Cohiba Trademark Fight Back at SCOTUS; Cuban Embargo, Preclusion Issues Raised

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By Tony Dutra

Nov. 6 — The long-running battle between two parties that use the “Cohiba” mark on cigars is the subject once again of a petition for writ of certiorari.

Conflicting decisions by the U.S. Court of Appeal for the Second Circuit and the Federal Circuit “raise important questions about the Cuban embargo and the legal standards for claim preclusion that warrant this Court's review,” according to the Oct. 31 petition filed by U.S.-based General Cigar Co.

General Cigar Wins First Round

Culbro Corp., which has since been merged into General Cigar, obtained a U.S. registration for the mark “Cohiba” as to cigars in 1981. General Cigar obtained a second U.S. registration in 1995.

Empresa Cubana del Tabaco (Cubatabaco) is a Cuba-based company that began producing premium cigars under the name “Cohiba” pursuant to a trademark registered in Cuba in 1972. In the late 1970s, Cubatabaco began registering the mark outside Cuba and eventually registered it in 115 countries. But it is prohibited by the Cuban Assets Control Regulations from selling merchandise in the U.S.

In 2005, the Second Circuit ruled that language in the CACR prohibiting Cuban companies from acquiring property rights in the U.S. applies to rights to exclusive use of a trademark. It further ruled that the same regulations prevent Cubatabaco from seeking cancellation of General Cigar's trademark registration. The Supreme Court denied Cubatabaco's petition for writ of certiorari in 2006.

Cubatabaco Wins Second Round

That sequence did not end the cancellation proceeding, however, as the courts left it to the Trademark Trial and Appeal Board to determine the preclusive effect of the court's decision (541 F.3d 476, 88 U.S.P.Q.2d 1125 (2d Cir. 2008)). In 2013, the board denied Cubatabaco's petition to cancel General Cigar's mark after determining that Cubatabaco lacked standing. It did not address issue and claim preclusion arguments.

The Federal Circuit reversed on June 4 (Empresa Cubana Del Tabaco v. Gen. Cigar Co., 753 F.3d 1270, 111 U.S.P.Q.2d 1058 (Fed. Cir. 2014). It held that general exceptions to the CACR, coupled with certain provisions of the Lanham Act, give the company standing to seek a cancellation of registrations that block its own ability to register trademarks.

The court further determined that neither issue nor claim preclusion barred the cancellation petition. “The Second Circuit never issued a final judgment on the merits of Cubatabaco's cancellation claims” and never addressed or declined to reach a decision on the merits on a number of issues Cubatabaco raised in its petition, the court said.

Thus, the Second Circuit's 2005 determination that the Cuban company could not prevail in an infringement action—since the relief sought would result in a transfer of the mark, which is prohibited by the CACR—was “irrelevant to the proceeding before the Board,” according to the Federal Circuit.

Questions on CACR, Preclusion

The questions presented in the cert. petition are:

1. Whether the Cuban Assets Control Regulations, which generally prohibit the transfer of any property to a Cuban entity by a person subject to U.S. jurisdiction, 31 C.F.R. §515.201(b), bar a Cuban corporation from obtaining administrative cancellation of a trademark registration that has been held by a U.S. company for more than thirty years.

2. Whether the Federal Circuit's categorical rule that a prior judgment in a trademark infringement action that affirms the validity of a trademark registration cannot, as a matter of law, bar the challenger from petitioning an administrative agency for cancellation of the same registration is contrary to established claim preclusion standards.

Seth P. Waxman of Wilmer Cutler Pickering Hale and Dorr, Washington, filed the petition. A response is due Dec. 5. Cubatabaco was represented by David B. Goldstein of Rabinowitz, Boudin, Standard, Krinsky & Lieberman P.C., New York, before the Federal Circuit.

To contact the reporter on this story: Tony Dutra in Washington at adutra@bna.com

To contact the editor responsible for this story: Tom P. Taylor at ttaylor@bna.com

Full text of the petition at http://pub.bna.com/ptcj/140512petition.pdf.