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PTO upholds Havana Club trademark, in defeat for Bacardi
CubaNews / February 2004

By Larry Luxner

A division of the U.S. Patent and Trademark Office in Washington has rejected motions to cancel the U.S. registration of the Havana Club trademark.

The Jan. 29 ruling by the PTO’s Trademark Trial and Appeal Board upheld the validity of the U.S. registration and its most recent renewal by Havana Club Holdings (HCH), a joint venture formed by France’s Pernod Ricard and the Cuban government in 1993.

“Pernod Ricard applauds the TTAB’s decision affirming the validity of the U.S. registration of the Havana Club trademark,” said Mark Z. Orr, vice-president of North American affairs at Pernod Ricard USA in Washington. “We commend the TTAB for reaching a fair and correct decision based solely on the merits of the case.”

At issue was a petition requesting the cancellation of the registration on the grounds that it was registered in the United States under allegedly fraudulent circumstances.

In its decision to uphold the registration’s validity, the TTAB rejected those allegations and noted with emphasis that the Havana Club trademark was obtained in 1976 only after the prior U.S. registrations had lapsed, apparently abandoned by the original owners in 1973.

The TTAB also ruled that HCH had filed a proper renewal application in 1996 and the USPTO had acted appropriately in accepting the renewal application and renewing the registration in HCH’s name.

Officials of the Bacardi rum empire, which claims prior ownership of the Havana Club mark, declined comment on the ruling.

Pernod Ricard distills and markets Havana Club rum in a partnership with the Cuban government. Last year, HCH shipped 1.92 million nine-liter cases of Havana Club rum. That’s up from 1.73 million cases in 2002, when the brand ranked No. 53 in Impact Databank’s list of the world’s top 100 premium distilled spirits.

Demand is particularly high in Italy, Spain and elsewhere in Western Europe, though because of the U.S. embargo against Cuba, not a drop of Havana Club rum may be sold in the United States (see CubaNews, December 2003, Page 1).

HCH’s annual revenues exceed $170 million, with profits of around $40 million, according to a recent article in Forbes, with $20 million of that — or about 3% of Pernod Ricard’s overall 2002 profits of 750 million euros — going to the French liquor giant.

According to the magazine, “Fidel hasn’t made out badly, either, drawing an estimated $23 million a year in hard currency from the venture (the government pays no taxes and so can pocket more of the profits than Pernod). In terms of exports, Havana Club is the 4th-biggest moneymaker for the state, after mining, tobacco and fishing.”

That’s why holding onto the Havana Club trademark is so important for both the Cuban government and Pernod Ricard.

Orr says the “the decision also reaffirms that the TTAB and the courts are fully capable of adjudicating matters involving Cuban-origin trademarks in a fair and impartial manner. To ensure this continues to be the case, we look forward to working with the many supporters of the proposed U.S.-Cuba Trademark Protection Act, within Congress and the U.S. business community, to bring about the repeal of Section 211 as soon as possible.”

Section 211, which prohibits U.S. courts from protecting the rights of expropriated Cuban trademarks, was slipped into a massive 1998 spending bill at the behest of Bacardi.

Among other things, the U.S.-Cuba Trademark Protection Act would repeal Section 211. It would also direct the PTO to establish a registry of U.S. trademarks in Cuba that were well-known at the time Castro came to power in 1959.

The bill would also require the Treasury Department to create a new general license category to allow the transfer of U.S. trademarks and trade names to Cuban entities.

In related news, Pernod Ricard has introduced fresh packaging, a new reference and an additional bottle size for Havana Club. The company says its new packaging — aimed at the European market — “retains the key elements that characterize the brand and identify it as the only authentic Cuban rum to be distributed internationally, while conveying an image of modern elegance and status.”

The label has been redrawn to resemble a cigar label, highlighting the brand’s Cuban heritage. Other changes include color-coded caps to differentiate references, an updated neck label and a more stylish bottle shape. The Añejo Reserva and Añejo 7 Year Old bottles remain the same as before.

Havana Club is also phasing out its Silver Dry reference and introducing a new family member: Añejo Blanco, ideal for customers who prefer a light rum with many different aromas and suave tastes.

“We had an excellent response when we tested the new packaging in key European domestic markets, and we are sure that we will have similar success in the travel retail channel,” said James Clarke, marketing director of Pernod Ricard World Trade.

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