Fake Cuban Cigars (Part 9)

"Pernod Ricard [and Cubaexport] knowingly purchased an interest in property that the Castro government illegally confiscated from my family and therefore has no legitimate claim to this trademark," said Jose Manuel Arechabala, speaking on behalf of the original Havana Club owners, the Arechabala Family.

In 1960, the Cuban government expropriated all of the Arechabalas' property connected to its rum business. The family then fled to the US and Spain. According to Stephen Kimmerling (1999)[PDF] and Perry, Woods & Shapiro (2000)[PDF], the Arechabala Family had evidently abandoned the Havana Club name from 1960 to 1974, when Cubaexport filed for the Havana Club registration. Perry et al. remind its readers that the Arechabala Family "neglected to renew the Havana Club trademark registration in the United States, although they could have done so with a Certificate of Excusable Non-Use." This is a very important point.

According to Kenneth Germain, a lawyer and professor of intellectual property who appeared before the Senate Committee on the Judiciary in 2004, US Trademark Laws rely on proper use of the trademark, and their constant renewal in order to "unclutter" the Trademark Register. Unfortunately, the Arechabala Family "allowed its pre-embargo U.S. Trademark Registration of HAVANA CLUB (for rum) to lapse by failing to file an appropriate and available post-registration document attesting to excusable non-use. Had this company acted appropriately, it could have maintained that registration. Because it did not, CubaExport, the record owner of U.S. Trademark Registration 1,031,651, was able to register HAVANA CLUB as a U.S. trademark for rum."

This is why section 211 exists. Bacardi-Martini Ltd. know that the Havana Club trademark was abandoned, and that if they ever had to go to court over ownership, they would lose to Cubaexport (Fidel Castro). Section 211 saves Bacardi from going to court, and allows everyone to hide behind the US embargo as an excuse. That's why the entire "stolen property" argument is irrelevant. And section 211 is but a fraud.

Just last month, reported in a few news outlets, a Spanish court made an important ruling. It was reported that a "Provincial Court of Madrid, Spain... rejected the Bacardi claims over ownership of the Havana Club rum." Part of the decision was based on the fact that "the Havana Club brand was never used by the previous owner and neither was it renewed when the time to do so expired."

It's a decision that Bacardi plans to take to the Spanish Supreme Court, but its doubtful it will win. Spain doesn't have a section 211, or an embargo. But, most importantly, its obvious that the Arechabala Family abandoned their trademark, and allowed it to expire under the laws of intellectual property around the world.

But, here we are, in the USA with our fake Cuban cigars and fake Cuban rum, all because of a fake policy towards Cuba. Not surprisingly, here in Miami, there are a lot of fake arguments about Cuba. And, I believe all this deceit can be remedied once the US embargo towards Cuba is gone, and only then will we begin to smell, taste, and see the real Cuba that has long been forbidden to the senses of reality.

[Part 1] [Part 2] [Part 3] [Part 4] [Part 5] [Part 6] [Part 7] [Part 8]

Fake Cuban Cigars (Part 7)

Despite the four letters to the PTO, sent by those who specifically received Bacardi contributions, Cubaexport's registered trademark was still not canceled. The PTO decided in 2004 that Bacardi's "petition fail[ed] to state a claim for cancellation." Bacardi was obviously upset. Since 1997, they had battled with Cubaexport in US courts to claim the Havana Club trademark.

I don't wanna bore anyone with the minute details of the court proceedings, but as Stephen Kimmerling summarized [PDF] in 1999 for the ASCE, the question still remained: "Does Cubaexport or Bacardi own the Havana Club trademark in the United States?"

In 1999, it seemed that Cubaexport had lost. That year, a New York federal judge decided that Cubaexport "ha[d] no rights to the Havana Club trademark" in the US. Bacardi felt vindicated. But, most of the Judge's decision relied on one controversial legislation called section 211 of the Omnibus Consolidated and Emergency Supplemental Appropriations Act. Legislation that had conveniently been introduced the year before by Florida's two Senators, Connie Mack and Bob Graham.

The New York court had made it clear that while Cubaexport had no rights to register the Havana Club trademark in the US (because of section 211 and the US embargo), or stop Bacardi-Martini USA from registering the trademark itself in the US, the court nevertheless would not order the cancellation of the Havana Club registration at the PTO.

As reported, this is the time when Bacardi began its aggressive petition, with the help of Jeb Bush and other politicians, to influence the director of the PTO, James E. Rogan, and the Secretary of Commerce, Donald Evans to cancel Cubaexports application. Lobbying money from Bacardi peaked around this time too. Donald Evans, in 2002, had replied to Bacardi that he did not have the authority to do so. I'm sure Rogan didn't either. And, in 2004 they had no choice but to dismiss Bacardi's petition.

