EU Appeals WTO Decision in "Havana Club" Rum Case.

The European Union has formally notified the World Trade Organization that it is appealing a panel ruling in a dispute with the United States concerning U.S. legislation that denies protection for trademarks linked with businesses confiscated by the government of Cuba. The notification sent to the WTO October stated the EU would appeal certain parts of the decision it said raised "some important systemic issues." The WTO's Appellate Body is expected to issue its ruling early next year.

The so-called "Havana Club" dispute centers on Section 211 of the Omnibus Consolidated and Emergency Supplemental Appropriations Act adopted by the U.S. Congress in 1998. Section 211 denies protection to trademarks that are the same or substantially similar to trademark used in connection with a confiscated business or asset without the consent of the original owner. The legislation was specifically designed to protect trademarks belonging to businesses confiscated by the Cuban government after the 1959 communist revolution.

Section 211 was tacked on to the 1998 budget bill by the U.S. Congress after lobbying by Bermuda-based spirits producer Bacardi, which is trying to wrest control over the U.S. trademark for the "Havana Club" brand of rum from the French-based spirits group Pernod Ricard. Pernod claims worldwide ownership over the trademark as the result of a joint venture it set up in 1993 with Havana Club Holdings, a state-owned Cuban firm. Bacardi says it acquired the Havana Club trademark from the exiled Arechabala family, which owned the distillery producing Havana Club that was seized by the Cuban government.

The panel found in favor of the EU on one point, ruling that Section 211 (a)(2) failed to provide the means for a claimant to assert ownership of a trademark linked with a confiscated business asset before a U.S. court as required by the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Section 211 (a)(2) prohibited U.S. courts from recognizing, enforcing, or validating the assertion of such rights by a claimant.

The panel however rejected the remainder of the EU's claim, namely that two additional provisions of the legislation -- Section 211 (a)(1) and Section 211(b) of the Act -- were also in violation of TRIPS rules. Section 211 (a)(1) limits the right to register or renew a trademark, trade name or commercial name used in connection with a confiscated business or asset unless express consent is given by the original owner or the bona fide successor-in-interest to the registration/renewal. Section 211 (b) prohibits U.S. courts from recognizing, enforcing or validating the assertion of treaty rights for trademarks, trade names or commercial names for marks or names used in connection with a confiscated business or asset unless the original owner or the bona fide successor-in-interest expressly consents to such an assertion.