Havana Club Rum

Trademark Dispute News

Bacardi's fight to retain Havana Club trademark

March 3, 2010 - BY LESLEY CLARK | Miami Herald

A years-long battle over the rights to a coveted brand of rum returned to Capitol Hill Wednesday as Miami-based Bacardi urged a House committee not to repeal a 1998 provision that gave it the U.S. rights to the name.

The provision -- better known as Section 211 -- has been under fire from the World Trade Organization, which in 2001 ordered the United States to revise the law.

Bills have been introduced that seek to satisfy WTO rules and would tweak the provision, but critics say the entire provision should be scrapped because it benefits a single company and could hurt the ability of other U.S. companies to protect their trademarks.

``In order to live up to our treaty obligations, and indeed honor our reputation and history of leadership when it comes to defending intellectual property rights and the rule of law,'' the provision should be repealed, Mark Esper, vice president of the U.S. Chamber of Commerce's Global Intellectual Property Center, told the House Judiciary Committee.

But Bruce Lehman, a former assistant secretary of commerce and expert counsel for Bacardi, told lawmakers that the provision is ``easily correctable'' and that repealing it would ``send a terrible signal to those throughout the world who wish to devalue intellectual property rights.''

At issue is the right to the Havana Club name. Bacardi says it bought the rights to the name in 1997 from the rightful owner, the Arechabala family, who had the trademark seized from them without compensation when Fidel Castro took power in Cuba.

But Cubaexport, a Cuban government company that partners with the French liquor giant Pernod Ricard, argues it has title. It sells rum under the Havana Club name in Cuba and around the world -- but not in the United States because of the trade embargo against Cuba.

The tussle dates back more than a decade: Bacardi scored a major victory when former Florida Republican Sen. Connie Mack tweaked a spending bill to include language that essentially grants the company the U.S. rights to the name by preventing U.S. courts from enforcing trademarks confiscated by the Cuban government.

But after the French government complained, the World Trade Organization objected. The latest legislation, sponsored by Rep. Debbie Wasserman Schultz, D-Weston, is aimed at addressing WTO rules by not applying solely to Cuban firms.

Committee chairman John Conyers, D-Michigan, acknowledged the history of the controversy as he opened the hearing.

``This is a fascinating subject,'' he said, noting it spans Castro's rise to power and more recently entangled former House Speaker Tom DeLay of Texas, who dismissed accusations from critics that he accepted a $20,000 contribution from Bacardi to one of his political action committees in exchange for supporting its position.

Lehman told lawmakers that opponents of the embargo against Cuba have seized on the issue. The bill that would do away with the Bacardi provision is sponsored by Rep. Charles Rangel, D-New York, who supports travel and trade with Cuba.

``The debate on the embargo centers on whether it helps or hinders Cuba's transition to a free-market economy,'' Lehman said in prepared remarks to the committee. ``This goal is not advanced by giving effect to Cuban confiscatory measures in the United States.'' 

Excerpted from Guardian.co.uk

Cuba registered the Havana Club brand name in the US during the 1970s, and has been selling Havana Club rum abroad through international partnerships since then.

Havana Club rum sells 3.4 million cases each year through a deal with the French drinks giant Pernod Ricard. But in 1996 Bermuda-based Bacardi won a separate 10-year legal battle that allowed it to start selling in the US its own Havana Club branded rum, produced in Puerto Rico.

"Havana Club is not an asset of the Cuban government," said Bacardi spokeswoman Patricia O'Neal, who cited a 1998 federal law, currently the subject of an appeal, banning the renewal of trademarks by nationalized Cuban companies.

August 29, 2009

Trademark wars: US goods carry famous Cuba brands

By WILL WEISSERT and MICHAEL FELBERBAUM | AP

Cuban rum maestro Jose Navarro's taste buds sing when he sips Havana Club, the sweet spirit distilled in this farming town south of the capital.

"It has to be Cuban," said Navarro, the oldest of the island's nine certified rum experts. "Havana Club can't exist anywhere else."

But another Havana Club does exist, one made by Bermuda-based rum giant Bacardi Ltd.

Washington's 47-year-old trade embargo has kept Cuban products out of the U.S. — but hasn't prevented companies from using the communist island's brand names.

As the U.S. and Cuba consider better ties, such trademark issues would have be settled before any easing of the embargo. The fight between Bacardi and the Cuban government for the Havana Club name already has played out in the U.S. courts and Congress for more than a decade — and is now before Spain's high court.

But the battles are about so much more than brand names. They are charged with 50 years of emotion over Fidel Castro's 1959 revolution and expropriation of private companies as he implemented socialism. They are also rooted in the future as U.S. corporations face the specter of new competition from Cuban products, which may carry a special allure after being banned for nearly a half century.

