By Gabriel Molina, Perodico 26 (Las Tunas, Cuba), September 25, 2006

26 Sep 2006 // CUBA has condemned the recent decision by the Bacardi firm to begin marketing a rum produced in Puerto Rico, under the Havana Club label, as "a fraudulent and deceitful action for consumers who have traditionally identified the trademark as a rum produced in Cuba and nowhere else."

Juan Antonio Fernández, the Cuban ambassador to the UN office and other international bodies in Switzerland, lodged the complaint last September 1 at the meeting of the Dispute Settlement Body (DSB) of the World Trade Organization (WTO), saying: "These actions by the Bacardi company, which ignore the most basic principals of commercial ethics, is attributable to the arbitrary and illegal Section 211, a regulation that was declared incompatible with the basic principles of the WTO, on February 2, 2002 by the DSB itself."

Section 211 – also known as the Bacardi Law – is a clause that was tacked onto a federal budget bill and passed by the U.S. Congress on October 21, 1998, at the request of Senator Connie Mack of Florida. The WTO described this amendment as discriminatory towards non-U.S. companies.

On September 1, the Cuban ambassador told how, since the meeting on July 19, he had warned that "the excessive delay in fulfilling the regulations of this organization in relation to the dispute in which we are involved, has an explanation: to prevent the renewal of the Havana Club rum trademark by a Cuban company in the U.S. Patent and Trademark Office. This action has the disgraceful objective of allowing the powerful Bacardi firm – closely linked to the anti-Cuban mafia in Miami and the extreme right in the United States – to appropriate the trademark on U.S. territory. These recent events have proved us right.

"Last July 28," added Fernandez, "the Office of Foreign Assets Control in the United States denied a request for a specific license to renew the registration of the Havana Club trademark in this territory. The real motives behind that refusal respond to satisfying the interests of the Bacardi company, which, for over a decade, has mounted countless actions in that country aimed at usurping ownership of the Havana Club trademark. "

The Cuban diplomat recalled how various "prudential deadlines" have been agreed between the European Union and the United States for the latter to comply with the DSB recommendations and conclusions, regulations that are still in force.

"Evidently, the conduct of the United States of America demonstrates the lack of adherence by that country’s government to the governing principles contained within the Understanding on Rules and Procedures Governing the Settlement of Disputes for dispute settlement and which has become a consistent pattern of ignoring multilateral agreements and acting in contempt of the WTO, which has serious systemic implications. Continuation of such conduct would set a dangerous precedent that could affect other members in the future, particularly underdeveloped countries, which consider the dispute settlement system to be an essential element in contributing security and predictability to the Multilateral Trading System."

"Can we give credit to the Multilateral Trading System, based on regulations and supposed equality with respect to all of its members’ obligations, when one of the principle players maintains an attitude of permanent and open contempt and an evident lack of respect for international disciplines?"

BACARDI CONCERNED AT THE ADVANCE OF HAVANA CLUB IN EUROPE

Prior to the revolutionary process in 1959, the Bacardi firm had transferred its distillery operations from Havana to Puerto Rico, in order to secure tariff benefits on territory that technically belonged to the United States. The move allowed the firm to obtain a ruling in its favor to maintain the brand name when it left the country. The headquarters was registered tax-free in Bermuda and later moved to Miami. Cuba had started to produce Bacardi rum but respectfully complied with the adverse international finding.

Bacardi alleges that it paid the Arechabala family for the rights to the Havana Club brand name. But that family no longer possessed those rights. When, in the mid-1990s, sales of real Cuban rum exceeded those of Bacardi in Italy and became a threat to the international market, Bacardi began to sell rum under the name of Havana Club, produced in the Bahamas by Galleon S.A. The company ceased production when Havana Club International, a joint venture between the Cuban Havana Ron y Licores company and Pernod Ricard of France took legal action to prevent the offending company from falsely using its name.

But in 1999 during a trial in southern New York, Bacardi’s lawyers managed to defeat HCI’s claim. Judge Shira Schenindlin based her ruling (Havana Club Holding S.A. vs. Galleon S.A. S.D. N.Y., 1999) on the 1998 law, known as Section 211, part of the Omnibus Appropriations federal budget bill that was passed — without debate — that year.

However, in January 2004, the Trademark Trial and Appeal Board (TTAB) of the U.S. Patent and Trademark decided in favor of HCI, which sells the well-known rum in some 80 countries. The decision rescinds attempts by Bacardi-Martini to sell its own, non-Cuban version of Havana Club in the United States. Eduardo Sardina, president and executive director of Bacardi, said that he would appeal the TTAB ruling.

