24 March, 2011

Kremlin misses Georgian wine brands

To evade Russian trade embargo on Georgian wines a Dagestan-based company, one of the key providers of the Kremlin, seeks for patent right on trademarks of top ten Georgian wine brands within the Russian territory.
Georgia can do nothing but warn Russian patent organization not to make such an outrageous illegal act; it can only hope that Russian side will not make such scandalous move, which may cause negative international acclaim.

Central Kizlari Scientific-research Institute (CKSRI)

that is focused on producing wines, beer, and non-alcohol drinks as well as on market research and monitoring, submitted a scandalous application at Rospatent, Russian state patent body in March. It requested to register 10 most well-known Georgian wine brands including Kindzmarauli, Khvanchkara, Alaznis Valley, Akhasheni, Tsinandali, Gurjaani, Gareji, Mukuzani, Napareuli, and Vazisubani as trademarks of CKSRI, Russian on-line edition ‘Marker’ informed on March 9, 2011.
According to Irakli Gvaladze, Head of Geopatent, Georgian patent body, about ten years ago Russian companies tried twice to register Georgian brands but Rospatent turned down their claims as contradicting the Russian law.
“But political situation was different then, we had no trade embargo,” Gvaladze told GJ. What makes alert Georgian side this time is uncertainty of Rospatent’s position for it does not rule out to make exceptions for the Kremlin connected company.
The point is that owner and director general of the questioned Kizlari company Dimitri Shevelyev, is a counselor of Guild of caterers providing the Kremlin. Moreover, he is a head of representation Kizlari cognac factory in Moscow. In the interview with Marker he stressed his organization will be handling with certification issues of products as well as market research and monitoring. But why the scientific-research institute needs its own wine brands Shevelyev refused to elaborate. Viktor Cherbishyev, Head of Rospatent, thinks they need official registration of Georgian brands to evade trade embargo imposed on Georgian wine due to alleged quality problems.
If Russian patent body approves this application the newly fledged company based in the Republic of Dagestan, a federal subject of Russia located in the North Caucasus region, will be able to skip embargo restrictions and enjoy profit from sale of popular Georgian wine brands still in demand at Russian market.
Georgian product including wines, mineral water, fruit and vegetable, banned by Russian sanitary service starting 2006 is reported [by Russian media] sneaking to Russian market through contraband, counterfeit as well as re-export implemented through third-countries.  Very likely the Kremlin is annoyed of illegal trade and decided to legalize it. If all Georgian branded wines were banned initially now Russian experts assure that brands are innocent in fact  and the problem is with the wine produced in Georgia.
According to Dmitri Fedorov, Director of Independent Wine Club of Russia, there are a lot of Georgian wines sold at Russian market that are not produced in Georgia but have Georgian names. He finds this not illegal as far as Russia prohibited not Georgian wine brands but wines produced in Georgia.
Assertion looks unserious to Georgian wine-experts as far as brands internationally are acknowledged to be based on certain geographic appellations including the soil, climate, harvest and wine-making technologies.


Andro Aslanishvili, a legal expert with Samtresti, vine and wine department of Agriculture ministry, thinks selling of so called Georgian wines produced and bottled in Russia is a violation of law on intellectual property on the one hand, and deceit of consumer on the other.
“The wine produced and bottled in Russia cannot be assumed as Georgian because it is not harvested in Georgia and made based on specific Georgian technology, and when you stick a Georgian name to it you deceive consumer for the content in the bottle does not respond to the appellation of brand put on the bottle. But protection of its consumer’s right is up to Russia itself. What troubles us is violation of our intellectual property rights, for they can use our brands to enjoy economic profit. You know it takes a lot of time and huge finances to create a brand and make it popular, and now it comes out that Russian company will be enjoying profit through the ready-made brands without much effort,” Aslanishvili told Georgian Journal.
According to Gvaladze, Russian-based “Georgian” brands cannot create problems to Georgian export to EU and US, for Georgia has already registered 18 geographical appellations of Georgian wines in EU and registration procedures are on in the US. But it may stymie Georgian companies at Russian market if Russia lifts embargo.
“In this case Georgian wine companies will have to compete with Russian-based Georgian brands and this looks absurd,” he said.
Tbilisi and Moscow are recommended to solve embargo problem in frames of negotiations over Russian entry at the World Trade Organization (WTO). Russia, been seeking for WTO membership for 17 years, already secured consent of all WTO member-countries except Georgia that withholds its pro unless Russia lifts trade embargo and acknowledges officially established economic border of Georgia including Georgian breakaway republics of Abkhazia and South Osetia [that Russia acclaimed as sovereign republics in 2008].
Russia is supposed to join WTO thanks to the US and EU support even if it misses Georgia’s consent [by the end of this year], and experts advise Georgian government to bargain lifting embargo with Russia rather than extend unrealistic political demands.
However the recent endeavourer of the Kremlin to grant Russian company with Georgian branded product producing right may affect Russia’s yet notorious image of a country ignoring intellectual property rights. One of the key problems Russia is hailed [by international community] to solve on its way to the WTO is violations of intellectual property rights. It is an open secret that Russia misuses international brands including Adidas and is recommended to solve this problem prior it joins the WTO.
Georgian government plans to appeal to the World Intellectual Property Organization [that includes Russia] if Russia officially registers Georgian wine brands to Russian company. Sakpatent sent a warning letter to Rospatent past week. Rospatent made no response as of yet. But Georgian side hopes it will not make illegal decision. A new international scandal seems not handy to Russia if it really wants to join WTO, Aslanishvili thinks although acknowledges that Russia is unpredictable.


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