Marky-show: starring

Irina Rosenberg

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Rospatent wants to socialize old Soviet brands

Over the past few months, manufacturers have been discussing Rospatent's intentions to take over state ownership of brands (a brand is a trademark with a strong name and reputation) that existed back in Soviet times. Rospatent (which controls intellectual property rights) intends to introduce the concept of “conformity mark” into the trademark law. According to the authors of the reform, marks of conformity will be used to designate brands that, before 1992 (the year of transition to a market economy traditionally begins with this year), were issued simultaneously by several enterprises. We are talking about brands such as “Mishka Clubfoot” candies, “Alenka” chocolate, “Stolichnaya” vodka, “Belomor” cigarettes - the new law will mainly affect food and cigarettes - in a word, names that are familiar to many from childhood. It is assumed that the government agency will issue paid licenses for the right to produce goods under the old brands to all willing manufacturers.

Questions of history
A trademark or mark is considered to be a name registered by a company in the manner prescribed by law (those that are not registered, but have come into general use, are considered a type, type, grade of product, for example, doctor’s sausage). In fact, Rospatent proposes to invalidate the registration of trademarks.

In Soviet times, there were sectoral ministries and research institutes that developed the recipe, technology, and standards of a particular product. They, as a rule, gave the name to the product. Recipes were included in industry directories, to which industry enterprises throughout the USSR had access. There were exceptions when the product was developed not by an industry research institute, but by specialists from a specific enterprise, which became the legal owner of the brand. But even if the product was registered under the name of a given enterprise, others could also gain “access” to its technology and name. This was done according to the instructions of the higher ministry, and it was not customary to argue with the ministries. Although enterprises that owned a trademark subsequently found themselves in a more advantageous position by defending their ownership rights. For example, as representatives of British American Tabacco (the current owners of the Java factory) reported, the Java brand was one of the few in Soviet times officially registered with the Moscow factory of the same name, so now no one else has the right to officially produce cigarettes under this name.

When Rospatent announced its plans to take ownership of old brands, the heads of some enterprises started talking about nationalization. “Only what has been privatized can be nationalized, and the name of the product was not included in the privatization documents; the registration of old trademarks was carried out after privatization,” comments lawyer Evgeniy Arievich, specializing in trademarks. “It’s another matter that in Soviet times there was registration of a product for a specific enterprise, and even if this product was produced by some other factories, it is still considered the property of the enterprise and cannot be taken away."

Others began to speculate about the degree of legality of Rospatent's plan. “If instead of one law we issue another, then everything will be done on a legal basis,” explains Evgeniy Arievich with a smile. But the point is not even about issues of legality and illegality or nationalization and denationalization. I would like to understand the purpose of this event.

Fight for the name
The head of Rospatent, Alexander Korchagin, in his interview with one of the Russian newspapers, explains his intention by saying that since the brand was “promoted” by the Soviet state, why should it now go to only one enterprise? And if it really wants to own it, it must pay money to the state. The fact that the Soviet state has long been gone is not taken into account. The second, at first glance, reasonable argument is that the “nationalization” of old brands is the only way, in the opinion of Rospatent, to stop conflicts between enterprises over “Soviet” brands.

After privatization, the managers of many enterprises very quickly realized that profit could be made from the name of a product. Because, as a representative of one of the confectionery factories put it, “half of the candies that we make taste the same and are similar in recipe, the main thing is the name, it’s either well-known or not.” Almost all manufacturers, having set out on a free voyage, chose not to develop new brands, but, using the nostalgic feelings of the consumer, to promote old ones. The most active began to submit applications to Rospatent for registration of trademarks in their property. According to the law, the right to own a “nobody’s” trademark is given to the person who first filed the application. Thus, manufacturers have the opportunity to prohibit their competitors from producing products under the most popular brands.

There were many conflicts. In the first half of the 90s, Moscow confectionery factories fiercely argued among themselves over who should own certain brands of sweets and chocolate. However, the confectioners found Solomon's solution. According to the general director of the Babaevsky concern, Mr. Nosenko, the confectionery factories that are members of the Russian Confectioners Association agreed that they would cede to each other the right to produce old brands (today, different candy and chocolate brands are registered with different factories). Only each factory now has its own branded labels; only the names remain old.

There are, however, examples where the conflict has been going on for many years. For example, it is more difficult for brewers to come to an agreement: unlike confectioners, whose arsenal includes a fair number of old brands loved by customers, they have nothing to transfer to each other. Of the old brands, almost only “Zhigulevskoe” is left, because most enterprises are developing completely new proprietary brands.

