Bacardi won a battle, but rum war not over

Posted on Wed, Aug. 09, 2006

TRADEMARKS
Bacardi won a battle, but rum war not over

BY ELAINE WALKER
ewalker@MiamiHerald.com

Don't expect the decadelong fight between Bacardi and Pernod Ricard over
rights to sell Havana Club rum in the United States to end anytime soon.

Pernod Ricard said Tuesday it plans to appeal a decision made last week
by the U.S. Patent and Trademark Office, which deemed the current
registration on Havana Club trademark ''canceled/expired.'' The
trademark is held by Cubaexport, a Cuban government company that has a
joint venture with Pernod Ricard to sell Havana Club in Cuba and around
the world.

The trademark's cancellation came as Bacardi U.S.A. this week launched
its own version of Havana Club rum in Florida, with possible expansion
in key U.S. markets.

''Bacardi has jumped the gun here,'' said Mark Orr, vice president of
North American affairs for Pernod Ricard. ``No court anywhere has ruled
that they're the rightful owner of the brand. There are many more scenes
in this to play out. We're confident that ultimately the courts will
rule that the registration is a valid one.''

Cubaexport has six months to file an appeal with the U.S. Patent and
Trademark Office. The issue can also be appealed further in the U.S.
courts. Orr says the registration will remain on the books while the
company appeals.

Since the creation of the joint venture between Cuba and Pernod Ricard
in 1994, Havana Club's sales have grown from 300,000 cases to 2.4
million cases in 2006. It is sold in Cuba, Europe and around the world,
but not in the United States due to the trade embargo.

Bacardi's Havana Club, which will sell for $19.99, is made in Puerto
Rico using the recipe developed by the Arechabala family who created the
rum brand in 1935. Fidel Castro's government seized the family's plant
and trademark on Jan. 1, 1960.

The family made a deal to sell the family's recipe and the Havana Club
brand name to Bacardi in the mid-1990s. Bacardi also sold the product in
the United States for a few years shortly after making the deal with the
Arechabalas, but pulled the product from shelves after the fight erupted
over the rights to the brand.

''We bought the rights from the legitimate owners,'' said Bacardi
spokeswoman Patricia Neal. ``It's indisputable that the Arechabalas and
Bacardi were the first ones to sell Havana Club in this country.''

The United States typically gives priority to the first entity to
utilize a brand, not the first to register it.

''In the U.S., I can go ahead and use a trademark for a number of years
without registering it,'' said Miami attorney Jim Gale, whose firm
Feldman Gale specializes in trademark law. ``In the U.S., you can have a
common law trademark that's just as effective.''

While a trademark in the United States holds no impact on operations in
another country, Bacardi has also been taking steps to gain rights to
use the brand elsewhere.

Bacardi already holds trademark registrations for the Havana Club brand
in Croatia, Kyrgyzstan and Tajikistan. In addition to the United States,
Bacardi has trademark applications for the brand pending in the Bahamas,
Nicaragua and India. The company is also challenging the trademark
registrations of the Havana Club brand in Canada and Spain.

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