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U.S. business interests spar over latest effort in Congress to repeal Section 211.

Several members of the House of Representatives are fighting to repeal a law that prohibits a Cuban-French joint venture from protecting the Havana Club trade name in the United States.

The arcane law, known as Section 211, was slipped into a massive 1998 spending bill at the behest of the Bacardi rum empire, which is battling to wrest control of the Havana Club name from Havana Club Holdings (HCH), a 50-50 venture between the Castro government and France's Pernod Ricard.

On Jun. 17, the U.S.-Cuba Trademark Protection Act was introduced by Reps. Charles Rangel (D-NY); Jeff Flake (R-AZ); William Delahunt (DMA); Amo Houghton (R-NY), Earl Pomeroy (DND) and Robert Matsui (D-CA).

While the legislation may soon have a Senate sponsor--Sen. Max Baucus (D-MT) is said to be interested--it faces an uphill battle and is likely to be blocked by House GOP leaders.

The bill would repeal Section 211, which prohibits U.S. courts from protecting the rights of expropriated Cuban trademarks. It would also direct the U.S. Patent and Trademark Office to establish a registry of U.S. trademarks in Cuba that were well-known at the time Castro came to power in 1959.

In addition, the bill would require the U.S. Treasury Department to establish a new general license category to allow the transfer of U.S. trademarks and trade names to Cuban entities.

Bill Reinsch, president of the National Foreign Trade Council, said the legislation is needed to protect more than 4,000 U.S. trademarks in Cuba, which he says are vulnerable to the "special-interest U.S. law" that breaches U.S. treaty commitments to Cuba.

"That law gives Castro the option of choosing not to honor the international treaties protecting U.S. trademarks in Cuba," said Reinsch, whose association speaks for 350 member companies.

Soon after approval of Section 211, Castro made a veiled threat to withdraw protection from hundred of U.S. trademarks registered in Cuba and said he was even thinking of producing a "Cuban Coca-Cola."

EU GIVES U.S. SIX MORE MONTHS TO COMPLY

HCH, hoping to sell Havana Club rum in the United States when the embargo is lifted, has registered the Havana Club trade name with the PTO. Rival Bacardi, however, claims it long ago purchased the rights to the Havana Club name from the Arechabala family, which produced rum under that name in Cuba before the revolution.

The European Union has complained several times to the World Trade Organization that Section 211 violates international trademark agreements, including the 1931 Inter-American Convention on Trademarks.

On Jan. 2, 2002, a WTO appellate body ruled the U.S. law inconsistent under the Agreement of Trade-Related Aspects of Intellectual Property Rights (TRIPS) because it treated Cuban companies differently from those of other WTO member nations.

The Bush administration promised to amend the law to comply with TRIPS, but never introduced any legislation to do so.

At a meeting last month of the WTO Dispute Settlement Body, EU officials warmly welcomed the introduction of the U.S.-Cuba Trademark Protection Act. They also agreed to extend their Jun. 30 deadline for repealing Section 211 by another six months; Congress now has until Dec. 31, 2003, to act.

In a press statement, the EU said the bill "would provide a whole scheme of measures that would ensure an effective protection of intellectual property rights both in Cuba and the United States," and that it hopes this initiative "will provide the basis to resolve this [Section 211] dispute to the benefit of all."

TOP REPUBLICANS LIKELY TO OBJECT

GOP leaders have referred the measure to the House International Relations Committee, where chairman Henry Hyde (R-IL) will probably keep it bottled up. Hyde is a strong supporter of the U.S. trade embargo on Cuba.

In March, CubaNews reported that the PTO had delivered a legal blow to HCH by rejecting a motion to dismiss Bacardi's long-running complaint against HCH based on an undisclosed e-mail to PTO Chief James Rogan from Florida Gov. Jeb Bush.

In his e-mail, Bush urged the PTO to "take quick, decisive action" to cancel the Havana Club trademark on Bacardi's behalf--an action HCH said violated the federal Government in the Sunshine Act.

Bacardi officials in the Bahamas, where Bacardi & Co. Ltd. is headquartered, referred CubaNews to the company's Miami-based spokeswoman, Pat Neal, who failed to return numerous phone calls and messages seeking comment for this story.

But Mark Orr, vice-president of North American affairs at Pernod Ricard USA, didn't mind talking to us. He said the bill "has broader consequences and implications than simply determining who owns the U.S. registration" to the Havana Club name.

"This is a very useful and thoughtful new approach from the standpoint of the U.S. business community," Orr told CubaNews. "They want to make sure there isn't any pretext for Mr. Castro to adversely affect their trademark rights, and that the framework is in place to protect those rights in a post-Castro Cuba."

Orr, who is based in Washington, added that repealing Section 211 "would simply put us back in the position of being able to have access to the court system to decide once and for all who owns the Havana Club trademark, which is where we were before Section 211 was enacted."

In 2002, Havana Club sold 1.8 million cases around the world, up from 1.7 million cases in 2001 and 300,000 cases when the joint venture began in 1994. Havana Club is now Italy's best-selling rum brand, said Orr, noting that Western Europe accounts for 70% of HCH's worldwide sales and Canada the other 30%.
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Title Annotation:repeal of legislation that prohibits Havana Club Holdings to protect Havana Club trademark within United States
Author:Radelat, Ana
Publication:CubaNews
Date:Jul 1, 2003
Words:938
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