B7/B5/2885
`07-03-2005
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`14:34
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`+41—22—735—41—92
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`12:20
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`FROM-S.P.l. snmts (Cyprus! Ltd
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`S.P.I.
`
`GROUP so
`+s57~a6a4ae5s
`
`PAGE
`F422
`P.Dfl1/002
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`62/B3
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`7'2"
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`IN THE UNITED STATES PATENT AND TRADEMARK omen
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
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`A.V. Imports, Inc.
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`Petitioner,
`
`v.
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`Cancellation No.: 92043340
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`Spirits International, N.V.
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`Respondent and Registrant.
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`:
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`.
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`'I‘I
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`OF ALEXANDER SK
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`0V
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`1. Alexander Slclmatov, hereby declare as follows:
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`1.
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`I am the Regional Manager of S.P.I. Spirits (Cyprus) Limited, an affiliated
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`company ofRegistrant Spirits International, N.V. (“SP1”). I submit this declaration based
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`on my personal knowledge.
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`2.
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`To the best of my knowledge, infonnation and belief, SP1 has not
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`abandoned its rights in the RUSSKAYA mark with an intent not to resume use.
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`3.
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`SP1 has taken the following steps to re-launch RUSSKAYA brand vodka
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`fbr sale in the United States:
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`a. Samples of the product and a Statement of Manufacture have been
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`submitted to the laboratory of the United States Alcohol and Tobacco Tax
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`and Trade Bureau (the “TTB”) for pro-COLA product evaluation. The
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`laboratory number assigned to this application for approval by the TTB is
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`120050630.
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`S-.P.I. Spirits (Cyprus) Limlted has reached a preliminary agreement with
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`its current distributor, Allied Domecq Spirits and Wine USA, Inc., to
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`rifilli,
`llllllllllllllllllllllllll|l|\\||ll|I|\||||lH|||
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`06-08-2005
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`u s. Patent :3. TM01‘cITM Mail Rep!
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`"
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`~
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`pt. #39
`I
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`

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`67/85/2885
`14:34
`+41-22-735-41-92
`S.F‘.I. GROUP SA
`PAGE
`B3/E13
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`nr-na-2on5
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`12-zn
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`FROM-8.P.l. Sr-Iirlts
`
`(Cyprus) Ltd
`
`+357-25349355
`
`1-275
`
`P.E|fl2/D02
`
`F-122
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`commence deliveries of RUSSKAYA brand vodka to the United States
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`immediately upon TTB approval.
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`I declare under penalty ofperjury that the foregoing is true and correct to the best of my
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`knowledge.
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`DATED:
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`‘7-Q
`
`Alexander Slcuratov
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`I hereby certify that this paper or fee is being deposited with the United States Postal Service "Express Mail Post Office to Addressee"
`service and is addressed to the Commissioner for Trademarks, PO. Box 1451, Alexandria, VA 22313-1451.
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`Certificate of Express Mailing
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`(Printed name of person mailing paper or fee)
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`"Express Mail" mailing label No.
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`EL98930/4671 US
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`te of Deposit
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`June 7 2005
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`Mario F. Ortiz
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`

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`
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`CERTIFICATE OF SERVICE
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`I hereby certify that true and correct copies of the foregoing SPIRITS
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`INTERNATIONAL, N.V.’S MEMORANDUM IN RESPONSE TO PETITIONER’S
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`MOTION FOR SUMMARY JUDGMENT; DECLARATION OF BEATRICE
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`\ SFONDYLIA with Exh. A; DECLARATION OF ANDREY V. SKURIKHIN with Exh. A —
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`M; DECLARATION OF CORRENE S. KRISTIANSEN with Exh. A - C;
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`DECLARATION OF ALEXANDER SKURATOV; DECLARATION OF WILLIAM A.
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`FINKELSTEIN with Exh. A — C, were served by first class mail to the following:
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`Justin E. Pierce
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`Andrew C. Aiken
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`Venable LLP
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`575 7th Street, NW
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`Washington, D.C. 20004
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`on this 7”‘ day of June 2005.
`
`MARIO F. ORTIZ
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`

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`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
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`A.V. Imports, Inc.
`
`Petitioner,
`
`v.
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`SPI International, N.V.
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`Respondent and Registrant.
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`Cancellation No.: 92043340
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`SPIRITS INTERNATIONAL, N.V.’S MEMORANDUM IN RESPONSE TO
`PETITIONER’S MOTION FOR SUMMARY JUDGMENT
`
`INTRODUCTION
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`Respondent Spirits International N.V. (“SPl” or “Respondent”) respectfully
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`submits this brief in opposition to the motion for summary judgment filed by Petitioner
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`A.V. Imports, Inc.’s (“A.V. Imports” or “Petitioner”).
