Panel downs PERTSOVKA vodka trademark appeal

The appeal panel of the Moscow State Arbitration Court has upheld a decision to reject ZAO Soyuzplodimport's (SPI Group) request for cancellation of the vodka mark PERTSOVKA in Latin script owned by the state-run company Soyuzplodoimport.

Soyuzplodoimport traces its history back to the 1960s when it was created by the Soviet government as, among other things, the sole authorized exporter of Russian vodka. It owned a number of famous marks for vodka, including PERTSOVKA.

During the Perestroika (a programme of economic, political and social restructuring in the Soviet Union) era of the 1990s, the PERTSOVKA mark and a number of other vodka marks were transferred to different companies, which were either partially controlled by Soyuzplodoimport or were created as subsidiaries of that company. Several further transfers occurred over the next few years and some of these marks were transferred to SPI Group - a closed joint stock company controlled by Russian businessman Yury Shefler. It continued to manufacture and export vodka under these trademarks, and also entered into licensing agreements with third parties.

The PERTSOVKA trademark was assigned to SPI Group in 1997. In 1999 it successfully filed for a 10-year renewal of the mark. However, in 2000 the Russian Ministry of Agriculture initiated a programme to reinstate Soyuzplodoimport's rights in a number of vodka trademarks. During 2001, the Russian Patent and Trademark Office (PTO) issued several controversial decisions cancelling some of the vodka trademark registrations owned by SPI Group. Several court decisions were also issued that invalidated some of SPI Group's trademark assignments, including the assignment of the PERTSOVKA mark. As a result of the Ministry of Agriculture's programme, Soyuzplodoimport regained rights in PERTSOVKA and re-registered it in Latin script in its own name.

In February 2003 SPI Group filed a lawsuit with the Moscow State Arbitration Court against the PTO, demanding the cancellation of Soyuzplodoimport's PERTSOVKA trademark registration. SPI Group argued that as the original assignment of the PERTSOVKA mark to SPI Group had been held to be invalid, it followed that its PERTSOVKA trademark renewal in 1999 should also have been deemed unlawful. Thus, according to SPI Group, since the PERTSOVKA trademark had not been properly renewed the registration must have expired. The PTO argued that the renewal had been effected properly and was consistent with Russian trademark legislation.

The court dismissed SPI Group's action on formal grounds because it had missed one of the required filing dates. The court also refused to reinstate SPI Group's cancelled PERTSOVKA registration in Cyrillic script on the grounds that it was likely to cause confusion with the Latin script mark now owned by Soyuzplodoimport.

The appeal panel of the Moscow State Arbitration Court has upheld this decision but it is likely that SPI Group will appeal.

Magdalena Sekula and Pavel Arievich, Gowlings International Inc, Moscow