Bacardi fails to cancel HAVANA CLUB mark

In Galleon SA v Havana Club Holding SA, the Trademark Trial and Appeal Board (TTAB) has denied Galleon SA's, Bacardi-Martini USA Inc's and Bacardi & Company Limited's (collectively Bacardi) motion for summary judgment in cancellation proceedings against US Registration 1,031,651 (the '651 registration) for HAVANA CLUB and design for rum.

The history of the dispute is protracted, involving proceedings in both the Federal Courts and the US Patent and Trademark Office (USPTO). On July 12 1995, Bacardi commenced this proceeding in the USPTO seeking cancellation of the '651 registration. In December of 1996, Havana Club International SA (HCI), an entity of Luxembourg, and Havana Club Holding SA (HCH), a Cuban company, filed a civil action in the US District Court for the Southern District of New York to enjoin Galleon, Bacardi-Martini USA and three other entities from using the trademark HAVANA CLUB, alleging violations of Sections 32 and 43(a) of the Lanham Act. The USPTO cancellation proceeding was stayed during the district court litigation and other subsequent appeals.

HCH was assigned the '651 registration by Havana Rum & Liquors SA, a Cuban company that was assigned the '651 registration in January 1994 by Cubaexport, a Cuban state enterprise. Cubaexport began selling HAVANA CLUB rum made in the Cuban distillery of Jose Arechabala SA (JASA) soon after the assets of JASA were seized by the new Cuban government in 1960. JASA had previously procured four US trademark registrations for HAVANA CLUB that had all expired by 1973, for failure to renew.

Cubaexport applied to register the HAVANA CLUB and design trademark in the United States on June 12 1974, resulting in the issuance of the '651 registration on January 27 1976, for an initial term of 20 years. Cubaexport sought to reorganize and find a foreign partner, and the 1994 assignments were a result of agreements reached between Cubaexport and Pernod Ricard SA, a French company. The Office of Foreign Assets Control (OFAC) granted a specific licence authorizing these assignments in November of 1995. HCH renewed the '651 registration for an additional term of 10 years in 1996.

On April 17 1997, OFAC revoked this specific licence pursuant to provisions of the Cuban Assets Control Regulations (CACR), stating that "[a]ny action taken under this specific licence from the date of issuance until now is null and void as to matters under the jurisdiction of [OFAC]".

In August 1997, the district court ruled on Bacardi's summary judgment motion on its counterclaim for cancellation, finding that HCH had no rights to the HAVANA CLUB trademark because the specific licence to assign had been revoked by OFAC and the CACR general licence authority did not authorize the assignment (see Havana Club Holding SA v Galleon SA (974 F Supp 302 (SDNY 1997))). The nullification of the assignment caused all rights in the mark to revert to Cubaexport. The district court refused to cancel the registration because Cubaexport was not a party to the litigation. The Second Circuit affirmed this decision (see Havana Club Holding SA v Galleon SA (203 F3d 116 (2d Cir 2000) 531 US 918 (2000))).

With the district court proceedings resolved, the USPTO turned to Bacardi's motion for summary judgment seeking cancellation of the '651 registration. Bacardi argued that the district court's ruling that HCH had never obtained any rights to the HAVANA CLUB registration made HCH's 1996 renewal a nullity. Accordingly, Cubaexport was the only party that could have renewed the '651 registration and its failure to do so resulted in the expiration of the registration. Therefore, the registration should automatically be expunged.

The TTAB disagreed with Bacardi's arguments and noted that the district court had specifically declined Bacardi's request to cancel the registration. The district court had found that Cubaexport had a business interest in maintaining its mark and cancellation would neglect its rights. Thus, all rights to the registration were to revert to Cubaexport. Additionally, HCH complied with all USPTO regulations in filing its 1996 renewal application. Any application submitted by Cubaexport would have been refused, as all USPTO records indicated that HCH was the owner of the '651 registration. For these reasons, the TTAB did not feel that the district court's order in any way compelled cancellation of the '651 registration and it denied Bacardi's summary judgment motion.

For background information on this case see US-Cuba Trademark Protection Act introduced to Congress and Timing of HAVANA CLUB compliance modified. For discussion of a similar dispute in Canada, see Bacardi's opposition to 'Havana Club' fails.

Howard J Shire and Christian A Sado, Kenyon & Kenyon, New York