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`SP1 is the current owner of U.S. Registration No. 1,487,042 for the mark
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`RUSSKAYA for vodka, as well as registrations for the mark in approximately eighty-
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`eight other countries. SPI also owns numerous U.S. and foreign trademarks for Vodka,
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`including the well-known STOLICHNAYA brand. Petitioner alleges that SP1 has
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`abandoned the RUSSKAYA mark, relying on a presumption of abandonment arising
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`from three years of nonuse. In fact, SPI has never abandoned the RUSSKAYA mark,
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`because it never ceased using the mark with the intention not to resume use.
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`SPI’s plans to resume use of the RUSSKAYA mark in the United States have
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`been affected by a highly politicized, worldwide dispute with the Russian Federation and
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`various Russian agencies and state-owned companies over rights to a group of vodka
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`trademarks, including RUSSKAYA and STOLICHNAYA, which SPI acquired in 1999.
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`In the past few years, the Russian Government has engaged in a systematic effort to re-
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`nationalize (without compensation) those vodka trademarks, first in Russia and then in
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`other jurisdictions. The dispute has resulted in litigation and administrative proceedings
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`pending in many countries, including the United States. This multi-jurisdiction litigation
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`has been spearheaded by the Russian state-owned company FKP Sojuzplodoimport, also
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`known as FTE Sojuzplodoimport (“FKP”). Not surprisingly, FKP has been identified as
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`the vodka supplier to Petitioner. It is manifest that this proceeding is part and parcel of
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`the Russian Govemment’s re-nationalization campaign.
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`Because of this continuing worldwide dispute and because of the resulting drain
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`in SPl’s resources, SPI concluded that it was not prudent to re-launch RUSSKAYA
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`vodka in the United States until its rights in the mark were confirmed. In the interim
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`period, SPI has focused its attention on its established STOLICHNAYA brand, one of the
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`best-selling Russian vodka brands in the United States. SPI has always intended to
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`resume use of the RUSSKAYA mark once its rights to the mark were upheld. Indeed,
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`now that SPI has received several favorable decisions, it has taken concrete steps to re-
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`launch the RUSSKAYA brand in the United States.
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`As more fully set forth below, SPI has not abandoned the RUSSKAYA mark and,
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`in any event, the issues presented by Petitioner’s motion are particularly unsuitable for
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`summary judgment. Accordingly, Petitioner’s motion for summary judgment should be
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`denied.
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`

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`
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`STATEMENT OF FACTS
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`A.
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`The RUSSKAYA Registration in the United States
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`Until the final years of the Soviet Union, the vodka industry in that country was
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`state-run and all trademarks to vodka products were owned by state companies. See
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`Declaration of Andrey V. Skurikhin (“Skurikhin Dec.”) 112. RUSSKAYA,
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`STOLICHNAYA and other vodka marks were registered in the Soviet Union and other
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`countries in the name of VVO Sojuzplodoimport (“VVO”), a state-owned company
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`engaged in the export of vodka and other agricultural products. Id. fi[3.
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`In 1973, VVO entered into an agreement with PepsiCo, Inc. (“Pepsico”), whereby
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`Pepsico agreed to supply the Soviet Union with Pepsi-Cola syrup in exchange for the
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`exclusive right to import STOLICHNAYA vodka into the United States. See Fin ’l
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`Matters, Inc. v. PepsiC0, Inc., No. 92 Civ. 7497 (R0), 1993 WL 378844, at *1 (S.D.N.Y.
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`Sept. 24, 1993). Pepsico and its distributor, Monsieur Henri Wines (“MHW”), invested
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`more than $100 million to popularize STOLICHNAYA vodka in the United States. Id.
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`Those efforts overcame American antipathy towards Soviet Union products in the midst
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`of the Cold War. Id.
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`Once the STOLICHNAYA brand became established in the United States, VVO
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`and Pepsico began making plans to introduce another vodka brand in order to grow the
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`business. See Declaration of Correne S. Kristiansen (“Kristiansen Dec.”), Ex. A at
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`Response No. 5. In 1986, VVO filed an application to register the RUSSKAYA mark
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`with the United States Patent and Trademark Office (the “PTO”). See Declaration of
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`Justin Pierce, Esq. (“Pierce Dec.”), submitted by Petitioner on May 10, 2004, Ex. A
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`The application was granted in 1988. See Pierce Dec. Ex. 3. On September 2, 1986,
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`

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`VVO granted Pepsico the exclusive right to import RUSSKAYA vodka into the United
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`States. Kristiansen Dec. Ex. A at Response No. 5. In or about 1988, Pepsico, through its
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`agent, MHW, procured label approvals for RUSSKAYA with the Board of Alcohol,
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`Tobacco and Firearms (the “BATF”) and began test-marketing the RUS SKAYA brand.
