Federal Treasury Enterprise Sojuzplodoimport v. Spirits Int'l. N.V., No. 06-3532 - U.S. Second Circuit
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Federal Treasury Enterprise Sojuzplodoimport v. Spirits Int'l. N.V., No. 06-3532

In Federal Treasury Enterprise Sojuzplodoimport v. Spirits Int'l. N.V., No. 06-3532, an action for trademark infringement by an entity created by the Russian government and purportedly granted rights by the government to manage the trademarks to Stolichnaya Vodka, the court reversed the dismissal of the complaint where plaintiff was not barred from challenging the validity of the assignment of the trademarks at issue in federal court on the ground that those trademarks were "incontestable" pursuant to 15 U.S.C. section 1065.

As the court wrote:  "Plaintiff-Appellant Federal Treasury Enterprise Sojuzplodoimport ("FTE") appeals from a judgment of the United States District Court for the Southern District of New York (Daniels, J.) arising from litigation over ownership of the famous STOLICHNAYA vodka trademarks. FTE, an entity created by the Russian government and purportedly granted rights by the government to manage the trademarks, sued two groups of defendants: (1) Spirits International N.V., SPI Spirits Limited, SPI Group SA, Yuri Shefler, and Alexey Oliynik (collectively, the "SPI defendants"), who also claim to be the lawful owners of the trademarks, and (2) Allied Domecq International Holdings B.V. and Allied Domecq Spirts & Wine USA, Inc. (collectively, "Allied Domecq"), to whom SPI has assigned its purported ownership rights. FTE's complaint asserted a variety of Lanham Act and related common-law claims. See 15 U.S.C. § 1051 et seq. The principal dispute in the district court was essentially whether Allied Domecq's claimed rights in the marks had become "incontestable" under the Lanham Act. See 15 U.S.C. § 1065(1)-(4). The district court concluded that the marks had become incontestable, and that therefore FTE could not challenge the validity of their assignment to Allied Domecq. The district court also considered and dismissed certain of FTE's common-law claims. Because we conclude that the district court improperly conflated incontestability with the analytically distinct issue of whether a subsequent transfer of the marks was valid, we hold that FTE may challenge Allied Domecq's claim of ownership of the marks in a federal action. Accordingly, we vacate the portion of the judgment that relates to the trademark claims. In a summary order filed contemporaneously with this opinion, we affirm the district court's dismissal of the common-law fraud and unjust enrichment claims."

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