Brands that have left Russia register trademarks. What does this mean?

A number of foreign companies that have withdrawn from the Russian market have registered new trademarks. The relevant data can be found in the Rospatent database. Why the companies took this step and how likely their return to the Russian market is, see the Izvestia article.

Reasons for registration

• The fact that companies that left Russia register trademarks became known through the study of the Rospatent database. The brands themselves have not publicly stated this. In response to media requests to comment on the situation, some companies, in particular Hyundai, reported that registration of signs is a common practice. No one has announced plans to return to the Russian market yet.

• At the moment, Rospatent has registered Louis Vuitton, Kia, Hyundai and IKEA trademarks. Applications for trademark registration continue to be submitted by Coca-Cola, Starbucks, Chanel, Mercedes, Microsoft, Nissan, Disney, Universal, Procter & Gamble, Pepsi, Moët Hennessy, Rolex and other foreign companies.

• At the same time, there is a risk of early termination of the trademarks of some companies. In particular, this applies to Inditex holding (Zara, Stradivarius, Bershka, Oysho, Pull & Bear, Massimo Dutti and others). There have also been no reports of the re-registration of trademarks of the departed H&M, Kering (brands Gucci, Balenciaga, Yves Saint Laurent), Uniqlo, Vans, Levi Strauss & Co and other brands.

Fake weight: Counterfeit clothes and shoes have become more common in Russia.

Last year, the number of left-hand goods shipped across the border increased by almost 20%

• Registration of new trademarks by foreign companies that have left the Russian market is a strategic maneuver. First of all, it is a way to maintain control over your brand: even if the company has physically left, its name, logo and recognizable elements remain protected, preventing third parties (whether competitors, former partners or enterprising businessmen) from using them to their advantage. According to Russian law, if the copyright holder has not used the trademark for three years, it can be revoked.

• Also, such registration may give a signal to both consumers and authorities that companies have not completely left the market. Brands reserve the opportunity to return when the political and economic situation changes. And in order not to start from scratch in the future, they consolidate their legal presence.

• In addition, in the era of parallel imports and the gray market, trademark registration is one of the few levers of influence on the situation. It allows you to initiate legal proceedings against unscrupulous suppliers or violators, as well as represent your interests.

The possibility of returning to Russia

• The likelihood of the return of foreign companies that have left Russia depends on economic and political aspects, as well as corporate strategy. Business is pragmatic: if the market remains profitable and demand for products is high, companies will look for ways to return. Russia is a huge consumer market with steady demand in a number of industries. Withdrawal from this market led to billions of losses for enterprises. For example, according to the Russian Direct Investment Fund, American companies have lost more than $300 billion.

PCs won't load: fake Russian brand electronics have appeared on the market

What kind of equipment is falsified most often and what is the risk of buying such gadgets?

• However, brands have to consider reputational risks. In the context of the global agenda, returning to Russia may cause criticism at home, especially from the media, investors and consumers who are sensitive to politics and ethics. But the information agenda is changing, partly due to the desire of the new US President, Donald Trump, to build a dialogue with Russia.

• It is also worth considering that many companies have not completely left the country. They transferred the business into the hands of third parties, retained the trademarks, and also continued their indirect presence through parallel imports. The likelihood of a return will depend on the speed of normalization of relations, economic benefits and the ability of companies to be flexible.

The reaction of the Russian market

• The massive return of foreign brands will certainly have an impact on the Russian market. During their absence, domestic companies have had a unique opportunity to occupy vacant niches, strengthen their positions, develop local brands and get used to the fact that there is no longer competition with global giants. However, the return of the former "heavyweights" will increase competition in the price plane, as well as in other indicators — quality, service and marketing. If foreign companies return, it will be taking into account previous experience and new realities. It will be difficult for those who have not managed to build a stable business model, scale up or build a loyal audience during the absence of foreign enterprises.

• The possible return of foreign brands may affect the investment expectations of domestic enterprises. While the foreigners were away, many Russian companies were counting on long-term growth prospects. But if brands return, especially with the right to buy out or through partner schemes, local players will have to rethink their strategies, and in some cases, retreat.

Third run: Korean cars return to Russia

SsangYong models under a new brand will be assembled in Kaliningrad

• However, it can be a catalyst for development in some areas. Those who survive and adapt will reach a new level. Some Russian companies may have a chance to become partners, distributors, or even co-owners of returning brands. The market will become more vibrant and dynamic.

• At the same time, the Russian authorities have repeatedly stated that they will continue to support domestic producers. In particular, President Vladimir Putin instructed to develop the most transparent rules for returning to the Russian market, while consolidating the advantages for local brands.

When writing the material, Izvestia talked and took into account the opinions of:

• economist Dmitry Golubovsky;
• Vyacheslav Igumnov, an intellectual property lawyer at Kosenkov and Suvorov;
• Honored Lawyer of Russia, Doctor of Law and Professor Ivan Solovyov;
• auto expert Igor Morzharetto;
• Vice-President of the National Automobile Union Jan Heitser;
• Vasily Koltashov, Head of the Center for Political and Economic Studies.