Kenneth Brown. Published Monday, June 18, 2001.
Miami Herald
The Arechabala family manufactured in Cuba the exquisite Havana Club rum.
Concealed in the shadows of more-highly publicized foreign-policy issues is
the defense of intellectual property rights and a recent World Trade
Organization panel's ruling that a provision in an appropriations bill is
inconsistent with the United States's trade commitments to protect intellectual
property.
The issue is particularly sensitive because it involves Cuba and the United
States has been a global champion of protecting intellectual property.
The U.S. embargo on trade with Cuba is well-known and recognized, but in
this case, the anti-Cuban sentiment among American politicians rolled over some
nations with which we share better relations.
The provision involved was slipped into a massive appropriations bill. It
bypasses the U.S. Patent and Trademark Office and courts to award a potentially
lucrative trademark to the Bermuda-based Bacardi beverage firm (a major
contributor of soft money to U.S. political parties).
For many decades, before Fidel Castro seized power, Cuba's Arechabala family
in Cardenas manufactured and sold an exquisite rum called Havana Club. However,
after leaving Cuba, the family failed to renew its U.S. trademark on the Havana
Club name. In 1976 the Patent and Trademark Office awarded the trademark to
Cubaexport in Cuba. And in 1993, Cubaexport formed a lucrative worldwide venture
with the French distiller Pernod Ricard to market Havana Club rum worldwide.
Bacardi insists that it acquired the Havana Club trademark directly from the
Arechabala family -- after the beverage giant announced that it would market its
own Havana Club rum in the United States. So the dispute between Pernod and
Bacardi ended up in court. As the case progressed, along came Section 211.
Section 211 of the Omnibus Appropriations Act of 1999 (introduced by
then-Florida Sen. Connie Mack) immunized Bacardi from being found guilty of
trademark infringement, no matter how egregiously illegal its actions may have
been. The law nullifies any Cuban-owned U.S. trademark registrations without the
consent of the original owners.
This sets a dangerous precedent because of the U.S. history of publicly
promoting the Agreement on Trade Related Aspects of Intellectual Property. That
is the agreement by which members of the WTO commit to abide by laws protecting
intellectual property.
To the naked eye, it appears that Section 211 was custom-tailored to secure
the U.S. rights to Havana Club for Bacardi, especially because Bacardi
maneuvered through a legislative "back-door'' to render the Cuba-Pernod
trademark claim defenseless. Most members of Congress, it appears, were simply
unaware of the global implications.
With Section 211 on the books, we won't know how the U.S. courts would have
ruled in the Pernod/Bacardi case. Once Congress acted, not even the U.S. Supreme
Court would hear Pernod's case.
The WTO panel found that Section 211 denies trademark holders access to the
U.S. courts, preventing them from defending their rights. That is contrary to
what is required under the international agreement, and it undermines the U.S.
position of championing intellectual property rights.
We are concerned that the panel did not find other elements of Section 211
to be inconsistent with the agreement. The ruling will impact not just a few
companies; it affects intellectual property owners worldwide. It bodes ill for
U.S. companies such as McDonald's and Coca-Cola trying to maintain established
trademarks in Cuba.
The WTO process is far from over. We urge the European Union to appeal
because we believe that many of the additional intellectual property issues can
be resolved in the appeals process.
Now that the WTO panel has held that certain elements of Section 211 violate
the international agreement, Congress immediately must repeal Section 211 and
affirm U.S. leadership on intellectual property and trade rights. The U.S.
government must lead by example on these issues.
Kenneth Brown is president of the Alexis de Tocqueville Institution in
Arlington, Va.
Copyright 2001 Miami Herald |