Incontestable Trademarks Still Subject to Ownership Challenge
The Second Circuit was presented with a factually complex dispute over ownership of the STOLICHNAYA vodka trademarks. The Second Circuit's opinion provides a complete recitation of the complex history of transfers of the marks but at a basic level, "the disputed facts involve a series of allegedly unlawful transactions transferring Russia's rights to the marks to privately held Russian companies, who then transferred those rights to non-Russian companies."
On the defendants' motion to dismiss, the District Court dismissed most of the plaintiff's' claims in part on the ground that they did not state a claim because they sought to challenge ownership of marks that had become incontestable under the Lanham Act and plaintiffs had not alleged any of the statutory exceptions to incontestability.
Among other things, the Second Circuit concluded that the District Court had improperly conflated incontestability with the distinct issue of whether a subsequent transfer of the marks was valid and that the plaintiffs remained free to challenge the alleged assignee's ownership of the marks regardless of their incontestability:
The district court's analysis was mistaken in one very important respect: it permitted Allied Domecq to "step into the shoes" of PepsiCo, the previous registrant of the marks, on the ground that under the Lanham Act the term "registrant" includes the "assigns" of a registrant. . . . Because, the district court reasoned, the marks were incontestable when held by V/O-SPI, they continued to be incontestable when held by Allied Domecq -- an assignee -- and, consequently, FTE's claims failed. Undoubtedly, the term "registrant" includes its "assigns" under the Act, but we disagree with the district court that this conclusion ends the matter. The district court was also called upon to inquire whether a valid assignment had ever actually taken place. This inquiry was required because only after a valid assignment of trademarks does the assignee succeed to the rights of the assignor.
The case cite is Fed. Treasury Enter. Sojuzplodoimport v. Spirits Int'l N.V., No. 06-3532-cv (2d Cir. Oct. 8, 2010).