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`Id.
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`Around this time, the Soviet Union entered into a period of severe political and
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`economic turmoil and Pepsico’s plans to launch the RUSSKAYA brand were derailed.
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`By 1988, Pepsico and MHW were experiencing repeated problems with Soviet vodka
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`production and interruptions in vodka shipments. Kristiansen Dec. Ex. A at Response
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`Nos. 5, 15. Pepsico believed it would be imprudent to launch the RUSSKAYA brand in
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`the United States until these problems were resolved. Kristiansen Dec. Ex. A at
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`Response No. 5.
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`In mid-1990, as part of economic reforms known as perestroika, the Soviet
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`Government adopted decrees authorizing the transformation of state-owned enterprises
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`into private companies. See Skurikhin Dec. 114. In September 1990, a lengthy process
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`began that resulted in the transformation of VVO into the private—forrn joint—stock
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`company VAO Sojuzplodoimport (“VAO”). Id. 115. VAO succeeded VVO in the
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`ownership of VVO’s entire portfolio of vodka trademarks in the Russian Federation and
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`elsewhere (collectively, the “Vodka Marks”), including the STOLICHNAYA and
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`RUSSKAYA marks.‘ Id. 116. Pepsico continued to do business with VAO, and the
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`1 VAO’s ownership of the U.S. STOLICHNAYA mark was upheld in the Financial
`Matters decision. See 1993 WL 378844, at *2. Ownership of the U.S. RUSSKAYA
`mark was not at issue in that case.
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`

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`business relationship remained essentially unchanged. See Financial Matters, 1993 WL
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`378844, at *2.
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`In August 1991, the USSR Patent Office (Gospatent) annulled the Soviet
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`STOLICHNAYA and RUS SKAYA registrations, among others, on the ground that those
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`names had entered into common usage. See Skurikhin Dec. 1116 and Ex. A. The Soviet
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`Union was dissolved in December 1991. Id. 117. VAO, as a successor to VVO, contested
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`Gospatent’s decision. Id. 1116. In May 1994, the Russian Patent Office (Rospatent)
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`annulled that decision and reinstated VAO’s rights in the trademarks.2 Id. 1117 and Ex. E.
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`In 1992, VAO assigned the Vodka Marks, including the RUSSKAYA mark, to
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`Pepsico. See Skurikhin Dec. 118; Pierce Dec. Ex. _C_. Under the assignment agreements,
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`VAO retained a reversionary interest in the marks. See Skurikhin Dec. 118; Pierce Dec.
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`Ex. Q. From September 1993 through January 1999, Pepsico vigorously defended a
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`Petition to Cancel the RUS SKAYA mark in the United States, which was ultimately
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`settled in Pepsico’s favor. See Declaration of William A. Finkelstein (hereinafter
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`“Finkelstein Dec.”) 114(b). Pepsico’s use of the RUSSKAYA mark during this period is
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`detailed in sworn interrogatory responses that Pepsico filed in that proceeding. See
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`Kristiansen Dec. Ex. A at Response Nos. 2, 5. On May 3, 1994, Pepsico filed a Section 8
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`declaration with the PTO, stating “the [RUSSKAYA] mark is still in use in interstate
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`commerce.” See Finkelstein Dec. 114(a) and Ex. A.
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`In 1996, VAO changed its name to VZAO Sojuzplodoimport (“VZAO”) to reflect
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`its change of legal form to a closed joint-stock company. See Skurikhin Dec. 119. In
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`2 As explained below, the May 1994 decision was reversed by Rospatent in February
`2000 but ZAO’s rights were again reinstated by the Russian courts shortly thereafter.
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`

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`January 1998, VZAO sold its interest in the Vodka Marks — including a reversionary
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`interest in the U.S. RUSSKAYA mark — to ZAO Sojuzplodoimport (“ZAO”) a Russian
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`joint-stock company incorporated in October 1997. Id. 1110. In April 1999, ZAO sold its
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`rights to the Vodka Marks in Russia and other countries — including the reversionary
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`interest in the U.S. RUSSKAYA mark — to SP1. Id. 1111.
