"Eco," "bio," "100% organic." Today, "green" labels appear more and more frequently, including among clothing brands. However, some brands spend more resources promoting a "green" image than on actual environmental initiatives. This marketing practice is called greenwashing (from the English "green" + "washing").

On October 22, 2024, the Federal Antimonopoly Service (FAS) presented recommendations aimed at combating greenwashing, and last year Russia established a Council for the Prevention of Greenwashing, which published a checklist for verifying environmental claims.

This issue is more relevant than ever. Consumers are increasingly focused on the eco-friendliness of products: over the first five months of 2024, consumer interest in environmentally friendly goods grew by 87% compared to the same period the previous year. Greenwashing, on the other hand, hinders the development of genuine sustainable development practices and undermines trust in environmental initiatives.

In this article, we try to figure out which brands have already been accused of greenwashing and what legal liability measures exist for such unfair marketing practices.

Greenwashing (from the English "green" + "washing") is a form of environmental marketing in which a company makes false or misleading claims about its environmental responsibility in order to create the impression among consumers that its products or activities are more environmentally "clean" than they actually are. In other words, when something non-eco-friendly is presented as eco-friendly.

It is a kind of marketing strategy in which a firm spends resources promoting a "green" image rather than on real environmental initiatives. The term was coined in 1986 by eco-activist Jay Westerveld.

Examples of greenwashing can include:

Greenwashing misleads consumers who are trying to choose more environmentally friendly goods, and it diverts attention from real problems related to sustainability and environmental protection.

The loudest greenwashing scandal in Russia broke out in 2020 around the H&M brand. An investigation by an eco-journalist revealed that clothing collected by the retailer from customers for recycling was not actually being recycled, but instead was sent for resale in the Moscow region. The case never reached court (possibly because there were no interested parties), but the story severely damaged the brand's reputation.

The American division of H&M was less fortunate. In 2022, consumers filed a class action lawsuit against the brand in federal court in New York. H&M was accused of running a broad marketing campaign to "greenwash" its products — that is, positioning them as environmentally friendly. The company actively used eco-tags that misled consumers. In particular, according to information on some products, their production used, on average, 20% less water. Additionally, in advertising for the Conscious collection, the retailer claimed that the items were made of "at least 50% sustainable materials, such as organic cotton and recycled polyester." An independent study did not confirm this information. In December 2023, the parties reached a settlement and the plaintiffs withdrew the suit.

The sporting goods retail chain Decathlon has also been accused of greenwashing. In 2022, the Netherlands Authority for Consumers and Markets conducted an investigation and found that the retailer made unsubstantiated claims about manufacturing products exclusively from environmentally friendly materials. The investigation determined that the chain used an "Ecodesign" sustainability label without explaining the basis for the claim, and did not provide sufficient information about its "environmental labeling system." Decathlon subsequently agreed to remove all unsubstantiated environmental responsibility claims from its websites.

In July 2024, the American-Canadian sportswear brand Lululemon was hit with a "global greenwashing" lawsuit from consumer eco-activists. The company is accused of misleading consumers by positioning itself as "sustainable," making unfounded claims about its commitment to environmental care in its "Be Planet" promotional campaign.

In the United States, where the number of greenwashing disputes grows every month, the most commonly cited authorities are the guidelines and laws of the Federal Trade Commission (FTC). Under these, companies should avoid broad environmental claims or clearly qualify them to prevent deception regarding the specific nature of an environmental benefit (16 C.F.R. § 260.7). In addition, the FTC requires that environmental marketing claims be substantiated by competent and reliable scientific evidence (16 C.F.R. § 260.5).

The Federal Trade Commission (FTC) has also developed the Green Guides, which help companies avoid deceiving consumers.

Furthermore, the Lanham Act (Section 43) — the primary federal U.S. law on trademarks and unfair competition — imposes civil liability for advertising that "misrepresents the nature, characteristics, qualities, or geographic origin of goods, services, or commercial activities."

Although this law does not directly relate to "environmental marketing," in some cases references to it can be an effective tool for companies seeking to curb unfair practices by competitors in this area. A company can sue a competitor if the competitor disseminates false information about its product or service that causes commercial harm. For example, if one firm claims its product is environmentally friendly but provides no evidence of this, another firm may file suit under the Lanham Act.

What happens to a company that engages in greenwashing? In the U.S., a court may order violators to pay compensation, cover damages, and stop the greenwashing practice.

In EU countries, companies can be held liable for greenwashing under the Unfair Commercial Practices Directive. Violations can result in fines and other sanctions if advertising misleads consumers regarding the environmental characteristics of products.

On October 22, 2024, the Federal Antimonopoly Service (FAS) published "Recommendations for Preventing Greenwashing in Marketing Communications," aimed at curbing the dissemination of unreliable (incomplete, inaccurate, or distorted) or incorrect environmental claims that mislead consumers about the environmental characteristics of goods.

In the Recommendations, FAS provides, for the first time, a definition of the term "environmental claim." It is defined as textual information and/or special symbols (eco-labeling) related to a product or service that indicate compliance with environmental standards or the presence of certain characteristics related to environmental impact. Such environmental claims may appear on product packaging, in product documentation, technical information, advertising, and digital or electronic media, including the internet.

In addition, according to the Recommendations:

In addition, liability for greenwashing in Russia is governed by laws on advertising and consumer protection. For example:

Additionally, in 2018, the law "On Organic Products" was adopted, establishing requirements for the production and labeling of such products. In particular, the production of organic goods must be isolated, must not use agrochemicals, pesticides, or antibiotics, and prohibits the use of consumer or transport packaging that would contaminate organic products.

Starting September 1, 2025, amendments to the "On Organic Products" law will take effect, prohibiting the labeling of products with the terms "organic," "green," "ecological," "biological," and their derivatives without a certificate confirming compliance with production requirements. Exceptions apply when "green" is used to denote color or ripeness (e.g., green bananas or green tea), or when the term "biological" is required by technical regulations.

