“Do Svidaniya” to a Vodka Trademark: New York Federal Judge Denies Standing in Stolichnaya Vodka Lawsuit

“Do Svidaniya” to a Vodka Trademark: New York Federal Judge Denies Standing in Stolichnaya Vodka Lawsuit

In 2004, the Russian Federal Treasury Enterprise Sojuzplodoimport (FTE) filed a lawsuit accusing defendants of misappropriating the American trademarks for Stolichnaya vodka. The Russian Federation created FTE and entrusted it with certain authority, including the use of alcoholic products in accordance with relevant trademarks. Though the Russian Federation ultimately owned the Stolichnaya marks, FTE argued that it had authority over the marks and, thus, standing to sue.

Last Thursday, the Southern District of New York dismissed FTE's long-running suit, holding that FTE lacked standing. Under the Lanham Act, 15 U.S.C. § 1114, only a "registrant" may bring a civil action for trademark infringement. "Registrant" is defined to include the trademark owner, as well as the "legal representative, predecessors, successors, and assignees ..." 15 U.S.C.  §§ 1051, 1127. FTE argued that it was either a legal representative or an assignee.

In rejecting FTE's arguments, the court initially noted that "legal representative" was not defined by the Lanham Act, the legislative history, or Second Circuit precedent. FTE argued for a broad definition, contending that a legal representative should include "any legally authorized agent." The court rejected this argument and adopted a narrow definition - that is:

a party qualifies as a legal representative ... if the party has the authority to appear on behalf of the registrant owner with respect to the registrant/owner's legal interests and the registrant/owner is unable or incapable of representing itself and enforcing its own rights.

Applying the narrow definition, the court held that FTE failed to establish its status as a legal representative for the Russian Federation. While FTE demonstrated itself as an agent/representative for the Russian Federation in relation to the marks, FTE failed to provide an explanation for pursuing the litigation in its own name on behalf of the Russian Federation, which was the real party in interest.

The court also held that in light of the complaint and the facts, FTE was not, as a matter of law, an assignee. However, "[i]n unique situations, an exclusive licensee may be considered an assignee pursuant to 15 U.S.C. § 1127's definition of registrant." Krasnyi Oktyabr, Inc. v. Trilini Imps., 2007 U.S. Dist. LEXIS 23733 (E.D.N.Y. Mar. 29, 2007) (emphasis added) [enhanced version available to lexis.com subscribers]. In assessing FTE's status as an exclusive licensee, the court noted that under the FTE's Charter with the Russian Federation, FTE's rights were neither tantamount to ownership nor sufficient to permit FTE to exclude the Russian Federation from taking action with respect to the marks. Consequently, FTE lacked truly exclusive rights to the Stolichnaya mark and, thus, was not an exclusive licensee/de facto assignee.

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