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`In the United States, Pepsico continued to be supplied with vodka by SPI’s
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`affiliates. Id. 1112. On May 10, 2001, Pepsico executed a deed of assignment assigning
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`all of its rights in the U.S. RUSSKAYA mark to SP1, as the successor to ZAO. See
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`Finkelstein Dec. 115 and Ex. l_3_. That assignment was recorded with the PTO in March
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`2002. See Finkelstein Dec. 116 and Ex. Q.
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`B.
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`The Russian Federation’s Campaign To Re-Nationalize the Vodka Marks
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`Shortly after SPI acquired the Vodka Marks from ZAO in 1999, it was confronted
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`with a relentless campaign by the Russian Government to re-nationalize (without
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`compensation) the Marks, including RUSSKAYA and STOLICHNAYA, in the Russian
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`Federation, the United States and elsewhere. See Skurikhin Dec. 1113. That campaign
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`continues to this day. To date, it has spawned litigation or administrative proceedings in
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`approximately 20 countries, including the Russian Federation, the United States, the
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`Netherlands, Austria, Australia and Brazil. Id. While so far not every proceeding
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`involves the RUSSKAYA mark, the legal theories advanced by the Russian Government
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`and its agencies and state-owned companies against SPI’s rights could equally be asserted
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`against the RUSSKAYA mark. Id. 1114.
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`In most cases, the challenge to SPI’s rights to the Vodka Marks is being brought
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`by FKP and/or its affiliates. Id. 1115. FKP is a Russian state-owned company, created in
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`2002, which purports to act on behalf or for the benefit of the Russian Government. Id.
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`FKP is listed as Petitioner’s supplier on its April 2004 l3ATF application. See
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`Kristiansen Dec. Ex. I}. On March 23, 2005, FKP applied for a U.S. registration of the
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`RUSSKAYA trademark (U.S. Application Serial No. 78/593,939). See Kristiansen Dec.
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`Ex. Q. It is then manifest that this proceeding is part and parcel of the Russian
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`Govemment’s re-nationalization campaign.
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`In February 2000, at the request of the Deputy General Prosecutor of the Russian
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`Federation, Rospatent reversed its May 1994 decision and reinstated the Gospatent
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`decision of August 1991 that had annulled the Russian registrations of the Vodka Marks.
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`See Skurikhin Dec. 1118 and Ex. _C_. In June and August 2000, however, the Russian court
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`finally armulled the 1991 Gospatent and 2000 Rospatent decisions, reinstating ZAO’s
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`rights in the Russian registrations of the Vodka Marks. Id. 1119 and Exs. _D_ and E.
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`I
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`On March 13, 2000, Acting President Vladimir Putin issued an executive order
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`(the “Putin Order”) to the Chairman of the Russian Federation Government, the General
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`Prosecutor, the Minister of External Affairs, the Minister of State Property and the
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`Minister of Taxes and Charges instructing them to take measures aimed at restoring and
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`protecting the state’s rights to intellectual property related to vodka production. Id. 1120
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`and Ex. E.
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`In November 2000, the Deputy General Prosecutor of the Russian Federation filed
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`a suit in a Russian court seeking to invalidate a provision in the articles of association of
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`VZAO (which had by then been renamed OAO Plodovaya Companya (“OAO”)) that
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`declared that VZAO was the legal successor to VVO. Id. 1121. The court granted the
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`relief requested in December 2000. Id. 1122 and Ex. (_}. However, the ruling was vacated
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`by an appellate court in February 2001. Id. 1123 and Ex. H. The Russian Government did
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`not further appeal the appellate court’s ruling within the time prescribed by the
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`procedural rules. Id. 1124. Instead, the Deputy General Prosecutor later brought the case
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`for review to the High Arbitrazh Court (the highest commercial court of the Russian
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`Federation) “by way of supervision” (or “protest”). Id. 1125.
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`The method of review “by way of supervision” has consistently been held to be in
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`violation of due-process requirements of Article 6, paragraph 1, of the European
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`Convention on Human Rights. See Volkova v. Russia (ECHR Judgment of 5 April 2005,
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`app. No. 48758/99); Ryabykh v. Russia (ECHR Judgment of 24 July 2003, app. No.
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`52854/99); see also Sovtransavto v. Ukraine (ECHR Judgment of 25 July 2002, app. No.
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`48553/99); Brumarescu v. Romania (ECHR Judgment of 28 October 1999, app. No.
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`28342/95). In October 2001 the Presidium ofthe High Arbitrazh Court ruled in favor of
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`the Russian Government (the “Presidium Decision”). See Skurikhin Dec. 1126 and Ex. 1.
