Cuba prevails in Havana Club rum dispute

havana-live-havana_clubHAVANA, Jan. 15th. A two-decades-old battle over who has the right to use the Havana Club trademark in the United States played out quietly at the U.S. Patent and Trademark Office this week with the decision that the rightful owner is a Cuban government company.

The fight pitted Bacardi against Cubaexport, the Cuban partner of French spirits maker Pernod Ricard in the worldwide distribution of Cuba’s most iconic rum — Havana Club.

Because of the embargo, Cuban-made rum isn’t even able to be sold in the United States. But with the thaw between the United States and Cuba, rum makers are looking ahead to the day when Cuba rum doesn’t just arrive in the suitcases of visitors to the island but is sold freely in the U.S. market.

The fight is about future market share in the world’s largest rum market.

On Wednesday, the trademark office informed David Bernstein, a New York lawyer who represents Cubaexport that the Cuban company’s U.S. registration of the Havana Club trademark had been renewed — but only until Jan. 27. That’s because the 10-year registration period dates to 2006 when Cubaexport was rebuffed in its attempts to re-register the mark.

Olivier Cavil, a spokesman for Pernod Ricard, said a petition has already been filed to renew the trademark for another 10-year period.

Bacardi wasn’t immediately available for comment.

The case dates back to 1994 when Bacardi, the largest privately held spirits maker in the world, applied for a U.S. trademark for Havana Club rum after purchasing rights to the name from the Arechabala family, who made rum in Cuba and had sold Havana Club in the United States as early as the 1930s.

But after going into exile after the 1959 revolution, the Arechabalas’ registration of Havana Club lapsed in 1973. Cubaexport saw opportunity and registered the Havana Club trademark in 1976.

In the trademark fight, Bacardi — a top rum maker in Cuba before its holdings were taken over by the Cuban government after the revolution — won a string of victories in

U.S. courts against Cubaexport.

Bacardi also tried to bolster its case by selling its own Havana Club, made in Puerto Rico from the Arechabala family recipe, in Florida to establish its ownership rights through use of the brand.

After the Supreme Court declined to review the case in May 2012, Bacardi waited for the U.S. Patent and Trademark Office to cancel Cubaexport’s right to use the name in the United States.

But Cubaexport filed a petition with the trademark office, saying that the registration couldn’t be revoked and remains “frozen while the embargo of Cuba is in place.”

Even though the United States and Cuba restored diplomatic ties last year, the embargo prohibits most financial transactions with the island unless they are licensed by Treasury’s Office of Foreign Assets Control.

When Cubaexport tried to get a license from OFAC in 2006 so it could pay $500 to renew the Havana Club trademark, OFAC declined, saying it had consulted with the State Department and granting Cubaexport a license “would be inconsistent with U.S. policy.”

The result: Cubaexport’s registration was declared “canceled, expired.”

The filing also was complicated by Section 211, which was attached to a 1998 federal spending bill and prohibits any trademark actions or payments in connection with a confiscated business or assets.

Cubaexport challenged OFAC’s decision in federal court in Washington D.C. but lost and also lost on appeal. When the Supreme Court declined to hear the case, it went back to the trademark office in 2012.

But recently, Cubaexport again applied for a license from OFAC to pay its registration fees and this time it was granted, said Cavil.

On Tuesday, Cubaexport presented a license that authorized payment of its filing fee for the 2006 registration renewal “as well as all other transactions necessary to renew and maintain the registration.” The next day, the trademark registration was renewed.

Asked if the rapprochement between the United States and Cuba, played into OFAC’s decision, Cavil said he couldn’t comment on political matters.

As far as the business impact of the decision, he said: “It’s not too significant. There’s no business impact at all because the embargo is still in effect.”

Pernod Ricard, which also has survived challenges from Bacardi over the international use of the name Havana Club, continues to distribute the brand in more than 100 countries and sells around 4 million cases annually. And with the pickup of tourism in Cuba since the rapprochement, sales of Havana Club are also brisk on the island.