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In isolated Myanmar, sanctions breed bogus US franchises

Experience a tiny 'Wal Mart' and a 'KFC' that serves fries with chopsticks.

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YANGON, Myanmar — Those who have wandered the fluorescent-lit aisles of America’s largest superstore would hardly recognize the “Wal Mart” in Myanmar’s crumbling city of Yangon.

For starters, the store is scarcely larger than a typical Wal-Mart parking spot. Only two incongruous items are sold there: cellphones and washing machines. The teen clerks must shoo out intrusive stray mutts and, by the showroom, a half-exposed sewer gurgles under the tropical sun.

Ask for the manager and out comes Phyo Khat Wai, 23 and chipper, a teal sarong swishing at her rubber sandals. Though she has never set foot in a legitimate Wal-Mart — or even outside her impoverished homeland — her shop’s sign is a faithful recreation of the logo recognized around the world: “WAL MART” in blocky words separated by a star.

“I just heard it’s some famous department store in America,” said Phyo Khat Wai, her shoulder-length hair streaked by a sepia-tone dye job. Her tiny shop is one of many imitation US retail stores in Myanmar. “I’ve never been to the other Wal-Mart and don’t expect I ever will.”

For decades, US sanctions against Myanmar have blocked the vast reach of American franchising that scatters McDonald's, 7-Eleven and Gap outlets across the planet.

There is a Starbucks in Saudi Arabia. There is a Pizza Hut in Ho Chi Minh City. But thanks in large part to US business blockades, these multinationals have yet to open shops in Myanmar, the Southeast Asian nation formerly titled Burma.

Two decades worth of embargoes, designed to drain power from a corrupt cabal of ruling generals, have created a American franchising vacuum. In this void, with few domestic intellectual property laws to stop them, Myanmar’s entrepreneurs have been free to brand their own shops with the names and logos of America’s top eateries and retailers.

Some trademarks are lifted outright: there is a rogue Holiday Inn in Myanmar’s Mandalay State and a Best Buy imitator in Yangon’s outskirts. Others such as “MacBurger” and “Burger Queen” tweak well-known titles for a veneer of not-so-plausible deniability. In one of Yangon’s slick new malls, the fried chicken outlet ICFC sports a logo in which the I and the C and mushed together in the likeness of a K. The french fries are served with ketchup and chopsticks.

Myanmar’s trademark impunity, however, is likely in its last days.

In the words of former junta general-turned-President Thein Sein, Myanmar is “engaged in an adventure to build a more democratic, open and inclusive society.” The White House has applauded the release of political prisoners and the loosening of strangleholds on trade and expression.

In response, the United States has cut a sharp foreign policy U-turn, aggressively suspended sanctions and allowed eager US companies to enter Myanmar. General Electric, Ford Motor Company and Coca-Cola have already pounced; Thein Sein, in a development unthinkable in years past, is expected to visit the White House this month.

But as American multinationals begin flooding into Myanmar, they will come face to face with their imitators. Many local entrepreneurs who’ve poured cash and capital into borrowed brand names will have no intention of standing down.

“How can the American Wal-Mart ask me to change my shop?” Phyo Khat Wai said. The prospect of a cease-and-desist order, she conceded, has never occurred to her. “They can’t do that. I was here first!”

KFC meets “KFC”

Intellectual property (or IP) is a relatively unknown concept in Myanmar.

The nation’s economy is just now emerging from a long chapter in which the military maintained a tight grip on trade and just about everything else. In a country still reveling over restored liberties to protest, publish uncensored news and criticize authority, the rights of multi-billion dollar conglomerates to protect brand names is a distant priority.

“In the past, people weren’t familiar with international trade. Our eyes were closed. They still don’t know IP should be a right,” said Thein Aung, a senior associate with the Myanmar Trademark and Patent Law Firm.

As one of the