Stoli open to Russian government lawsuit

Drinks producer SPI Group is facing a trademark dispute that could see its Stolichnaya vodka brand taken into Russian state control following a US court ruling.

A panel of judges in a US appeals court ruled on Tuesday (5 January) that SPI Group and its Stolichnaya brand’s former US distributors could face legal action from Russian state-owned company Federal Treasury Enterprise, which argues that it is the rightful owner of the Stolichnaya trademark.

The Stolichnaya brand was privatised by the Russian Federation following the collapse of the Soviet Union and communist rule in the 1990s.

But after a Russian court ruling in 2000 that deemed this privatisation invalid, FTE filed a suit in the US against SPI and its American distributor in 2004 claiming that it owned the trademark under permission of the Russian government.

In 2014 a US court ruled that the Russian government’s transfer of rights to the Stolichnaya brand to FTE was illegal under Russian law, and that FTE did not have the right to make the case on behalf of the Russian government in American courts.

This latest development sees that decision overturned, leaving SPI and its former US distributors Allied Domecq and William Grant open to legal action over the ownership of Stolichnaya vodka.

Circuit Judge Dennis Jacobs of the 2nd Circuit Court in Manhattan wrote in the latest decision that it was not under the jurisdiction of US judges to prevent FTE, under license of the Russian state, from taking legal action.

Commenting on the 2014 judgement, Judge Jacobs is reported by legal news site Law360 saying: “The declaration of a United States court that the executive branch of the Russian government violated its own law by transferring its own rights to its own quasi–governmental entity would be an affront to the government of a foreign sovereign.”

Daniel Bromberg, counsel for FTE, commented: “We look forward to proving on behalf of the Russian people that our client FTE is the true owner of the Stolichnaya trademarks, as courts in other countries have recognised.”

Stolichnaya vodka is produced and distributed by Stoli Group, a subsidiary of SPI Group.

The company is expected to release a statement on the decision shortly.