto the treaty, that path isn’t likely because the US has suspended normal trade relations with Russia.
“In the past, it would have been possible,” Hughes said. But, he added, “The US has already said the normal rules for our international commercial interaction are over.”
While the recent applications for McDonald’s and Starbucks’ trademarks may be more brazen assaults on US IP than in Russia’s past, Hughes said the assaults are nothing new.
“The Russian Federation has been a notorious zone of counterfeiting and piracy for years and years,” he said. “It’s not like they’re suddenly turning their back on IP. They’ve never been good at enforcing it.”
He points out that Russia was put on the Office of the United States Trade Representative’s (USTR) priority watch list for knockoff products in 2021, 2020, and 2019. More recently, on March 11, the US Trade & Patent Office announced it terminated its engagement with Russia’s intellectual property agency, the Federal Service for Intellectual Property, also known as Rospatent.
To date, there has been no response by Facebook, McDonald’s, or Starbucks to the knockoff trademark applications filed in Russia mimicking their iconic brands. An Ikea spokesperson said, “We don’t want to speculate. It is too soon to talk about any potential consequences of this.”
Trivia: A Quarter Pounder With Cheese in Russia is called a Grand Cheeseburger