Bacardi's Havana Club is an 80-proof rum that has sold in Florida since 2006, and sales have been so strong, it's thinking of expanding the label to other states, said spokeswoman Patricia M. Neal.

Even though Cuba's Havana Club rum can't be sold in the U.S., the Cuban government still sued Bacardi for using the name.

Bacardi argues it owns the name because the original Havana Club was expropriated by Castro from its Cuban producers, the Arechabala family, who went into exile. Bacardi bought the name and recipe from the Arechabalas in 1997.

Cuba says it registered the Havana Club trademark in the U.S. in 1976 after the Arechabalas let their claim on it expire. It has sold the rum internationally since 1993 in a joint partnership with French spirits consortium Pernod Ricard.

So far the U.S. courts have sided with Bacardi based on a 1998 federal law that prevents the registration or renewal of U.S. trademarks tied to companies nationalized by the Cuban government. Cuba has appealed its most recent case to the U.S. District Court of Appeals in Washington.

Meanwhile, Cuba's Havana Club is winning abroad. A Bacardi suit filed in a Spanish court against the Cuban government and Pernod Ricard over the trademark in that country was thrown out in 2007. Bacardi, too, has appealed, and the case is before the Spanish Supreme Court.

The true argument is over who can claim to produce authentic Cuban rum — especially if the country opens up to global commerce.

Bacardi, a family-owned spirits conglomerate founded in Santiago, Cuba, in 1862, pioneered the light, dry smoothness Cuban rum is now famous for, devising a charcoal-filter system and aging in oak barrels for added sweetness.

But the Bacardis joined the fiercely anti-Castro exile community in Miami after Castro nationalized the company in 1960. Havana Club, like all Bacardi rums, is made in Puerto Rico — and says so on the bottle.

Still, Neal says her company's Havana Club transports consumers "back to the time it was created: sultry nights, classy nightclubs, and pulsating Latin music, enjoyed by locals and visitors alike."

Cuba and Pernod Ricard spent $70 million to rehabilitate a Havana Club distillery specializing in darker, higher quality anejo rum in San Jose de Las Lajas.

"If I have a recipe, am I producing a Cuban rum? No. Cuban rum is not a recipe. It's an expression of an entire culture," said Navarro, while scrutinizing stacks of barrels filled with aging rum.

Even without the U.S. market — 40 percent of world rum drinkers — Cuban Havana Club has seen its annual sales soar 13 percent to 3.4 million cases. Bacardi's more than 200 brands and labels sell 20 million cases in 150 countries every year.

It's a debate that may ultimately be decided by consumers.

John Verburg, manager at Cafe Habana in Ann Arbor, Michigan, uses Barcardi to mix his mojitos, the famous Cuban cocktail of rum, sugar and mint. But he's asked all the time when he will get rum "authentically from Cuba."

"I don't know if people are salivating yet," Verburg said, "but it could be something very exciting."

Felberbaum reported from Richmond. Associated Press Writer Andrea Rodriguez contributed to this report from Havana.

July 29, 2009

The family of Bobby Fuller, a man who was executed for invading Cuba, has won a $100 million lawsuit against the Cuban government for wrongful death due to a terrorist act. Yes, you read that right but that's not what this entry is about. The family is requesting that their judge "order the sale of Havana Club, Cohiba and 12 other Cuban trademarks to help satisfy their award".

From these excerpts from the article Shameless family of Bobby Fuller uses US legal system for Cuba money grab

"For one thing, the value of the trademarks registered in the United States is unclear. Cuban-made products cannot be sold here. The trademarks’ highest value would be based on a post-embargo marketplace—a possibility that appears closer under the Obama administration.

It is also not clear whether the three Cuban entities can claim ownership of their 14 trademarks in dispute. A 1998 U.S. law prevents Cuban trademark owners from renewing their trademarks in the United States if they were confiscated along with companies nationalized by the Cuban government."

END

So, the controversy rages over who actually owns the Cohiba and Havana Club rum trademarks. Continue to visit this site for more information as we find it.

July 23, 2009

Bacardi Limited, the largest privately held spirits company in the world, today announced the Supreme Court of Spain has decided to hear its appeal in the case involving trademark rights to the Havana Club rum brand. The decision by the Spanish Supreme Court is a critically important and successful step in the case, as the Court is highly selective in what cases it reviews.

