Being Dick Tracy: fighting the IP war in Venezuela
Francis Dutton gives an interesting overview of the business of protecting consumer brands in Venezuela.
There are 18million adults in Venezuela, only 2million of whom who can afford the good things in life such as insured medical care, holidays, premium cable channels; all the things the more fortunate take for granted. The rest; and it is a big number when you take into account that at least half of them live in 3 cities, Caracas, Maracaibo and Valencia/Maracay, don’t have the money to buy the good stuff. However, that does not stop them desiring those things and being predisposed to buying anything that looks like the real thing, for example clothes, shoes, perfume etc. Indeed their appetite is voracious for products that can make them feel good when they are out and about.
In some cases; such is their desire, Venezuelans will go without necessities in order to buy pirated consumer/luxury brands. I believe this is because it supports their hope that their fortunes will improve, as well as taking their mind off the chances of being shot or stabbed (crime rates in Venezuela are amongst the world’s highest. Venezuela’s only significant export is oil. Everything else is imported, although, under different circumstances, the country could be self-sufficient in food and in general could be significantly more progressive given the enormous reserves of natural resources.
Welcome to our IP world, where the only growth industry is piracy.
The ‘Boletín de la Propiedad Industrial’ (Bulletin of Industrial Property) is the national Venezuelan Intellectual Property bulletin which is published every 6-8 weeks and lists all the trademarks being registered, granted or which are in pre-registration. When reading through, there are a variety of frequent contributors who regularly endeavour to take advantage of the hard work and investment which generates successful brands. The people behind these applications appear to have an optimistic interpretation of intellectual property law and believe that applying for trademarks such as “WRENGLER or OAKLEIS” will face little in the way of difficulties. They also seem to think they can use famous brands so long as it’s for clothes and the TM is in another class or if they use the well-known brand and add another word like” fashion”.
However, applying for a trademark costs money and applying in a couple of classes 3 or 4 times a year begins to add up and we can’t assume these people just have more money than they know what to do with, so why persist?
The answer cannot be found without an understanding of the local culture and the practicalities of the “street”. Some bet that if they use a well-known European brand with no presence here, it will fly under the radar, particularly if they apply under a different class. Others see such a huge potential profit if they can bring in containers full of counterfeit product, so the relative cost of a trademark application is small in order to obtain a piece of paper that says they “registered” the brand. They can use this registered status at customs inspections or at National Guard checkpoints if it is travelling in the vast interior of Venezuela.
So why not call the local police and have them arrest the shop owners who openly sell the fake goods? Well, let’s just say it doesn´t work like that here. There is a huge amount of money at stake and a 98% chance of getting away with murder, so seizing goods which please a very big consumer demand is not a vote winner.
How then do we run an effective and efficient IP full service firm here?
You do not stop the pirates just by filing oppositions or pre-emptively registering your brand. You protect the brand by targeting the revenue streams. The only way to do that is get out on the street and emulate Dick Tracy or Batman (if they had been famous for chasing counterfeiters rather than gangsters and jokers). The battle is won on the streets (sometimes by starting online), identifying the retailers, following the trail to the distributors and then patiently waiting for shipment information to make the big score at the frontiers. It’s also important to dissuade the opportunists by registering the brand here even if the marketing priority is the booming economies of Brazil and Columbia.
However, there are ethical considerations to take into account so we are very fortunate to have the necessary connections (nurtured over nearly 15 years) with Customs/National Guard/elite police units to carry out the interdictions. Our success in obtaining the crucial data to identify shipments must end without mistakes. The officers who assist us must be confident that we are pointing to the right containers, so the coup and career enhancement is theirs. It’s the only way we can express our appreciation and encourage continued cooperation.
Being an IP business in Venezuela requires tight management of external resources. To achieve success one has to motivate and monitor people. One has to be where they are and that is in the city areas where the products are sold and distributed and at the ports and frontier entry points to identify the containers.
Success comes from having a strategy which takes into account a target’s habits, priorities and contacts. It comes from having a plan that coordinates retail shops/internet sales sites, distribution centres and shipping seasonality (the biggest shipments are in July through September— to be ready for Christmas sales, alternatively the month before elections and January/February are very quiet).
Every month I review the IP Bulletin and point my finger at possible targets. It´s then up to the brand owner to weigh the cost/benefit balance and decide whether to inhibit and discourage the brand infractors to make them go away and seek softer targets. The really devious thinkers will appreciate that a competitor who isn´t prepared to make the IP protection investment will be the next target.
In conclusion, effective IP protection in Venezuela is not for the faint hearted or unimaginative. It’s exciting, sometimes dangerous but very rewarding work.
Francis Dutton is the VP International Affairs for González & Newman, one of the leading TM protection firms in Venezuela, with a strong portfolio of International clients, with particular emphasis on luxury and consumer brands. At the moment he is waiting at a port hoping to catch out the distributors of products by Yes Said Laurent, Diort and Cristian Loubooting.