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`OAO is challenging the validity of the Presidium Decision in proceedings before the
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`European Court of Human Rights. See id. 1127. SPI contends that the Presidium Decision
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`violates basic notions of due process and contains manifest errors of substantive law. Id.
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`1128. Accordingly, SPI contends that the Presidium Decision is contrary to fundamental
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`U.S. public policy and hence cannot be recognized or given effect by any court or
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`administrative agency in the United States.
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`On the basis of the Presidium Decision, Rospatent transferred to the Russian
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`Federation, without any compensation, the Russian registrations of the Vodka Marks
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`(including the RUSSKAYA mark) that existed at the time of the transformation of VVO
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`into VAO and annulled similar Russian registrations that had been subsequently obtained
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`by VAO or its successors. Id. 1129. The Russian courts later upheld Rospatent’s actions.
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`Id. 1130.
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`Having completed the takeover of the Russian registrations of the Vodka Marks,
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`the Russian Government turned to the re—nationa1ization of the same trademarks
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`registered abroad. On April 9, 2003, Rospatent asked the World Intellectual Property
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`Organization (“WIPO”) to record a change of ownership of the Vodka Marks from SP1 to
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`FKP. See Declaration of Beatrice Sfondylia (“Sfondylia Dec.”) 112 and Ex. A. WH’O,
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`which has no authority to review the validity of requests from trademark offices of
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`member states, complied with the request in June 2003. Id. 113. Since then, SPI has
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`challenged the WIPO action in administrative proceedings in several WIPO member
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`states. Id. 114. To date, SPI has obtained favorable resolutions in at least four countries.
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`Id. 115.
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`At about the same time, FKP started to file legal actions in various countries
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`challenging SPI’s ownership of certain of the Vodka Marks in those countries. While the
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`RUSSKAYA trademark is not yet explicitly at issue in those legal actions, the legal
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`theories advanced by FKP could be used to challenge SPI’s rights to all of the Vodka
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`Marks. In May 2003, FKP filed a claim against SPI in the Netherlands challenging SPI’s
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`right to certain of the Vodka Marks and seeking, inter alia, transfer of those marks to
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`FKP. See Skurikhin Dec. 1131. The hearing on the merits in this action took place in
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`April 2005 and a decision has not yet been rendered. Id. 1132. SP1 has obtained, however,
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`the seizure of a shipment of vodka infringing SPI’s rights and the Dutch courts have
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`denied FKP’s request to lift the seizure. Id. 1133 and Ex. J
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`In July 2004, FKP filed a claim in Austria against SP1 and its Austrian distributor
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`claiming ownership of the Austrian STOLICHNAYA and MOSKOVSKAYA trademarks
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`and seeking to enjoin SPI fiom using those marks. Id. 1l34. In November 2004, the
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`Regional Court of Linz dismissed FKP’s claim for injunctive relief. Id. 1l35 and Ex. K.
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`The decision was affirrned by the Court of Appeals of Linz in February 2005 and has not
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`been appealed further. Id. 1[35 and Ex. L. The case on the merits is pending. Id. 1135.
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`In September 2004, FKP filed a claim against SP1 and other related companies in
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`Brazil challenging SPI’s ownership of certain of the Vodka Marks, seeking transfer of the
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`registrations to an affiliate (another Russian state—owned company called FGUP
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`Sojuzplodoimport (“FGUP”)), cancellation of other registrations and preliminary
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`injunctive relief. Id. fi[36. The Brazilian courts have denied preliminary relief and the
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`proceeding is pending on the merits. Id. fi[37 and Ex. M.
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`In Australia, FKP has intervened in an action brought by an SPI affiliate against
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`its Australian distributor, Diageo Australia Limited. Id. 1l38. FKP is seeking transfer of
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`the Australian registrations for STOLICHNAYA and MOSKOVSKAYA to itself or, in
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`the alternative, to FGUP. Id. The case is pending. Id.
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`In the United States, FKP filed suit in federal district court in October 2004
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`against SP1, SPI affiliates and SPI’s distributor, Allied Domecq Spirits and Wine USA,
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`Inc. (“Allied Domecq”), claiming, among other things, ownership of the
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`STOLICHNAYA group of marks in the United States. Federal Treasury Enterprise
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`Sojuzplodoimport et al. v. Spirits International N. V. et al., Civil Action No. l:04-CV-
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`08510 (GBD)(THK) (S.D.N.Y.).‘ The defendants have filed motions to dismiss, which
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`are pending.
