EU ESCALATES DISPUTE WITH U.S. OVER CUBAN RUM.

The European Union has raised the stakes in a transatlantic battle over the rights to a brand of Cuban rum, asking for a World Trade Organization (WTO) dispute panel to probe a U.S. law on trademarks, reports CANA-Reuters (July 3, 2000):

The WTO dispute stems from a legal tussle between two world famous drinks manufacturers, Bacardi and France's Pernod Ricard SA, over which has the rights to the "Havana Club" trademark in the U.S. The EU objects to the 1998 U.S.

Omnibus Appropriations Act, which says trademarks connected to assets confiscated by Cuba's Communist Government after the 1959 revolution cannot be registered without the permission of the original owner; U.S. courts have cited the act in blocking a trademark infringement suit filed by Havana Club Holdings S.A., a joint venture between Pernod Ricard and a Cuban state company to market Havana Club rum produced in Cuba.

Havana Club Holdings filed the suit in a U.S. federal court in 1996 after Bacardi, the world's largest privately held spirits company, began selling a Bahamian rum in the U.S.

under the Havana Club name; The EU's executive commission argues that the act violates a WTO agreement on intellectual property by treating some foreign right-holders with Cuban assets less favorably than U.S. right-holders. It said that the law also broke international trademark rules since the registration of a trademark "cannot be made conditional on the consent of a trademark owner who has abandoned his rights."

The row joins a list of nagging trade disputes that have soured relations between the 15-nation EU and the U.S., including rows over hormone-treated beef, bananas, U.S. tax breaks for exporters and EU government aid to aircraft consortium Airbus; Cuba has applauded the EU's stance. President Fidel Castro has threatened to escalate the dispute by taking reprisals against U.S. brands registered on the island. The dispute has its origins in 1960 when Jose Arechabala's Havana Club rum plant at Cardenas, Cuba, was expropriated by Castro's Government. The Pernod Ricard joint venture was formed in 1993, although its rum cannot currently be sold in the U.S. because Washington has banned all Cuban goods since 1962. At stake in the case are rights to the lucrative U.S. market if the embargo is lifted.

In April 1997, Bacardi said it acquired from the Arechabala family the rights to the Havana Club trademark in the U.S., Cuba and elsewhere.