And so approaches the time to make some of the most important and impactful decisions of the year: what will be this Christmas’ tipple of choice. Perhaps Martini Asti as an aperitif and Johnny Walker Black Label or Jack Daniels sipped by the fireplace after a wholesome Christmas dinner? No, this year I have decided to savour some of Ukraine’s finest beverages; and no, I do not mean vodka or khrenovukha. This year smoked salmon canapés will be accompanied by the gently petillant Marengo and Tairovo Asti, remarkably not produced in the Asti region of Italy. And after dinner we will be treating guests to the dazzling “taste of whiskey” carefully crafted by the master distillers of Black Jack no. 21. What is particularly special about this “taste of whiskey” is that it contains no actual whiskey – masterful! And if that doesn’t get everyone’s palate to euphoric climax then I certainly know what will: the breathtaking Jack Tolker Black Level. All available at your local supermarket.
While piggy backing off other companies’ brands (and I am not just talking about drinks brands) seems clever and profitable to some it is in fact as damaging as piggy backing off, or to use a less euphemistic term, stealing someone’s physical stuff: a factory for instance. Instinctively it seems more innocent to abuse someone’s rights to an imagined word or graphic than to misappropriate someone’s actual stuff. However, brands are, like factories, the product of investment and risk taking. If investors feel that others will devalue any brand they build, they won’t bother building them, resulting in an environment where commoditization reigns and markets slide down the value chain. If you aren’t convinced that losing brands is harmful, I should also point out that brand builders tend to need physical capital to produce their brands: by scaring off brand builders one is also scaring off fixed capital investors.
The Global Intellectual Property Center of the U.S. chamber of Commerce notes of Ukraine both a “rudimentary framework for trademarks and design protection that does not provide guarantees against unfair use” and “among the highest rates of counterfeiting and piracy worldwide; currently relatively little effort to combat”. Sadly Ukrainian legislation fails to adequately protect intellectual property rights. Having worked for a number of years in the beverages industry I learnt that to protect brands in Ukraine one has to tackle producers head on through private investigations and law enforcement. By regularly disrupting the production by others of one’s own brands it becomes economically unviable to counterfeit them. Due to the rudimentary framework for trademarks in Ukraine, one must replace defence through economic courts with costly and labour-intensive mechanisms of deterrence.
Between 2006 and 2015 Ukrainian courts have considered more than 18 thousand cases of disputes on the protection of intellectual property rights. However, judging by the overt violations of intellectual property that can be found in almost every supermarket, the work of the courts has been, to put it mildly, ineffective.
However, attempts are underway to improve Ukraine’s protection of intellectual property. On December 1, 2017 the Intellectual Property High Court of Ukraine will emerge onto the judicial scene. Its likely impact is still unclear given it will have to operate, to begin with at least, in the same constrained legislative framework as before. In addition, the Ministry of Economic Development and Trade of Ukraine together with the Institute of Intellectual Property of the National Academy of Legal Sciences of Ukraine have developed a draft law “On the National System of Protection of Intellectual Property in Ukraine”. The draft offers some improvements, but it is only a start. We hope that these initiatives are the beginning of meaningful change that will encourage the world’s great brand builders to choose “Brand Ukraine”.
