Georges Joffre, Brand Protection Manager at LVMH Moët Hennessy — Louis Vuitton (LVMH), was elected Vice-Chairman of the Intellectual Property Committee of the Franco-Russian Chamber of Commerce and Industry, which was established on November 22, 2018. The first meeting of the committee focused on the protection of intellectual property in the fashion industry. In an interview with Alexandra Bakhtiozina, Georges shared his unique experience in combating counterfeiting in Russia and around the world.
(Georges Geoffroy)
You have been working at LVMH for 7 years. How did it all start? How did you join the LVMH Group team?
Georges: It all started with an internship. I specialized in combating the gray market, parallel imports (the import of original goods from other countries without the proper consent of the copyright holder — ed.) and mostly worked only with French law. Four years ago, I started fighting the proliferation of counterfeit goods. At the moment, I am working on brand protection in the perfumery and cosmetics sector. As you can see, I have quite a diverse experience.
LVMH Group has more than 70 brands in its portfolio in five main sectors: perfumery and cosmetics, fashion, wines and spirits, watches and jewelry, and exclusive goods. LVMH is a global leader in the luxury industry, with a turnover of around 40 billion euros last year. Thanks to my work at LVMH, I have been able to gain insight into the counterfeit goods situation in markets around the world and compare different regions and countries.
How do you fight counterfeit in Russia?
Georges: Over the past three years, we have had more than 128 cases related to counterfeit goods in Russia: 28 were initiated by customs authorities, and 97 were initiated by law enforcement agencies. I can note a significant increase in the number of counterfeit cases compared to previous years. For example, in 2016, we were involved in only 20 cases, but now we are handling more than 70 cases. But this does not mean that there are more counterfeit goods in Russia. Not at all. The increase in cases reflects our increased efforts to combat counterfeiting and our coordination with Russian government agencies. For example, last year, we were able to stop the local production of counterfeit cosmetics and perfumes in Izhevsk for the first time, resulting in the seizure of over 14,000 finished products.
Is LVMH's strategy for combating counterfeiting in the perfume and cosmetics sector different from its strategy in other sectors?
Georges: Our approach to counterfeit products in the field of perfumery and cosmetics is very simple — absolute intolerance. This means that we always file a complaint against the offender, regardless of the amount of counterfeit goods. It doesn't matter to us whether it's one piece or a million. If we see a violation, we initiate a case.
We also try to be proactive, participating in investigations and conducting market research to gain insights into the counterfeit situation in a particular city, region, or country. A deep understanding of the market situation is key to choosing the right strategy for combating counterfeiting in each specific case.
Close cooperation with government agencies is an important aspect. We support and encourage the police's efforts to combat counterfeit goods. At all stages of the investigation, we provide all the necessary information, organize training sessions to raise the awareness of law enforcement agencies about LVMH brands and products, and explain how to distinguish fake perfumes and cosmetics from original products.
Is Russia an important market for LVMH? What was your first reaction when you learned that you would be working with the Russian market?
Georges: We operate in more than 70 countries around the world. Wherever we operate, we systematically combat the circulation of counterfeit products. Russia is a key player from an economic, diplomatic, and political perspective. And for LVMH, the Russian market is certainly extremely important.
Each country has its own characteristics that must be taken into account when choosing the most effective strategy for each market. Russian customs and law enforcement agencies are very active and cooperative when it comes to combating counterfeit goods. Copyright holders should support government agencies in their efforts, communicate their concerns, and share best practices. For example, two years ago I held a meeting with the staff of the Volgograd Customs Office and last year I met with representatives of the police in Izhevsk. Just yesterday, I was in Makhachkala (Republic of Dagestan), where I met with local law enforcement officials to discuss counterfeit goods in the region.
Can you recall a case that surprised you?
Georges: I can recall two cases. One was in Izhevsk. It was the first time in Russia that we were able to detect the production of counterfeit goods within the country. Previously, we had always assumed that all counterfeit goods on Russian store shelves were manufactured in China or Turkey. However, in this case, we discovered local production. In addition, we had to deal with an organized criminal network that was also connected to local political structures. Therefore, we needed to control every step of the investigation, helping the police collect the necessary evidence and providing them with all the information they needed. It was also important to ensure cooperation between the law enforcement agencies in Izhevsk, St. Petersburg, and Kazakhstan. There were also logistical challenges. For example, we had to send some of our employees on a business trip to help the police identify counterfeit goods.
In 2016, there was another interesting case: the investigation of the introduction into circulation of 23 tons of counterfeit perfumes of various brands. We worked simultaneously with the customs authorities and the police. The court of first instance satisfied our claims, but then its decision was appealed. The court of appeal found that the counterfeit goods should be returned to the infringer. We had to work with bailiffs to prevent the return of these goods into circulation. We filed a cassation appeal.
At the same time, the infringer filed a lawsuit against LVMH Group, claiming that we are interfering with their business activities. We have already held a round of negotiations with the infringers in Dagestan, but the case has not been resolved yet.
The cases you mentioned involve violations of trademark rights. Currently, there is a widespread discussion about the possibility of legal protection for perfumes, including as an object of copyright. In your opinion, should perfumes be protected by both copyright and trade mark laws, or is the protection provided by trade marks sufficient?
Georges: In my opinion, the legal mechanisms available to us as trade mark holders are sufficient. Copyright protects works of art and literature. LVMH uses copyright protection for its books and videos, but relies on trade marks for brand and logo protection.
Have you ever encountered illegal use of industrial designs?
Georges: Yes, sometimes infringers go beyond violating trade mark rights: they not only use the same perfume name, but also produce similar bottles or packaging. They may not use our perfume names at all, but they mimic the design of our bottles. For this reason, we obtain protection for the design of our bottles and packaging in some countries.
For example, in early 2018, we successfully prevented the import of bottles that mimic our own into Russia.
Can the fragrance formula itself be legally protected?
Georges: No, the chemical formula itself cannot be protected. However, companies like Dior, Guerlain, Givenchy, and Kenzo invest heavily in research and development to ensure high-quality products. Counterfeit products may not meet the same high standard of quality.
What are your priorities? How do you choose who to sue or send a letter of claim to: the manufacturer, the wholesale distributor, or the retailer?
Georges: We focus on the distribution points where counterfeit products are directly sold. During investigations, we often discover that small shops are part of an extensive organized crime network.
What advice can you give on how to combat counterfeit products in Russia?
Georges: Each country has its own unique characteristics that we must consider when developing our strategies. For example, in Russia, it is very important to maintain contact with government agencies, provide support for investigations, and conduct training sessions and seminars. Undoubtedly, interacting with customs authorities and the police is a challenging task in terms of logistics, as Russia has the largest territory in the world.
Alexandra Bakhtiozina, Senior Lawyer at Seven Hills Legal LLC, Senior Lecturer at the Higher School of Economics