Each country has its own standards. However, to mitigate the risk of liability for greenwashing, it is important to remember that an environmental claim made by a manufacturer, importer, distributor, or retailer must be clear, unambiguous, and — most importantly — verifiable.

Vague and overly broad wording should not be used, including phrases such as "environmentally safe," "environmentally clean," "environmentally friendly," "soil-friendly," "non-polluting," "green," "nature-friendly," "ozone-friendly," without further explanation.

Furthermore, "environmental" claims may not be made if they can only be verified using confidential information.

Environmental claims are made either as self-declarations or with confirmation via an appropriate certificate. The second method is safer and carries fewer risks. Among the most popular and internationally recognized certification systems are Ecolabel and Vegan Society. In Russia, the (currently only) equivalent labeling is "Leaf of Life" ("Листок жизни").

As we can see, the Federal Antimonopoly Service recognizes the existence of the greenwashing problem. The publication of FAS Recommendations specifically devoted to this topic indicates that FAS intends to monitor it closely and take action. Therefore, in the near future, we should expect the first inspections regarding false "green" claims by brands in Russia, followed by increased scrutiny of environmental claims by government agencies and courts.

In December 2023, the U.S. Court of Appeals for the Second Circuit heard an appeal in the case Vans, Inc. v. MSCHF Product Studio. It ruled in favor of Vans (as did the lower court) — finding unconvincing the defendant's arguments that trademarks belonging to others could be freely used for creative self-expression. This case is an excellent illustration of the frequent clash between the interests of a brand — the trademark owner — and the interests of creative collectives and artists.

Vans accused the Brooklyn-based creative collective — which positions itself as a "relentless critic of contemporary consumer culture, defined by an endless chase after fast fashion" — of infringing its exclusive trademark rights. MSCHF released a limited sneaker collection — in collaboration with hip-hop artist Tyga, popular among young people — called "Wavy Baby." The design of the sneakers was a clear reference to Vans' iconic "Old Skool" shoe line (see Fig. 1). This is what prompted Vans' complaint.

MSCHF believed they were not infringing trademark rights and that their actions met all the requirements of "fair use." They insisted that "Wavy Baby" was a kind of "slap in the face of public taste." Vans Old Skool sneakers are "the perfect embodiment of the dichotomy between an elite and a mass-market product," which is why they were chosen as the object of parody. According to the defendant, society's need for free expression of ideas and thoughts — guaranteed in the U.S. by the First Amendment — should prevail over intellectual property rights.

The court remained unmoved, ruling that MSCHF was required to stop its unlawful use of Vans' trademarks.

As it later became known, the parties ultimately resolved their dispute through a settlement agreement, under which MSCHF acknowledged the unlawful use of Vans' trademark and agreed to stop selling "Wavy Baby" products in any form and to recall the disputed products from all stores.

This case is notable primarily because it is the first since the famous Jack Daniel's Properties, Inc. v. VIP Products LLC case, in which the U.S. Supreme Court emphasized that a defendant's use of someone else's trademark as a designation for its own goods — even if done in a parodic or critical manner, as provided for under fair use law — constitutes infringement of the exclusive trademark right.

Consequently, case law on so-called "creative use" of trademarks without the rights holder's consent — which is still in the process of forming — is currently not developing in the defendants' favor.

That said, one can still attempt to argue against the court by invoking the fair use doctrine, citing a couple of well-known cases such as New Kids on the Block v. News America Pub., Inc. or Mattel Inc. v. Walking Mountain Productions. However, courts must now more carefully analyze the brand's "goodwill" and precisely how and for what purposes that goodwill is being used.

If consumers form an associative link between the defendant's disputed goods and the rights holder's goods, such use has almost no chance of being recognized as creative interpretation, critical commentary, or parody. This is because, in such a case, the rights holder's goodwill — into which it has invested significant financial and other resources — is also placed at risk. In other words, one cannot free-ride on someone else's reputation by invoking fair use.

Thus, the trademark owner still holds broad monopoly rights and can block virtually any use of its trademark. However, the fact that more disputes of this kind have begun appearing in the courts may signal that the situation will soon change.

It is well known that trademarks, like other intellectual property objects, have certain — though not always obvious — substantive boundaries, that is, restrictive barriers beyond which the rights holder's exclusive control ceases. The existence, for example, of the institution of "free use" of the results of intellectual activity in Russia (for copyright and patent rights) and of the "fair use" doctrine in the U.S. is justified by society's need for cultural enrichment and basic education.

However, means of individualization — trademarks in particular — primarily serve the needs of commerce. Cases of their free use depend on the utilitarian function of the trademark: to serve as an identifier of the source of origin of a good, with which potential consumers associate certain expectations and perceptions about the quality and other characteristics of the product. It logically follows that, compared to copyright and patent objects, there are significantly fewer cases of free use.

In Russia, using a trademark for descriptive, informational, or other purposes unrelated to individualizing goods, works, or services is not considered a violation of trademark rights. Both lawmakers and the courts hold this position.

Parodic use of someone else's trademark, however, is very unlikely to be regarded by a Russian court as falling under the above exception and thus not constituting infringement of the rights holder's rights.

Although, in our view, this approach does not fully reflect the multifaceted nature of trademarks. Trademarks are not simply a utilitarian tool for labeling products. They can often influence public sentiment, become symbols of an era or of certain phenomena, and serve as a means of expressing particular positions, thoughts, and views. In such cases, a ban on parodic use of someone else's trademark restricts freedom of speech and self-expression.

Disputes in Russian courts over the use of others' trademarks in works of art without the rights holder's consent are currently extremely rare, which in turn indicates the absence of sufficient legal "groundwork" for courts to apply. The court's conclusions in the case of LOUIS VUITTON MALLETIER v. OJSC "Nidan Soki" (a juice manufacturer) appear highly contradictory. In the advertisement, a woman drinking the advertised juice and in no hurry is contrasted with a comically nervous passenger with huge Louis Vuitton suitcases, frantically stuffing them into a car. The court found that the stylized flower design used to mark the suitcases and women's handbag shown in the juice advertisement was confusingly similar to the stylized flower figurative trademark belonging to LOUIS VUITTON MALLETIER.

