Risky Business: Iranian IP Theft Remains Significant Threat To Global Business

(New York, N.Y.) — On World Intellectual Property Day, the international community recognizes the role intellectual property (IP) rights plays in creating a strong global economy. The Islamic Republic of Iran is undermining robust protection of trademarks, patents, industrial designs, and trade secrets. Companies outside of Iran regularly face infringement violations of their IP rights by Iranian business entities, many of which are front companies for the Islamic Revolutionary Guard Corps (IRGC).

Iran’s low degree of protection for IP rights presents a significant risk to international companies. Property Rights Alliance, for example, ranks Iran 113 out of 129 in its 2020 International Property Rights Index, ranking countries commitments to the protection of IP rights. 

Dozens of companies have notified United Against Nuclear Iran (UANI) that Iran is misappropriating their company name and falsely implying a business relationship. UANI received six such notifications in the past month alone. As a result, numerous businesses have taken action to enforce IP rights. Below are recent illustrative examples of communications between UANI and global companies on potential IP theft by Tehran.

The Iranian company Kahrobagostar Co. advertised its alleged affiliation with the Russian company Elkam ArtEfficial Lift. Kahrobagostar is an Iranian supplier of industrial equipment and raw materials for the industries and mines, petrochemicals, power plants, and gas and oil sectors. Once alerted by UANI to Elkam’s appearance on Kahrobagostar’s website, Elkam wrote to UANI reaffirming that it did not do business in Iran. Elkam confirmed it had sent an “urgent inquiry” to Kahrobagostar requesting their company’s removal and it was ready to pursue legal action to defend the company’s name, brand, and philosophy.

Kahrobagostar “Representative” webpage, featuring Elkam

In another example, the Iranian company Pardis Industry, a supplier and testing provider for measurement, monitoring, and research equipment in the industrial, scientific, technological, and medical sector, appeared to feature an affiliation with several western companies on its website. Like Kahrobagostar, Pardis’ customers also appear to be affiliated with sanctioned entities, including the IRGC.

Pardis Industry Website

The German school supply company, PHYWE Systeme, responded to UANI’s concerns about their contacts with the petrochemical company Pardis Industry in Iran. PHYWE Systeme acknowledged that they had not made any deliveries or had contact with Iran for years. The Denmark railway equipment manufacturer, Greenwood Engineering, was also contacted regarding their potential cooperation with Pardis, and they responded to UANI saying they had respected the international trade regulations, with only one single sales record with Pardis back in February 2016.

UANI’s resource, Business Risk Matrix, outlines the risks inherent in doing business with Iran, classifying them into 10 categories of concern. There remain serious legal, political, financial, and reputational risks associated with doing business in Iran, particularly in sectors of the Iranian economy dominated by the IRGC, which remains sanctioned by the United States and the international community as a terrorist organization.

To read UANI’s resource: Iran Risk Snapshot, please click here.

To read UANI’s resource: Business Risk Matrix, please click here.

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