GOVERNOR JEB BUSH PUTS PRESSURE ON THE PATENTS OFFICE

The Washington Post daily reported on October 18, 2002 how Florida Governor Jeb Bush had intervened on behalf of Bacardi, despite the fact that the Patent and Trademark Office regulations prohibit partisan actions which force a decision benefiting one party in any dispute. It is not a problem of ideology. The "bat" rum producer has donated huge sums of money to the Republican Party, including to Senator Mel Martinez, who has been accused by the CREW anti-corruption group in Washington of accepting over $60,000 from Bacardi. The Post also reported on December 4 that Rodríguez-Marquez belatedly presented the necessary federal report showing that he had spent $500 million on "lobbying" since 1998. Besides that, Bacardi spent another $2.2 million contracting "lobbyists".

When the dispute was underway, Bacardi president Jorge Rodríguez-Márquez put pressure on Governor Bush.

The president’s brother then wrote to James Rogan, director of the Patent and Trademark Office: "I wrote to him on behalf of the Florida firm Bacardi-Martini, USA, Inc. to ask the Patent and Trademark Office to take decisive and rapid action on the outstanding application¼ the expired patent (from Cubaexport) should be cancelled immediately."

Rogan, appointed by President George W. Bush, met secretly with individuals from the governor’s office. Rodríguez-Márquez himself has acknowledged that he met with State Department authorities, contacts of Vice President Dick Cheney and White House political advisor Karl Rove about the matter. And that is how they discovered legal subterfuge.

HCI demonstrated that Havana Club was not confiscated, but the Arechabala family simply failed to renew the trademark and gave up the business when it faced financial difficulties in 1955. The Cuban firm took control of a company that was bankrupt.

The TTAB ruling last January maintained that Bacardi’s attempt to invalidate HCI’s registration of the trademark had no legal basis because Cubaexport had registered the trademark in the correct way in Cuba and had transferred registration to the United States in 1976, three years after the Arechabala family had permitted its expiration. In 1993, Cubaexport and Pernod-Ricard formed HCI and renewed the trademark name.

With this backing from the Patent Office, Congressman Jeff Flake, a Republican, introduced a bipartisan bill in Congress to invalidate Section 211, given that it "is simply putting at risk U.S. trademarks overseas." Flake declared that Congress has the responsibility to create a policy to protect U.S. trademarks, not to endanger them.

Democrat Charles Rangel – who together with 14 other Congress members from both parties endorsed the bill – stated at the time how "Cuba and the United States have respected one another’s trademarks for the last 75 years. It is shameful to think that Congress can liquidate this area of cooperation in order to benefit one particular interest (that of Bacardi), at the expense of hundreds of U.S. citizens with trademark names."

The U.S.-based National Foreign Trade Council (NFTC) highlighted the support of the business community and Congress in a press release. The NFTC is an important business organization that champions a system of open world trade based on international regulations. Founded in 1914 by a large group of U.S. companies, the NFTC serves some 350 firms from its offices in Washington and New York.

The organization’s president, Bill Reinshi, has stated that more than 5,000 U.S. trademarks that have been registered in Cuba since 1918 and a further 400 registered since 1959 were at risk thanks to Section 211, "which infringes on the commitments reached with Cuba."

He added that U.S. trademarks that are registered in Cuba — including McDonalds, Pepsi, Coca-Cola and Nike — and global recognition of the same "are vitally important for the economy of the United States." For the first time in 40 years, these trademarks are appearing in Cuban warehouses, he said, but they are at risk because of 211, given that it gives the Cuban government the option of not respecting international treaties that protect trademarks registered by the Untied States in Cuba.

President Fidel Castro said in 2001 that Cuba could sell Coca-Cola, Bacardi rum and Cuban anti-AIDS medicines patented by U.S. companies.

But the U.S. Treasury Department cleared the way for Bacardi with a ukase. Acting under the orders of the State Department, J. Robert McBrien, director of the State Department’s Patent Office, refused the Havana Club International joint venture the necessary license to renew ownership of the trademark on its patent and trademarks register, despite the fact that the company has owned the right to do so since 1974, when it paid the $500 fee required on time. The decision was based on laws surrounding the so-called "embargo" of Cuba. In this way, last August 8 the rum manufacturer was then able to announce that it would once again bring a rum called Havana Club onto the U.S. market.

FOR INSTANCE, ARAB COUNTRIES COULD CANCEL U.S. OR ISRAELI TRADEMARKS

Reinsch stated that the government "has done a real injustice that will come back to bite a lot of other companies."

Some of them now fear the decision could set a precedent that other countries can use to cancel trademarks or play politics with intellectual property law. Arab countries for instance, could cancel trademarks for companies friendly to Israel. Or Pakistan could do the same with marks owned by companies working in India," added the president of the National Foreign Trade Council.

The HMI has said that it would once again take the case to the courts.

Meanwhile, in its complaint to the World Trade Organization, Cuba has reiterated its call for swift and effective action to be taken, and demands that the United States "immediately and unconditionally complies with the resolutions and recommendations of this organization, in particular those relating to this dispute," by repealing the unjust and discriminatory Section 211.

Once again, it has been revealed how U.S. policy on Cuba is being held hostage by a group of individuals who have taken over Florida and are imposing their will in defiance of the laws and real rights and interests of that country.