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EU versus US: Havana Club Rum Case. Presenters: Will Prible David Razmgar Alicia Skiba Timothy Skrynnikov. History and Context. Complicated Story Several issues: Trademark violations Revolution Capitalism versus socialism Two groups of players: US versus EU

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eu versus us havana club rum case

EU versus US:Havana Club Rum Case


Will Prible

David Razmgar

Alicia Skiba

Timothy Skrynnikov

history and context
History and Context
  • Complicated Story
  • Several issues:
    • Trademark violations
    • Revolution
    • Capitalism versus socialism
  • Two groups of players:
    • US versus EU
    • Bacardi versus Havana Club
us vs eu cuba
US vs EU & Cuba
  • EU brought the case before the WTO on behalf of Cuba and France.
    • Support from several other countries as well.
  • Politically charged:
    • Forty year trade embargo on Cuba
    • Influential Cuban exile community
Havana Club was sold in pre-revolution Cuba by an enterprise owned by the Bacardi Company.

The Bacardi family fled Cuba and went into exile in 1960.

Trade name “Havana Club” was revived in 1993 by a joint enterprise of the principal rum producers of Cuba and the French consortium Pernord Ricard enterprise

Bacardi began using the trademark “Havana Club”

Pernord Ricard filed suit, but a NY Federal Judge ruled that Cuban nationals could not assert their trademark rights


issues us law
Issues: US Law
  • Section 211 (a)(2) of the Omnibus Consolidated and Emergency Supplemental Appropriations Act adopted by the U.S. Congress in 1998
    • “prohibits the enforcement of, and transactions related to, the registration and renewal of trademarks that are the same or substantially similar to those used in connection with a business that was confiscated by the Cuban government”
issues wto
Issues: WTO
  • The EU and several other countries raised claims against Section 211 (a)(2) under the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement
  • The European Union presented to the first panel 14 complaints contending various violations of a part of the law, known as Section 211, but the three-member board upheld only one.


    • Articles 2.1 and 16.1 of TRIPS
    • Article 42
    • Article 3.1
    • Article 4
violation descriptions
Violation Descriptions
  • Articles 2.1 and 16.1 of TRIPS- WTO members to provide protection for trademarks, trade names or commercial names.
  • Article 42- WTO members make civil judicial procedures available to right holders concerning the enforcement of any intellectual property right covered by the agreement.
  • Articles 2.1 and 3.1- WTO members provide treatment to nationals of other member countries no less favorable than that granted to home nationals
  • Article 4- requires that any advantage granted to nationals of one WTO member country be granted to nationals of all other WTO members immediately and unconditionally.
conflicts eu vs us
Conflicts: EU vs. US
  • Party Positions
application of trademark law in havana club case
  • A primary conflict in this case arises regarding the right to sell Cuban rum in the United States. The embargo against Cuba prohibits trade between the two countries.
  • If this rum that Bacardi sells in the United States under the name "Havana Club" actually is Cuban rum, it is illegal. However, Bacardi is not a Cuban company, nor do they produce any rum in Cuba.
  • In this case, Bacardi may sell their version of Havana Club in the United States. At this point, the issue becomes the (knowingly or unknowingly) pirated trademarked name "Havana Club."
article 42 fair and equitable procedures
  • The E.U. requested that the WTO consider the validity of Section 211 in light of TRIPS of which both the E.C. and the U.S. are members.
  • TRIPS requires that members of the agreement make available civil judicial procedures concerning the enforcement of intellectual property rights covered by the agreement.
us argument
  • The United States claimed that the core issue in the Havana Club dispute "is whether the TRIPS agreement requires the United States to recognize and enforce trademarks used in connection with assets that have been confiscated/expropriated without compensation from their rightful owners."
wto decision
  • On August 6, 2001, a panel of the World Trade Organization (WTO) decided that a United States law violates international intellectual property rules.
  • The WTO panel found that Section 211 violates this aspect of TRIPS by failing to provide to certain Cuban trademark holders judicial recourse in U.S. courts. The panel recommended that the United States bring its laws into conformity with its obligations under the TRIPS agreement.
why the ruling is important
  • Hundreds of United States companies have registered their trademark names in Cuba, where Castro has threatened not to recognize U.S. trademarks if the U.S. fails to acknowledge Cuban trademarks.
  • The United States has invoked the TRIPS agreement in order to protect its pharmaceutical industry against generic medicines produced more cheaply in developing countries without any trademark licensing agreement.
  • The U.S. has acknowledged that the WTO dispute resolution process is effective since members know there will be consequences-such as trade sanctions-if they violate WTO commitments.
brief reminder

