MOSCOW, November 27 (RAPSI, Vladimir Yaduta) - A U.S. federal judge has dismissed a lawsuit brought by Russian state-run company Sojuzplodoimport (FTE) that claimed it was the rightful owner of a Stolichnaya trademark held by distributors, according to the copy of the ruling obtained by RAPSI on Thursday.

It is the second round of trademark litigation initiated by the Russian company and its licensee OAO Moscow Distillery Cristall in the US.

In earlier litigation, a US federal appeals court affirmed, in August 2013, a lower court’s decision dismissing a lawsuit disputing US-trademark rights to the Stolichnaya vodka brand for lack of standing. On appeal, the court found that under US law, FTE was neither an assign nor a legal representative of the Russian Federation. As Cristall’s rights are purely derivative of FTE’s rights, the issue of its standing was rejected as well.

The Russian Federation issued in February 2014 a decree authorizing the transfer of ownership rights in the trademarks at issue to FTE. Pursuant to the decree, FTE and the Russian authorities entered into an assignment agreement, in which they  purportedly assigned the trademarks to FTE and expressly relinquished any and all interest in the trademarks.

FTE then filed a new lawsuit with the US District Court for the Southern District of New York, alleging that the decree and the assignment cured the previous standing defect.

Last August, the court issued an opinion granting in part and denying in part defendants’ motion to dismiss the new complaint. Since issuing the opinion, the court has heard extensive expert testimony on Russian law.

The expert reports addressed one of the principal questions of whether Russian authorities could effect a legally valid transfer of full ownership rights in the trademarks at issue to FTE through the assignment and decree.

Critical to this question was an October 2014 amendment to the Russian Civil Code, which took effect just days before the expert reports were filed.

Mr. Gladyshev, expert of a group of companies dubbed “SPI”, which is among co-defendants, laid out structural analysis of certain Civil Code provisions to support his position that FTE still holds the trademarks under operative management.

US District Judge Shira Scheindlin ruled as a result that FTE cannot hold exclusive rights to trademarks outside of operative management.

“Mr. Muranov’s [expert of Sojuzplodoimport] argument, which hinges on a distinction between rights in rem and the legal regime of intellectual property, while persuasive at first blush, lacks sufficient support in Russian case law and the Civil Code,” according to the ruling.

“This case presents the difficult challenge of interpreting a new foreign law that has not yet been addressed by the courts in that country... in the long run, a better system should exist to address the problem of U.S. courts interpreting issues of first impression under foreign law," the ruling concludes.