Remarkably, however, the court in this case did not consider at all the nature of the use of the fashion house's trademark. Was the juice manufacturer hoping to draw attention to its product by free-riding on the reputation of a world-famous fashion brand? Or was its purpose primarily parodic? Unfortunately, the judges gave no due consideration to these factors, limiting themselves to a more formal application of the law and ordering OJSC "Nidan Soki" to stop its unlawful use of designations belonging to LOUIS VUITTON MALLETIER.

Today, using someone else's trademarks — or designations confusingly similar to them — and hoping for protection by invoking their parodic nature is a rather risky strategy, both in Russia and in the U.S.

The case of Vans, Inc. v. MSCHF Product Studio has become something of a turning point in the long-running search — by both scholars and practitioners — for answers on the lawfulness of using trademarks for parodic and critical purposes without the rights holder's consent. Although the boundaries of "freedom of self-expression" remain blurred, the emergence of case law on this issue demonstrates the relevance of the problem — and shows that courts are trying to find the boundary of the trademark holder's monopoly, especially in ambiguous cases where it is difficult to determine whether something is creative self-expression or, in fact, an infringement of exclusive rights.

An interview by Alexandra Bakhtiozina with Karina Bogdan, owner and creative force behind the company Sun Stone, about the particularities of the jewelry industry, attempts to protect her designs from copying and imitation, and a lawsuit she lost.

I was born and raised in Kaliningrad. From childhood I was fascinated by the beauty of amber as a stone, but I was put off by the finished products offered on the jewelry market: all those hedgehog-shaped pieces covered in amber chips, the bead necklaces.

At the time, in Kaliningrad, almost every family had someone who worked with amber. My family was no exception. Thanks to my father, I traveled from childhood to international jewelry exhibitions in America, Hong Kong, Japan, Germany, and Italy. That's when I started collecting jewelry. Some people have a separate wardrobe for clothes — I have one for jewelry.

By age 23 I had a university degree and worked successfully for a while as a lawyer specializing in economic crimes. But my creativity and love of jewelry never went away. I moved to St. Petersburg and increasingly found myself drawn to amber pieces, but I still couldn't find anything stylish and beautiful.

That's when the idea came to me to order a piece made to my own sketch. I wasn't very happy with the execution. But whenever I wore my piece, I got a ton of compliments. That's how the idea for a small collection, inspired by my childhood memories, was born. It took me more than six months to find a manufacturing company. Amber is a very particular stone to work with — you have to account for its fragility and a huge number of nuances in setting it.

In the end, an even crazier idea came to mind — not just to release a collection and open my own store, but to set up my own production facility. My husband supported me in this. He believes in me a great deal and doesn't argue with my crazy ideas — even when I try to complicate our lives by dreaming up new things before we've even made money on the old ones.

Our first and biggest pain point is design copying and imitation. When competitors are "inspired" by our collections, that's one thing. It's a completely different matter when someone makes an absolute copy — same proportions, identical down to the last detail.

It's important to understand that it takes a conscientious manufacturer months, sometimes years, to create a new collection — one that carries a piece of the soul, a story, emotions. And then someone just comes along and copies it. They even try to sell it in the very same stores we sent catalogs of our new collection to.

Honestly, at one point we practically turned the market upside down when we appeared with our jewelry. We saw everything differently, we tried to make things fresh and modern. We created new collections with enormous love, and then, a month later, all the store counters would be flooded with dreadful, poor-quality pieces that looked a lot like ours.

Many companies in the jewelry industry run on this business model: copy the original designs of niche brands, and hope that either they won't get caught, or that any damages awarded will be more than covered by the sales revenue. Some retail jewelry chains even ask directly to have counterfeits produced for them.

Developing a design and putting it into production is a huge amount of work and expense. We also provide customer service, do our own photoshoots and advertising, and invest significant resources into all of that. So it's very unpleasant to realize there's a risk that others will profit off your work later — especially if they manage to avoid any accountability for it. Every case like that feels like a blow to me. It's as if a piece of my soul has been stolen and trampled on. And on top of that, so many customers suffer too, buying low-quality goods.

It varies. One time we found out completely by accident — we suddenly started getting a wave of complaint claims. Four in one week, when that's just not normal for us.

As soon as I saw them, I even called our production manager and scolded them, suspecting they were making third-rate pieces on the night shift and selling them on the side. That's how similar the pieces in the photos looked to ours. But then we were told where the customers had bought them, and we went to a store in the 585 chain and saw it with our own eyes.

When our "Geometry" collection came out, we sent the new pieces to various wholesalers. One of them was the 585 chain. In the end, they didn't order the pieces — but later, on their shelves, we found pieces made by some company from Kostroma that looked very much like ours.

We know a lot of people who have lost copyright-protection cases in similar situations. Even so, we went to court back then to protect our copyright (case No. А31-11574/2021). For almost two years we tried to prove that the disputed pieces were reworked versions of our designs. As evidence, we presented sketches, the briefs we gave our 3D designer, and confirmation that pieces with our design had been released earlier. But unfortunately, we lost the case. The defendant didn't even really bother proving anything — they simply relied on arguments about parallel/independent creation. Although, in my opinion, even a simple comparative analysis shows that virtually identical collections couldn't possibly have been created independently of one another.

We were very upset at the time. Probably the worst part is that I can no longer enjoy that collection — now it's tied to negative emotions from the lost case. But even worse is that customers came to us who were convinced they'd bought our pieces and were very disappointed. We had to explain to them that it wasn't ours, that we'd been copied.

We thought we were prepared. It turned out we weren't. We always try to gather as much evidence as possible at the design-development stage: we keep records of internal correspondence and memos between me and the 3D designer, we pay compensation according to set rules for every piece the designer prepares. We enter pieces into competitions that issue certificates confirming the date a collection was released. But none of that helped us in our dispute.

