By Trevor Little
May 15 2012
No sooner had the US Supreme Court refused to review the decision of the Court of Appeals of the District of Columbia which prevented the renewal of Pernod Ricard’s HAVANA CLUB trademark registration in the United States, than the multinational drinks company came out fighting – unveiling a new brand for its Cuban-produced rum.
WTR has previously covered the dispute over the HAVANA CLUB rum mark at some length, the case providing an interesting case study of the intersection of trademark law and politics. To recap, the Arechabala family produced Havana Club rum in Cuba from 1934 until the 1959 revolution, when the Cuban government expropriated the family’s physical assets. In order to exploit the Havana Club brand internationally, the Cuban government later entered into a joint venture with Pernod Ricard, Havana Club Holdings, to work with Cuban state company Cubaexport and distribute the rum all over the world. However, due to the US embargo on goods from Cuba, the joint venture is unable to sell its Havana Club rum in the country. Meanwhile, Bacardi struck a deal with the Arechabalas to commercialise the original recipe and now sells its own rum under the HAVANA CLUB mark in the United States.
At the heart of the debate is the application of a law passed in 1998. The HAVANA CLUB trademark had been registered in the United States by Cubaexport in 1976 (and was renewed in 1996) but, in 2006, the US Treasury Department's Office of Foreign Assets Control (OFAC) prevented Cubaexport from renewing the mark, by retroactively applying a law (Section 211 of the US Omnibus Appropriations Act of 1998), which forbids the registration or enforcement of a trademark in the United States that is identical or similar to one used in connection with a business or assets that were expropriated.
On March 29 2011 the Court of Appeals for the DC Circuit in Cubaexport v US Treasury Office of Foreign Rights Control denied Cubaexport’s appeal of a district court decision in OFAC’s favour, blocking Cubaexport’s attempt to renew its 1976 US trademark registration for HAVANA CLUB. Earlier this year, Cubaexport requested review at Supreme Court level – a motion denied yesterday.
In response to the Supreme Court’s decision, Pernod Ricard speedily announced the August 2011 registration of the HAVANISTA trademark at the USPTO, and outlined its plans to expand into the US market when and if the trade embargo with Cuba is lifted.
Speaking at a press conference in Paris, Jérôme Cottin-Bizonne, CEO of Havana Club International, stated: “We are not going to speculate when the embargo will be lifted, but the US rum market represents 40% of the world’s total rum market. We cannot accept not being present the day the embargo is lifted. On the very day the embargo is lifted we want to be able to sell genuine Cuban rum into this market and want to make it very clear that, if the embargo is lifted, we will not be barred from selling Cuban rum in the United States. If some people thought that, through this decision and through their litigation, they would deprive us from expanding our Cuban rum business in the US once the embargo is lifted, this is a clear message that no, we have been able to register our brand name Havanista at the USPTO and we are ready to commercialise this brand in the US market – where there is a strong appeal for genuine Cuban rum.”
Asked by WTR whether it planned to publicise the mark prior to entry into the US market, Pierre Pringuet, chief executive officer of Pernod Ricard, explained that “the brand is registered in the US today but won’t be activated from a marketing and commercial point of view until the end of the embargo”. On the registration itself, Olivia Lagache, general counsel for Havana Club, expanded: “We have an exception that allows us to keep the trademark registration without using it as we aren’t able to right now in the US.”
Havanista will be produced and bottled in Cuba and is a brand designed purely for the US market, as Pernod Ricard’s Havana Club is already sold in markets such as Mexico. Using the same distillery as its Havana Club-branded rum, the plan is for speedy market entry once permitted. Pringuet explained: “We will be very quick. We are ready to produce and market the brand. The artwork is ready. It’s a matter out of our hands but as soon as the embargo is lifted we will be there – in a matter of days or weeks.”
The announcement is a canny move by Pernod Ricard, simultaneously ensuring that press coverage of the Supreme Court decision focuses on its commercial response and also creating awareness of the new brand. While the battle for control of the HAVANA CLUB mark in the United States comes to an end, the fight for market share is yet to commence.
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