"Zhigulevskoe" was registered in 1992 as a trademark by the Samara brewing enterprise JSC "Zhigulevskoe Beer". Having demanded that other breweries stop producing beer under this brand or enter into appropriate agreements with the company to use the brand, the Samara plant initiated a number of arbitration courts and won most of them. Let's say, in the winter of this year, the Moscow Arbitration Court satisfied another claim on this topic against the Ostankino and Badaevsky plants.

Moscow enterprises filed counterclaims, and in early August the Rospatent Appeals Chamber satisfied them, excluding the word “Zhigulevskoye” from the protection of the Samara enterprise’s trademark and thereby creating a precedent for transforming the trademark into a specific concept, in fact, into the same mark of conformity. But is this price of appeasement justified? Manufacturers, unfortunately, do not understand that endless lawsuits do not benefit the commercial appeal of the brand, and ultimately it simply dies.

Most experts also think that Rospatent’s decision to nationalize all old marks without exception is ill-conceived. “Let the state take back those names that have not yet been registered with anyone. Why destroy something that has its rightful owner, something that is successfully produced?” - Vasily Terevtsov, head of the Rostabakprom association (unites all Russian cigarette manufacturers), is perplexed. “It would be much more reasonable and fair to develop a mechanism for recognizing old brands as collective trademarks. For example, within the framework of industry associations, manufacturers who produced goods under the same brand before 1992 would register it for common use. This way, we can take into account the interests of everyone: the brand, developed collectively, remain in use by the same groups, their circle does not expand,” suggests Evgeniy Arievich. The tobacco industry has already taken this path: Prima can be produced free of charge by all enterprises included in Rostabakprom.

There would be something to fight for
The innovation will allow virtually anyone to buy the right to produce an old Soviet brand, even if they have never produced it and have no idea about the technology. Nevertheless, Alexander Korchagin believes that the quality of products should improve if the old brands are managed by the state, which intends to control their production - the standards and subtleties of the recipe. A simple example. If you add grated peanuts instead of grated almonds to the “Bear-Toed Bear” candy, it will become “Little Red Riding Hood”, and if you do not add nuts at all, you will get a completely different candy. And if you wrap it in a wrapper that depicts bears familiar to everyone from childhood in a pine forest, it will actually turn out to be a fake, even if it is quite tasty and of high quality in itself.

Indeed, in recent years many old brands have been discredited. But it’s not even a matter of small, semi-clandestine firms cheating at every possible price. Legitimate manufacturers also often use cheaper raw materials, their substitutes, or even skimp on components. Today, the quality of goods remains solely on the conscience of manufacturers. So far Rospatent has not given an answer on how it will control quality. Theoretically, considerable funds are needed to create a system of conditions and obligations “under which” the state will allow the use of old brands (for example, an enterprise, under the threat of deprivation of a license, undertakes not to deviate one step from the adopted technology and GOSTs), and the bodies necessary for verification. But we could never boast of success in testing anything. It is worth recalling that even under the Soviet control system, products under the same names differed depending on the manufacturer: the “Mishka” of some Podolsk plant was not the same as the Moscow one. We must not forget about the raw material problem: under a centralized distribution system, only some manufacturers received access to first-class raw materials, but now not everyone has the means to buy high-quality raw materials.

Let's look at the problem from the other side. A trademark is an exclusive thing. Today, even in cases where several enterprises produce old brands, their range is still limited. If anyone gets the right to produce a brand, the brand will very soon lose its reputation. This means that the manufacturer will think a hundred times before buying the right to a brand, and the state may be left with nothing. For example, as a representative of one of the tobacco factories noted, if Rospatent suddenly gets its way, it will be much easier for them to abandon the production of Prima altogether than to pay for this “dying brand.”

Already today, some manufacturers have begun to understand that it is impossible to speculate on buyers’ nostalgia indefinitely. It is necessary to develop new brands, especially since a new name and packaging does not necessarily imply the creation of a completely new product. After all, in new packaging you can wrap a product with the same taste, color and smell that consumers are accustomed to. Which, by the way, referring to the traditional nature of tastes, is what both domestic and Western companies operating in our market do.

Old names have a rather limited circle of buyers, mainly older people. In short, many Soviet brands are living out their last years (with the possible exception of some vodka brands). Let them live in peace. No need to touch them.