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`10
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`

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`Encouraged by favorable recent developments — denial of preliminary relief in the
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`Austrian and Brazilian actions and favorable administrative decisions arising out of SPl’s
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`challenge to the WIPO action — SPI has began taking steps to resume use of the
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`RUSSKAYA mark in the United States. Samples of the product and a Statement of
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`Manufacture were submitted to the United States Alcohol and Tobacco Tax and Trade
`
`Bureau (“TTB”) for pre-COLA product evaluation. See Declaration of Alexander
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`Skuratov (“Skuratov Dec.”)1[3(a). Further, SPI Spirits (Cyprus) Limited, an exclusive
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`licensee of SPI, reached a preliminary agreement with its current distributor, Allied
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`Domecq, to start deliveries of RUSSKAYA brand vodka to the United States
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`immediately upon TTB approval. Id. 1l3(b).
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`The energy with which SP1 has defended its rights in the face of the onslaught of
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`litigation brought by the Russian Government and its affiliates demonstrates SPI’s
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`commitment to the Vodka Marks, including the RUSSKAYA mark. The speed with
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`which SPI has taken steps to re-launch the RUSSKAYA brand filrther highlights its
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`dedication. SPI’s actions are wholly inconsistent with an intent to abandon the
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`RUSSKAYA mark.
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`ARGUMENT
`
`A.
`
`Whether SP1 Abandoned the RUSSKAYA Mark is A Fact-Intensive Inquiry
`Inappropriate for Summary Judgment.
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`In this cancellation proceeding, Petitioner A.V. Imports does not challenge SPI’s
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`ownership of the RUSSKAYA mark. Rather, the sole ground for its petition is
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`abandonment. Under the Lanham Act, a registered trademark is abandoned only when its
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`use is discontinued with an intent not to resume use. 15 U.S.C. § 1127 (emphasis added).
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`Summary judgment is very rarely granted. on the question of whether a trademark owner
`
`
`
`11
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`has abandoned a mark because of the fact-intensive nature of the inquiry and the issues of
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`intent that dominate the analysis. The Federal Circuit has recognized that “the factual
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`question of intent is particularly unsuited to disposition on summary judgment.”
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`Copelands ’ Enters., Inc. v. CNV, Inc., 945 F.2d 1563, 1567 (Fed. Cir. 1991); see also
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`Opryland USA, Inc. v. Great American Music Show, Inc., 970 F.2d 847, 850
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`(Fed.Cir.1992). This is particularly true in the present context where SPI’s intent is
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`inextricably bound up with a very complex set of facts: a lengthy and involved multi-
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`country dispute with the Russian Government over ownership of the Vodka Marks.
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`Summary judgment is appropriate only in cases where there are no genuine issues
`
`of material fact in dispute. Fed. R. Civ. P. 56(c). In a motion for summary judgment,
`
`“[t]he evidence must be viewed in a light favorable to the non-movant and all justifiable
`
`inferences are to be drawn in its favor.” Lloyd ’s Food Prods., Inc. v. Eli ’s, Inc., 987 F.2d
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`766, 767 (Fed. Cir. 1993). The petitioner bears the heavy burden to demonstrate that
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`there are no genuine issues of material fact, and that it is entitled to judgment as a matter
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`of law. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Petitioner has not begun to I
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`meet its heavy burden on this motion.
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`B.
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`SPI Did Not Abandon the RUSSKAYA Mark.
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`Petitioner must prove that SP1 abandoned the RUSSKAYA mark by a
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`preponderance of the evidence. Cerveceria Centroamericana, S.A. v. Cerveceria India,
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`Inc., 892 F.2d 1021, 1023-24 (Fed. Cir. 1989). Although nonuse of a mark for three
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`consecutive years creates a primafacie case of abandonment, 15 U.S.C. § 1127, a
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`registrant may rebut such a presumption by putting forth (i) evidence that he used the
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`mark or intended to resume use, or (ii) evidence of excusable nonuse negating the
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`presumptive intent to abandon. Aris A. Zissis d/b/a Importer Wines and Spirits v.
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`Karolos Fix et al., 2001 WL 58414 (T.T.A.B. 2000), citing Rivard v. Linville, 133 F.3d
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`1446 (Fed. Cir. 1998). Moreover, “[t]he burden of persuasion remains on the party
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`seeking cancellation even if a statutory prima facie case of abandonment has been
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`established.” United States Olympic C0\mmittee v. Moeb, Inc., 2003 WL 22273105, at *3
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`(T.T.A.B. 2003), citing 0n—Line Careline, Inc. v. America Online Inc., 229 F.3d 1080
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`(Fed. Cir. 2000). Accordingly, it is Petitioner’s burden to demonstrate that no genuine
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`issues of material fact exist regarding both excusable nonuse of the RUSSKAYA mark
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`and SPI’s intent to resume use of the mark. SPI has presented evidence of both
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`excusable nonuse and an intent to resume use. That evidence raises many genuine issues
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`of material fact that preclude summary judgment.
