Despite many Western companies announcing their complete withdrawal from Russia following its 2022 invasion of Ukraine, some are holding on to their trademarks in the country, citing strategic planning and intellectual property concerns.
Despite many Western companies announcing their complete withdrawal from Russia following its 2022 invasion of Ukraine, some are holding on to their trademarks in the country.
According to a study by Ukraine’s Kyiv School of Economics, more than 460 international companies have ceased operations in Russia since the start of its full-scale invasion. However, 25 of these companies are keeping their trademarks registered in Russia, including well-known brands such as Ikea, McDonald’s, and Mercedes-Benz.
A trademark is a distinctive sign, phrase, or symbol that identifies a product or service and distinguishes it from others.
To secure trademark rights, an applicant must submit their mark for registration with the relevant authorities.
The process typically involves conducting a thorough search to ensure the mark is not already in use by another party.
Once registered, trademark owners have exclusive rights to use their mark, preventing others from using similar marks that may cause confusion among consumers.
Maintaining the trademark means that a company’s names, logos, and designs remain its intellectual property and cannot be used or imitated by others. Companies that have not applied for their trademarks to be used in Russia after February 2022 include German consumer goods and adhesives manufacturer Henkel and Finnish energy supplier Fortum.
The decision to keep trademark rights in Russia is primarily a formal procedure, as Russian economist and journalist Jan Melkumov explains. ‘Companies want to avoid someone else using their brand names, ‘ he says. ‘They don’t want to spend money on lawyers and go through a new registration process.’
However, the risks associated with doing business in Russia are high, and only a few big companies would be likely to return to the country. According to Melkumov, a return to the Russian market depends less on the willingness of companies and more on the political situation and regime in Russia.
Currently, Chinese, Indian, and Middle Eastern companies are actively replacing Western competitors in the Russian market. A study by Nikoliers, a consulting firm, found that 27 clothing and shoe brands from these countries have already replaced 32 Western companies that have left the Russian market.
Companies That Have Abandoned Their Brands
The other companies listed by the Kyiv School of Economics have either not submitted or have withdrawn trademark applications. Examples include German detergent and adhesive maker Henkel, which halted the procedure to extend its trademark rights in 2022.
In practice, there may be exceptions. Under Russian law, a competitor can legally challenge the right to use an ‘ownerless’ trademark if it has not been used for three years. For instance, in March of this year, Russian air conditioning manufacturer Rusklimat succeeded in having the Swedish company Ericsson‘s trademark registration declared invalid in court.
Why Companies Protect Their Trademarks
Companies protect their trademarks by extending the registration of their marks to ensure that their names, logos, and designs remain their intellectual property. This is particularly important for companies that have not applied for their trademarks to be used in Russia after February 2022.
A trademark is a unique symbol, phrase, or design that identifies a company's products or services.
In the United States, trademarks are registered through the U.S. 'Patent and Trademark Office' (USPTO).
To be eligible for registration, a mark must be distinctive and not likely to cause confusion with existing marks.
Once registered, trademark holders can enforce their rights against infringers and use the symbol to indicate exclusive ownership.
The decision to keep trademark rights in Russia is a strategic move, as Melkumov explains. ‘For them, it’s a question of strategic planning, ‘ he says. ‘If the political situation changes in five or 10 years, it will be easier for them to reestablish their presence.’
Strategic planning is a systematic approach to defining and achieving long-term goals.
It involves identifying key objectives, analyzing internal and external factors, and developing strategies to achieve them.
Effective strategic planning enables organizations to adapt quickly to changing market conditions, allocate resources efficiently, and drive growth and innovation.
Key elements of strategic planning include setting clear vision and mission statements, conducting thorough analyses of strengths, weaknesses, opportunities, and threats (SWOT), and establishing measurable goals and key performance indicators (KPIs).
However, given the turbulent political situation and high risks associated with doing business in Russia, only a few big companies would be likely to return to the country.
