Why Western companies cling to trademark rights in Russia

Since the beginning of the Russian invasion of Ukraine in February 2022, more than 460 international companies have ceased operations in Russia by selling or liquidating their assets, according to a study by the Ukrainian Kyiv School of Economics (KSE Institute). According to the study, 59 global brands have completely left the Russian market.

However, 25 of these companies are maintaining their trademark registration in Russia, as DW discovered after examining the database of the Russian patent office Rospatent. Among them are the furniture store Ikea , the fast-food chain McDonald's, and the car manufacturers Mercedes-Benz, Jaguar, and Volvo.

The remaining 34 companies, including the German consumer goods and adhesives manufacturer Henkel and the Finnish energy provider Fortum, have stopped submitting applications to use their trademarks in Russia as of February 2022. Some companies, such as the consumer goods manufacturer Unilever and British American Tobacco, have transferred the trademark rights to some of their products to their former Russian subsidiaries. They formally no longer have any connection with them.

"The return of Western companies," "Western companies follow Ariston and flock to Russia," "The State Duma supports the return of Western companies"—the Russian press has been full of such headlines in recent weeks. As evidence, the media pointed to the Rospatent website, according to which companies such as McDonald's and KFC, which had previously announced their complete withdrawal from Russia, have applied for new trademarks or the extension of existing trademark rights.

Ikea has also found itself in the spotlight. The Swedish company had clearly condemned Russia's all-out invasion of Ukraine and sold its business. In 2024, Ikea finally left the Russian Federation and sold its last warehouse in the Moscow region, where it had begun its presence in Russia in 2003. According to the Rospatent database, Ikea has filed at least four applications for renewal of its trademark registrations as of February 2022, one of which is still under review.

Who has abandoned their brand?

The remaining companies on the list of the Kyiv School of Economics study have either stopped submitting applications or withdrawn their applications, such as Henkel. The German detergent and adhesives manufacturer has stopped the process of renewing its trademark rights in 2022, and the current registration expires at the end of this year.

Overall, the certificate for a brand is valid for ten years, and many companies that applied before February 2022 still have some time.

For example, the German DIY chain Obi had already filed an application for trademark registration in 2021, but it was not approved until the end of 2022. The company's intellectual property will therefore theoretically remain protected for years to come.

However, there may be exceptions. Under Russian law, a competitor may challenge the right to use an "ownerless" trademark in court if it hasn't been used for three years. In March of this year, the Russian air conditioning manufacturer Rusklimat successfully had the trademark registration of the Swedish company Ericsson declared invalid.

Why companies protect their brands

Russian economist and journalist Jan Melkumov sees the renewal of trademark rights primarily as a formal procedure. An application indicates that a company in Russia does not want to part with its trademark. "Companies want to avoid someone else using their trademarks. They don't want to spend money on lawyers or go through a new registration," he told DW.

According to Melkumov, if companies have agreed to a repurchase agreement when selling their assets in Russia, they can also get their trademarks back. However, if the buyer has already resold them, a repurchase could take years.

At the same time, Melkumov emphasizes that, given the turbulent political situation and the high risks, few large companies would choose to return to Russia. "For them, it's a matter of strategic planning. Should the political situation change in five or ten years, it will be easier for them to restore their presence," says Melkumov.

According to him, a return to the Russian market depends less on the companies' willingness than on the political situation and the regime in Russia . "Even under favorable conditions, a return will not be reminiscent of the 1990s. There won't be as much enthusiasm and confidence in Russia as there was then—people will be cautious," Melkumov said.

Caution is also evident in the statements from McDonald's and Coca-Cola. The Ukrainian organization B4Ukraine, which advocates for the isolation of Russia, surveyed numerous companies about their plans for the Russian market. The two US companies explained their position in responses published by B4Ukraine.

McDonald's said the reasons that led it to exit Russia in 2022 "still hold today." Coca-Cola wrote that "sanctions and other legal hurdles remain in place, impacting any consideration of a return to the Russian market."

Chinese take the place of Western companies

Meanwhile, Russian authorities have developed specific criteria for companies to return to Russia. According to the RBC website, foreign companies could be required to guarantee local production, technology transfer, and the establishment of joint ventures with Russian shareholders.

But for now, all this is only on paper, and the real beneficiaries of the current situation are companies from China , India , and the Middle East. They are actively taking the place of Western competitors, emphasizes Jan Melkumov. According to a study by the consulting firm Nikoliers, for example, 27 clothing and footwear brands from these countries have already taken the place of 32 Western companies that have left the Russian market.

Adapted from Russian: Markian Ostapchuk