South Florida Sun-Sentinel
March 31, 2004

U.S. and Cuban companies battle over trademarks on rum, cigar brands

 
By Doreen Hemlock
Business Writer

Two trademark cases over Cuba's legendary tobacco and rum are making waves in U.S. courts, underscoring decades-long conflicts over U.S.-Cuba business that have emerged among issues in the U.S. elections this year.

The cases involve the Cohiba cigar and Havana Club rum names, with separate companies in the United States claiming rights to the names for U.S. sale, butting heads for those rights with companies in Cuba that are joint ventures between the island government and European partners.

Recent decisions in each case in favor of the Cuban companies are being appealed.

The Cuban producers cannot sell into the U.S. market today because of the 4-decade-old U.S. embargo on trade with communist-led Cuba. But the companies are preparing for the day they can, encouraged by an erosion of the embargo that has included direct phone links and more recently, sale of U.S. farm products to the island, analysts say.

"The reason these cases are very, very important at this time is because the lifting of the embargo is within sight, particularly if there's a change of administration in the United States this year," said Hans de Salas, a research associate at the Institute of Cuban and Cuban-American Studies at the University of Miami.

In the tobacco case, Cuba's Cubatobaco SA won a U.S. court order Friday that blocks New York-based General Cigar Holdings Inc. from selling cigars in the United States under the Cohiba name.

In a 137-page decision, U.S. District Judge Robert Sweet in Manhattan ruled that General Cigar, a unit of Swedish Match AB, didn't own the rights to the brand and violated the trademark. He also found strong evidence of intentional copying of the name to "capitalize on the success of the Cuban Cohiba brand."

Havana-based Cubatobaco holds the mark and sells Cuban Cohibas worldwide except in the United States because of the embargo.

General Cigar has been making Cohibas in the Dominican Republic for more than a decade and selling them in the United States since 1992. The company said it will appeal.

In the rum case, spirits giant Bacardi filed suit late Monday in Washington, D.C., seeking exclusive rights to the Havana Club rum brand and cancellation of the U.S. trademark registered by a Cuban government company. Cuba makes the rum brand today in a joint venture with French liquor giant Pernod Ricard.

Bermuda-based Bacardi Ltd. aims to overturn a Jan. 29 decision by the U.S. Trademark Trial and Appeal Board, which found the Cuban agency had properly registered the name. Bacardi argues that while the registration itself may be valid, Cuba lacks U.S. rights to the brand, because the name was confiscated from its owners.

"We want to see a resolution to this matter. It's been 10 years," Bacardi spokeswoman Patricia Neal said in an interview Tuesday. "We want to see the courts clear this up, once and for all."

The cases come as both President Bush and Democratic presidential hopeful John Kerry speak out against Cuba, apparently seeking to woo hard-line voters of Cuban descent in Florida, a key battleground state.

Information from Bloomberg News was used in this story.

Doreen Hemlock can be reached at dhemlock@sun-sentinel.com or 305-810-5009.

Copyright © 2004