Stolichnaya brand vodka, the best selling vodka in the world and a top seller in the U.S. market, has finally received partial resolution of a dispute over the ownership of its trademarks and copyrights used in the United States. A U.S. Federal Court kept the Stolichnaya brand in the hands of U.S. distributors of the brand after a lengthy trademark battle with the Russian government and a private Russian vodka company.

The basis of the legal wrangling in this case begins in 1992, after the fall of communism, when the state began privatizing many businesses that were run by the government. In 1997, the state agency sold the rights to forty-three vodka brands, including Stolichnaya, for 0,000 to a Russian company named Spirits International N.V. (S.P.I.).  The current Russian government claims that the brand was stolen and sold without authorization of the government and took legal action. Russian courts ruled that S.P.I. illegally obtained the brands and overturned the transaction within Russia.  Since then, the Russian government, along with state import-export agency Soyuzplodimport and private vodka company Ost Alco, have been trying to prevent S.P.I. from selling vodka under the Stolichnaya name in the US. In the meantime, S.P.I. sold the rights to sell the brand in the U.S. to Allied Domecq for an undisclosed sum in 2000. Last year, Pernod Ricard bought most of Allied Domecq, including the US rights to Stoli, and has continued to sell the brand in the U.S.

The U.S. case against S.P.I. and Allied Domecq was filed in the U.S. District Court of the Southern District of New York against Allied Domecq (now, Pernod Ricard, after the Allied Domecq sale) and S.P.I. seeking declaratory and injunctive relief and damages. The Russian plaintiffs want to prevent Pernod Ricard from continuing to sell vodka under the Stolichnaya brand name and to recover for past sales they think were illegal. However, the U.S. Federal Court ruling has ended the Russian attempts to stop distribution under the Stolichnaya brand for the time being.

While there are still factors in the dispute that need to be determined before the situation is resolved, including the debate over the source of the vodka, there are several strong points the court made on establishing a trademark in the U.S.:

- The U.S. Court stated that the decisions of foreign courts concerning the respective trademark rights are irrelevant and inadmissible in America.

- The fact that the trademark has been used for over five continuous years here in the U.S. makes it non-contestable.

In summary, there are some important lessons from this case that a trademark owner must be aware of. They must know the law of each jurisdiction where they do business and follow it accordingly or risk losing the use of the trademark. Also, in the U.S., companies must maintain continuous use of a trademark as an added protection against trademark claims.