TRADE: Cuba-US Trademarks War Looms Over Rum Judgement

By Patricia Grogg Reprint | | Print |

Patricia Grogg

HAVANA, Apr 25 1999 (IPS) - A US court ruling this month prohibiting the use of a well-known Cuban rum label threatens to trigger a war between Cuba and the United States over trademarks.

The row stems from the use of the brand name “Havana Club” – famous in pre-revolution Cuba as part of the Bacardi company, the Cuban rum producers who went into exile in 1960.

The name was revived in 1993 by a new company – Havana Club International, a commercial partnership between the Cuba Rum Corporation, which unites the principal rum producers of Havana, and the French consortium Pernod Ricard.

Pernod Ricard has affiliates in more than 90 countries and is a leading global distributor of such alcoholic beverages as cognac, rum, whisky, wine, aperitifs and liquors.

In five years, Havana Club International’s sales of the “Havana Club” brand of rum grew to 1 million cases in 1998, with 27 million dollars in earnings.

The Bacardi company records annual sales of 20 million cases of its rum, six million of them in the United States.

Havana Club International filed the lawsuit in 1996, two years after Bacardi began distributing its own brand of Havana Club rum, in an effort to stop Bicardi using the disputed name.

A New York Judge, Judge Shira Scheindlin, determined on April 14 that US law does not permit Cuban nationals to assert trademark treaty rights if such names or marks were used in connection with confiscated businesses.

In spite of the US embargo against Cuba since the 1959 revolution that brought Fidel Castro to power, many U.S. companies have registered their trademarks in Cuba.

The United States-Cuba Economic Trade Commission, a non- governmental organisation that has its headquarters in the United States, confirms that in the last two years 235 United States trademarks were registered in Cuba.

“The majority of foreign companies that apply to register trademarks in Cuba are from the United States,” stated Clara Amparo Miranda, chief of the Industrial Property Office’s Department for Trademarks and Other Symbols.

As an example, Miranda pointed out that companies from the United States have registered as many as 114 trademarks in one day. The list of trademarks in Cuba includes Coca-Cola, United Airlines, Playboy magazine – which even registered its “bunny” logo – and the McDonalds and Pizza Hut food chains.

Cuba could declare the registrations invalid if the companies do not sell any of the corresponding products within three years.

But until now, explained Miranda, the authorities have not wanted to implement that legal provision.

Miranda added that international agreements establish special treatment for well-known trademarks, and that they receive protection even when they are not registered.

The Bacardi corporation was founded in 1862 and dominated the local rum market until its Cardenas distillery was confiscated by the revolutionary government and its owners – the family of Jose Arrechabala – emigrated to the United States.

Bacardi-Martini USA defended itself against the Cuban lawsuit alleging that it bought the Havana Club trademark from Arrechabala in 1995. But the Cuban-French partnership maintained that the name had been abandoned by the Arrechebala family.

The legal decision, based upon United States legislation, could be challenged by way of international agreements that protect those who register trademarks in a given country.

Since December 1989, within the framework of opening its doors to foreign investment, Cuba was reinstated into the Madrid Agreement regarding the International Registration of Trademarks and Its Protocol.

Havana may also take up an appeal of the decision with the World Trade Organisation or the legal counsel of the Paris Convention for the Protection of Industrial Property.

In January, president of the Cuban parliament, Ricardo Alarcon, warned that the judicial process could become a serious problem if its development jeopardised the Cuban-French company “unjustly and illegally.”

The United States “is on the verge of further complicating its relations with the rest of the world, and setting a negative precedent,” declared Alarcon.

US experts quoted here feared that the case could bring “chaos and confusion” in an area of international relations as delicate as intellectual property.