How Russia Is Trying To Replace McDonald's And Peppa Pig

Companies have pulled out of Russia in record numbers after the country invaded Ukraine. Russia is retaliating against some of the companies by looking the other way or ending patent protection on trademarks. Here’s the latest.

There’s A New McDonald’s: A new trademark filing in Russia on March 12 for “Uncle Vanya” bears a striking resemblance in color and logo to McDonald’s Corp MCD, one of the largest restaurant companies in the world.

A recent report by trademark attorney Josh Gerben suggested that Russia could allow local businesses to take over abandoned brands and locations in the country and operate them under other names.

Russia legalized patent theft from countries that are “unfriendly” to it. Previous owners will not be compensated for their previous patent rights.

“Russian officials have also raised the possibility of lifting restrictions on some trademarks, according to state media, which could allow continued use of brands such as McDonald’s that are withdrawing from Russia,” a Washington Post report said.

The filing for “Uncle Vanya” lists items such as snack bars, cafes, restaurants and self-serve restaurants.

“The loss of viable IP rights in Russia could also further isolate the country for years to come,” Gerben said in a tweet.

Morgan Stanley analyst John Glass lowered its price target on McDonald’s from $294 to $287. In the note, Glass said Russia and Ukraine represent 2% of system sales, 9% of revenues and around 3% of operating profits for the company.

McDonald’s is also paying employees and rent on restaurants, but not bringing in revenue. The analyst said these items could lead to a cost of 28 cents per share if restaurants are closed for the remainder of 2022.

Gerben had earlier given a hypothetical example of local companies operating the 850 McDonald's restaurants that were closed.

“If a company could lose a lot of money/stock value from having their intellectual property seized in Russia, does it need to consider shareholder value over moral obligation?” Gerben asked about the pressure on companies for morals and profits.

Related Link: Russia Could Allow People To Steal Patents, Operate Closed Businesses Such As McDonald's 

Peppa Pig: Children’s brand Peppa Pig, owned by Hasbro, Inc. HAS subsidiary Entertainment One, has found itself a target of Russia’s trademark war.

Russia has made Peppa Pig free to copy for Russian businesses without the threat of being punished for trademark claims by Entertainment One.

The court ruling is being done in retaliation to countries that have placed sanctions on Russia. Peppa Pig is well-loved in the U.K., a country that has been active in placing sanctions on the country.

Entertainment One has previously taken legal action against a Russian company that created a version of the cartoon character. The court case and claim for 40,000 rubles was dismissed by a judge.

The judge cited the “unfriendly actions of the United States of America and affiliated foreign countries” in the ruling.

The ability of companies to use Peppa Pig free without fear of punishment could extend to other brands in the future.

The U.S., U.K., Australia, Ukraine and Japan are among the 20-plus countries listed as unfriendly to Russia.

Photo: Sandra Cohen-Rose/Colin Rose via Flicker Creative Commons