Global Intellectual Property Center

Bacardi’s fight to retain Havana Club name resurfaces in Congress

Bacardi’s fight to retain Havana Club name resurfaces in Congress

A years-long battle over the rights to a coveted brand of rum returned to Capitol Hill Wednesday as Miami-based Bacardi urged a House committee not to repeal a 1998 provision that gave it the U.S. rights to the name.

The provision — better known as Section 211 — has been under fire from the World Trade Organization, which in 2001 ordered the United States to revise the law.

Bills have been introduced that seek to satisfy WTO rules and would tweak the provision, but critics say the entire provision should be scrapped because it benefits a single company and could hurt the ability of other U.S. companies to protect their trademarks.

“In order to live up to our treaty obligations, and indeed honor our reputation andhistory of leadership when it comes to defending intellectual property rights andthe rule of law,” the provision should be repealed, Mark Esper, vice president of the U.S. Chamber of Commerce’s Global Intellectual Property Center, told the House Judiciary Committee.

But Bruce Lehman, a former assistant secretary of commerce and expert counsel for Bacardi, told lawmakers that the provision is “easily correctable” and that repealing it would “send a terrible signal to those throughout the world who wish to devalue intellectual property rights.”

At issue is the right to the Havana Club name. Bacardi says it bought the rights to the name in 1997 from the rightful owner, the Arechabala family, who had the trademark seized from them without compensation when Fidel Castro took power in Cuba.

But Cubaexport, a Cuban government company that partners with the French liquor giant Pernod Ricard, argues it has title. It sells rum under the Havana Club name in Cuba and around the world — but not in the United States because of the trade embargo against Cuba.

The tussle dates back more than a decade: Bacardi scored a major victory when former Florida Republican Sen. Connie Mack tweaked a spending bill to include language that essentially grants the company the U.S. rights to the name by preventing U.S. courts from enforcing trademarks confiscated by the Cuban government.

But after the French government complained, the World Trade Organization objected. The latest legislation, sponsored by Rep. Debbie Wasserman Schultz, D-Weston, is aimed at addressing WTO rules by not applying solely to Cuban firms.

Committee chairman John Conyers, D-Michigan, acknowledged the history of the controversy as he opened the hearing.

“This is a fascinating subject,” he said, noting it spans Castro’s rise to power and more recently entangled former House Speaker Tom DeLay of Texas, who dismissed accusations from critics that he accepted a $20,000 contribution from Bacardi to one of his political action committees in exchange for supporting its position.

Lehman told lawmakers that opponents of the embargo against Cuba have seized on the issue. The bill that would do away with the Bacardi provision is sponsored by Rep. Charles Rangel, D-New York, who supports travel and trade with Cuba.

“The debate on the embargo centers on whether it helps or hinders Cuba’s transition to a free-market economy,” Lehman said in prepared remarks to the committee. “This goal is not advanced by giving effect to Cuban confiscatory measures in the United States.”