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Zao Odessky Konjatschnyi Zawod v. SIA " Baltmark Invest"

United States District Court, E.D. Virginia, Alexandria Division

February 21, 2014

ZAO ODESSKY KONJATSCHNYI ZAWOD, Plaintiff,
v.
SIA " BALTMARK INVEST," et al., Defendants

For Zao Odessky Konjatschnyi Zawod, a Ukranian corporation, Plaintiff: Filipp Iosifovich Kofman, Kevin Richard Garden, International Legal Counsel, PC, Alexandria, VA.

For Sia " Baltmark Invest", a Latvian corporation, Defendant: Thomas Leo Appler, Andrew Clark Hall, Peter Meredith Moore, Wilson Elser Moskowitz Edelman & Dicker LLP, McLean, VA.

OPINION

Page 852

MEMORANDUM OPINION

James C. Cacheris, UNITED STATES DISTRICT COURT JUDGE.

At issue in this case is the ownership of the SHUSTOV trademark. For the reasons set forth below, the Court concludes that Defendant, SIA " Baltmark Invest" (" Baltmark" ) is the owner of the mark.

On December 3, 2013, this matter came before the Court for a bench trial on Plaintiff ZAO Odessky Konjatschnyi Zawod's (" Odessky" ) Amended Complaint against Defendant Baltmark. This case arises out of a Trademark Cancellation petition initiated by Odessky seeking cancellation of Trademark Registration No. 2885912, which is currently held by Defendant Baltmark. The cancellation proceeding was consolidated before the Trademark Trial and Appeal Board (" TTAB" ) with Baltmark's predecessor in interest's opposition to Odessky's Trademark Application Serial No. 78/240612. The TTAB dismissed Odessky's petition to cancel, sustained Baltmark's predecessor in interest's opposition and refused registration to Odessky. Odessky now petitions this Court to consider the application on the merits, and asks this Court to cancel Baltmark's Trademark Registration No. 2885912 and dismiss Baltmark's opposition to Trademark Application Serial No. 78/240612. As a result of the Court's prior rulings, the following claims were submitted to the Court at trial: Count III (abandonment based on failure to timely assign the SHUSTOV mark), Count IV (bad faith in appropriating and registering the SHUSTOV mark); Count V (dismissal of opposition

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to application No. 78/240612); and Count VI (claim that Baltmark lacks rights in the SHUSTOV mark).[1]

After thoroughly reviewing and considering the relevant records and evidence, including exhibits and observing and evaluating witness testimony at trial, the Court makes the following findings of fact and conclusions of law.

I. Findings of Fact

Parties

1. Plaintiff Odessky is a Ukrainian corporation with its principal place of business located at 13 Melniskaja, Odessa, 65005 Ukraine. (Joint Stipulation of Undisputed Facts ¶ 1 [Dkt. 107.])

2. Defendant Baltmark is a Latvian corporation with its principal place of business located at 29-5 Skolas St., Riga, Latvia, LS 1048. ( Id. ¶ 2; Tr. 35:2-3.)

3. Elena Sorokina (" Sorokina" ) is the owner and sole shareholder of Baltmark. (Tr. 34:15-19.) Sorokina holds college degrees in civil engineering, law, and finance. (Tr. 92:4-6.) She also holds an MBA in strategic management of companies. (Tr. 92:7-8.) She has over twenty years business experience in Russia and has worked for over ten years as a manager. (Tr. 92:11-13.)

4. Global Closed Joint Stock Company (" Global" ) is a Russian closed joint-stock company with its principal place of business located at 5 ippodromnaya St., Tambov, Russian Federation 392028. (Joint Stipulation of Undisputed Facts ¶ 3.)

5. ZAO " Gruppa Predpriyatij Ost" (" OST" ) was a Russian closed joint-stock company with its principal place of business located at p. Chernogolovka, ul. Trety proyezd, d. 16, 142 432 Moskovskaya obl., Noginsky rayon, Russian Federation. ( Id. ¶ 4.)

Trademark Application and TTAB Proceedings

6. On December 12, 2002, OST filed a trademark application in the Russian Federation, Application No. 2002731063, to register the printed word " SHUSTOV" displayed on a bell-shaped design. ( Id. ¶ 6.)

7. The printed word " SHUSTOV" displayed on a bell-shaped design was registered to OST in the Russian Federation as Certificate No. 240948 on March 21, 2003, for use in connection with: alcoholic beverages; alcoholic beverages comprising fruits; spirits; honey drink; peppermint nastoyka; sake; rice spirit; gin; rum; bitter nastoyka; liqueurs; whiskey; brandy; aperitifs included in class 33; and vodka. ( Id. ¶ 7.)

8. On April 22, 2003, plaintiff Odessky filed U.S. Application Serial No. 78/240612 to register on the Principal Register the SHUSTOFF MARK, IN TYPED FORM, for alcoholic beverages (except beers); aperitifs; distilled liquors; spirits; wines; whisky; vodka; gin; cocktails; liqueurs; distilled beverages; bitters (schnapps and liqueurs); rum; liqueurs and spirits (digestives); alcoholic extracts. ( Id. ¶ 5.)

