Trademark battle shifts in Polmoses' favor
The almost decade-long battle between food, beverage and spirits exporter Agros Holding and the liquor producing Polmos companies assumed a new shape June 30, when Parliament passed a law on industrial property rights that will allow the state-owned Polmoses to export all of their own products.
"It was the one and only right decision," said Henryk Wnorowski, commercial director at Polmos Bialystok, the biggest of the mora than 20 Polmos firms.
An amendment to the industrial property rights law states that trademarks registered within Poland or abroad by communist-era foreign trade companies or their heirs such as Agros are to be returned to the producers of the trademarked good if the trademark has been used to export goods that have been produced for 10 years before the moment the bill is ratified.
Now everything depends on President Aleksander Kwasniewski, who has 21 days from the day the bill was passed to accept or reject it.
Wnorowski believes the president will sign the amendment. "We aren't even considering any other decision from him," he said. "Historic justice has just been meted out."
"Finally a law was passed that will solve the situation of owners deprived of their rights to export their products," said Henryk Tomasik, the director of Polmos Warszawa and the representative of all the Polmoses in the court case against Agros.
The liquor producers now grouped under the Polmos name were divested of the right to export their products in 1951, when those rights were transferred to foreign trade companies. In the 1970s, the Foreign Trade Ministry ordered the return of the trademarks to liquor producers. Agros did nothing, and ended up in the 1990s with 25 trademarks registered abroad, among them the well-known and lucrative Wyborowa and Zubrowka vodkas. The Polmoses obtained the right to register the trademarks of their new brands in 1988.
The trademark battle between the Polmoses and Agros, which is partly owned by the French Pernod Ricard, began in 1991.
According to an Agros statement issued last week, the company is angered by the Sejm decision. Agros warned that passing the bill would imperil Polish-French relations and even Poland's entry into the European Union (EU), whose presidency France assumed July 1. The exporter also claims that the amendment is not in line with EU laws, international conventions, any agreements between Poland and France, or most importantly, the Polish Constitution. Agros said the amendment is unconstitutional because it leads to the dispossession of a company without providing for any deserved compensation. Nearly one quarter of Agros' 1999 exports of $39.4 milion came from vodka sales.
"It's not true (that Agros is being deprived)," Polmos Warszawa's Tomasik said. "The property is returning to its owners."
Wnorowski expressed surprise that anyone paid attention to the Agros statement. "If the Sejm passed the bill, what does an Agros statement matter against that Sejm decision?" he said.
The amendment to the existing trademark law will have a dramatic impact on the Polmoses' privatization, Tomasik said. "Every investor will be interested in a Polmos company with brands that it can export," he said. The Treasury Ministry has said that the Polmoses are to be privatized this year. But so far, only two privatization tenders have been issued for the Krakow and Szczecin Polmoses.
The regained trademarks will increase the Polmos companies' assets and attract more investors, Tomasik said. "Yes, certainly the Polmos companies' value will grow," Wnorowski said, adding that the market is too small for all of the Polmoses to exist as private companies. "Some of them are already worth nothing," he said. He also said that some Polmos companies are waiting for privatization like salvation.
With regained trademarks, most Polmoses will be able to increase their exports and penetrate new foreign markets. Although Polmos Bialystok currently profits from selling to the Polish market, Wnorowski said regained trademarks would increase the company's revenue by several million dollars. Polmos Warszawa will particularly benefit if the law is passed, as 35% of its 1999 revenue was generated by liquor exports.
According to Agros, if Kwasniewski signs the bill, the company will fight to retain its trademark rights, even if that means dragging the dispute onto the international stage.
However, Tomasik said that Agros hasn't considered the possibility of a compromise. "Agros is acting from the position of intimidation only," Tomasik said.
