U.S. law draws a distinction between common law ownership of a trademark, which is based on use, and holding the registration for that trademark. Bacardi has won all U.S. court cases relating to the rights to use the Havana Club brand, up to the U.S. Supreme Court. However, a recent Trademark Trial and Appeal Board (TTAB) of the U.S. Patent and Trademark Office ruling left one issue of the dispute to be resolved, when it allowed Cubaexport to retain title to the registration. By law, Cubaexport's registration cannot be recognized.
"The TTAB acknowledged in its ruling that it only has the authority to address trademark registration issues and suggested all broader issues such as rights to use go to the court for a decision," said Eduardo Sardina, President and CEO, Bacardi U.S.A. "We're asking for this review because the TTAB failed to take into account a pattern of questionable practices that led to Cubaexport gaining the registration, and current U.S. law which prohibits U.S. registrations of Cuban trademarks that were confiscated without compensation."
The previous holder of the registration, Havana Club Holdings (a Cuban-French joint venture), was deemed by the U.S. courts to have "no rights" to the brand. This occurred when the attempted transfer of the registration from Cubaexport to Havana Club Holdings was revoked by the U.S. government and courts.
In its filing, among other things, Bacardi specifically asks the U.S. District Court to:
-- Cancel the current registration of Cubaexport with the Patent and Trademark Office (PTO) on grounds that it expired and was not validly renewed; and that it was fraudulently obtained and maintained by Cubaexport.
-- Declare that Bacardi owns the common law rights to the Havana Club trademark and that Cubaexport has no enforceable rights in the mark or the registration.
Havana Club rum was created in Cuba in 1934 by the Jose Arechabala, S.A., a Cuban company owned by the Arechabala family, which registered the trademark in the U.S. in 1935 and sold its rum in the U.S. over a 20-year period. The business was seized without compensation by the Cuban government in 1960. In 1976, after the Arechabala family's Havana Club registration expired, Cubaexport registered the Havana Club trademark in the U.S. through a loophole in the Cuban trade embargo.
In 1993 the Cuban government established a partnership with the French liquor company Pernod Ricard to exploit the brand. Due to the confiscation without compensation of all their assets in Cuba, the Arechabala family could not resume its rum operations in Cuba but had always planned to resume producing and marketing Havana Club when it became financially possible and sold their rights to Bacardi to achieve this.
Congress closed the loophole in the Cuban embargo in 1998, when it passed a law (known as Section 211) to prevent recognition of trademarks confiscated without compensation by Cuba, except with the consent of the rightful owners.
This principle was reconfirmed by the U.S. Congress and upheld by the World Trade Organization (WTO) as consistent with international agreements and treaties on intellectual property rights.
Bacardi USA, a wholly owned subsidiary of Bacardi Limited, is the import, sales, and marketing arm of one of the world's leading wine and spirits producers. Bacardi USA boasts a brand portfolio of some the United States most recognized and top selling spirits including: BACARDI rum, the world's top selling premium distilled spirit; MARTINI & ROSSI vermouth, the world leader in Vermouth; DEWAR'S scotch whisky, the number-one selling blended scotch whisky in the United States; BOMBAY SAPPHIRE gin, one of the fastest growing brands in the spirits industry; and CAZADORES BLUE AGAVE tequila, ranked fourth in global sales in its category.