A Litigation Bonus: Free Advertising

There's no such thing, it's said, as bad publicity. A number of companies operating in Russia have found some truth in that old saw, as protracted battles in Russian courts have served to spin page after newspaper page of publicity for the companies involved.

"If you find yourself in litigation, and find yourself on the side of the right, then you can get some wonderful publicity," said Michael Albano, director of client relations at the public relations agency Friedmann & Rose.

Albano was quick to eschew entering litigation for PR mileage, however, and said a company with a valid claim may avoid litigation if the risk of negative publicity is perceived as too high.

"As a public relations device, I wouldn't say that court cases are a reliable avenue of promoting a company," he said. "It's not something that we actively promote with any of our clients."

But if there is already a case in the courts, then carefully managing publicity can have a positive advertising effect.

Members of the press may find court cases more interesting than press conferences or product presentations, according to one Russian journalist.

"Trials are interesting in and of themselves," said Vladimir Kulistikov, deputy editor of NTV's news service. "It's intriguing. Especially when a product that everyone knows is involved."

A string of civil cases and appeals pitting U.S. Smirnoff vodka against the Russian Smirnov brand, for example, yielded yards of publicity for the little-known Russian label.

The Descendents of Pyotr Arsentyevich Smirnov, Supplier to the Courts of His Highness the Emperor, a trading house established in 1991 by the famous Russian vodka-maker's great grandson Boris Smirnov, began selling Smirnov vodka with practically no advertising. Ironically, it was the U.S. company Heublein Inc. that helped make Smirnov famous when Heublein sought to defend its own Smirnoff trademark in a Russian court, said Smirnov general director Sergei Obnosov.

"We made our name largely thanks to this court case," said Obnosov. "We didn't have a strong advertising campaign. ... It was the articles in the press that helped us; whether they were for or against us, they were hidden advertisements for our product."

Heublein purchased the rights to the Smirnoff name from Smirnov's son, Vladimir Petrovich, following his emigration from Russia after the 1917 Revolution. In 1991, when Boris Smirnov registered the Smirnov name with Russia's Rospatent agency, Heublein protested to Rospatent's appellate chamber. The chamber turned down the appeal, and Heublein sued the appellate chamber. Boris Smirnov's company filed a countersuit against Heublein, and there are now about 10 outstanding suits in the conflict, said Sergei Marinich, a partner in the Salans Hertzfelt & Heilbronn law firm, which represents Heublein in Russia.

The Smirnov descendants trading house has little direct promotional advertising, said Andrei Fedotov, general director of the Russian Public Relations Group advertising monitor.

"Boris Smirnov was a genius for creating a scandal and going to court against the international company Smirnoff," Fedotov said. "It was not only free, but it was very, very attractive advertising."

Another high-profile court case, which has pit Bayer of Germany against France's UPSA, also attracted the interest of journalists and the reading public.

In 1992, Rospatent awarded Bayer -- which invented aspirin in 1897 and considers the word its own trademark -- the registered trademark to the word "aspirin" in Russia. The decision was reversed in 1994 under pressure from other makers of pain relievers, and Bayer subsequently took Rospatent to court. UPSA was a third party in the case, and in 1997 a ruling was handed down declaring aspirin a general term and not Bayer's exclusive trade name.

Both companies believe the other benefitted from the press exposure the court cases brought.

"When it came to advertising, they [UPSA] showed up everywhere," said Yelena Shmidt, head of Bayer's nonprescription drug department.

"When the suit began, no one even knew of UPSA's existence. But when UPSA's name was mentioned in the media as being in litigation with Bayer," she said, "everyone found out that there was some French company making aspirin."

Shmidt acknowledged UPSA was adroit in playing off the public's distaste for monopolies. "They were supposedly fighting Bayer's monopoly on the aspirin market," she said, "although we have never wanted to have a monopoly."

For its part, UPSA says Bayer's advertising was more powerful.

"UPSA hardly cleaned up from this court case," said Yelizaveta Naumova of the Mikhailov & Partners PR agency, which represents UPSA. "It was Bayer who did, calling out everywhere that they had invented aspirin."

In the end, both companies used the matter to their favor. Naumova said about 20 journalists attended a June UPSA press conference, held the day after Rospatent's appellate chamber ruled that the word aspirin could not belong to a particular company. There were nearly 30 articles written on the case.

Bayer held at least two press conferences, each with about 20 journalists in attendance, Shmidt said. She said there were more than 100 articles published concerning the case.