Log In

Reset Password

Rum war muddles US copyright law

HAVANA (AP) - Next to the fragrant old, oak barrels in Havana's Rum Museum a poster brags: "There's no rum as good as ours."

The slogan doesn't come from Cuba's premium brand, Havana Club, for which the museum is a showcase.

Rather, it is attributed only to "a brand produced in Cuba at the beginning of the century".

That's a roundabout way of saying - or rather not saying - "Bacardi".

Since 1994, Bermuda-based Bacardi has been locked in a legal battle with French spirits giant Pernod Ricard, which runs a joint venture with the Cuban government, over the rights to sell rum with the Havana Club label in the United States.

The issue also pits the United States against the European Union in a fight before the World Trade Organisation that could undermine Washington's status as a world-wide defender of intellectual property rights.

At the core of the dispute before the WTO is a US law barring US courts from enforcing Cuban brand names for products made by firms nationalised after Fidel Castro took power in 1959.

The 1998 law, known as Section 211, stripped Pernod Ricard of any right to legally challenge Bacardi in the United States.

Last week the WTO ruled against the EU on 13 of its 14 claims in the trademark law dispute.

Though foes in nearly all areas, Washington and Havana had agreed to recognise each other's intellectual property rights under the Inter-American Trademark Convention.

There are nearly 4,000 trademarks registered in Cuba by US companies, ranging from Aunt Jemima and Jell-O to Starbucks coffee and Sun Microsystems, according to the US-Cuba Trade and Economic Council, a non-profit making body that studies the island's economy.

Those trademarks could now be questioned by Cuba.

Castro has already threatened to retaliate by making a Cuban Bacardi.

Wayne Smith, former chief of the US Interests Section in Havana and now a senior fellow at the Centre for International Policy in Washington, says that's probably more posturing than a real threat.

"But if the United States doesn't respect the Interamerican Trademark Convention, then that would appear to remove Cuba also from its obligations," he said.

"Beyond that, it could cause utter chaos in terms of trademark protection world-wide."

Pernod Ricard and the EU both stressed that the WTO panel sided with them on the key single issue of Section 211 by recommending that the United States make changes to conform to the WTO's Trade-related Aspects of Intellectual Property Rights Agreement, better known as TRIPS.

"Section 211 is a black mark on America's record of leadership within the world trading community," said Mark Orr, Pernod Ricard's vice president for North America and a former US trade official.

"Trademark owners must be able to enforce their intellectual property rights in court."

Bacardi, whose owners fled revolutionary Cuba, started making its version of Havana Club in 1994, three years before claiming to have bought the US rights to the brand from the Arechebala family, the brand's original owners.

But the Arechebalas had let those rights expire in 1973, only to see them snapped up in 1976 by a Cuban company and transferred in 1993 to Havana Club Holding, the Cuban government's joint venture with Pernod Ricard.

Last year the Pernod-Cuba venture sold 1.4 million cases of Havana Club in more than 80 countries and the brand is registered in 100 more.

Bacardi's market for its Havana Club is limited to the United States.

Bacardi executives in the past have tried to play down the duel, saying they were more worried about competition from top vodka brands than other rums.

Meredith McKeon of Jorge Rodriguez-Marquez, a Miami-based firm that handles Bacardi's press relations, said the company "isn't commenting at all on the Havana Club dispute".

Smith says the WTO ruling is particularly worrying because it appears to remove trademarks from the TRIPS agreement, which US officials have invoked most recently to protect its pharmaceuticals industry against cheaper generic medicines produced in developing nations.

"It's totally counterproductive to US interests in getting better protection for intellectual property globally," Smith said, who admits to being "baffled" by the US Commerce Department's willingness to push the issue.

"This law only benefits Bacardi, which isn't even a US company," he said.

"But then, this has to do with Cuba, which ... seems to have the same effect on US administrations as the full moon has on werewolves."