Intellectual Property: Case Study
Intellectual Property Law
Dmitriy Perepelkin
Sergei Lazarevich
Kirill Evdokimov
Olga Afanasyeva
Vladislav Kornilov
April 2016
Degree Programme in International Business
Intellectual Property Law
Contents
1 Introduction 3 2 Law 3 3 Sanctions to the Offender 3 4 Outcome 3 5 Conclusion 3 References 4
Introduction
On 3rd of December 2015 on Finnish news portal yle.fi was published an article about a dispute between two brands Finnish “Valio” and Russian “Baba Valia”. Antimonopoly office in Saint-Petersburg has convicted the Russian butter producer “Traditsiya” LLC to be a transgressor for copying the external packaging design of the Finnish butter and for confusing consumers. Russian department of Valio acted as an offender in the case.
From its side, Valio supported its claims by comparison analysis implemented by patent attorney according to which composite and graphic design of both packages are practically identical. However, Finnish butter came to the Russian market serval years earlier while “Baba Valia” appeared in the stores only in September 2014.
Federal Antimonopoly Office made on its website a survey, according to which 58% of respondents considered the packages to be similar, while 42% did not find any similarity. “Traditsiya” LLC decided to change the package design of their product and provided the valid evidence to that. Therefore, the antimonopoly office decided not to give any claims against the Russian company. (Yle uutiset, 2015)
Law
According to the Bern Convention for the protection of literary and artistic works, the company “Traditsiya” broke the law under the Article 2, point 7 “Literary and Artistic Works Covered”: Subject to the provisions of Article 7(4) of this Convention, it shall be a matter for legislation in the countries of the Union to determine the extent of the application of their laws to works of applied art and industrial designs and models, as well as the conditions under which such works, designs and models shall be protected. Works protected in the country of origin solely as designs and models shall be entitled in another country of the Union only to such special protection as is granted in that country to designs and models; however, if no such special protection is granted in that country, such works shall be protected as artistic works.
At the same time, the company broke the federal law of Russian Federation Part 2 of Article 12 “The law of protection of competition”: unfair competition, related to the acquisition and using of exclusive rights for the benefit of a legal entity, production, works or services, is prohibited.
Sanctions to the Offender
To make a decision about penalty, court have to firstly assume territory of the case. In this situation Russian legislation was used, because Valio butter products was considered here as Russian, because they was produced in village Ershovo, because of Russian food embargo.
By the Russian "Law of defending competition", "Baba Valya" broke article 14 points 2, 5 and 6. 2 – prohibition on unfair competition by leading to misapprehension, prohibition on unfair competition by use of results of intellectual activity, 6 – prohibition on unfrair competition by creatition mixture confusion. Part two of article's 14 point 6: 'Copying or imitation of appearance brought into customer use by concurrent is forbidden. Including, package of product, any names, color range and any branded style of company
Depending of trial process "Baba Valya" could get administrative punishment vary from notification (article 39, point 1) to fine and in cases of taking over monopoly position, division of company to smaller once
Outcome
Federal antimonopoly office in Saint Petersburg decided that “Traditsiya” LLC, which developed and used packaging for its butter “Baba Valia” violated the law of protection of competition (Article 14). In autumn 2014 “Valio” made a complaint to Federal Antimonopoly Office in Saint Petersburg about similarity in design of “Baba Valia” packaging and example that they received letter from customers who bought “Baba Valia” thinking that they bought “Valio” because of similar packaging. FAS conducted a survey on its website for evaluating people’s opinions on similarity of butters’ packaging of “Valio” and “Baba Valia” which showed that many people considers design of two butters similar, after Feferal Antimonopoly Office decided that ”Baba Valia” violated the law. Before the Federal Antimonopoly Office made a decision “Traditsiya” LLC changed the design of its packaging and because of this fact FAO decided not to punish them with fine.
Conclusion
Competition has always been tricky and in some cases even unfair and against the law. In fact, Valio is a world-known brand, especially in a European market, while “Baba Valia” is only known on a Russian market. Probably “Traditsiya” LLC thought that copying the design will not cause them any significant problems, at least one tiny scandal that won’t even become a high-profile lawsuit and won’t cause a public resonance at all. Why small companies are so determined to risk that much? The answer is quite obvious: to make a profit out of somebody else's work. With no doubt, “Baba Valia” was on a spotlight for short period of time, which indeed was beneficial for them and helped to increase their popularity among Russian and CIS countries consumers. We would call it a risk reward. However, a company spent money on a court costs as well as on a development of a new brand design. Despite the fact that “Traditsiya” LLC was accused in breaching Part 2 of Article 12 “The law of protection of competition” in addition to that the Law under the Article 2, point 7 “Literary and Artistic Works Covered”: Subject to the provisions of Article 7(4) of Bern Convention, “Traditsiya” LLC was not obliged to pay any indemnification and the case was swept under the carpet. Federal Antimonopoly Office has decided not to issue a penalty order, as previously , in the autumn of 2015, "Tradition" LLC changed the packaging design , removing the recognizable elements that could mislead consumers. All things considered ,the problem arising here is tremendously essential. It seems like Russian legislation system doesn’t work properly and, in some sense, significantly corrupted nowadays. We find it ridiculously unfair due to the reason that "Tradition" LLC didn’t pay any penalties. Certainly, many things have to be changed in Russian jurisdiction system unless Russia wants to be develop its economy isolated from other countries as it did in times of USSR * References * Yle uutiset. (3 December 2015). The company "Valio" won the dispute against "Baba Valia". Retreived from yle.fi: http://yle.fi/uutiset/kompaniya_valio_pobedila_babu_valyu/8500829
* Vedomosti. (3 December 2015). Federal Antimonopoly Office declared that packaging design of “Baba Valia” is similar to “Valio” design. Retreived from www.vedomosti.ru:http://www.vedomosti.ru/business/articles/2015/12/03/619428-baba-valya-valio
* http://www.dairynews.ru/news/-valio-protiv-baby-vali.html 