Bacardi, Jose Arechabala, S.A. and members of the Arechabala family sued Havana Club Holding, Havana Rum and Liquors, S.A., Cubaexport, and the Republic of Cuba in 1999 in Madrid’s Court of 1st Instance No. 54 to invalidate the Cuban entities’ transfer of the registration of the Havana Club trademark in Spain from Jose Arechabala, S.A.

Bacardi owns the rights to the Havana Club rum brand, having purchased the trademark from the original legal owners, creators and proprietors of the brand. The Arechabala family created Havana Club rum in 1935 in Cuba and subsequently sold their rum in Spain and other countries. In 1959, the Arechabala’s Havana Club brand and other assets were confiscated by the Cuban government without compensation. In the early 1990s, Cuba signed an agreement with French-based Pernod Ricard to exploit the confiscated brand globally through a joint-venture called Havana Club Holding.

April 22, 2009

ACN - Representatives from ten countries and from the European Community reiterated in Geneva their call for the United States to observe the ruling of the World Trade Organization (WTO) relevant to Cuban claims for its rights over the Havana Club trademark.

The issue is related to Washington's persistence of Section 211, which permits the Bacardi company to takeover the Cuban rum brand Havana Club, in spite of having being disqualified by the WTO Solution of Differences Court seven years ago.

Jorge Ferrer, secretary of the Cuban mission in Geneva said on Monday at a meeting of the organization that the situation has not changed and that this year's reports by the defendant have only made an ambiguous reference to the topic, reported PL.

The diplomat explained that at the end of March, according to media outlets, an American federal judge rejected a demand made by the island's CUBAEXPORT, which is the legitimate owner of the Havana Club brand, against the Foreign Assets Control Office of the US Treasury Department.

Five years after the promulgation of Section 211, it was considered as a violation of the fundamental principles of the Paris Convention and the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights.

The derogation of that Section has been demanded several times at the WTO headquarters.

This year, the US attitude was questioned as well by the European Community (representing 27 members of the continental bloc), and by China, Brazil, Ecuador, Venezuela, India, Costa Rica, Thailand, Mexico and Vietnam.

In his statements, Ecuador's representative said the dispute is the oldest pending issue of the organization.

March 30, 2009

By Nedra Pickler | The Associated Press - 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.

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.

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.

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."

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."

March 3, 2009

By Phil Milford | Bloomberg - A lawyer for the U.S. unit of Pernod Ricard SA, the world’s second-largest liquor maker, told a judge that Bacardi USA’s use of the Havana Club brand misleadingly suggests its rum is made in Cuba, as a trial began today.

A lawyer representing Bermuda-based Bacardi Ltd.’s subsidiary countered that the liquor it sells is clearly labeled “Puerto Rican Rum,” and that Pernod’s false-advertising claim is aimed at stifling competition.

“Havana Club was the subject of a consumer survey which concluded 18 percent surveyed were misled that the rum was made in Cuba,” Pernod lawyer Eric Hubbard told U.S. District Judge Sue L. Robinson, who is trying the case without a jury in Wilmington, Delaware.

Pernod sued in 2006 alleging “false representation of geographic origin” by closely held Bacardi, according to court papers. Bacardi claims Paris-based Pernod sued in part because it fears lost sales for its Malibu-brand rum.

“Pernod must show that it suffered damages from alleged misrepresentations made by the Bacardi product,” Bacardi lawyer William Golden Jr. told the judge. “We say there is no such harm.”

Golden said that Pernod’s survey is flawed because of the “convoluted” nature of the questions. He told Robinson that Pernod is motivated by the prospect of bringing Cuban rum into the U.S. if trade restrictions against Cuba are ever lifted.

Cuban Trademark

“When democracy is restored” and the U.S. trade embargo against Cuba is lifted, “Bacardi intends to pursue its claims to the Havana Club mark in the appropriate Cuban tribunal,” Bacardi lawyers said in pre-trial filings.

The trial is the latest round in a protracted dispute between Pernod and Bacardi over the Havana Club brand. In 2007, Pernod won an order barring Bacardi from using the trademark in Spain.

In 2006, the U.S. Patent and Trademark Office prohibited Pernod from selling its Havana Club rum in the U.S. Pernod at the time sold the rum in more than 100 countries under a 1994 joint venture with Cuba.

Pernod Ricard, with $9.66 billion in sales last fiscal year, fell 41.5 cents to 41.45 euros in Paris trading today. Pernod’s largest competitor is London-based Diageo Plc.

The case is Pernod Ricard USA LLC v. Bacardi U.S.A. Inc., 06CV505, U.S. District Court, District of Delaware (Wilmington).

To contact the reporter on this story: Phil Milford in Wilmington, Delaware, at pmilford@bloomberg.net