Bacardi Asks Agency to Reconsider Trademark Decision

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By Anandashankar Mazumdar

Feb. 16 — Bacardi U.S.A. Inc. has asked a Treasury Department agency to reconsider its recent decision to give the Cuban government a license to pay fees to renew a trademark registration on the term “Havana Club,” according to a Feb. 16 announcement by Bacardi.

Bacardi Ltd. of Bermuda claims that it is the rightful owner of the “Havana Club” trademark for rum, having purchased the rights from the Arechabala family, whose Cuban rum distillery was seized after the Castro revolution.

Court, Administrative Proceedings on Hold

As an entity of the Cuban government, the Cuban Food and Varied Products Export Enterprise (Empresa Cubana Exportadora de Alimentos y Productos Varios, known as “Cubaexport”) is restricted from conducting business in the United States under the terms of the Cuba embargo. The Treasury's Office of Foreign Assets Control (OFAC) has the authority to grant licenses to allow such entities to engage in transactions.

In 2006, the OFAC said that Cubaexport did not have a license to pay fees to the Patent and Trademark Office and its trademark registration for “Havana Club” was declared “cancelled/expired.”

However, last month Cubaexport said that it had obtained the proper license and paid its trademark registration renewal fees to the PTO, and the PTO renewed the trademark registration, which is now active .

Bacardi filed a request under the Freedom of Information Act seeking documents from OFAC, the Treasury Department, the PTO, the State Department, the Executive Office of the President and the National Security Council explaining the granting of the license to Cubaexport 10 years later.

On Feb. 16, a Bacardi spokeswoman told Bloomberg BNA in an e-mail message that it has received some kind of response from OFAC regarding its request and that, “We are working with OFAC to obtain responsive documents as quickly as possible.”

Decades-Long Dispute Over Trademark Rights

José Arechabala S.A. held a U.S. trademark registration, but because of the seizure of its assets by the Cuban government, it was unable to continue producing Havana Club rum and its registration expired in 1974.

In 1976, Cubaexport acquired a U.S. trademark registration, which, according to Bacardi, was possible only because it had “concealed from the PTO that the original Cuban trademark had been confiscated” (U.S. trademark registration No. 73/023,981).

However, Cubaexport and its licensees—including France-based Pernod Ricard S.A.—have been barred from importing Cuba-produced Havana Club rum into the U.S. under the terms of the embargo.

In 1994, the Arechabala family sought cancellation of the Cubaexport trademark registration on the basis of abandonment. That effort failed because the embargo made Cubaexport's failure to use “Havana Club” in the U.S. a case of excusable nonuse.

Around that time, Bacardi acquired the “Havana Club” rights from the Arechabala family and began selling Havana Club rum made in the Bahamas using the family's original recipe. This was the first time since 1960 that a rum under that name was being distributed in the U.S.

Bacardi then initiated another cancellation proceeding before the PTO and also filed its own registration application for “Havana Club” rum (U.S. trademark registration application No. 74/572,667).

In 1996, Cubaexport's business partners renewed its trademark registration and it also sued Bacardi for infringement. Havana Club Holding, S.A. v. Galleon S.A., No. 96-09655 (S.D.N.Y. complained filed December 1996). Bacardi countered with another cancellation claim, and the cancellation proceeding before the PTO was stayed.

The OFAC then declared that Cubaexport did not have a license to pay PTO fees. The U.S. District Court for the Southern District of New York then dismissed the Havana Club Holding action on the basis that the holding company had not acquired any enforceable U.S. rights from Cubaexport. In 2000, the U.S. Court of Appeals for the Second Circuit affirmed.

Bacardi then resumed the cancellation proceeding before the PTO, but the Trademark Trial and Appeal Board ruled against Bacardi. Bacardi then appealed the TTAB's ruling to the U.S. District Court for the District of Columbia. Bacardi & Co. v. Empresa Cubana Exportadora de Alimentos y Productos Varios, No. 04-00519 (D.D.C. complaint filed March 29, 2004) That proceeding has been in limbo since July 2014.

According to Bacardi, this proceeding will resume now that Cubaexport's registration has been renewed.

To contact the reporter on this story: Anandashankar Mazumdar in Washington at

To contact the editor responsible for this story: Mike Wilczek in Washington at

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