Starbucks Opening in Russia!

(Via The Moscow Times)
The first Starbucks cafe will open in the Mega mall outside Moscow next month, according to The Moscow Times. The opening was delayed by a two year court battle over the company’s trademark.

Starbucks first registered its name in 1997, but then lost the trademark in 2002 in the ‘mineral and fruit drinks’ and ‘restaurants and cafe services’ categories due to the company’s failure to actively use the name. Sergei Zuykov, a Moscow lawyer, picked up the rights to the name and offered to sell it back to Starbucks for $600,000. In 1992, Starbucks would have had to hire some former Spetsnaz commados to solve its ‘Zuykov problem’. But in 2002, Starbucks availed itself of the Russian court system and ultimately prevailed last year (tip of the hat to Yevgeny Arievich of Baker & McKenzie for this win). Starbucks representatives say that after their victory in court, the company waited longer to set up a business model tailored to the Russian (read Muscovite) market.

I think that Starbucks will be a big hit in Moscow and that we are likely to see several more stores open in the next few years. Moscow has the type of go-go, 24-hours-a-day style that goes well with Starbucks. Outside of Moscow, however, is a different story entirely. In the regions, Russians prefer black tea to coffee and a cafe culture is noticeable absent. Nonetheless, I think Starbucks could make successful inroads outside of Moscow and St. Petersburg, especially with younger people.

Finally, I think the legal back story is especially interesting and encouraging. First, it demonstrates how far Russia’s court system has come in the past 10-15 years. Also, it represents a victory for intellectual property rights, which are still in their infancy in Russia.

Note: check out this recent and comprehensive law review article on intellectual property reform in Russia.

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