CU trademark war
Sept 4, 2002

Chicago Tribune - Patent and trademark disputes can be dry affairs, but the one between Cuba and the U.S over Havana Club rum is sexier than most. Aside from the odd mix of rum `n' politics, it has serious potential repercussions to American trademarks and intellectual property rights around the world. The story begins before Castro's revolution in 1959, when Bacardi and Havana Club were leading rum brands. Both family-owned businesses were confiscated by the Castro government. The Bacardis made a smooth jump to Florida, set up corporate shop in Bermuda, and became the pre-eminent rum brand in the world. The other rum moguls faded to Spain and in 1973 let the Havana Club trademark lapse at the U.S. Patent Office. In 1976, Cuba registered the Havana Club trademark in Washington. Trademark registrations have been largely unaffected by the cold war between the two countries, and in fact, about 5,000 American trademarks are registered in Havana, among them many Illinois heavies such as Caterpillar, Wrigley and Kraft Foods. Not a peep was heard about Havana Club until 1993, when the Castro government teamed with French liquor distributor Pernod Ricard to aggressively trademark and sell lots of rum around the world--and pose a competitive challenge to Bacardi, the other major rum producer. The Bacardis had kept their trademarks current and become one of the largest liquor distillers in the world. The firm proved politically savvy too, by contributing to the campaigns of U.S. senators from Florida, Republican Connie Mack and Democrat Bob Graham, among others. In 1996 Bacardi challenged the Havana Club trademark by selling a few hundred cases of a rum by the same name. Predictably, Pernod Ricard sued over trademark infringement. But two years later, Bacardi short-circuited the lawsuit in Congress: In the final moments of the 1998 session, the two Florida senators--without a word of debate or warning--attached Section 211 to an appropriations bill. Sometimes known as the Bacardi amendment, Section 211 neatly bars U.S. courts from entertaining challenges to trademarks formerly owned by companies whose assets were confiscated by Castro, even when they had been allowed to lapse. Pernod Ricard's case became moot, and so did its plans to pitch Havana Club rum against Bacardi in the U.S. market in the post-embargo era. A neat move by Bacardi but not for the U.S., which, because of Section 211, was found guilty of discriminatory trade practices by the World Trade Organization earlier this year. The U.S. maneuvering presents a risk for American firms with trademarks registered in Havana that hoped to protect their brands and do business in post-embargo Cuba. Grumpy Fidel now says, caramba, if the U.S. can trash the Havana Club trademark in Washington, he can do the same to American brands registered in Havana. In other words, get ready for Cuban retaliation against U.S. brand names. Section 211 is a classic case of narrow, well-financed interests trumping the best interests of the U.S. The next logical step is to repeal Section 211, and there is considerable bipartisan sentiment in Congress to do just that. But not so fast. If President Bush were to sign the repeal, he'd be running not only into Bacardi--a generous and stalwart campaign contributor--but also the feverishly anti-Castro Cuban-American voters in Florida, who are so important to brother Jeb Bush's re-election as governor. That voting bloc won't tolerate even a semblance of trade normalization with Cuba. So instead the administration is rewriting and broadening Section 211, to get around the WTO and European partners' objections. But badly conceived, under-the-table legislation hardly improves by making it more encompassing. Ever hear of Cuban-made "Kraft" macarrones y queso? Unless 211 is repealed, you might soon.