(Photo by philosophygeek/Flickr)
With its plot twists and sheer length, the decade-old battle for the Stolichnaya vodka trademark is starting to resemble a Russian novel.
In the latest installment, on Monday a state-chartered Russian company that claims to be the rightful owner of the names Stolichnaya and Stoli survived motions to dismiss filed by a group of international beverage companies. With this 42-page decision, U.S. District Judge Shira Scheindlin in Manhattan refused to toss Lanham Act trademark infringement claims asserted by Russia’s Federal Treasury Enterprise Sojuzplodoimport (FTE) and its lawyers at Quinn Emanuel Urquhart & Sullivan.
Scheindlin did, however, dismiss FTE’s unfair competition and state law claims, finding that they could have been brought in earlier rounds of litigation.
FTE first sued beverage companies Allied Domecq and SPI Group in 2004 for using the Stolichnaya name, and demanded damages based on their Stoli sales. In a complaint peppered with allegations of fraud, forgery and mysterious poisonings, FTE claimed that the U.S. Stoli mark had unlawfully changed hands and was licensed to the defendants during the privatization wave that swept Russia at the fall of the Soviet Union.
U.S District Judge George Daniels dismissed most of FTE’s complaint in 2006, on the grounds that the defendants and their predecessors had used the Stoli trademark for years without challenge. The U.S. Court of Appeals for the Second Circuit affirmed in part, but remanded the case to allow FTE to challenge the validity of the underlying trademark assignment.
On remand, Daniels dismissed the claims again in a September 2011 ruling, finding that FTE lacked standing under the Lanham Act. The Second Circuit upheld that ruling last August, finding that the Russian government hadn’t formally assigned ownership of the trademarks to FTE.
In the second round of litigation, FTE filed another complaint in February, asserting that the Russian Federation assigned the company the Stoli marks in February. The defendants’ lawyers at Covington & Burling, Kenyon & Kenyon, and Debevoise & Plimpton argued that the assignment wasn’t valid under Russian law. Scheindlin wasn’t prepared to decide the Russian law questions posed by the defendants. “Because I have only been provided with counsel’s reading of Russian law—as opposed to full discovery, including expert testimony—I cannot rule that the assignment is invalid,” she wrote.
Quinn Emanuel’s Marc Greenwald told us Tuesday that he was glad that his client’s core claims survived. “We look forward to proving our case after discovery,” he said.
On the defense side, Covington & Burling represents SPI, a Luxembourg-based company that produces Stolichnaya in Latvia for worldwide consumption. (Russia produces its own vodka under the identical name.) Kenyon & Kenyon’s Edward Colbert represents William Grant & Sons Inc., the U.S. distributor. Pernod Ricard, which divested the Stoli brand after acquiring Absolut vodka in 2008, is represented by David Bernstein at Debevoise & Plimpton.
Bernstein told us Tuesday he was pleased that Scheindlin dismissed many of FTE’s claims, but he thinks the remanding trademark claims should have been dismissed as well. “When you look at Russian law, it’s clear that the parties here do not have the right to have standing,” he says. “As a matter of pure fairness, it’s just inappropriate for this lawsuit to be bringing these claims again after they were brought by the same plaintiff 10 years ago,” he says.