Without Buyers, Trademark Racketeers Would Go Out of Business
 

Peter Necarsulmer, president of the Coalition for Intellectual Property Rights (CIPR), is confident in the necessity of fighting those who use trademarks without authorization.

Q: Entrepreneurs, whose main business is registering existing trademarks to their names, assert that their actions are lawful. Can it be true that the legal brand owners have nothing to oppose them with?

A: Technically, if a legal owner did not register his trademark or failed to prove that his trademark had been known in Russia before being registered by an unauthorized user, it turns out that the latter acted legally according to Russian law. Unfortunately, Russian legislation has gaps, and frequently neither the courts nor regulatory agencies are able to protect legal brand owners. Seizure of trademarks by third parties continues to pose a serious problem in Russia. It creates a problem not only for victims of hijackers but also for the entire economy, its investment climate and Russia's reputation. Investments by many international companies such as Coca-Cola, Starbucks, and Becton-Dickinson were hindered or stopped because of people using their trademarks without authorization.

Q: How can companies protect themselves from the hijackers?

A: The main thing that must be done by legal owners of trademarks is to simply say "no" to blackmail. Let’s take Coca-Cola for example. About 60 trademarks of this company were registered by a "patent racketeer" who demanded a large ransom for "his help in protecting Coca-Cola’s rights to the company’s trademarks." Coca-Cola, however, showed Rospatent the documents with evidence that the company’s trademarks were widely used in other countries, and regained its property.

Q: But just a few companies succeed in solving the problem like Coca-Cola…

A: Yes, indeed, in accordance with Russian legislation, the genuine trademark owner should first prove that the "racketeer’s" registration was in bad faith. It is very difficult, takes up much time and may prove costly for the company. Companies therefore often choose to contact blackmailers and buy back their own property from them so as to solve the problem as soon as possible. If there were no such buyers, however, the "racketeers" would soon leave the business.

Q: Do CIPR corporate members have to protect their trademarks from seizure in the West?

A: In developed countries the problem also exists, but on a much smaller scale than in Russia. Brand owners there rarely encounter blackmail from those who have seized their trademarks, which is common practice in Russia. The rights of legal owners are better protected there.

Q: It would be helpful for Russia to use Western experience. In your opinion, which standards do you think would be most called for?

A: For example, a requirement to openly publish applications for trademark registration could be introduced into Rospatent’s regulations. In Western companies there are people responsible for regularly monitoring published lists of registration applications and for tracking down possible violations of their company’s rights. Incidentally, several former Soviet states like Moldova and Latvia have a requirement to openly publish registration applications. Another effective standard is the possibility of protesting registration within a certain timeframe (generally from one to six months) after the trademark is registered. This would enable the real trademark owners to avoid losses arising from the sale of someone else’s property under their brands. Ukraine, for example, keeps to this standard, while Russia, unfortunately, does not.

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