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`1.
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`SPI’s Nonuse Is Excused By the Numerous Legal Challenges
`To Its Rights to the Vodka Marks.
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`On May 10, 2001, PepsiCo executed a Deed of Assignment, effective January 1,
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`2001, transferring all right, title and interest in the U.S. RUSSKAYA mark to SP1. See
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`Finkelstein Dec. 115 & Ex. 3. By the time SPI acquired the RUSSKAYA mark from
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`Pepsico, the Russian Government has already begun its campaign to re-nationalize the
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`Vodka Marks (including the RUSSKAYA mark). See Skurikhin Dec. 1113. Since SPI has
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`acquired the RUSSKAYA mark, the Russian Government has continued its attacks on
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`SPI’s rights in Russia while also seeking a worldwide seizure of the Vodka Marks
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`through the WIPO Challenge. See id. 111116-30; see also Sfondylia Dec. 112. Also during
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`this time, FKP has filed legal actions in the Netherlands, Austria, Brazil and the United
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`States. See Skurikhin Dec. 111131-38; see also Federal Treasury Enterprise
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`Sojuzplodoimport et al. v. Spirits International N. V. et al., Civil Action No. l:04-CV-
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`08510 (GBD)(THK) (S.D.N.Y.). Each of these actions has challenged, directly or
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`indirectly, SPl’s rights in the RUSSKAYA mark.
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`Contrary to Petitioner’s repeated suggestion, SPI did not attempt to “warehouse”
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`the RUSSKAYA mark during this time. Rather, SPI made a sensible business decision
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`that, given that world-wide dispute involving the Vodka Marks, it would be best to delay
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`a re-launch of the RUSSKAYA brand. SPI’s nonuse under these circumstances is
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`excusable because its activities “are those that a reasonable businessman .
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`.
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`. would have
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`undertaken.” Rivard, 133 F.3d at 1449; see also Frank Bonafilia v. Am. Marketing Ass ’n,
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`2004 WL 2075788, at *5 (T.T.A.B. 2004). It is well—established that “nonuse of a mark
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`pending the outcome of litigation to determine the right to such use or pending the
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`outcome of a party’s protest to such use constitutes excusable nonuse sufficient to
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`overcome any inference of abandonment.” Penthouse Int 7, Ltd. v. Dyn Electronics, Inc.,
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`196 U.S.P.Q. 251, 257 (T.T.A.B. 1977); see also Telos Corp. v. Telestrategies, 2005 WL
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`329711, at *3 (T.T.A.B. 2005) (denying summary judgment where evidence indicated
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`that discontinued use of mark was result of pending opposition proceeding); United
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`States 0lympic‘Committee v. Moeb, Inc., 2003 WL 22273105, at *4 (T.T.A.B. 2003)
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`(denying petition to cancel).
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`Relying on the Penthouse decision, the Board in United States Olympic
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`Committee observed that the lengthy legal battle over the parties’ respective rights in the
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`mark AMERICA’S TEAM created a “cloud of uncertainty as to whether respondent’s
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`rights in the registration would survive the proceeding” and held that the registrant was
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`justified in postponing its use of the mark in question. 2003 WL 22273105, at *4. Here,
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`the sheer volume of legal actions concerning ownership of the Vodka Marks, their
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`international scope3 and the demands they placed on SPI’s time, attention and resources
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`likewise justify SPl’s decision to postpone the re—launch of the RUSSKAYA brand.
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`While it is true, as Petitioner points out, that SP1 continued to sell
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`STOLICHNAYA vodka in the United States during the pendency of its legal disputes
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`with FKP, that fact is immaterial. It would be a foolish business decision to pull a highly
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`popular brand such as STOLICHNAYA off the market at this juncture, just as it would be
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`a foolish decision to invest heavily in a largely dormant brand like RUSSKAYA. SPI’s
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`business decisions with respect to the STOLICHNAYA brand are simply not relevant to
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`the highly fact-specific question whether SPl’s actions with respect to RUSSKAYA
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`were, as the court in Rivard put it, “those [of] a reasonable businessman, who had a bona
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`fide intent to use the .
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`.
