BBC News Online,
Friday, 6 July, 2001, 20:08 GMT 21:08 UK
The European Union has said it has emerged victorious over a key
intellectual-property-rights issue surrounding a brand of rum that a governing
body claimed violated a World Trade Organisation (WTO) accord.
But conflicting reports have claimed the US has won this round, on 11 of 12
points in a row over who has the trademark rights to the rum brand.
At the heart of the case is US legislation that grants companies who fled
Cuba after the revolution the rights to any trademarks confiscated by the Cuban
government.
The law, known as Section 211, bars registration of trademarks that were
confiscated by Fidel Castro's Communist regime when it rose to power in 1959.
Rum row
The controversy involves French drinks company Pernod-Ricard in its battle
over the copyright to the "Havana Club" brand.
The rights are also claimed by Bacardi, a Bermuda company, which used to be
based in Cuba but fled when the Communists took control.
"The WTO found in favour of the EU's complaint on one of the principal
points," said European Commission trade spokesman Anthony Gooch.
He said the US law violates a WTO agreement on intellectual-property rights
by denying effective access to US courts for Pernod-Ricard to pursue its claim
against Bacardi.
The EU has contended Section 211 breaches international trade law.
The EU has set about to dispel reports that it had lost the case, the
decision of which will not be released by WTO panel until 6 August.
"I don't think it is quite correct to say one side has won, and one
side has lost," Mr Gooch said, who added that the
intellectual-property-rights issue is a key point.
"You could argue that there are certain other elements in the report
that do not go in our favour, but that is an extremely important point in the
whole case," Mr Gooch told reporters.
He said the EU would have to "weigh the merits" of an appeal in
the case, after the decision is released in August.
"We'll have a couple of months to decide [whether to appeal] - as will
the US," he said.
A commission official had indicated that other legal arguments in the case
might have caused the WTO dispute panel to rule against it.
Cuban revolution
Bacardi, the world's biggest privately held drinks company, is the world's
leading rum producer.
The $1.5bn (£1bn) US rum market is the world's biggest, and Bacardi
controls half of it.
Bacardi claims to have bought the rights to the Havana Club brand from the
Arechabala family in 1997.
The Arechabala's Cuban rum factory was nationalised by the Cuban government
in 1960.
Pernod-Ricard, meanwhile, had established a joint venture with a Cuban rum
company to market Havana Club rum worldwide.
It took Bacardi to court when the company began to market a Bahamian rum in
the US under the Havana Club brand, but a US court ruled against Pernod in
February 2000.
Bacardi has called the EU's complaint "an unwarranted and reckless
intrusion into a civil dispute between two business competitors".
Helms-Burton
The US legislation is one of a raft of measures designed to enforce a
boycott of the Cuban economy.
Even if Pernod wins its case at the WTO, it will not be able to market its
Cuban rum in the US until it lifts the total ban on Cuban imports that has been
in place since 1962.
The EU has also objected to the Helms-Burton Act, which seeks to punish
foreign companies that invest in Cuba by restricting their activities in the US.
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