Cuba

The number of U.S. trademark registrations in Cuba is multiplying — fast

Girls model for quinceañera photos at an International Trade Market that features U.S.-style advertising in Mariel, Cuba.
Girls model for quinceañera photos at an International Trade Market that features U.S.-style advertising in Mariel, Cuba. TNS

The policy of rapprochement with Cuba promoted by the Obama administration has sparked a frenzy in U.S. companies rushing to register their brands on the island.

The Cuban Office of Industrial Property (OCPI), the government agency that examines and awards trademark and trade name registrations on the island, has received more than 1,000 applications so far this year to register trademarks and distinctive signs belonging to U.S. companies.

That is more than double the number of applications received in 2015, and far exceeds the number before Havana and Washington announced a thaw in relations on Dec. 17, 2014. Only 78 U.S. brands were registered on the island that year, according to a report by Reuters.

Although many American companies have registered their trademarks in Cuba since the 1960s covered by an exception to the U.S. embargo, experts say that recent regulatory changes to expand engagement with Cuba have sparked interest in the business opportunities offered by the island.

“The six rounds of regulatory changes since December 17, 2014 have been a catalyst for an increase in registration in Cuba of intellectual property owned by U.S. companies,” said John Kavulich, president of the U.S.-Cuba Trade and Economic Council.

The six rounds of regulatory changes ...have been a catalyst for an increase in registration ...

John Kavulich, U.S.-Cuba Trade and Economic Council

During 2015, well-known brands like Netflix, Hershey's and Twitter filed to register their trademarks on the island. General Motors registered many of its vehicles including Camaro, Tahoe, Cruze and Buick. Chrysler did the same with its Compass, Charger and Challenger brands. And various restaurant chains such as Outback Steakhouse, Chick-fil-A, Bonefish Grill and IHOP also filed.

Among the names listed in OCPI’s records for 2016 are Disney, Taco Bell, Uber, Starbucks, Chevron, Domino's, Bank of America, Apple and Microsoft. MGM Resorts International, the Las Vegas casino empire, filed to register its brand in Cuba in January 2016. Go Pro, Fossil and Abbott, filed in August. Instagram and Persicope, in June.

Some media brands, including MTV, Showtime, Dish Network, Comcast, Bloomberg, CBS and Univision have also filed for registration on the island where the government-owned television often plays American movies and programs without paying for royalties.

In addition to the trademarks registered by OCPI, the Spanish acronym for Oficina Cubana de la Propiedad Industrial, others are registered under the Madrid Protocol, an international treaty of which Cuba is a signatory. To date, Cuba has more than 6,000 brands of U.S. companies in its registry, according to official records from the Cuban Foreign Ministry.

To date, Cuba has more than 6,000 brands of U.S. companies in its registry

The increase in the number of U.S. trademark registrations in Cuba is a direct consequence of President Barack Obama’s orders to loosen regulations, according to economist Emilio Morales, president of the Miami-based The Havana Consulting Group.

“These are brands that have not been commercialized in Cuba and now they see an opportunity,” Morales said. Prior to the reestablishment of U.S.-Cuba relations, investors’ interest in Cuba was “very poor.”

First-to-file jurisdiction

Cuba is first-to-file jurisdiction, so anyone can register a trademark that has not previously been registered. In addition to the OCPI screening, the application is published for two months for review.

The OCPI declined to answer questions for this report.

In order to protect their intellectual property, some companies have registered their trademarks in Cuba for decades, renewing registration every 10 years as established by Cuban laws and registering new trademarks when they arise. McDonald’s, for example, has registered its brands in Cuba since 1985, but in 2015 requested to register McCafé.

Many U.S. companies are registering their brands in Cuba as a proactive measure to avoid potential future complications, according to lawyer Christiane Campbell, an intellectual property expert and member of the Cuba Business Group at Duane Morris, a law firm with offices in South Florida.

“[The companies] are trying to be proactive,” Campbell said. “Some third party can go to Cuba and register their trademark, holding them hostages, and then say ‘if you want your brand, you have to buy it from us.’

“It’s a defensive approach,” she said.

[The companies] are trying to be proactive.

