International Business

Bacardi says it’s not over yet in Havana Club trademark battle

These bottles of Havana Club rum were distilled in Cuba and are distributed around the world by Cubaexport and its partner Pernod. Cubaexport and Bermuda based Bacardi are locked in a trademark fight over use of the Havana Club trademark in the United States.
These bottles of Havana Club rum were distilled in Cuba and are distributed around the world by Cubaexport and its partner Pernod. Cubaexport and Bermuda based Bacardi are locked in a trademark fight over use of the Havana Club trademark in the United States. AP

In its long-standing fight with the Cuban government for ownership of the Havana Club rum trademark, Bacardi has asked to see all the documents related to the U.S. decision allowing Cubaexport to renew the trademark for use in the United States.

In mid-January, the U.S. Patent and Trademark Office renewed Cubaexport’s registration of the Havana Club trademark. Even though the U.S. embargo against Cuba prohibits Cuban rum from being sold in the United States, the more than two-decades-long trademark battle is about market share at a time when the embargo is no longer in effect.

Bacardi, the largest privately-held spirits maker in the world, has claimed ownership of the mark after purchasing the rights to the name and the original Cuban recipe from the Arechabala family, who made the rum in Cuba before the 1959 revolution. After the family’s rum-making plant was seized and they went into exile, the trademark registration lapsed in 1973. Three years later, CubaExport registered the trademark in the United States.

This week, Bacardi filed a Freedom of Information Act request with the U.S. Department of Treasury asking for all documents and communications from the patent office, the Office of Foreign Assets Control, the State Department, the White House, the National Security Council, Treasury and/or any third partners that could shed light on the decision to renew the Havana Club registration.

“We are filing this Freedom of Information Act request because the American people have the right to know the truth of how and why this unprecedented, sudden and silent action was taken by the United States government to reverse long-standing U.S. and international public policy and law that protects against the recognition or acceptance of confiscations of foreign governments,” said Eduardo Sánchez, Bacardi’s senior vice president and general counsel.

“There are a lot of avenues still available if Bacardi wants to go forward with a court challenge,” said Doug Wolf, a Boston lawyer who is chairman of Wolf Greenfield’s trade and copyright group. “Typically they could go to the district court in the District of Columbia and ask for an appeal of the Patent and Trademark Office decision.”

Wolf said the blanket FOIA request was unusual in a trademark case. “I’ve never seen it before,” he said. “But this is a crazy case with all its twists and turns.”

Bacardi has maintained through numerous court cases that the trademark was “fraudulently obtained” and deals with a property that had been illegally confiscated.

After purchasing the name from the Arechabalas, Bacardi began selling its own Havana Club rum, made in Puerto Rico. It began by distributing limited quantities in Florida and now also sells the rum in selected retail stores and high-end bars in four other states to help establish its ownership rights through use of the brand.

Cubaexport, which distributes Havana Club around the world in partnership with French spirits maker Pernod Ricard, challenged Bacardi’s use of the name Havana Club, and the case went all the way to the Supreme Court, which declined to review the case in May 2012. Bacardi expected the U.S. Patent and Trademark Office to cancel Cubaexport’s right to use the name in the United States, allowing it to go forward with its registration of the mark.

Since first obtaining the Havana Club trademark, Cubaexport renewed the mark twice — that is, until 2006.

When Cubaexport tried to get a license from Treasury’s Office of Foreign Assets in 2006 to pay the $500 to renew the Havana Club trademark — a necessary step because the embargo prohibits most financial transactions with Cuba — OFAC refused, saying that after consulting with the State Department, granting the license “would be inconsistent with U.S. policy.” Cubaexport’s registration was considered expired.

Now, however, the United States and Cuba have reestablished diplomatic relations. Although the patent office won’t comment on whether that had any bearing on its decision, Cubaexport got the OFAC license to pay the fee in January, and the next day, the trademark was renewed.

Bacardi contends that that decision was a violation of Section 211, which prohibits any trademark actions or payments in connection with a confiscated business or assets, and “long-standing OFAC policy.”

Meanwhile, the registration that Cubaexport obtained only covered the 10-year period from January 2006 until Jan. 27. Cubaexport has filed to renew the trademark registration for another 10 years. “We filed our application for renewal before the 27th deadline, which is the requirement,” said Olivier Cavil, a spokesman for Pernod Ricard. “We expect it to be processed now in the ordinary course.”