Food Giant Picks Fight With Pirates

By Alla Startseva, Staff Writer

Darya, one of the nation's largest producers of frozen foods, declared war Tuesday on brand pirates, calling on other producers to do the same.

"It's time to sharpen the focus on the unscrupulous use of brand names, which are intellectual property," said Oleg Tinkov, owner of the St. Petersburg-based Darya. He said his company is negotiating with Baltimor foods, which produces ketchup under the similar brand Krasna Darya.

Tinkov, who has the rights to the Darya brand for ketchup and dozens of other products, said he would sue Baltimor for damages if talks are fruitless. "We are talking about millions of dollars," he said.

According to Russian law, the harshest punishment available is a $256,000 fine, said Sergei Kotov, an Anti-Monopoly Ministry official in charge of intellectual property violations.

Eugene Ariyevich, a partner at Baker & McKenzie and counsel to the Coalition for Intellectual Property Rights, said: "Unfortunately, the existing punishment is not a deterrent. The penalties are too small and are usually built into expenditures."

Ariyevich said Darya has no choice but to sue because the Anti-Monopoly Ministry is limited in what it can do to stop pirating.

This isn't the first time Darya has dealt with brand-name infringement — several regional producers currently sell pelmeni under the Darya brand or in a box with a picture of a woman in traditional Russian dress, Darya's symbol.

"It takes one to two years to finally resolve the problem with violation of intellectual rights," Ariyevich said. Indeed, it took Darya two years of legal wrangling to stop Russky Produkt from selling cocoa powder under its brand.

"There is so much bureaucracy involved — while the company is losing money, reputation and consumers' loyalty to our brand," said Tinkov.

Svetlana Gorlenko, lawyer for state patent agency Rospatent, said her agency, together with the Association of Trademark Attorneys, has drafted a raft of bills to stiffen penalties and bring trademark law in line with the World Trade Organization. She said the State Duma would debate them in the fall.