In Europe, for example, ahead of major exhibitions, organizers publish a catalog of all participants' designs. That provides a certain presumption of who created something first, which can later be useful in court. Besides, the overall culture around this is simply higher in Europe. Here, we often still end up standing at exhibitions side by side with dishonest companies.

Over these two years we've been imitated and copied in various ways, both in Russia and abroad. But something copied on this scale — yes, that was a first. That's why we went to court.

We're a small jewelry company. We put all our energy and resources into creativity and developing original designs. We have a lawyer who works remotely and helps us with contracts. But when questions came up about protecting intellectual property, we turned to outside consultants.

There's support from friends. But everyone's gotten so used to it, copying has become such a norm in the jewelry industry, that the "support" tends to sound more like: "that's just how it is, hang in there."

Sometimes big federal retail chains approach dishonest manufacturers with an order and ask them to produce a copy of another company's original designs — cheaper, lower quality. We've received offers like that too.

Or they suggest making pieces not out of natural amber but out of pressed or synthetic material, on the assumption that the customer won't know the difference. We've always refused that, even at the cost of potential profit.

Yes — if we run into copying again, I'll try to give it much more publicity. I'll shout about it from the rooftops and cover it in the media, so that, first and foremost, our customers don't fall for a fake like that. We tried to handle it delicately and calmly through the courts, but we lost time and were very disappointed by the ruling.

I don't really believe that the people who produce counterfeits will suddenly develop a conscience. But for a retail chain that sells those counterfeits, it's still a major reputational risk. Personally, as a consumer, if I found out about something like that, I'd start wondering whether the store was deceiving me in other ways too.

If stories about dishonest copying get publicity and public condemnation, I think that could help reduce the amount of counterfeiting to some degree. Unfortunately, though, counterfeits aren't always condemned by consumers either. Not everyone understands, sadly, that developing a design and making quality jewelry is the work of a great many people, whose labor deserves to be rewarded.

Honestly, even I don't always know how to protect myself, and I'm someone with a law degree and even work experience in the legal profession.

I'd probably say: invest in building brand recognition. Find your own style and distinctive features, and make sure you get maximum rotation in the media. After that, it's up to the customer to decide for themselves whether they'll chase after mindless, soulless consumption of fakes, or choose a quality, original product made and designed with love for its customers.

We recently launched a second brand — LAMA. Through it, we're going to try to bring to life a bunch of cool ideas that I couldn't realize within the concept of SUN STONE.

This time we tried to be wiser, and from the very beginning we documented the design-creation process as thoroughly as possible. We got a certificate of participation in a professional exhibition, complete with photos of our pieces and the date. We hope that will help us if a dispute ever comes up again. Because I don't think I could survive another case of copying resolved so unjustly. So much effort goes specifically into developing a unique design. And when you face injustice and an inability to protect your rights, your enthusiasm takes a real hit.

"The perfumer works miracles, people think him half a wizard—so much the better. What he alone knew, was that his art was a craft like any other, and it was in this that he took his pride."¹

Perfumery has always been an important part of human culture. The perfumery industry, generally considered quite closed and conservative, has been developing rapidly in recent years (even flirting with artificial intelligence). After the pandemic, we came to value our sense of smell more, which also drove growing interest in aromatherapy and scents that affect mood and emotional state.

Creating a fragrance requires significant creative effort, skill, and talent, and the huge teams behind perfume brands are constantly chasing unique, one-of-a-kind scents. This makes the question of protecting a fragrance all the more pressing. The appearance of counterfeit products, fakes, and imitations obviously reduces consumer demand for the original.

That is exactly why it's important for perfume brands to understand what legal tools exist to protect a fragrance, which ones fit their particular product, and how to actually secure that protection. In this article, we attempt to analyze which legal mechanisms stand guard over a perfumer's interests.

The trademark is a perfumer's main weapon in the fight against counterfeits. What can be registered as a trademark is the name and logo, the label, and also the shape of the bottle — provided the shape is not merely functional but also has distinctive character and essentially performs the function of a trademark: giving the consumer an idea of the product's source.

Registering the name, logo, and bottle shape as trademarks gives the rights holder fairly powerful tools to fight dishonest imitators. If a competitor releases a similar perfume to one already well known on the market (and it's usually well-known, popular scents that get copied and imitated), how can they signal to potential buyers what the perfume resembles, if they can't use identical or confusingly similar names, logos, and packaging?

However, a trademark won't help if the infringer uses the same scent (because they liked someone else's and don't want to develop their own) but doesn't mimic a particular brand or try to trade on its reputation — which often happens with smaller niche brands.

That's because the scent itself cannot be registered as a trademark. Or rather, registration of an olfactory trademark is provided for under Russian law, but not for products like perfume. The relevant regulation (FIPS Order²) states that "perfume, by virtue of its purpose (a scenting agent), must by definition have some smell, and therefore the smell of perfume cannot serve as a means of individualizing it." Consequently, an olfactory trademark can be registered if consumers have formed a strong association between a product or service and a specific smell that individualizes that product or service. Think, for example, of how Massimo Dutti stores smell.

Despite the growing popularity of scent marketing, only one olfactory trademark has ever been registered in Russia (Certificate No. 470375), protecting the smell of leather. Even so, it's hard to conclude that this trademark was actually registered as an olfactory one. In the trademark's description, it's listed as a combined mark, and the protected subject matter is given as the phrase "Leather Scent" together with a corresponding image (rather than the scent itself).

Thus, trademarks can only provide legal protection for the external features that individualize perfume products (packaging, logo, label, bottle shape) — not for the scent itself. In most cases that's enough, but there remain situations where trademarks simply cannot help.

For example, at one point shopping centers were actively offering so-called "loose" or "bulk" perfume — these are the same "copies" and "dupes," just without a label or packaging. Often the seller will simply tell the customer verbally that they have a scent similar to Chanel No. 5 or Dior J'adore. Whether such use would be found to infringe trademark rights is a contentious question. After all, the seller isn't claiming it's the original, and isn't using the logo, packaging, or label. They mention the names of specific fragrances more for informational purposes, to describe what the product they're offering smells like. Such use is obviously not in the interest of the perfume brands whose analogs are being sold in bulk. However, the legal uncertainty over whether such use would infringe trademark rights has most likely discouraged perfume brands from trying to defend their interests in Russian courts.