Christiane Campbell, intellectual property expert

To “rescue” a brand is much more expensive than protecting it, Campbell said.

In Cuba, the average cost of registering a trademark is $1,500: about $300 charged by the Cuban government, plus legal counsel fees. However, in a case of litigation, the costs are much more. A U.S. company whose trademark has been registered in Cuba by a third party must prove ownership.

After the re-establishment of relations, some have tried to register on the island brands that do not belong to them. Several reports indicate that last year a Cuban lawyer residing in the U.S. requested to register 65 American brands, including Chase, NFL and Jetblue.

Apparently none of the brands in question was granted to that petitioner. Last August, JetBlue became the first U.S. airline to have a regular commercial flight to Cuba in more than 50 years.

Registering a trademark without being the owner is illegal “at an international level,” said Miami lawyer Jesús Sánchez Lima, adding that Cuba is a signatory to numerous international treaties on intellectual property.

However, it is common practice for companies to look after their brands, he said. His firm has registered U.S. brands in Cuba for more than 20 years.

Cuban obstacles

Robert Muse, a Washington-based lawyer with vast experience in U.S. laws regarding Cuba, said that with the new regulations pushed through by the Obama administration, a path has opened for companies to start operating on the island.

I do not see any legal impediments to, say, Starbucks opening a store in Havana.

Robert Muse, Washington-based lawyer

“I do not see any legal impediments to, say, Starbucks opening a store in Havana,” he said. The new regulations allow U.S. companies to establish premises in Cuba, to hire Cuban workers and to export agricultural commodities to Cuba.

“Under the new regulations, Starbucks could lease a distribution center, hire Cuban employees and sell their coffee in Cuba,” Muse said. However, he added, “Cuba is a hard nut to crack.”

“The Cuban side is what sets the bar,” said Morales, of The Havana Consulting Group. “In Cuba, they do not want franchises and there is no franchise law. Not even the self-employed [cuentapropistas] have legal personality.

“All these companies, which mostly operate with franchises, are seeing a business opportunity in a market where there is no franchise,” he said.

Last month, Cuba squelched plans for a small Alabama company to assemble small tractors on the island. The Cleber company was authorized by the Office of Foreign Assets Control and the Commerce Department — and got public touting by Obama — to build the first U.S. factory on the island in more than 50 years. But Cleber was awaiting approval from the Cuban government and at the recent Havana International Fair got its answer: no.

Since the rapprochement between the two countries began, many U.S. companies have been eyeing opportunities to do business on the island, but have been reluctant to move forward due in part to uncertainty about guarantees offered by the Cuban government and for fear of violating the embargo, which remains in place.

In addition, weighing in on closer relations between Cuba and the United States are thousands of claims for property confiscated by the Cuban government in the early years of the revolution.

Last month, the first meeting on intellectual property between Cuba and the U.S. took place in Havana to discuss current regulations and the guarantees offered by Cuban laws for the protection of industrial property. At the meeting, the cases of the Havana Club rum litigation and the Cohiba cigars came up.

The Trump era

Kavulich said that the interest of U.S. companies in registering their brands in Cuba is likely to spike in the short term, seeking to protect themselves from a possible retrenchment in U.S.-Cuba ties under a new administration with Donald Trump at the helm.

However, Muse said it is unlikely that the president-elect will set back the business ties with Cuba, especially since U.S. companies are now allowed to establish a physical presence on the island. That measure opened up the opportunity for the Starwood Hotels to start managing hotels on the island.

“[Trump] is in that business,” Muse said in reference to hotel management.

Morales, of The Havana Consulting Group, agrees: “[Trump] has an interest in Cuba. Several of his consultants went to Cuba to explore business opportunities,” he said. “In addition, the most complicated part was already done by Obama, who changed the policy toward Cuba by 180 degrees. From the point of view of business, that’s a well-trodden path.”

According to Morales, the Cuban government “wasted the Obama years” demanding, among other things, the lift of the embargo. Now, with the Latin American left suffering one political setback after another and with the support of Venezuela getting weaker, the island is at a crossroads where it will have no choice but to deal with the Republican president.

“I think the strategy will be to push for the Cuban government to move forward,” Morales said.

Abel Fernández is on Twittter @abelfglez

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