Russian Vodka trademarks: Hanoi Court rejected SPI's lawsuit against the IP Vietnam

Russian Vodka trademarks: Hanoi Court rejected SPI's lawsuit against the IP Vietnam

The lawsuit is part of a long-running and complicated dispute between the Rusian State-owned FKP Sojuzplodoimport (“FKP”)  and the Dutch company Spirits International N.V (“SPI”) over the lawful ownership of the famous vodka trademarks, registered since the the Union of Soviet Socialist Republics (“Soviet Union”) era started in 1922 and collepsed in 1991. This dispute started in the Russian Federation recognized as the legal successor of the Soviet Union and continued in many countries, including Vietnam.

Background

In 2017 SPI sued the IP Vietnam in Hanoi People's Court for the latter’s decision on (i) cancelling the recordal of SPI as the owner of International Trademark Registrations No. 571311; 574229; 633001 and 711772 (picture below) which designates Vietnam and is used for wine products in Class 33, and (ii) recording the FKP as the owner of these trademarks.

Initially, in 1969, these verbal-figurative trademarks were registered through the Madrid Agreement in 1969 under the name of a Soviet state enterprise named VVO Sojuzplodoimport (VVO. The Soviet government used these famous, iconic trademarks to market the Russian vodka both domestically and abroad.

When the Soviet Union collapsed its economy fell into chaos. A joint stock company, named  VAO Sojuzplodoimport (“VAO”) was established and declared itself in its charter as the successor of the state-owned enterprise VVO and by this way  VAO usurped the trademark rights owned by VVO. After that VAO changed the company name and transferred a number of trademark rights protected in Russia (in total 43 trademarks for 300,000 US$) to a Dutch entity SPI.

In 2002, the Supreme Arbitration Court of the Russian Federation ruled that the declaration of VAO itself in its charter as the successor of VVO illegal, therefore VAO has no right to assign the above-mentioned trademarks to SPI; essentially this action is usurpation of VVO's trademark ownership rights. According to the Russian Federal Authorities, the asigned value of those trademarks  at that time should have been US$ 400 million instead US$ 300 thousands; It must also be added that billionaire Yuri Shefler, currently the owner of SPI, was the owner of VAO when the  trademarks were assigned.

Also in 2002 in the Russian Federation  the Ministry of Agriculture established FKP and by order of Prime Minister L. Kasyanov assigned the management of the above mentioned trademarks to FKP.  In 2010, Prime Minister of the Russian Federation V. Putin signed a decision which authorized FKP to represent the Russian Federation’s interests in all court cases for the restoration and protection of the Russian Federation’s rights to Russian alcoholic beverage trademarks abroad such as Stolichnaya, Moskovskaya, Sovetskoe...

In that spirit FKP sued SPI to regain ownership of the trademarks along with the exclusive rights to export vodka in the Netherlands, Belgium, Luxembourg, Austria, Great Britain, Ireland, Czech Republic, Italy, Sweden and Cyprus.

FKP requested to cancel recordal of trademark ownership of SPI

In Vietnam, on September 11, 2012, KFP filed an application to the IP Vietnam to request this agency to (i) cancel the recordal of SPI as the owner of the trademarks: No.571311 - “STOLICHNAYA RUSSIAN VODKA ”; No.574229-“ SOVIET WINE PARKLING” ; No.633001 - “MOSKOVSKAYA RUSSIAN VODKA” and No.711772 - “RUSKAYA RUSSIAN VODKA”, and (ii) record KFP as the owner of these trademarks

The IP Vietnam relied on  Article 138.1 of the IP Law to handle the case, which is written as follows:

Article 138. General regulations on assignment of industrial property rights

1. Assignmentr of industrial property rights means the owner of industrial property rights transfers his or her ownership rights to another organization or individual.

Based on the evidence that KFPprovided which SPI could not refute, the IP Vietnam  accepted KFP's request to cancel the recordal of SPI as the owner of the said trademarks, and at the same time to record KFP as the owner of these trademarks.

SPI appealed this decision of the IP Vietnam but the latter  rejected SPI’s appeal in 2016.

SPI sued IP Vietnam and Decision of Hanoi Court

SPI has sued the IP Vietnam  in court, asking the Court to cancel the above decision of the IP Vietnam.

On September 27, 2023, the Hanoi People's Court opened a first-instance administrative court to hear the case. At the trial, the representative of the Procuracy supported the decision of the IP Vietnam. After deliberation, on September 30, 2023, the Trial Council pronounced a verdict denying the lawsuit filed by SPI.

Pham & Associates represented KFP in both the appealing procedures before the IP Vietnam and the first- instance trial at administrative court./.