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Second Circuit Rules on Important Case Involving STOLICHNAYA Vodka

October 8, 2010

WASHINGTON, DC, October 8, 2010 — The U.S. Court of Appeals for the Second Circuit issued an opinion and summary order today in the case of Federal Treasury Enterprise Sojuzplodoimport (“FTE”), et al. v. Spirits International N.V. (“SPI”), et al., Case No. 06-3532-cv. At stake in the lawsuit are, among other things, the U.S. rights to the famous STOLICHNAYA brand, one of the best selling vodkas in the world. This action is one of many brought by Russian government entities in countries throughout the world pursuant to a directive issued by then-Russian President Putin in an effort to renationalize intellectual property rights that were privatized during the period of “Perestroika” that surrounded the demise of the Soviet Union.

In response to the court’s opinion, Covington litigation partner Gene Gulland stated: “SPI is pleased that the Court of Appeals has rejected FTE’s claim that the assignment of the trademarks to Allied Domecq was procured by fraud, which is the only ground on which FTE claimed that the assignment was invalid. SPI is also pleased with the Court of Appeal’s suggestion that the Russian Federation and FGUP may be indispensable parties who must be included in the litigation and who thus would be subjected to full discovery under U.S. law. SPI is confident that, upon remand to the district court, it will prevail and that discovery will demonstrate the claims have no merit and the complaint was purely politically motivated.”

Along with Mr. Gulland, the Covington team included senior counsel Bing Leverich, partners Oscar Garibaldi and Emily Henn, and associates Hope Hamilton and Peter Saharko. All reside in Washington, except for Ms. Henn, who is based in the firm’s Silicon Valley office.

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