SPI in high spirits after suit against STOLI marks is dismissed for lack of standing

by Knobbe Martens

In Federal Treasury Enterprise Sojuzplodoimport v SPI Spirits Ltd, the US Court of Appeals for the Second Circuit has affirmed the dismissal of a lawsuit over certain US registered trademarks related to Stolichnayabrand vodka, finding that a Russian state-owned company lacked standing to challenge use of the marks in the United States. 

Stolichnaya, or Stoli, is a well-known and valuable Russian vodka brand that was originally state-owned. The protracted fight between Federal Treasury Enterprise Sojuzplodoimport (FTE) and SPI Spirits began when SPI gained control of several trademarks relating to the Stolichnaya brand following the collapse of the Soviet Union.


The Soviet Union granted PepsiCo a 10-year licence for the STOLI marks. FTE claims that, when the licence expired in 2001, the rights in the STOLI marks reverted to the Russian Federation, as successor to interests held by the Soviet-created state enterprises. Thereafter, FTE obtained certain rights from the Russian Federation in connection with the STOLI marks. 

In 2004 FTE filed suit against SPI in the US District Court for the Southern District of New York alleging infringement of US trademark registrations for the STOLI marks in violation of Section 32(1) of the Lanham Act, 15 USC § 1114(1)(b), and the case has been dragging on since then. The case reached the Second Circuit when FTE appealed a district court decision that dismissed FTE’s claims finding that FTE had no statutory standing to sue SPI. 

FTE appealed, contending that it was entitled to sue for infringement of the STOLI marks because the Russian Federation “entrusted” it with care of the STOLI marks, and that FTE is either the Russian Federation’s “assign” or “legal representative”. FTE also maintained that it was entitled to proceed because the Russian Federation had “ratified” the suit. 

In a series of decrees over time, the Russian Federation endowed FTE with certain rights in connection with the STOLI marks. The issue was whether the rights granted to FTE rose to the level of allowing FTE standing to sue in relation to the STOLI marks with regard to Section 32(1) of the Lanham Act. 

Centrally relevant to the case are three sources of documents conveying those rights: 

Only registrants as statutorily defined have “statutory standing” to bring an action under Section 32(1). The Lanham Act defines registrants as embracing the actual registrant’s “legal representatives, predecessors, successors and assigns” (15 USC § 1127). The Second Circuit examined whether FTE has sufficient claim to the registered STOLI marks for FTE to be characterised as an “assign” or “legal representative” with standing to sue under Section 32(1) of the act. 

Initially, the Second Circuit noted that Russian law is only relevant in helping determine the relationship between FTE and the Russian Federation vis-à-vis the marks, and that the US laws guide the determination of whether this relationship extends sufficient rights to FTE for it to be considered as an “assign” or “legal representative” with standing to sue under Section 32(1). 

First, regarding whether FTE is an “assign” of the Russian Federation, the Second Circuit noted the following two legal requisites inherent in the concept of assignment under the Lanham Act:

FTE relied on the charter and the decrees to support that an assignment occurred. However, the Second Circuit found that neither document represents a clear writing that effects an assignment of the STOLI marks from the Russian Federation to FTE. Rather, the Second Circuit found that the Russian law and the decrees direct that the Russian Federation retain formal title to the STOLI marks, and moreover, expressly reserve to the Russian Federation certain rights that are generally inherent in the concept of ownership. For example, FTE identified no constraints to the Russian Federation’s authority to use the STOLI marks itself, and the Russian Federation appeared to be free to withdraw FTE’s rights to use the STOLI marks and to grant others similar rights.

Therefore, the Second Circuit affirmed the district court's finding that FTE is not an “assign” of the Russian Federation for purposes of the Lanham Act.

The Second Circuit also found that FTE was not a “legal representative” entitled to bring suit under Section 32(1) on behalf of the Russian Federation. The Second Circuit noted that, to serve as a “legal representative” on behalf of a trademark holder, a putative plaintiff must demonstrate both its legal authority to represent the owner and that the trademark holder is legally incapable of representing itself. Here, the Second Circuit found that FTE has not alleged that the Russian Federation was incapable of bringing suit on its own behalf, and therefore, this line of arguments by FTE failed.

Finally, the Second Circuit also held that the Russian Federation has not “ratified” this suit under Rule 17 of the Federal Rules of Civil Procedure because to ratify a suit, the real party in interest must (i) authorise continuation of the action and (ii) agree to be bound by its result, neither of which occurred. 

Since FTE could not allege facts sufficient to satisfy any of the above requirements, the Second Circuit found that it was neither an assign of the Russian Federation nor the Federation’s legal representative under the terms of the Lanham Act, and therefore lacked standing under the Lanham Act. Accordingly, the Second Circuit affirmed the decision of the district court.

This article first appeared in World Trademark Review Daily, published by The IP Media Group, on September 16, 2013. To view WTR Daily online, please go to www.worldtrademarkreview.com.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Knobbe Martens | Attorney Advertising

Written by:

Knobbe Martens

Knobbe Martens on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.