Group withdrawal from Russia: “At Uncle Vanya” instead of McDonald’s?

More than 200 international corporations have restricted, suspended or terminated their business in Russia. How are things going with their stores and brands? Will Russians soon buy their furniture from IDEA instead of IKEA?

Long queues used to form here when the first McDonald’s in the Soviet Union opened right next to Pushkin Square in the heart of Moscow 32 years ago. Now there is a yawning emptiness in the interior. The golden M only shimmers slightly behind the new, dark glass facade.

Like many other foreign companies, the US fast-food chain announced that it would at least temporarily close its shops in Russia soon after Russian troops invaded Ukraine. A total of 850 branches with around 62,000 employees. The chairman of the Russian State Duma, Vyacheslav Volodin, commented on it at the time: “They said they would close. That’s fine, close it. Tomorrow there will be no more McDonald’s there, but there will be a ‘Uncle Vanya’ instead Jobs will be preserved and prices will be reduced.”

Shortly thereafter, the first images appeared on the Internet showing how the golden M could simply be turned and thus also used as a trademark for “Uncle Vanya”. And apparently someone had actually tried to officially register this “brand”. The head of the Russian patent authority Rospatent, Yuri Zubov, said in an interview with the media portal “Izvestia”: “I can say that the applicants realized their mistake and withdrew their application about two weeks after the press reported it. That’s the end of the story.”

Remembering the time of thriving pirate copies

Online, the “At Uncle Wanja” project caused amusement, but also ridicule. Also because some felt transported back to the 1990s and thus to the time of flourishing pirate copies. However, this was not the only case, reports the head of the patent office, Subow: “We receive applications for the registration of brands such as Coca-Cola and McDonald’s, but also brands that are confusingly similar, such as NeZpresso for Nespresso and IDEA for IKEA. However, most of these applications are withdrawn by the applicants themselves after a short period of time.”

According to the business portal RBK, around 50 such applications should have been made by the end of March. At the same time, such a “Russian takeover” is not legally possible at the present time, says the lawyer Alexei Matjukhov. “So far, thank God, Russia has not withdrawn from the Madrid Agreement, which regulates the international registration of trademarks,” he explains. “The majority of Russian subsidiaries of international brands work with corresponding license agreements. And of course, Russian legislation does not allow the same or extremely similar brands to be registered.”

But that could change, the lawyer concedes, if Russia withdraws from other international agreements and thus also from the Madrid Treaty: “Then it would be entirely possible for other people to register these brands.”

Shops remain empty

For the time being, however, the shops of the companies concerned simply remain empty. The employees continue to get their salary – at least in part.

Above all, fashion labels from H&M to Gucci and Prada give Russian customers hope that they will be back soon with notes attached to the barricaded doors. But nobody really knows what that means.

Unclear future of locations

Economic expert Pavel Weschajew explains in an interview with RBK: “Unfortunately, we cannot say at the moment whether an actual handover will take place in this case to the Russian management of the company. Or whether there will be a ‘masked’ corporate contract so that it’s just hidden foreign ownership.” According to the economic expert, only time can clarify what will ultimately become of it.