Validity cannot be challenged during opposition proceedings


In Bacardi & Company Limited v Havana Club Holding SA, the Canadian Federal Court of Appeal has reiterated that trademark opposition proceedings are not the proper place to challenge the validity of trademark registrations. The decision stems from the latest skirmish in the long-running global battle for the rights to the HAVANA CLUB mark between Bacardi & Co Limited and state-owned Cuban company Havana Club Holding SA.

Bacardi opposed applications for two HAVANA CLUB design marks filed with the Canadian Intellectual Property Office (CIPO) by Havana Club Holding on the grounds that they were confusingly similar to existing registrations for HAVANA CLUB originally registered by Jose Arechabala SA. However, Havana Club Holding was recorded as the successor in title to the original registrations on the Canadian trademarks register.

In the context of the oppositions, Bacardi tried to argue that Havana Club Holding was incorrectly recorded on the register. It submitted that the forced nationalization of Jose Arechabala SA in the 1960s following the revolution in Cuba had no effect in Canada and, as a result, Havana Club Holding, the purported successor of the nationalized company, was not the legitimate owner of the existing registrations. Bacardi claimed that it had purchased rights to the HAVANA CLUB trademark from the Arechabala family.

Both the CIPO and the Federal Court dismissed Bacardi’s opposition and it appealed to the Federal Court of Appeal.

Without commenting on the merits of Bacardi’s arguments, the court held that the jurisdiction of the registrar in trademark opposition hearings is quite narrow and is limited to either refusing an application or rejecting the opposition. As such, the registrar has no authority to amend the register, which is what Bacardi was seeking. To obtain its desired remedy, the court stated that Bacardi should have proceeded under Section 57 of the Canadian Trademarks Act, which gives the Federal Court jurisdiction to order that any entry in the register be struck out or amended on the grounds that it does not accurately express or define the rights of the purported owner.

The Bacardi family was exiled from Cuba after the revolution and has had a long-standing trademark dispute with the current Cuban regime over use of the HAVANA CLUB trademark in association with rum. The Cuban trade embargo protects Bacardi’s operation in the United States, but the Cuban government has made significant sales of its own Havana Club rum in Europe, Canada and Mexico.

For a background discussion of this case, see Bacardi's opposition to 'Havana Club' fails, and for an analysis of a similar dispute in the United States, see Bacardi fails to cancel HAVANA CLUB mark, Timing of HAVANA CLUB compliance modified and US-Cuba Trademark Protection Act introduced to Congress.

Arnold Ceballos, Smart & Biggar/Fetherstonhaugh & Co, Toronto

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