Judge kills Cuban lawsuit on Havana Club trademark

By NEDRA PICKLER
March 31, 2009

WASHINGTON (AP) — A federal judge dismissed a Cuban lawsuit Monday over the termination of U.S. trademark rights for its Havana Club rum, a victory for Bacardi's effort to take over the brand name as its own in the United States. The dispute dates back decades and is entangled in property seizures during the Cuban revolution, the trade embargo with the island nation and U.S. trademark law.

Cuba's Havana Club is not sold in the United States because of the trade embargo, but the company got a U.S. trademark for the name in 1976 for future opportunities in case the embargo is lifted. French spirits producer Pernod Ricard has partnered with the Cuban government to sell Cuba's Havana Club internationally and has successfully driven up sales around the world outside the United States. Cubaexport, Cuba's state-owned export enterprise, filed the lawsuit three years ago against the U.S. Treasury Department's Office of Foreign Asset Control after the agency refused to allow renewal of its trademark. Tom Gjelten, an NPR reporter and author of a book on the dispute, said Bacardi realizes it's possible the Cuba trade embargo could be lifted and Cuba's Havana Club could become a threat to its rum sales in the United States. Gjelten said Bacardi shrewdly bolstered its case by getting Congress to pass a law in 1998 that prevents the registration or renewal of trademarks connected with companies nationalized by the Cuban government. U.S. District Judge Royce Lamberth cited that law Monday in his decision to throw out Cubaexport's case. "What this decision seems to be is one more nail in the coffin for Pernod Ricard trying to hold onto its use of the Havana Club trademark in the United States," said Gjelten, author of "Bacardi and the Long Fight for Cuba."

Cubaexport attorney Vincent N. Palladino said they will appeal the decision. "The decision, and the process OFAC followed in denying Cubaexport a license, are especially disappointing given that U.S.-Cuba policy is under review," Palladino said in an e-mail. Pernod Ricard referred requests for comment to its attorneys, who did not respond to messages left by The Associated Press. Bacardi fought to have Cuba's trademark canceled and is now selling its own Havana Club rum in limited quantities in Florida, made in Puerto Rico so it doesn't violate the trade embargo. Bacardi has an application pending to register the mark in its own name. As Bacardi explains it, Havana Club rum was developed in 1935 by a family owned Cuban company, Jose Arechabala SA. When Fidel Castro rose to power, the family's plant and trademark were seized and the Cuban government began producing rum under the Havana Club label. Bacardi bought the original recipe and the Havana Club name from the Arechabala family in 1994. "We are the legitimate owners of the brand," said Patricia M. Neal, spokeswoman for Bacardi USA Inc. "We're thrilled that once again the U.S. courts have upheld these laws."

Copyright © 2009 The Associated Press. All rights reserved.