An Israeli court, however, has had to carefully analyze this exact question over the past six years. It recently issued its ruling in the case brought by a group of perfume companies (including L'Oréal, Revlon, Ralph Lauren Polo, Chloé, and Armani) against Oil De Lamor. The court ruled that referencing someone else's trademarks is permissible, so long as it does not mislead consumers as to the source of the product.

In this case, the court concluded that Oil De Lamor's use of the perfume brands' trademarks — the company produced cheaper analogs and used the names of well-known brands but added the word "compatible" — was a good-faith act that was not intended to mislead consumers. The court also emphasized that the plaintiffs were trying to expand the scope of protection granted to trademarks, essentially trying to protect the scent itself rather than the brand.

As it turns out, yes. For example, the company Coty Inc. obtained a patent (No. 2575778) for the invention "Perfume," whose claims described in considerable detail the process for producing the perfume and various ways of embodying the formula in a fragrance.

Obtaining an invention patent, however, is a fairly expensive and labor-intensive procedure. The applicant must prove inventive step, industrial applicability, and novelty. It's also important to remember that the term of protection for inventions cannot exceed 20 years. This means that once a patent is granted (which requires disclosing and publishing the perfume's formula), the invention will enter the public domain after 20 years and can then be used freely by third parties. This limited term of protection often runs counter to the interests of the perfume industry. Famous perfumes (for example, Chanel No. 5, Miss Dior, YSL Black Opium) don't go out of style for decades, which creates a need to protect them for a much longer period.

In addition, artificial intelligence is now helping create so-called "dupes." Algorithms analyze the original fragrance formula and suggest how ingredients in the composition can be swapped out so that the scent remains similar while not infringing the patent's claims.

Design patents (industrial designs) can also protect the appearance of a bottle or label, provided they are new and original.

However, relying solely on a design patent is unwise, since legal protection for industrial designs is granted for a maximum of 25 years. If a bottle and its packaging are used for a sufficiently long time and intensively enough that they begin to perform the function of a trademark (that is, become associated with a specific manufacturer), it makes sense to also try to register them as a trademark.

A third option, also frequently used in the industry, is to try to keep the perfume's scent a secret. In this way, a perfume can be protected under Article 1465 of the Russian Civil Code as know-how (a trade secret), provided its composition/formula has commercial value precisely because it is unknown to third parties, and provided third parties have no free access to that information. However, if the composition of the perfume becomes known to third parties, the know-how rights cease to apply.

That said, perfumery specialists can often determine what goes into a fragrance's composition using a special device — a mass spectrometer, which automatically separates mixtures into individual components and identifies those substances. So the effectiveness of know-how as a tool in a perfumer's arsenal is also questionable.

Copyright protects works created through creative labor and expressed in an objective form. When we talk about copyright, what first comes to mind are literary works, music, paintings and graphic art, films, or even video games. But can the scent of a perfume be protected by copyright, given that the process of creating a fragrance undoubtedly also requires creative labor?

In the process of creating a fragrance, the perfumer contributes not only labor but also something that cannot be reduced to mere technical operations or logical deduction — they express certain aspects of their own personality in the final result. And no one but that person could arrive at an identical result, even if placed in the exact same starting conditions.

Neither in Russia nor abroad is there a settled position among lawmakers and courts on this question. There is also no established Russian case law on granting copyright protection to a perfume's scent. At the same time, in academic circles there is often opposition to granting copyright protection to a perfume's scent, on the grounds that supposedly (1) perfume is not expressed in an objective form, and (2) perfume cannot be considered a "work" in the copyright sense.

Similar arguments against copyright protection for a perfume's scent were also set out in a French court ruling concerning the Christian Dior Dune fragrance.³ However, in the Netherlands in 2006, one of the first rulings was issued that extended copyright protection to the scent of a Lancôme perfume.⁴

The French company Lancôme filed suit against the Dutch company Kecofa, citing trademark infringement. Kecofa was selling a perfume called Treasure, similar to Lancôme's Trésor. The court of first instance dismissed the claim, finding that Kecofa's perfume was significantly cheaper and did not create consumer confusion.

Lancôme then took a different approach and filed a new claim, this time alleging infringement of copyright in the perfume's scent. The court sided with Lancôme and found that Kecofa had infringed its rights, reaching several important conclusions in its ruling:

This ruling revived the debate over whether perfume can be protected by copyright.

We believe that Russian law does not prevent granting copyright protection to a scent: a fragrance is expressed in an objective form and can be perceived by the senses, and it can also be considered a "work" (since the list of works under the Russian Civil Code is not closed/exhaustive). We hope that Russian courts will adopt a similar approach, which would allow for more effective protection of the rights and interests of perfume manufacturers.

Sometimes bad faith is obvious, yet proving infringement of specific intellectual property rights (trademarks, industrial designs, inventions) is quite difficult. For example, a name might seem similar but not confusingly similar, and the packaging and label might not explicitly copy or imitate someone else's product — yet still be designed in such a way that, taken together, they could mislead consumers as to the source of the goods.

In such cases, it makes sense to turn to the Federal Law "On the Protection of Competition," which, in addition to a general prohibition on unfair competition, contains a more specific prohibition on unfair competition involving the creation of confusion (Article 14.6). Before the FAS or in court, however, one would have to prove that the companies operate in the same market and are competitors (which is not as simple a task as it might seem at first glance, especially when prices differ significantly).

Consequently, perfume brands have the entire arsenal of tools offered by intellectual property law at their disposal. The choice of a specific strategy depends on the situation. Often, though, the optimal strategy is a combination of several approaches (for example, first filing a design-patent application for the packaging and label while it is still new, and then registering them as a trademark later, once that same design has instead gained recognition through prolonged, intensive use) — allowing for the most effective protection of rights and interests in the event of infringement.

