Reginald Dale. International
Herald Tribune. Friday, May 25, 2001
WASHINGTON A preliminary verdict is due soon in one of the more exotic trade
conflicts of recent years - a modern sequel to the rum wars that enflamed the
Caribbean in the age of the buccaneers.
On one side is the European Union, championing the cause of President Fidel
Castro of Cuba and the French liquor company, Pernod Ricard.
On the other side is the United States, defending the interests of the
Cuban-American-owned Bacardi Ltd., the world's biggest rum producer.
The dispute over a rum trademark has been enlivened by Bacardi's plans to
market a Havana-style rum not made in Cuba, in the United States. Mr. Castro has
retaliated by threatening to produce Cuban versions of Bacardi and Coca-Cola,
the ingredients of the classic Cuba Libre cocktail.
In similarity to the notorious trans-Atlantic banana war, the product at the
center of the dispute is not native to either the EU or the United States.
Bacardi, which has its headquarters in Bermuda, made the Havana-style rum it
briefly sold in the United States in the mid-1990s in the Bahamas.
Pernod Ricard's rum is made in Cuba in a joint venture with the Cuban
government. That rum is barred from the United States by the Cuban trade
embargo, but the French company aims to sell it there once the embargo
disappears.
Both companies want to call their rum "Havana Club," a
distinguished brand name dating from pre-revolutionary Cuba, in the United
States. Pernod Ricard already markets its Cuban-made rum under that name in the
rest of the world.
But far more is at stake than the writing on a rum label.
If the United States were to prevail, a precedent would be set that could
seriously undermine future international efforts to protect trademarks and other
forms of intellectual property.
Largely because of political contortions stemming from its 40-year-old
political and economic confrontation with Cuba, the United States is on the
wrong side of this issue. Washington is actually arguing a case that is against
its own interests.
As a result, many American trade experts both hope and expect that the
preliminary ruling due to be issued by the World Trade Organization in the
coming weeks will favor the EU.
A defeat for the United States, however, could provoke a new political
outcry in Washington over loss of sovereignty to the WTO. It would be widely,
though dubiously, interpreted as overruling the U.S. Supreme Court, which let
stand a lower court judgment in Bacardi's favor last year.
Cuba staked a claim to the Havana Club trademark in the United States after
the original holders, the Arechabala family, fled Mr. Castro's revolution and
allowed their rights to lapse. Bacardi subsequently bought the rights from the
family, from whom it says Cuba "stole" the trademark.
What makes the case highly significant is a provision sneaked through the
U.S. Congress by former Senator Connie Mack, Republican of Florida, in deference
to the Cuban exile community. The provision effectively awarded the trademark to
Bacardi by invalidating the Cuban claim while the case was still before the U.S.
courts.
That action violated all sorts of legal and constitutional principles,
according to many legal experts.
Such blatant political intervention would hardly be tolerated by Washington
in other countries.
"You can't have Congress deciding who owns trademarks; it is an
invitation to everyone else to do the same," says a top trade lawyer. The
EU says the provision violates WTO rules by discriminating against foreigners.
The Washington-based Organization for International Investment warns that
the provision "threatens to unravel the reciprocal protection of
intellectual property that has been in place for more than a century and
provides Cuba with a legal basis for denying protection to American trademarks."
U.S. companies have registered hundreds of trademarks in Cuba in
anticipation of the time when Mr. Castro and the embargo will be gone.
The best outcome would be for Congress to recognize its mistake and repeal
the provision without fuss - if the United States wants to avoid piracy of its
own trademarks in future.
E-mail address: Thinkahead@iht.com
Copyright © 2001 The International Herald Tribune
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