By JUAN O. TAMAYO
Herald Staff Writer

It is a capitalist's nightmare -- communist Cuba producing fake Coca-Cola,
stealing profits from Coke's owners and perhaps producing such bad fakes that
they give the real thing a bad name.

But that's exactly what President Fidel Castro is threatening to do in retaliation for
a New York court ruling against Havana last month in a battle over the trademark
for the Cuban-made Havana Club rum.

``They should not complain if we start using any North American brand to produce
and commercialize products. We are not going to remain, of course, with our
arms crossed, Castro said in a four-hour speech last week.

``Maybe there are some who say, Caramba! Let's taste Cuban Coca-Cola. Or
brand-name perfumes, or other goods sold in duty-free shops, he said.

Castro's threat was the latest of several Cuban statements and warnings showing
displeasure with Havana's defeat in the U.S. legal dispute between Havana Club
and the exile-owned Bacardi rum giant.

``As far as Cuba is concerned, Bacardi is faking Havana Club, so they would be
merely retaliating, said Pamela Falk, professor of international trade and business
law at the City University of New York.

Bacardi won the April 13 court ruling with help from a measure approved by
Congress last year to deny trademark protection to any product nationalized by
Cuba, a step controversial even among U.S. officials.

The measure ``is problematic because it violates our obligations under
international trademark pacts, said a memo prepared by the staff of U.S. Trade
Representative Charlene Barshefsky last October and published the next month
by the news weekly Inside U.S. Trade.

The measure was sponsored by Florida Sens. Bob Graham, a Democrat, and
Connie Mack, a Republican.

Bacardi's victory allowed it to sell its own Havana Club rum in the U.S. market,
despite Cuba's argument that a joint venture with French liquor giant Pernod
Ricard holds the Havana Club trademark in the United States.

The U.S. embargo would bar Havana from selling Cuban-made Havana Club rum
in the United States in any case. But Bacardi and Pernod Ricard appear to be
jockeying for positions in a post-embargo market, trade analysts said.

Just what might happen if Castro goes ahead with his threat is unclear, the
analysts added, given the complexities of trademark regulations and Cuba's
unusually isolated position in world markets.

Producing fake Cokes or brand-name perfumes could ``increase Cuba's image as
a rogue state, said Falk, but could also focus a spotlight on the United States'
apparent violation of international trademark conventions.

Cuba might also make a profit by selling home-brewed ``Coke to the million-plus
tourists who visit each year, Falk added. Most Cokes now available in Cuba are
bottled outside the United States or are sold through third countries not subject to
the U.S. embargo.

Given Cuba's socialist inefficiencies, such fakes are bound to taste quite different
from real Cokes, perhaps bad enough to make those tourists forswear Cokes
altogether.

But other analysts said any Havana decision to stop protecting the more than 400
trademarks for U.S. goods now registered in Cuba could lead to significant
problems if U.S.-Cuba relations ever warm up.

When U.S. firms like McDonald's, Victoria's Secret and Toys R Us pulled out of
South Africa because of apartheid, their trademarks lapsed and were re-registered
by South African citizens.

``In McDonald's case, the company then spent hundreds of thousands of dollars
to get its name back, said John Kavulich, director of the New York-based
U.S.-Cuba Trade and Economic Council.

``The result in Cuba, he added, ``could be an immense amount of effort and time
by the U.S. companies to get their trademarks back and do business when it is
possible to do business.

                     Copyright 1999 Miami Herald