There was one major problem with the air conditioners advertised on the Internet as produced by Japan’s Yamaha – the motorcycle and musical instrument manufacturer doesn’t make air conditioners.
This didn’t stop Saturn TV, a Kyiv-based company, from calling itself the official dealer of Yamaha Electric Co. in Ukraine.
In fact, they sold low-quality Chinese goods under the Yamaha logo and had even registered the Yamaha trademark, until they were shut down by a court decision after the Japanese company complained.
“It’s business. We thought if we can – then we can,” said Andriy Sviridov, Saturn TV’s commercial director.
Cheap copies and imitations of famous brands can be easily found in pharmacies, supermarkets, appliance shops and clothing stores across Ukraine.
Fake brands trick customers, who think that they are buying a well-known brand, but often receive a low-quality substitute – one that might even be dangerous for their health.
Owners of original brands suffer, as the knock-off brands take away their income and may spoil a hard-won reputation.
“Outrageous counterfeiting is pushing away people willing to invest money in the country.
They do not want to launch production here because it is impossible to protect yourself [from the copies],” said Anna Derevyanko, executive director of European Business Association.
Even the world’s largest companies with billion-dollar turnovers don’t succeed in defending their interests in Ukraine, a country notorious for its weak protection of intellectual property rights.
Italy’s Ferrero claims that its Raffaello brand chocolate (top) is being copied (bottom) by Russia’s Landrin confectionary group.
In January, Italian chocolate-maker Ferrero lost a two-year dispute with Russian confectionary factory Landrin, who sold candies similar in name and packaging to Ferrero’s Raffaello. Ukrainian courts refused to grant the white coconut praline legal protection.
Ferrero had won similar lawsuits against Landrin in Russia, Latvia and Georgia. The case in Ukraine caught a lot of attention. Closely watching the court session were the representatives of U.S. and Italy embassies, as well as the European Business Association and the European Commission.
Every year the situation appears to get worse. According to Ukraine’s Antimonopoly Committee, the number of appeals against copycat brands increased by 25 percent in the past two years. Alcohol, drugs, food and engine oil brands are the most attractive for brand-stealers.
In one example, a small Lutsk company called Viva was producing Twist, Milka, Success and Bumbo candies, boldly copying the package of Twix, Milka, Snickers and Bounty chocolate bars produced by confectionary giant Mars. Lutsk’s candies were selling well until the Antimonopoly Committee shut them down.
Inexperienced courts
“There are brand imitations in civilized countries as well, but you buy them only at flea markets. In Ukraine, the fake Gucci and Prada can be found in decent shops,” said Michael Doubinsky, managing partner at Doubinsky & Osharova patent law firm.
Doubinsky said he was surprised to find fake Mul-T-Lock locks in Nova Linia, a leading Ukrainian construction materials and home improvement chain. The Israeli producer of the original locks was worried. A fake Mul-T-Lock could break and ruin the company’s reputation.
“The situation was so outrageous that we [pursued] a criminal case,” Doubinsky said referring to the case. Although the production of fake locks ceased, the criminal case ended in three months with no result.
“So the brand-stealers went unpunished. And that’s too bad,because counterfeiting of trademarks is the fourth most profitable business after trading weapons, drugs and prostitution,” Doubinsky said.
According to Ukrainian law, a company violating intellectual property law is fined 5 percent of its annual revenue and the fake goods are destroyed. However, many companies don’t even dream of monetary compensation. They would just like to get the copycats to stop.
McDonald’s, for example, is confused with Ukraine’s McFoxy fast-food chain, but – after McDonald’s refused to challenge McFoxy in court after losing what it sees as a similar lawsuit years ago with instant coffee retailer MacCoffee.
Surprisingly, the main problem in defending intellectual property rights in Ukraine is not the nation’s notoriously corrupt courts. The main cause of “unjust” decisions are judgesandstate experts who are not experienced in intellectual property issues,according to Doubinsky.To work around such a problem some countries, including Russia, have established specialized patent courts.
Veterans ofcopying
Protecting intellectual property in the pharmaceutical industry can be toughest. Ukrainian drug producers tend to copy foreignbrands in every possible way: the packaging, thename and the chemical formula.
When giant pharmaceutical companies come to Ukraine with a new medicine, they have to disclose the formula. Within five years, Ukrainian producers have the right to produce cheap copies, so-called generic drugs.
But the manufacturing company is still obliged to prove that it is able to reproduce the drug’s active ingredient and will not cause damage to people’s health.
IrinaKirichenko, lawyer at Kyiv’s Ilyashev & Partners law firm, is now representing Russian Nizhfarm plant in their lawsuit against Ukraine’s Farmak pharmaceutical company.
The Russians came to the market with their original medicine Chondraksid against vascular inflammation. Shortly afterward, Farmak started producing a medicine with a similar formula and named it Chondrasil.
A spokesman from Farmak said that the company will not comment during the court case. “I walked through several pharmacies to check it out. Asking for Chondraksid I was offered Chondrasil, sometimes with the comment that the last one is cheaper,” Kirichenko said.
The lawyeris not veryoptimistic about theoutcomeof this fight, even though she won a similar case when Belgian H.Lundbeck AS company obliged two companies (Turkey’s Trifarma and Ukraine’s Farmak) to stop copying its antidepressant Cipralex.
“After winning law suits against these two companies, we had a clones attack from others producers,” Kirichenko recalled.
The Belgian producers simply stopped fighting in court.
They simply found the Ukrainian market too small and expensive to fight for. Unless Ukraine’s government steps in to improve protection of intellectual property rights, some foreign pharmaceutical companies could simply stop bringing their new and life-saving medicines to Ukraine, warns Kirichenko. Ukraine’s citizens could, in such a scenario, suffer by consuming cheap and dangerous fakes.
Healthyconformism
In some cases, the line is blurred between what is intellectual property theft, and what is fair game.
Roman Belkin, brand manager of FM group, which owns the CoffeeTime chain, said he simply ignores the similar network called CoffeeLife.
“Knowing our country as I do, I see no reasons to sue Coffee Life. Yes, we look alike. But many coffee shops’ logos are similar, and almost always they are round. Coffee is in every name. Generally, we are all copying each other,” he said.
FM Group, which owns the Coffee Time brand cafes, is not very shaken up by competitors with similar names, such as Coffee Life (above).
(Courtesy)
Another option is to turn potential competitors into friends. That’s what Andriy Slabinsky, producer of Jazz Koktebel Festival, did.
His rivals launched a festival named Live in Blue Bay, the same Crimean town his Jazz Koktebel festival is held. It ran the same headlinersand was held just a week before Slabinsky’s event, which had been there for years.
The producer was furious. He first tried to argue, and then sent a claim. His opponents were not ready to make any concessions. And then, all of a sudden, a miracle happened: The owners of an alternative festival came with a peace treaty.
“Now we have a friendly relationship. They try to help us and would even bring chairs,” Slabinsky said.
But while pleasant to hear about, such amicable resolutions over intellectual property rights are a rarity in Ukraine, experts say.
Kyiv Post staff writer Kateryna Panova can be reached at [email protected].
