APRIL 21, 1999
By Gail Appleson, Law Correspondent
NEW YORK, April 20 (Reuters) - A federal judge has ruled that a joint venture selling Cuba's most popular rum has no rights to the trademark name Havana Club in the United States, and that Bacardi & Co. Ltd. can sell rum under that name in this country.
The ruling, filed April 14 in Manhattan federal court by U.S. District Judge Shira Scheindlin, could spark further trade problems between the United States and Cuba. Fidel Castro's government had threatened to stop protecting U.S. trademarks in Cuba if Bacardi won the legal battle.
A key part of Scheindlin's ruling was based on a U.S. law passed in 1998 that limited registration and renewal of trademarks and trade names of property seized by the Cuban government.
Havana Club was confiscated by President Fidel Castro's government in 1960 from its Cuban owners, the Arechabala family.
The ruling stemmed from a 1996 lawsuit filed in New York by Havana Club Holding, S.A. and Havana Club International. The plaintiffs, which were formed by a joint venture of France's Pernod Ricard and Cuba's Havana Rum and Liquors, said they own the trademark to Havana Club, Cuba's best-selling rum.
Michael Krinsky, a New York lawyer for the plaintiffs, could not be reached for comment.
Castro's government alleged that Bacardi lobbyists were behind the 1998 law. Earlier this year it threatened to stop protecting the 3,000 to 4,000 U.S. trademarks registered in Cuba, including McDonald's and Victoria's Secret, if Havana Club lost its lawsuit.
"On its face," the law "would appear to prevent Havana Club International from asserting its trade name claims," Scheindlin wrote.
Bermuda-based Bacardi, the world's largest privately held spirits company, had argued that the Arechabala family originally owned the Havana Club rum brand from 1934 to 1960.
It said the Castro government forcibly confiscated the family's assets, including its right to the Havana Club trademark, without any compensation.
Following the seizure, the Castro government began to sell rum under the Havana Club trademark. Since 1994 it has worked with the joint venture to sell the rum internationally, Bacardi said.
Bacardi worked with the Arechabala family to regain the Havana Club trademark rights and the spirits company filed for trademark registration for Havana Club rum in the United States in 1994.
It began distributing Havana Club rum, which was made in the Bahamas, in New York in 1995. It halted sales the next year pending outcome of the litigation.
Although the Cuban-French venture sells its Havana Club rum in other parts of the world, it cannot sell it in the United States because U.S. law has prohibited the importation of Cuban-origin products since 1963.
The plaintiffs filed the lawsuit in the hope that the bar would one day be lifted and they would be able to compete in the United States.
Scheindlin ruled Bacardi had registered the Havana Club trademark in the United States, and she dismissed the lawsuit on the grounds that the plaintiffs had no legal standing for bringing the case.
"Plaintiffs ability to enter the United States is too remote at this point to confer standing," Scheindlin wrote.
"Before plaintiffs can sell rum in this country, significant changes must first occur in the political situation in Cuba, in addition to executive and legislative action in this country," she said.
23:26 04-20-99
Copyright 1999 Reuters Limited
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