Russia has just scored a victory in its 15-year legal battle to reclaim the Stoli and Stolichnaya vodka brands.
A court in The Netherlands said Tuesday that FKP Sojuzplodoimport, a Russian state-owned company, is the rightful owner of the trademarks in Belgium, the Netherlands, and Luxembourg. The Dutch court has jurisdiction over the vodka brand in the region -- known as the Benelux -- due to unified trademark rules.
SPI Group -- which sells Stoli and Stolichnaya vodka around the world -- has been ordered to stop selling the vodka in the three countries, and pay Russia a heap of money, court documents show.
It must pay Russia all the profits it made since 1999 from selling Stoli, Stolichnaya and a third vodka brand, Moskovskaya, in the Benelux, according to the ruling.
SPI had halted sales of these products in the region in 2015 in response to an order from a lower court.
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"SPI will continue to pursue all available legal remedies in the Netherlands, including the appeal of this decision to the Dutch Supreme Court," the company said in a statement on Tuesday.
Founded by Russian billionaire Yuri Shefler in 1997, SPI is facing similar legal challenges from Russia over the trademarks in several other European countries, the United States and Australia. SPI asserts that it owns the Stoli, Stolichnaya and Moskovskaya trademarks in more than 180 nations.
Russia disputes this claim.
"Yuri Shefler took possession of the vodka trademarks after the collapse of the Soviet Union and has exploited them since," said Hoyng Rokh Monegier, the intellectual property law firm that represented Sojuzplodoimport, in a statement.
Following the collapse of the Soviet Union, many businessmen took advantage of a chaotic privatization process to amass assets in industries such as energy, construction and banking.
"There's lots of opportunities for the state to go back into history and question the ... asset accumulation during that period," said Timothy Ash, a Russian specialist and senior strategist at BlueBay Asset Management.
SPI said Shefler bought the company that owned the vodka trademarks in 1997, more than five years after it was privatized, paying over $15 million for a controlling stake.
Joris van Manen, a senior lawyer at Hoyng Rokh Monegier, said he expected the latest ruling would force SPI to hand over "many millions" in profits to his client.
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SPI has had more success defending its rights to the vodka brands outside Europe. The Federal Court of Appeal in Brazil ruled at the end of 2017 that the drinks group owned the trademark rights in the country.
SPI said a similar case in the U.S. District Court for the Southern District of New York has been stalled since late 2017. Sojuzplodoimport has been told it must provide additional documents from the Russian government for the case to move forward.
This follows a separate U.S. Court of Appeals ruling that rejected the Russian company's legal challenge in 2013.
SPI -- also called Spirits International -- said in November that it "continues to expect positive results because the plaintiffs' claims in the long-standing dispute have no merit."
SPI Group is headquartered in Luxembourg. In addition to Stoli, it produces, sells and distributes more than 380 wine and spirit brands.
-- Rachelle Peterson contributed to this report.
