The Sickle, The Hammer, and the (Star)Bucks
The New York Times runs a fascinating article today about trademark and copyright squatters in Russia. The article use one Sergei A. Zukyov as Exhibit A in explaining how people like him first register trademarks of well-known global brands in Russia and then hide behind Russian law to sell the names back to the companies who pioneered and own them- for a hefy fee of course. One of the hundreds of brand names that Zukyov controls in Russia is Starbucks. His asking price is $600,000. Starbucks, it seems, is giving their answer in court. Others, we are told, pay up. Given the fees that copyright, trademark, and intellectual property owners command, the vagaries of foreign patent law, and lax enforcement all make such decisions easier to understand though no less unpalatable.
There may be one thing working in Starbuck's favor, something over which they do not have direct control but from which they may be able to benefit- Russia's desire to join the WTO:
Better enforcement of intellectual property rights is seen as a requirement for Russia's entry in the World Trade Organization later this year or early next year.Authorities are indeed trying to clamp down. Last winter police made a show of grinding millions of counterfeit cigarettes under bulldozer tracks into the black mud of a field outside Moscow.
But that has not prevented intellectual piracy from rising to the higher levels of American-Russian relations. Rob Portman, the United States trade representative, bluntly told a Russian delegation in Washington on Sept. 27 that widespread piracy was a barrier to Russian membership in the W.T.O.
By no means, however, is any of this a guarantee that the problem will go completely away:
Somehow, though, in the through-the-looking-glass world of Russian law, tougher enforcement has actually spawned a new breed of pirate.The improved enforcement over the last five years has also allowed brand squatters to use the courts to take aim at large Western companies that failed to register their trademarks quickly enough, according to Anna A. Baglay, a lawyer with Intels Agency, a Moscow firm specializing in intellectual property rights.
Mr. Zuykov repeatedly referred to the Russian civil code when asked what gave him the right to a venerable brand with roots in the faraway coffee culture of the Northwest United States. He took pains to emphasize the legality of his chosen profession. And he spoke bluntly about his intentions: to extract as much cash as possible from Starbucks.
Starbucks registered its trademark in Russia in 1997, but did not open any coffee shops here. In 2002 Mr. Zuykov filed to cancel the chain's trademark because it had not been used in commerce, and registered it in the name of a Moscow company he represents as a lawyer.
In essence, what this suggests is that in Russia, the local chain coffee shop can be one where everyone knows your name and where the owners got charged for theirs- a cost that they likely pass onto you.