How does the brand Leta manage to reinvent amber, create unique jewelry designs, and fight back against violations of its rights?

In an interview with Alexandra Bakhtiozina, Mikhail Tantsura shared his unique experience launching a niche jewelry brand, and talked about the dispute — and upcoming lawsuit — with the company Sunlight.

Tell us how it all started, and why jewelry specifically.

It all began when my friend — and now also my business partner — Katya Alagich visited an amber processing plant. Katya went there at the invitation of the PR team after the plant came under the control of Rostec. When Katya got back, we talked, and we sighed together about how unfortunate the situation was — amber is such a cool stone, yet it's mostly used in jewelry with such outdated designs. That time, nothing came of it; we just sighed about it.

At the time I had a different project going on in parallel — a guide for expats and tourists, and English-language tours. At some point I decided to find something new for myself. About six months after that first conversation with Katya about amber, it came back to me, and I thought that amber's "unfashionable" reputation was a problem that could actually be solved. That idea stuck with me, and I started digging into data on the jewelry market, and on the amber market specifically. I wanted to flip the game and come up with amber jewelry that wasn't outdated, but beautiful and modern.

That was exactly our story hook: we reinvented amber, gave it geometric form, and created modern shapes and motifs.

The brand was originally called Ambery. When did the rebrand happen?

We released our first amber collection and immediately started work on our second collection, Roma — which happens to be the one Sunlight decided to copy. In that collection our stones are smaller. Our production workshop did manage to make amber stones of the right size, but the team really struggled with it and told us that it was too complicated for large-scale production. So we were faced with a choice: either look for a different production team, or use different stones for that collection. We were completely happy with our production team — the stones they made for the first collection were of very high quality. It was clear these were people who approached their work conscientiously, and that mattered a lot to us.

Beyond that, we also decided that working only with amber might eventually get boring for us too. Amber's color palette is fairly limited, after all — it runs from orange to yellow. So we decided to try other stones as well. That's how, with the launch of our second collection, Roma, it became clear that it was time for a rebrand. And we changed "Ambery" to "Leta."

How was the ROMA collection created? What was the source of inspiration?

Architecture, and classical and contemporary art, are the foundation of every one of our collections. The Roma collection became our version of a modern reading of ancient Roman architecture. Its main motifs are narrow window openings and semicircular arches, the strict symmetry of columns, and the oculi in cathedral domes. And the photoshoot for the Roma collection is our reinterpretation of the story of Roman Holiday — the 1953 American film starring Audrey Hepburn.

How did you find out that similar pieces were being sold at Sunlight?

Some friends sent us a photo from the store and asked whether it was our jewelry.

What was your first reaction?

For Katya, of course, as the designer, it was unpleasant and hurtful, but she tries to take it with humor. You can see that in the video where we walked into the store together, smiling, to do a test purchase.

When I found out, I actually found it kind of funny. If you're going to borrow something, you should at least do it smartly — change something, refine it, make it better, do it in a way that keeps you from getting caught. But here everything was done so crudely that there wasn't even room to argue it was "just similar" or that they'd drawn on the same source of inspiration. Six of our pieces were copied one-to-one.

So we're confident we'll win the upcoming lawsuit. It's all so obvious and clear-cut that I have no doubts about it at all.

Are you expecting the defendant to argue "parallel/independent creation" in court?

Yes, that will most likely be their defense strategy. They even have a template with those kinds of arguments that they use to respond to customer questions about copying. If someone calls them out somewhere for copying, they immediately paste in that stock phrase as a reply.

That may well be their core strategy: take what belongs to others, copy it, and hope they don't get caught. Or hope that arguments about parallel creation will work.

Why do you think this happens? The market in Russia isn't that big after all — everyone can see everyone else, and it's obvious this kind of thing gets discovered sooner or later.

I think that when weighing the possible downsides, infringers understand that most small brands don't have their rights protected and lack the resources to make a big fuss. Small brands aren't always ready to defend their rights and go to court. So for the infringer, the potential profit from the infringement often outweighs the potential losses.

Did you prepare in advance to protect your rights in case of infringement?

Before releasing a collection, we always have photos and detailed descriptions notarized, with the date recorded. In the event of a copyright dispute, that kind of evidence can help establish in court that our work came first. It's much cheaper than obtaining a design patent for every individual design.

Did you try to resolve the dispute amicably?

We sent a pre-litigation demand letter proposing to settle the dispute out of court. What's more, in that letter we offered, as an option, not to make the infringement public. But the letter was ignored.

Now you're planning to go to court. What outcome would satisfy you?

A ban on selling the counterfeit goods and their destruction, plus payment of compensation at double the value of the goods sold.

We got very lucky, because Sunlight had the number of units sold posted right on their website for each item. Usually calculating compensation is harder, because you also have to go hunting for that sales data.

Did this whole experience teach you anything? Will you do anything differently now?

There's not much you can really do here — fakes, knockoffs, copies will always exist. It's simply a separate, constant background task for any designer who cares: monitoring for cases like this and defending your rights.

Was this the first time something like this happened to you?

We had suspicions about one other brand, which may have drawn inspiration from our first collection and also released some fairly original amber jewelry. They too leaned into geometric shapes, and in our view their pieces looked a lot like ours. But that was a case where proving infringement would have been difficult, because it was a deeply reworked and reimagined design. It's possible our jewelry simply became a source of inspiration for them. We decided at the time that there was no point starting a dispute. Besides, that brand was even smaller than us. It's one thing when a giant of the industry copies you and can get away with anything; it's a completely different story when someone is simply inspired by you.

We chose amber ourselves because from the start we wanted to create something for export, to show that Russia doesn't just export oil and gas, but design too. That's the purpose behind creating our brand, and I'm genuinely glad that other designers have also discovered this stone, are popularizing it, and are reinterpreting it in a modern way.

There really have been a lot of Russian brands lately making contemporary amber jewelry.

Yes, and that's wonderful!

Does the industry support you?

