The Vodka X-Files

By Roman Kutuzov

Vedomosti has disclosed that in early July the Government issued a secret decree No. 511-30 aimed ‘to reinstate the Russian Federation in its exclusive rights to the alcohol trademarks’. The Ministry of Internal Security, the Federal Security Service and the Prosecutor’s Office are to help the Ministry of Agriculture to take the trademarks away from private companies; and Mikhail Barschevsky, a former Russian leading counsel, currently a governmental representative in the Constitutional Court, is assigned to coordinate their activities.

Vedomosti has got at its disposal Decree No. 511-30, and one member from the working group, set to put the decree into effect, has confirmed that the document is authentic. However, the members from the working group refused to comment on the decree contents. Clearly, the database of the Governmental Information Department (DPI) does not include this document. According to an employee of the Department, this situation occurs, when a document is secret.

The document does not list the trademarks in question. But there is a great probability that they are ‘Stolichnaya’, ‘Moskovskaya’ and other trademarks, which in Soviet days were owned by VVO Soyuzplodoimport and currently belong to the private company ‘Soyuzplodimport’. The vodka trademarks yield big money for their owners. According to Data Impact Company, last year, ‘Stolichnaya’ took the first place in terms of sales worldwide.

In recent, the Ministry of Agriculture has been more actively seeking to take the brands away from the private company. The Deputy Minister of Agriculture, Vladimir Loginov, plays the lead in this fight. He has been appointed to run the working group working to return ‘Stolichnaya’ to the State.

Naturally, Barschevsky has been appointed Loginov’s deputy because a complicated court litigation is coming. The Ministry of Agriculture has recently established GUP VAO Soyuzplodoimport and is trying to demonstrate that this company is a successor to the Soviet company of the same name. ZAO Soyuzplodimport has already contested the establishment of the GUP in the court.

However, Barschevsky has told Vedomosti that he has not even heard of the decree. As appears from the document, not only frank methods will be used while fighting with Soyuzplodimport. For instance, the working group includes Senior Investigator of cases of particular importance from the General Prosecutor’s Office, Lubov Kuleba; Deputy Chief of the Main Directorate for Fight Against Economic Crime of the Ministry of Internal Security, Valery Mishin; one of the leading law enforcement officers from the Federal Tax Police Service, Konstantin Pirtskhalava; and Akhat Fatekhov from the Economic Security Department of the Federal Security Service.

From the point of view of the patent legislation the decree does not seem that dangerous for Andrey Skurikhin, head of Soyuzplodimport, who stated to Vedomosti that his company’s rights to vodka brands could be disputed only through court. Partner of the law firm Baker & McKenzie, Eugenie Ariyevich, says the same thing: “ The document is amazing. Its title alone astonishes. The Russian Federation has never had the rights to trademarks. According to the law, trademarks could only belong to a business entity, a legal or a physical entity, to which Russia, the Government or the Ministry of Agriculture do not belong.”

But it is not at all the legal side of the matter that is important in the decree. It does not contain any particular new information, besides the composition of the working group. Probably, the decree had been kept secret due to this composition. And now, as a result of the information spill, Skurikhin, probably, has to find out, on who’s side the law enforcement bodies are standing in the vodka conflict. And how effective will the continuation of the compromising material war, which has recently broken out in the press and on the Internet (Soyuzplodimport and the Ministry of Agriculture became the victims of this war).

Extract from Decree No. 511-30 dated 6.07.2001

“1. To concede to the Ministry of Agriculture, according to legal procedure, on behalf of the Russian Federation the right to posses trademarks for alcoholic products and products containing spirits…

3. The Ministry of Agriculture… together with the Ministry of Property Relations and the Russian Agency for Patents and Trademarks … are to provide for the adoption, according to set procedure, of measures aimed at protection and restoration of the exclusive rights of the Russian Federation to trademarks and alcohol and spirit products. The plenipotentiary representative of the Russian Government… in the Constitutional Court should co-ordinate the actions regarding the issue of the stated above federal executive bodies.

4. To create for resolving the matters [regarding the return of the trademarks] and matters of making answerable the persons that are guilty of the violation of interests of the Russian Federation, a interdepartmental working group.”