BUSINESS
Putin Asks US Courts to Follow Russian Rulings
Russia, seeking to regain lucrative Stoli trademarks, says issue already litigated
BY DUNCAN OSBORNE
In a move that could signifi -
cantly assist the Russian
government in recovering
the trademarks to Stolichnaya
Vodka, its lawyers have asked
a judge hearing a long-running
US federal lawsuit to follow rulings
from courts in Russia and the
Netherlands and issue a partial
summary judgment saying that
the original conversion of the government
owned entity in the Soviet
Union owning those trademarks
to a private company subsequently
purchased by its current owner
was not consistent with Russian
law or the law in the former Soviet
Union.
“By recognizing the legitimacy
of the Dutch or Russian courts’
decisions and precluding further
dispute over the fully and fairly litigated
issue of VVO’s transformation,
the Court will be saving itself
and the parties from needlessly expending
judicial resources through
protracted — and redundant —
proceedings,” attorneys for the
Russian government wrote in an
April fi ling in the District Court for
the Southern District of New York.
“The Court will also be preventing
SPI from attempting unfairly to relitigate
an issue that it has already
fully litigated and lost.”
If the US federal court agrees
with the Russian government, that
will not end the case, but it will aid
the Russian case by saying, in essence,
that the Soviet Union entity
that owned the trademarks was
never properly privatized. That
could mean that the trademarks
are the property of the Russian
Federation, the government that
succeeded the Soviet government.
Stolichnaya, now known as Stoli,
began as a Soviet Union-owned
brand in the late 1930s or early
‘40s. In 1969, the Soviet government
registered the US trademarks
and it was consistently sold as an
authentic Russian vodka. Following
the collapse of the Soviet Union
in the early ‘90s, many state-owned
businesses were privatized. The
new owners, who were frequently
government employees, were supposed
to pay a market price set by
a commission, but they effectively
looted those assets. Stolichnaya,
the current government of the
Russian Federations claims, was
among those businesses that were
stolen.
The legal fi ction in this case is
that Federal Treasury Enterprise
Sojuzplodoimport (FTE) and Moscow
Distillery Cristall, two private
entities authorized by the Russian
government, are the parties suing
in roughly 30 countries to win
back the trademarks. In fact, the
effort to recover the trademarks
began in 2000 on an order from
Vladimir Putin, an autocrat who is
the Russian president.
The current owners of the
brand, Yuri Shefl er and Alexey
Oliynik and Spirits International
(SPI), their company, have argued
that the transfer of the trademarks
through a series of legal entities
in Russia was legal. They bought
the trademarks from the private
company that owned them for
$285,000, according to published
reports.
The US lawsuit, which began
in 2004, was held in abeyance for
several years while the parties apparently
discussed a settlement. It
was revived in 2014, but discovery
was stayed in 2017 after SPI said
that many Russian government
documents that it needed for its
case had not been produced. Lawyers
for the government had to review
thousands of documents in
Russia and turn them over to SPI.
The stay was lifted last year and
the Russian government asked the
court to recognize the decisions in
Holland and Russia in April.
The Russian government has
won lawsuits seeking the return of
the trademarks in the Netherlands,
which includes those in Belgium
and Luxembourg, as well, and the
Russian courts also supported the
government. Russia also won in
Austria. A lawyer for Russia wrote
in an earlier court fi ling that comity
among 13 European Union
members would result in those
countries giving the trademarks to
Russia.
While the Russian government
is arguing that international comity
requires the US federal court
to recognize the decisions from the
Netherlands and Russia, SPI appears
to be arguing that there is
no international comity because
courts in Brazil and Australia
ruled in favor of SPI.
The Brazilian courts concluded
that the conversion of the state entity
to the private company eventually
purchased by SPI was done
properly. The Australian court effectively
ended the lawsuit by permanently
staying the proceedings
because the Russian government
did not cooperate with the discovery
of evidence needed in the case.
Many of the SPI’s June 5 and 6
legal documents responding to the
motion for partial summary judgment
were fi led under seal so other
arguments and evidence are not
publicly available.
The Stolichnaya brand was embroiled
in controversy in 2013 when
LGBTQ activists called for a boycott
of Russia and Russian products
after that country enacted
an anti-gay propaganda law that
barred positive depictions or advocacy
of LGBTQ causes or people.
In 2018, SPI made overtures to
the LGBTQ community by commemorating
Harvey Milk, the fi rst,
out gay elected offi cial in California,
on a Stoli label.
June 25- July 15, 2 46 020 | GayCityNews.com
/GayCityNews.com
