Pernod Ricard Says EU, US Preparing Talks in Havana Club Spat.

Pernod Ricard SA said EU and U.S. officials are to meet today in Geneva to sort out a dispute involving trademark rights to the Havana Club brand of rum, which Pernod and Bacardi Ltd. both claim as their own.

The EU is seeking action with the World Trade Organization (WTO) against a U.S. law it said unfairly stripped Pernod of its exclusive right to sell Havana Club rum. Pernod, the world's fifth-largest liquor maker, charges an April court ruling was based on a U.S. law known as Section 211 that violates trade rules.

Officials will meet with the WTO in a first round of talks that could last at least two years, said a Pernod senior official. The talks will "seek to get explanations on the U.S. side regarding Section 211, and the EU will explain why it thinks it's a violation," he said.

The 1998 law denies legal protection for trademarks confiscated by the Cuban government, which acquired the Havana Club brand of rum after its former owner fled Cuba. The former owner joined forces with Bacardi to claim the trademark, while Pernod Ricard entered a joint venture with a Cuban government company to make Havana Club rum.

The EU decision to take the rum dispute to the WTO threatens to put trade relations on even shakier ground as disputes escalate over a series of issues, including hormone-treated beef and genetically modified food products.

Pernod sells 1 million cases of Havana Club, with Spain the most important market after Cuba. Italy is the fastest-growing market. Pernod expressed confidence about the WTO talks. "It's so clear section 211 is infringing on international trademark laws that we can't imagine for one second we could lose," the senior official said. "If the 15 member states allowed the EU commission to go forward, they have done so after careful analysis, and this shows the right is on our side."