Yes — after we told our story publicly, several brands that had also run into copying reached out to us. The comments varied: some just wanted to share their own complaint, some asked for advice, some wished us luck in court. So far, though, we've only told our story publicly and haven't tried to rally all designers into a united front against unfair copying. That said, we've now started thinking that maybe it's worth raising this issue on a broader, more global level — not so much from a legal standpoint, but more from a moral and ethical one.

Do you think publicizing this story will help? Does the institution of reputation work in Russia?

Of course! Even if Sunlight itself doesn't care. You can compare it to civil society — if you stay silent and do nothing when your rights are violated, everyone will start to think that's just normal. So, in a broader sense, we see making this story public as also serving a kind of social mission.

What other legal difficulties have you run into as the brand has developed?

Overall, no real difficulties — I'm fairly well-versed in company formation, equity distribution, and trademark protection, since I also work in consulting on the side.

Some question comes up — say, how to sell jewelry abroad. I start searching for answers, which eventually leads to a workable scheme that we start operating by. I just have that kind of mindset — I enjoy figuring things out, even bureaucratic questions. I genuinely like solving problems. I don't even really see it as a hardship, more as a challenge that's satisfying to work through.

You and Katya have formed a really organic creative-business partnership. Who's responsible for what?

Katya is responsible for the design of all the collections: she comes up with the ideas and draws them. The sketches are then handed off to a specialist who handles 3D modeling. Based on the 3D models, wax models are made first, which are then sent into production. We have a PR manager, an employee who handles online orders, and an employee responsible for working with the stores that carry us. And then there's me.

We also have a production team, but production is outsourced — they make jewelry for other brands too. Our core team is made up of 7 people.

What are your future plans?

Releasing new collections, and returning to international markets. Before March 2022, roughly 30% of our sales were abroad. Several foreign stores we used to work with stopped selling us. We have a plan to rebuild that volume of sales, and that's what we're working on going forward.

Protecting the interests of participants in the fashion industry, and above all its creative side (designers, fashion houses, artists, and so on), calls for special tools. Because many of the important ideas, solutions, and processes circulating within the fashion industry cannot be protected by copyright or patent law, the institution of trade secrets and know-how comes to play a particularly important role in protecting them.

As Merlin Hernandez, a management consultant with extensive experience in the fashion industry, notes, industrial spying is fairly widespread in the world of fashion, and a great many such cases are recorded when outsourced manufacturing is used to produce fashion items.¹ In the words of the same Merlin Hernandez, "any [emphasis ours — A.M., L.K.] information about a designer's new collection or marketing strategies that falls into competitors' hands before it has been picked up by the market can shorten the collection's life cycle and, going forward, diminish its value."² As we can see, in order to remain resilient in competition on the fashion market — and not only there — virtually any data, any information about a product, the methods used to make it, and how it's promoted on the market is critically important, not just the portion of that information that happens to be patentable or eligible for copyright protection. Merlin Hernandez himself even uses the phrase "design theft."

The regulation of trade secrets is addressed by Directive (EU) 2016/943 of the European Parliament and of the Council on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use, and disclosure.³ According to the preamble of this Directive, a trade secret covers valuable know-how and business information where that information is not generally known, is not disclosed, and its holder intends to keep it confidential. Trade secrets may be used or disclosed only with the consent of their holder. Article 2 ("Definitions") of the Directive contains the concept of "infringing goods." The obvious first instinct is to translate this as "counterfeit products" ("контрафактная продукция"). However, we render it instead as "goods obtained as a result of the unlawful acquisition, use, or disclosure of a trade secret," especially since, in that same article, an "infringer" is defined as "a natural or legal person who has unlawfully acquired, used, or disclosed information constituting a trade secret." The accuracy of our translation is further confirmed by the Directive's own explanation of what is meant by "infringing goods": goods whose design, characteristics, functioning, production process, or marketing significantly benefits from trade secrets unlawfully acquired, used, or disclosed.⁴

EU member states are required (under Article 10 of the Directive), among other things, to prohibit the production, offering, placing on the market, or use of such "infringing goods," as well as their import, export, or storage for those purposes.⁵

The world of fashion is well aware that, frankly speaking, "protective certificates" in the form of copyright and patent rights over fashion items are a weak barrier against counterfeiters and forgers. One recent example is the infringement of the intellectual property of two Indian fashion designers, Rohit Bal and Raghavendra Rathore. Neither copyright nor patents helped them — within 48 hours of their collections being shown at Lakmé Fashion Week, the original pieces had already been copied and were being sold at low prices. This is not just a matter of economic losses, but also of contempt for the work of entire creative teams who developed those collections and spent a long time preparing for the premiere show.⁶

Fashion houses, like other economic actors, use various means to protect themselves against industrial espionage: special agreements supplementing the employment contract, or terms written directly into the employment contract itself, concerning the non-disclosure of relevant confidential information — including obligations extending for several years after the employee leaves the company. These can also include separate obligations for employees not to compete with the employer (noncompete clauses).⁷

Similar agreements are also concluded with business partners, distributors, retailers, and licensees. In some cases such agreements may even be entered into with a fashion house's clients and with individuals who attend closed preview shows. It is not uncommon for models from new collections to be copied and put into counterfeit circulation by street vendors even before the official show has taken place: for example, an original designer handbag from a fashion collection priced at $700 may be sold as a "pirated" copy for as little as $65.⁸

At the same time, one cannot rely on such agreements alone, since, under the law, the holder of such confidential information (i.e., a trade secret) must protect it through specific measures — a trade secret regime.

