The court’s verdict on the case, which began in 2003, calls on Spirits International to cease trade in the vodka brands in the Benelux market. However the ruling also provides for Yuri Shefler to compensate Russia for its losses during the time period that he exploited the trademark.
SPI has been producing Stolichnaya, one of Latvia’s most best-known products, and exporting it to 180 national markets around the world from its distillery Latvijas balzams for many years. Last year the SPI Group consolidated its Baltic alcoholic beverage making and distribution holdings into a single concern called the Amber Beverage Group.
In 2014 it reported making 2.7 million decaliters of Solichnaya and Mokovskaya, comprising 82% of the distillery’s entire output, which includes more than 50 other vodka brands and flavors. The company’s turnover in 2013 was €101.1 million, earning €6.23 million in profit.
According to the court, if Yuri Shefler, the tycoon who owns international alcoholic drinks maker SPI, doesn’t relinquish the brands to Russia’s control, Spirits International will face a penalty of €100,000, which can increase by €50,000 daily if not paid on time.
The decision, still subject to appeal, could set a precedent for other cases pending worldwide regarding the rights to these vodka brands, including in the US, Australia, Switzerland and 12 European Union countries, said Joris van Manen, a lawyer at Hoyng Monegier LLP, the law firm which represented Russia against Shefler.
“Yuri Shefler took possession of the vodka trademarks after the collapse of the Soviet Union and has exploited them since,” Hoyng Monegier said in a statement.
The decision is “not correct in light of the facts,” SPI Group, the owner of Spirits International, responded in an e-mailed statement. “We are examining all of our options for the next steps. In any case, the decision affects only a small part of our overall global market,” the group maintained.