In the meantime, Cubaexport and Pernod-Ricard appealed the 1999 New York decision, received help from the Organization for International Investment, but eventually lost in a 2000 Supreme Court decision. They also looked to the WTO. Bacardi called the WTO attempt "an unwarranted and reckless intrusion into a civil dispute." But, in 2002, the WTO's Dispute Settlement Body gave a final report calling section 211 of the 1998 Omnibus Consolidated and Emergency Supplemental Appropriations Act a violation of parts of international law.

The WTO, along with the European Community and other nations, is hoping that the US will change section 211, implement the recommendations of the final report, and even provide that Cubaexport defend again its trademark in US courts, denied initially by section 211.

It's been five years since that report, and the US has stalled so far on making any changes to section 211. And, most likely never will make changes until they see a "free Cuba." Last year, the US Patent and Trademark Office finally canceled Cubaexport's Havana Club trademark. The European Community was "extremely disappointed" at the decision, and Bacardi finally gave its thanks to the PTO.

Like Altadis cigars in the US, Bacardi plans to sell Havana Club rum with ingredients not made in Cuba. Both are imitations of Cuban products, which the rest of the world so happens to enjoy authentically.

[Part 8]

Fake Cuban Cigars (Part 6)

Without question, what I had in mind with Fake Cuban Cigars has turned into another beast (but it will all come around to Juan Penton versus Altadis again). The battle over the Havana Club trademark, and the several reports and articles I read over this unprecedented legal dispute, that has lasted for about a decade, has delayed several other topics that I wanted to comment on. But, this has just been a fascinating and enlightening research topic concerning another conflict in the disappointing history of US/Cuba relations.

The history of the dispute over Havana Club has been written about extensively through reports (Kimmerling 1999; Perry, Woods & Shapiro 2001, Swann 2002) by the Association for the Study of the Cuban Economy (ASCE) , the WTO, and through articles from various organizations. Even an entire book has been devoted to this "hidden war" between the US and Cuba. I will attempt to summarize this story, but encourage readers to rely on the links for the detailed history. To start off, our main actors are Bacardi-Martini USA versus Cubaexport.

"The application NEEDS to be denied," pleaded Jorge Rodriguez Marquez in an e-mail to Jeb Bush's office in Washington D.C. Rodriguez Marquez was vice-president of communications for Bacardi-Martini USA at the time. He was referring to the trademark application for Havana Club that, for the moment, rightfully belonged to Cubaexport since 1976. And, this e-mail was just one of many frustrated exchanges between Bacardi and the office of Jeb Bush, revealed by the Washington Post and the Daily Business Review in 2002.

Both papers found that Rodriguez Marquez was demanding that Jeb Bush, Florida Governor, influence the US Patent and Trademark Office (PTO) to deny Cuba's trademark application, and in the meantime Bacardi also funneled tens of thousands of dollars into the coffers of the Florida GOP. It was reported that Bacardi in 2002 alone contributed about $60,000 to the Florida GOP. "Thank you for your valuable support regarding our problems at Commerce and Treasury," wrote back Rodriguez Marquez to Jeb. From 1998 to 2002, the total contributions were about $200,000 to the Florida Republicans. In 2004, Dan Christensen, reporter from the Daily Business Review, found that more Bacardi money had spread beyond Florida in order to fight Cubaexport's application.

Christensen reported that three US House Representatives in 2002, including the infamous majority leader Tom Delay, had received Bacardi contributions (about $60,000 total) during the same time Rodriguez Marquez was pleading with Jeb Bush to influence the PTO. When Jeb finally sent a letter to the PTO in 2002 "calling for cancellation" of Cubaexport's trademark, three other letters by the three US House Representatives had already been sent to PTO's boss, the US Secretary of Commere.

After the articles, the lawyers of Cubaexport's joint partners were angered. "Bacardi's attempt to bring political influence to bear on a matter that is supposed to be decided by administrative law judges on rules of law is grossly improper. The law bars ex-parte communications," explained the lawyers.

But, like Juan Penton versus Altadis, that didn't matter to Jorge Rodriguez Marquez, he was innocent, and facing a greater threat: Fidel Castro. In one of his e-mails, Rodriguez Marquez makes it clear that Bacardi is "a standing symbol of doing things the right way," but he was growing frustrated and fearful that "Castro and Pernod are winning." Pernod-Ricard was the French joint partner with Cubaexport.

[Part 7]