For example, under Federal Law No. 98-FZ "On Trade Secrets" of July 29, 2004 (as currently in force), a trade secret is a confidentiality regime for information that allows its holder, under existing or possible circumstances, to increase income, avoid unjustified expenses, maintain a position in the market for goods, works, or services, or obtain some other commercial benefit. In turn, information constituting a trade secret means information of any kind — production, technical, economic, organizational, and other information, including information on the results of intellectual activity in the scientific and technical field, as well as information on methods of carrying out a professional activity — that has actual or potential commercial value precisely because it is unknown to third parties, to which third parties have no lawful free access, and in respect of which the holder of such information has introduced a trade secret regime. The holder of information constituting a trade secret is a person who lawfully possesses such information, has restricted access to it, and has established a trade secret regime with respect to it. As is well known, the required list of such measures necessarily includes: defining the scope of information constituting a trade secret; restricting access to such information by establishing a procedure for handling it and monitoring compliance with that procedure; and marking physical media containing such information, or including in the details of documents containing such information, the label "Trade Secret," indicating the holder of that information.⁹

Ignoring these simple requirements can prove costly for the injured party. For example, a court in New York City (Kings County) once heard a claim brought by an employer (a low-price wholesale clothing distributor) against a former employee and a competing company. The employee's duties included finding overseas retail outlets from which to purchase goods, which he did through a local business broker. Several years later, this employee left the company and went to work for a competitor, who then began placing its orders with the same retail outlets, through the same broker. Under New York law, a former employee generally has the right to do business with the same partners, unless he has signed a "non-compete agreement with the former employer barring him from independently serving his former employer's clients, from using trade or business secrets, and from disclosing customer information obtained unlawfully." The court ultimately ruled in favor of the defendants, finding that the broker's identity and the identifying details of the counterparty businesses did not constitute a trade secret. The defendant failed to prove that the broker and these businesses sold to him exclusively or had promised to do so, and also failed to present evidence that the identifying information about the broker and the businesses was in fact kept secret. Nor did the defendant present evidence that he had made significant efforts to find these businesses, establish business contacts with the broker, or that the identity of the counterparties had been kept confidential.¹⁰

Given the digitalization of nearly every sphere of our lives — and the fashion industry is no exception — cyber espionage attacks targeting fashion houses and other businesses in this industry pose a particular risk. As cybersecurity specialists note, hackers target two kinds of data held by fashion companies: consumer data, including credit card information, and clothing design information. This information can be unlawfully used by former and current employees of fashion companies who go on to start their own fashion businesses, or it can be passed on to competing companies, or simply sold on the black market for confidential information. For example, in 2014, data on more than one million customer credit cards belonging to Neiman Marcus fell into the hands of attackers as a result of a three-month cyberattack. Companies such as Patagonia, Bebe, and Kmart have suffered similar attacks.¹¹

Contemporary researchers particularly highlight "The Internet Threat" facing the fashion industry: thanks to all manner of devices, gadgets, and communication tools, real-time internet broadcasts of premiere collection shows now take place, and the intended recipients of such "transmissions" are so-called "knock-off manufacturers" — inexpensive underground factories abroad focused on producing cheap copies of original pieces on an industrial scale. Such "stamping mills" are capable of producing several thousand copies within six weeks or less. On this point, Xinbo Li notes: "Initially, fashion designers tolerated the production of illegal copies, viewing it as evidence of the popularity of their original fashion pieces. Today, 'fast fashion' items are copied at such a high speed that this has already created an entirely different reality."¹²

Industrial espionage in the textile industry, as such, has existed for several centuries now. For example, in 1259, a special decree of the authorities in Berlin forbade foreigners from working on local weaving looms, "so that they might not learn the secrets."¹³ During the reign of Ivan IV, the English were granted permission to trade duty-free within the Moscow state — this is how the "Muscovy Company" came into being. However, its activities went far beyond mere commerce. The renowned historian Klyuchevsky characterized it as follows: "The instructions with which it (the company) supplied its agents in Russia best show the spirit and the aims with which it operated." Among other things, the Muscovy Company demanded that its agents send samples of the ores and minerals found in abundance in Russia, and insisted on the need to uncover the recipes used for dyeing fabrics, leather, and so on.¹⁴

At one time, Article 1355 of the 1845 Penal Code (Ulozhenie o Nakazaniyakh) provided as follows: "Any person belonging to a factory, plant, or manufacturing establishment who discloses any secretly held method used in the manufacture or finishing of the products of such factories, plants, or manufacturing establishments, without the express consent of those to whom such secret rightfully belongs, and consequently to their detriment, shall be subject to: imprisonment for a term of four to eight months."¹⁵ The prominent Russian legal scholar V. Rosenberg referred to such a secret as an "industrial (trade) secret" and divided it into "a secret concerning the technical processes of manufacturing or producing certain goods (manufacturing-industrial secret), and a commercial or business secret, relating to the operations of selling goods and concerning the individual characteristics of a commercial enterprise and its trading activity."¹⁶ In other words, Rosenberg classified secrets relating to the processes of producing goods under the first category, and secrets relating to the processes of distributing goods under the second.¹⁷

A bit more should be said about "know-how." Translated from English, "know-how" refers to a designation for technical knowledge, production experience, and other information necessary for manufacturing a particular product or reproducing a given technology.

Current legislation contains no detailed definition of know-how, but one of the earlier drafts of the Federal Law "On Trade Secrets" defined "know-how" as "results of intellectual activity protected under a trade secret regime that can be transferred to another person and lawfully used by them, including: unpublished scientific and technical results, technical solutions, methods, ways of using technological processes and devices that are not protected by patent under the law, or that are not protected at the discretion of the person lawfully holding such information; knowledge and experience in the sale of products and services; information on market conditions; results of market research; and commercial, methodological, or organizational-managerial ideas and solutions."¹⁸

A great many inventions, discoveries, production methods, and the like are not patented in today's world but are instead protected under a trade secret regime, and the best-known example of this is the recipe for Coca-Cola, which has been kept secret for over a hundred years. The situation is similar with the production of Chinese porcelain. By some estimates, this technology is more than two thousand years old, and even to this day, the full tradition of its manufacture has never been fully disclosed to producers around the world. As recently as two hundred years ago, disclosing or attempting to obtain this production secret was punishable by death.¹⁹

As we can see, the institution of trade secrets can protect virtually any information related to production, technological data, and the like, whereas under the law, inventions, industrial designs, trademarks, and other intellectual property objects refer to quite specific, defined results of intellectual activity.²⁰