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. Last Updated: 07/27/2016

One Fuming Dispute That May Clear the Air

There is probably no other country in the world swarming with so many unlicensed and pirated Western products as Russia is today. And from the looks of it, Western manufacturers will have a long wait for the promises of a civilized market in Russia to come true.

Ironically, it is exactly at this peak of piracy that a respectable Russian institution sues a no-less-respectable Western company for breach of trademark. After posters advertising Hermitage cigarettes, a new light-flavored smoke from the British-based Rothmans tobacco company, appeared along the streets of St. Petersburg, the State Hermitage Museum raised its voice in protest.

Interestingly, it isn't the first time the venerable museum's name has been used to attract smokers. During the Soviet era, the local Kositsky tobacco factory made horrible (as a smoker, I can testify) cigarettes of the same name. Of course, that was in the days of a party-ruled economy, and the museum did not protest.

But just because Russia has en-tered the capitalist free-for-all does not mean the Hermitage wants to capitalize on the incident. Instead of claiming damages, Mikhail Piotrovsky, the Hermitage director, is more interested in resolving the philosophical issue at hand: He does not want the museum's name sullied by tobacco stains. "The majority of people in the world see cigarettes as murderers," Piotrovsky said. "For the Hermitage to be associated with cigarettes is dangerous for its reputation." He would rather have the product renamed and matter settled out of court.

Piotrovsky is sincerely bewildered at the other party's ungentlemanly behavior. "It's a fact that Rothmans would never have acted so boldly in England," he noted.

Statements coming from Rothmans are conflicting, and indicative of the company's embarrassment. Originally the company's officials claimed they had been in touch with the Hermitage. Later on, a manager in their Moscow office acknowledged the violation of Russian intellectual property law. Hermitage cigarettes are a product of Rothmans-Neva, a St. Petersburg-based joint venture with a new factory which opened in March 1993.

The $80 million investment project seemed to be going nowhere, thanks to heavy taxes and production costs. The new brand seemed like it would give business a boost.

No matter how it is eventually solved, this case is an interesting episode in Russia's development toward a market economy. First of all, Russians, increasingly aware of their own intellectual property, will make progress toward recognizing and respecting the property of the others. Secondly, the Hermitage affair sets an example of a search for a dignified and not necessarily monetary solution for a legal dispute.