9. On May 23, 2003, OST filed U.S. Application Serial No. 76/519958 based on its Russian registration and alleged an intent to use the mark in commerce, pursuant

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to Section 44(e) of the Lanham Act, 15 U.S.C. § 1126(d), on or in connection with: alcoholic beverages; alcoholic beverages comprising fruits; spirits; honey drink; peppermint nastoyka; sake; rice spirit; gin; rum; bitter nastoyka; liqueurs; whiskey; brandy; aperitifs; and vodka. ( Id. ¶ 8.)

10. Pursuant to Section 44(e), OST, through its duly authorized representatives, alleged in U.S. Application Serial No. 76/519958 that it had a bona fide intention to use the SHUSTOV mark in commerce in the United States on or in connection with alcoholic beverages; alcoholic beverages comprising fruits; spirits; honey drink; peppermint nastoyka; sake; rice spirit; gin; rum; bitter nastoyka; liqueurs; whiskey; brandy; aperitifs included in International Class 33; and vodka. ( Id. ¶ 9.)

11. OST, through its duly authorized representative, alleged in U.S. Application Serial No. 76/519958 that it knew of no other person, firm, corporation or association that had the right to use the SHUSTOV trademark in commerce, either in the identical form or in such near resemblance as to be likely, when used on or in connection with the goods/services of such other person, to cause confusion, to cause mistake or to deceive. ( Id. ¶ 10.)

12. In U.S. Application Serial No. 76/519958, OST, through its duly authorized representative, alleged that it believed it owned or was entitled to use the trademark consisting of the printed word " SHUSTOV" displayed on a bell-shaped design that it sought to register. ( Id. ¶ 11.)

13. In U.S. Application Serial No. 76/519958, OST, through its duly authorized representative, alleged that all statements made in OST's application were true, and that all statements made in OST's application made on information and belief were believed to be true. ( Id. ¶ 12.)

14. On March 19, 2004, OST amended its identification of goods in connection with which it had a bona fide intention to use the SHUSTOV mark to: alcoholic beverages, namely distilled spirits; distilled rice spirits; aperitif wines; alcoholic aperitif bitters; alcoholic honey drink; peppermint schnapps; alcoholic fruit-based beverages; sake; gin; rum; liqueurs; whiskey; brandy; vodka in International Class 33. ( Id. ¶ 13.)

15. On September 21, 2004, the printed word " SHUSTOV" displayed on a bell-shaped design was registered to OST as U.S. Registration No. 2885912 for use in commerce on or in connection with: alcoholic beverages, namely distilled spirits; distilled rice spirits; aperitif wines; alcoholic aperitif bitters; alcoholic honey drink; peppermint schnapps; alcoholic fruit-based beverages; sake; gin; rum; liqueurs; whiskey; brandy; vodka, in Class 33. ( Id. ¶ 14.)

16. On June 9, 2004, Odessky received notice from the U.S. Patent and Trademark Office that U.S. Application Serial No. 78/240612 would be published for opposition on June 29, 2004. ( Id. ¶ 15.)

17. On July 28, 2004, OST filed its Notice of Opposition, which was instituted as Opposition No. 91161570, to Odessky's registration of the SHUSTOFF trademark in U.S. Application Serial No. 78/240612 on the grounds of priority and likelihood of confusion with OST's then pending SHUSTOV mark and design in U.S. Application Serial No. 76/519958. ( Id. ¶ 16.)

18. U.S. Registration No. 2885912 issued to OST on September 21, 2004. ( Id. ¶ 17.)

19. On January 11, 2005, Odessky filed its answer to OST's Notice of Opposition and alleged, as its affirmative defenses, that OST acted in bad faith in registering the SHUSTOV mark. ( Id. ¶ 18.)

Page 855

20. On October 6, 2006, OST moved for summary judgment in Opposition No. 91161570, alleging that it had established priority through its Russian registration of the SHUSTOV trademark, and that Odessky's registration of the SHUSTOFF trademark would cause a likelihood of confusion. ( Id. ¶ 19.)

21. On February 22, 2007, Odessky cross-moved for summary judgment that OST acted in bad faith in obtaining U.S. Registration No. 2885912 because OST did not own the SHUSTOV trademark. ( Id. ¶ 20.)

22. On April 15, 2008, the TTAB denied OST's motion for summary judgment and Odessky's cross-motion for summary judgment, citing disputed material facts in the record. ( Id. ¶ 21.)

23. On February 22, 2007, Odessky filed a Petition for Cancellation of U.S. Registration No. 2885912, which was instituted as Cancellation No. 92047126, alleging that OST acted in bad faith because it did not own the SHUSTOV mark, and that OST had committed fraud in obtaining U.S. Registration No. 2885912 because it did not have a ...


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