Trademark ownership of Stolichnaya in Australia is to switch, pending the outcome of a court case in the country. Diageo, the current distributor of Stolichnaya in the country, has agreed to the move in the hope that the brand will not be damaged while litigation decides trademark ownership of the vodka.

Distribution and trademark licence arrangements for Stolichnaya are due to come to an end on 4 September. Due to ongoing litigation between Russian company Spirits International (SPI) and FKP (a Russian government entity) as to the rights to the trademark ownership of the brand, Diageo, which is also a party to the litigation, agreed that as an interim measure, the relevant trademarks should be assigned into the custody of SPI as from 4 September.

This move will allow SPI's appointed distributor to continue to distribute the brand in Australia and therefore to facilitate continued sales and marketing.

Diageo agreed to this interim arrangement, which has now been sanctioned by the court, because resolving the question of trademark ownership is likely to be a complex and time-consuming exercise, the spirits company said in a statement.

SPI has undertaken to compensate Diageo and/or FKP for any proven loss of profit for the interim period it holds the rights, should it ultimately lose the case.

This court-sanctioned interim arrangement does not affect rights to the Ruski ready to drink brand which are wholly owned by Diageo, and are the subject of a separate claim in the same proceedings.

Diageo said yesterday (19 May) that it is committed to acting with integrity over matters such as this. "It is for this reason that Diageo agreed to an interim arrangement which protects the brand throughout this period of dispute while preserving the legal rights of all parties to the litigation," the company said.

According to Russian press reports, SPI has already found a new partner for Stolichnaya in Australia in Allied Domecq. The UK company already sells Stolichnaya and Moskovskaya vodka on many principal markets, including the US. Annual sales in Australia are estimated at 100,000 decalitres on average.