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`. mark in United States commerce.” Rivard, 133 F.3d at 1449.
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`Likewise, Petitioner’s argument that SP1 had the resources and raw ability to
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`launch the RUSSKAYA brand during this period is irrelevant. Whether or not SP1 had
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`the tools to do so, it would have been imprudent for SP1 to re—launch the RUS SKAYA
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`3 Courts that have considered the issue have held that factors such as government
`interference also weigh against a finding of abandonment. See, e.g., Saratoga Vichy
`Spring Co. v. Lehman, 625 F.2d 1037, 1043-44 (2nd Cir. 1980) (affirming district court’s
`finding that registrant’s mark was not abandoned where legislation effectively forced
`registrant to withdraw from water business and where registrant thereafter sought
`continuously to sell the business); Miller Brewing Co. v. Oland ’s Breweries (1971) Ltd. ,
`548 F.2d 349, 351 (C.C.P.A. 1976) (affinning Board’s finding that Canadian brewer did
`not abandon its mark where its use in the United States was discontinued “due to both
`economic and business problems in Canada”); Chandon Champagne Corp. v. San
`Marino Wine Corp., 335 F.2d 531, 534-35 (2nd Cir. 1964) (affirming district court’s
`finding that registrant’s wartime withdrawal from U.S. market did not amount to
`abandonment); Aris A. Zissis d/b/a Importer Wines and Spirits v. Karolos Fix et al. 2001
`WL 58414, at *3 (T.T.A.B. 2000) (Board observed that, despite its ultimate finding of
`abandomnent, initial period of nonuse was excusable due to Greek govemment’s
`interference with brewery’s operations).
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`15
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`
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`brand while its ownership of the RUSSKAYA mark was under attack. Accordingly,
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`SPI’s actions were those of “a reasonable businessman.” Id.
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`2.
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`SP1 Intends to Resume Use Of The RUSSKAYA Mark.
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`Now that SPI has obtained several favorable rulings in its worldwide dispute over
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`its rights to the Vodka Marks, SPI has taken steps to re-launch the RUSSKAYA brand.
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`These steps include making a submission to the TTB for approval and negotiating an
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`agreement with Allied Domecq to start deliveries of RUSSKAYA brand vodka to the
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`United States immediately upon TTB approval. See Skuratov Dec. 113. Although SPI’s
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`nonuse of the RUSSKAYA mark would be further excused until all the legal actions have
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`been resolved in its favor, the evidence of its recent actions to re-launch the RUSSKAYA
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`brand demonstrates SPI’s clear intent to resume use of the RUSSKAYA mark in a
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`prompt manner.
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`C.
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`The RUSSKAYA Mark Was Not Abandoned By Pepsico Prior to Its
`Assignment to SP1.
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`Petitioner makes a half—hearted argument that the RUSSKAYA mark was
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`abandoned during Pepsico’s tenure. Petitioner concedes that Pepsico was using the
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`RUSSKAYA mark until at least 1994. Further, Petitioner has never sought discovery
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`from Pepsico in this matter.4 Petitioner cites no evidence that Pepsico discontinued use
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`of the RUSSKAYA mark or that it did so with an intent not to resume use.
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`4 To the extent that Pepsico had facts relevant to this proceeding, SPI intended to
`introduce them through testimonial depositions during the testimony period. See
`Kristiansen Dec. 1[5. However, if further information is needed in order to establish that
`Pepsico did not abandon the RUSSKAYA mark, summary judgment should be refused
`because “facts essential to justify [SPI’s] opposition” have not been fully developed .Fed.
`R. Civ. P. 56(1).
`
`16
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`

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`At no time prior to its assignment of the RUSSKAYA mark to SP1 in 2001 did
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`Pepsico abandon its rights in the RUSSKAYA mark with an intent not to resume use.
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`See Finkelstein Dec. 113. Pepsico’s commitment to the RUSSKAYA mark is
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`demonstrated by the following actions:
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`0 From September of 1993 through January of 1999, PepsiCo vigorously
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`defended a Petition to Cancel the RUSSKAYA mark in the matter of
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`The Frank Pesce International Group, Ltd. v. PepsiCo, Inc. ,
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`Cancellation No. 22,190, which was ultimately settled in Pepsico’s
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`favor. See Finkelstein Dec. 1l4(b).
`
`0
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`Interrogatory responses made by Pepsico in that proceeding detail its
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`use of the RUS SKAYA mark and the reasons it was precluded from
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`selling more RUSSKAYA vodka in the United States. See Kristiansen
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`Dec. Ex. A.
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`0