D-Day looms in bitter Cuba-US rum trademark war

Posted on Tuesday, 06.05.12

D-Day looms in bitter Cuba-US rum trademark war
By PETER ORSI
Associated Press

HAVANA -- There was the Cold War, the Bay of Pigs and the Cuban Missile
Crisis, and there is still no end in sight to U.S.-Cuban animosity. Now
a bitter dispute over a sweet-tasting spirit appears to be nearing an
end game after more than a decade of legal wrangling.

Time and again U.S. courts have ruled against Cuba in its fight to
control the U.S. rights to the trademark Havana Club, the island's
flagship rum brand that is sold in more than 120 countries around the
world - but not in the United States.

By mid-June, Cuba could lose all chance of pressing its legal claims
against Bacardi, which distributes a limited quantity of its own Havana
Club rum in Florida and says it plans to expand to other U.S. states in
the near future.

Indignant over what it considers wholesale piracy of a national icon,
Cuba accuses the U.S. of using an under-the-radar maneuver to block Cuba
from paying the small trademark renewal fee, and has raised its concerns
at increasingly high levels of government. If the trademark expires,
Cuba says it could retaliate on U.S. trademarks currently protected on
the island.

"The United States' disrespectful attitude in divesting the legitimate
Cuban owners of the Havana Club brand can put at risk the brand and
patent rights of American companies in our country," Maria de los
Angeles Sanchez, director of Cuba's office of intellectual property,
said Tuesday. "Cuba reserves the right as a sovereign nation to act at
the appropriate moment."

Such retaliation might have limited immediate impact, as most U.S. goods
are barred from being sold to the island under the 50-year-old U.S.
embargo. However there are some legal sales of food items, and companies
could also face tough and costly legal battles to win back their
trademark rights in a post-embargo Cuba.

Although the U.S. sanctions prevent Cuba from marketing Havana Club in
the United States, the island has held the trademark there since 1976
after the Cuban family that originally owned the brand let their
registration lapse.

But since it came time to renew in 2006, Cuba says, it has been unable
to do so because the U.S. Treasury Department's Office of Foreign Assets
Control, which enforces the embargo against the island, has not issued a
license for Havana to make the $200 renewal payment.

Cuba sued the U.S. government, but lost. And when the U.S. Supreme Court
declined to review the ruling on May 14, a 30-day countdown began after
which the U.S. Patent and Trademark Office can cancel the trademark.

That means that as soon as June 13, Cuba's claim to the name could
expire, and with it the island's best hope of continuing its legal battle.

Cuba has sent repeated diplomatic notes to Washington about the Havana
Club trademark, but without yielding any result, Vice Foreign Minister
Abelardo Moreno said.

U.S. government representatives declined to comment Tuesday. But in a
written response to a question posed at a May 17 briefing, the State
Department said the Office of Foreign Assets Control declined to license
Cuban state-run export company Cubaexport to pay the fee, per policy
guidance from State.

"Cubaexport was accorded and exercised a panoply of rights available to
it under U.S. law," the statement read. "Cubaexport has had its day in
court."

The French company Pernod Ricard, which partners with Cuba to distribute
Havana Club worldwide, vows the battle isn't over.

"We are currently studying possible legal actions and studying the
decision," Olivia Lagache, general counsel for Havana Club, said by
phone from Paris. "We will still fight to keep this trademark alive."

But the French spirits maker is also putting contingency plans into
action. After the Supreme Court ruling, Pernod Ricard announced it had
registered the brand name Havanista in the United States to sell rum
there whenever the embargo is lifted.

The U.S. is an extremely lucrative market and home to some 40 percent of
the world's rum drinkers, who would likely jump at the chance to sip the
light, dry rum, distilled through a process of charcoal filtering and
oak-barrel aging to give it extra sweetness.

Havana Club offers a range of rums that go from just a few dollars to
the ultra-high-end Maximo Extra Anejo, which retails for more than
$1,200 a bottle.

Right now Bacardi dominates worldwide with 19.3 million cases of its
rums sold in 2010, according to Impact Databank. That compares to 3.8
million cases of Pernod Ricard's Havana Club sold in 2010, according to
the French company.

Bacardi says it legitimately has the right to market Havana Club in the
United States. The Bermuda-based company says it purchased global rights
to the trademark in 1997 from the Arechabala family, the original owners
who had let their registrations lapse. At the time, Bacardi was already
embroiled in a legal dispute over its use of the name.

In rulings favoring Bacardi, courts cited 1998 U.S. legislation - which
Bacardi lobbied for and some call the "Bacardi Bill" - preventing
lawsuits to enforce a trademark involving a company that was
nationalized by Cuba. That same legislation also amended U.S. law so
that such trademarks could no longer be renewed automatically, and
required a specific license from the Office of Foreign Assets Control.

Pernod Ricard considers the legislation unfairly retroactive.

Bacardi applauded the Supreme Court decision. It said it has a trademark
pending with the patent office since 1994, and is confident of gaining
approval soon.

"Cuba does not have a valid registration," said Patricia M. Neal, a
spokeswoman for Bacardi USA. "As a matter of law, the United States
Patent and Trademark Office will formally cancel the registration of
Cuba Export for the mark in due course."

---

Associated Press writers Andrea Rodriguez in Havana and Matthew Lee in
Washington contributed to this report.

http://www.miamiherald.com/2012/06/05/v-fullstory/2834387/d-day-looms-in-bitter-cuba-us.html