Cuba registered the Havana Club trademark with the US Patent and Trademark Office (PTO) in 1976 after its former owners let it lapse in 1973.

  • Havana Club Holdings is a joint venture of Cuban government and Pernot Ricard (French Company), which currently sells Havana Club in more than 80 countries.
  • In 1997, Bacardi announced it had purchased the Havana Club trademark from its original owner, Jose Arechabala S.A.
  • When Bacardi started testing Havana Club in the U.S. market, Havana Club Holdings filed a federal trademark infringement lawsuit.



  • On August 6, 2001 WTO voted in favor of the E.U.
  • WTO sided with E.U. objections to a U.S. law, Section 211

(This law denies protection for trademarks linked to business confiscated by Cuban government since communist takeover in 1959).

  • According to the panel, Section 211 denies trademark holders access to the U.S. court system and prevents them from defending their rights in court. This violates WTO rules under TRIPS because it disadvantages foreigners over U.S. nationals.
  • The ruling gave the U.S. until the end of 2004 to comply with WTO rules or face sanctions.
friends of bacardi
  • Bacardi, a major donor to U.S. Political campaigns, pressured U.S. Congress to pass Section 211 in 1998.
  • Three powerful members of Congress received campaign money from Miami-based Bacardi:
    • House Majority Leader Tom Delay, R-Texas
    • Rep. Henry Bonilla, R-Texas
    • Sent. Ernest Holling, D-South Carolina
  • Each sent nearly identical letters to Secretary of Commerce in November 2001, urging Donald Evans to intervene and cancel the Havana club trademark registration.
  • Before and after the three members of Congress sent their money to Evans, Bacardi sent money to the political causes of the three members.
  • In addition, Jeb Bush was accused of lobbying the U.S. government on behalf of Bacardi, which donated $200,000 to Florida Republicans since 1998.
international interests
  • At stake is control in the U.S. the fastest-growing spirits brand in the world.

-In 10 years the Havana Club reached an annual worldwide sales of 2 million.

-When (not if) the U.S. lifts its sanctions that prohibit sales of Havana Club label in the U.S. the brand could gain a big share of the 1 billion U.S. rum market.

  • Political/Foreign Interests.

-Cuban officials alleged that Bacardi has sought to oust Castro by financing plots to murder.

-Bacardi executives have been instrumental in lobbying for tougher sanctions against Cuba.

  • Global Community.

-The WTO ruling impacts not just few companies but IP owners worldwide.

-Cuba and France which own the worldwide brand in a 50-50 joint venture.

the bacardi bill
  • Senator Larry Craig, R-Idaho, introduced legislation, known as the Bacardi Bill, on December 9, 2003 to repeal Section 211.
  • The S2002 was proposed “To improve and promote compliance with international IP obligations relating to the Republic of Cuba, and for other purposes”.

- Trademarks and trade names are vital assets of the many U.S. companies that engage in the international trade.

the bacardi bill1
  • Worldwide sales of branded products of the U.S. companies contribute in important ways to the livelihood of American workers and businesses. These sales also depend on the security of the U.S. trademarks and trade names protected by reciprocal treaties and agreements for protection of IP.
  • Hundreds of U.S companies have registered their trademarks in Cuba in order to ensure the exclusive right to use those trademarks when the U.S. trade embargo is lifted.
  • Independent on Sunday; April 11, 2004
  • Broward Daily Business Review; June 18, 2004