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With great fanfare, Cuban officials during a Bay of Pigs commemorative banquet in late March popped open a Bacardi-labeled bottle of what they presented as “our own” rum. The dinner presentation in Havana came hours after Fidel Castro, showing outrage over Bacardi Ltd.’s success in securing the rights to the Havana Club rum brand in the U.S., announced that Cuba could retaliate against some of the 4,000 U.S. trademarks registered on the island. “I think [the bottle] was only a token,” said Wayne Smith, a former U.S. diplomat to Cuba and a Johns Hopkins University researcher who attended the banquet. “I have no reason to suggest that they have begun to mass manufacture Bacardi rum in Cuba.” Bluff or not, the incident shows how a controversial U.S. law called Section 211 and the five-year rum row between Bermuda-based Bacardi and France’s Pernod-Ricard S.A. over the U.S. rights to the Havana Club trademark have heightened the sense of insecurity on both sides of the Florida Straits. One of the side effects is a rush of U.S. companies to the Cuban Office of Industrial Property (OCPI). The demand for trademark registrations around 1998, during the early stages of the rum row, was so intense, says Robert Muse, a Washington lawyer with a track record of handling U.S.-Cuban legal issues, that applications are still clogging the system at Cuba’s trademark and patent office. What’s more, Muse says, the relaxation of U.S. restrictions on food exports to Cuba last fall created a second rush that is ongoing. “There’s been a constant increase in volume,” he says about trademark registrations. “Because of the recent legislation in food sales, which includes an extensive list of goods — soft drinks, beer, wine spirits, you name it — many U.S. companies have begun to think how they can protect their trademarks.” To be sure, the registration of U.S. trademarks in embargoed Cuba is nothing new. While they can’t trade directly with Cuba, a trickle of companies with brands such as Macy’s, Eskimo Pie and Black & Decker filed during the Cold War decades of the 1970s and 1980s. But the trickle turned into a creek in the early 1990s and into a torrent in the past three years. As of June, some 4,000 U.S. trademarks were registered in Cuba (of a total of 60,000), according to the New York-based U.S.-Cuba Trade and Economic Council. The number of applications pending since late 1998 is not known. Efforts to obtain numbers from OCPI, which operates in Havana under the auspices of the Ministry of Science, Technology and Environment, and lawyers in Cuba were not successful before deadline. Most Fortune 500 companies have tried to make sure their names and brands are protected in Cuba, says Jesus “Jay” Sanchelima, a patent and trademark attorney with Sanchelima & Associates in Miami. The list ranges from giants such as PepsiCo and McDonald’s Corp. to small companies such as New Jersey-based Goya Foods and rather unexpected brands such as Weight Watchers. It also includes South Florida names such as Lauderdale Lakes-based Sports Authority. A Sports Authority spokeswoman did not return calls. “[Companies] could be criticized by their shareholders if they failed” to register their trademarks in Cuba, Muse said. “If, say, Budweiser failed to register, and Julio Rodriguez owns the Bud name in Cuba, he could extract a heavy licensing fee. They want to avoid that.” Indeed. McDonald’s learned its lesson when it had to spend heavily on licensing and lawyer fees in South Africa after the embargo against the former apartheid state was lifted. Uncle Sam even made it legal to pay for trademark registrations. There has always been a provision in the Trading with the Enemy Act of 1963 that allowed the registration of trademarks. The Clinton administration in 1995 amended the Cuban Assets Control Regulation, specifically allowing payments related to intellectual property protection in Cuba. “The view of U.S. governments has been that the embargo is temporary,” Muse said. “They want a smooth resumption of trade after the embargo is lifted.” Many companies feel they must act today rather than tomorrow. “The general sense is that the embargo is coming down,” said Muse. “There are many initiatives in Congress. Many people see the embargo’s demise as in the fairly short term. These companies are making sure they’re poised to have their things in order in Cuba.” Cuba, for that matter, doesn’t mind. The communist state has set up the infrastructure — all U.S. companies have to do is knock at the office of one of a half-dozen lawyers’ collectives in Havana such as Bufete Internacional, Consultores de Marcas y Patentes, Consultores Asociados and others, drop their application, including a print of the trademark and a letter of authorization, and pay $550 plus attorneys’ fees. The Cuban lawyers then deal with OCPI. Registrations lapse after 10 years if they aren’t renewed. A handful of law practitioners in the U.S. also specialize on the issue. Sanchelima, the Miami trademark attorney, often represents U.S. pharmaceutical companies in their quest to secure patents in Cuba, a country that’s very active in biotechnology research. Cuba, which is a member of most international property rights treaties, last year introduced a new trademark law that Sanchelima characterizes as “quite advanced by all standards.” Decree-law 203, for instance, recognizes fragrances, sounds, colors and three-dimensional objects. But the Cuban test as to whether a new trademark can be registered over existing trademarks is not clear, according to Sanchelima. And how those laws will be enforced remains to be seen. The only recent case of a U.S. company trying to make a trademark case in Cuban courts involved Northfield, Ill.-based Kraft Foods Inc., according to Sanchelima. In 1998, the food giant successfully appealed against an OCPI decision to cancel the Kool-Aid trademark for nonuse. But the situation may worsen quickly if Cuba makes good on its threat to do like the U.S. does — ignore the validity of the neighbor’s trademarks. Section 211 of the 1999 U.S. Appropriations Bill, the object of the wrath of Cuba, European governments and most recently the World Trade Organization, prohibits the recognition in the U.S. of Cuban trademarks that were confiscated by the Cuban revolutionaries after 1959. “I don’t think that Section 211 is the real threat,” Sanchelima said. “The real threats are gray market, parallel imports. State distilleries in Cuba can easily stick Bacardi labels to bottles in Cuba. And little would impede them from exporting these to Mexico or Europe.” As long as the embargo is still standing and emotions remain high, the corporate key words are “low profile.” None of the dozen U.S. companies the Daily Business Review asked about their Cuban trademarks, including McDonald’s, which registered its name in Cuba in 1996, responded. So, no word either if McDonald’s is planning to register a trademark for the “Cuban Sandwich,” which it is test-marketing in 11 South Florida restaurants these days.

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