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Some of the nation’s largest and most powerful businesses have endorsed a bill in Congress to repeal a controversial law enacted five years ago to help liquor giant Bacardi Ltd. in its long-running trademark battle against a French-Cuban joint venture. The U.S.-Cuba Trademark Protection Act of 2003 would repeal � 211 of the 1999 Omnibus Appropriations Act — a provision some members of Congress and U.S. trade organizations contend jeopardizes existing trademark protections and future access to Cuban markets. Last month, USA*Engage, a Washington, D.C.-based coalition of about 670 U.S. companies and trade organizations that oppose unilateral economic sanctions against foreign nations, sent a letter of support to two congressmen who are sponsoring the repeal legislation. “Section 211 threatens over 5,000 American trademarks registered in Cuba by more than 400 companies,” wrote Bill Reinsch, co-chair of USA*Engage and president of the National Foreign Trade Council. General Motors Corp., Ford Motor Co., DaimlerChrysler, DuPont, Eastman Kodak and Caterpillar are among the corporate behemoths that have lent their names to the repeal effort. Also on the list is Halliburton, the Houston-based oil services company formerly headed by Vice President Dick Cheney. A principal fear expressed in the letter is that in retaliation for � 211, Cuban President Fidel Castro might cancel trademarks in Cuba, as he’s threatened to do and allow others to re-register those marks for use on local products or internationally on counterfeit products. If the bill isn’t passed, some observers say, the United States will be in violation of a World Trade Organization ruling and European countries would have the right to impose sanctions, including tariffs or limiting exports, against the country. WTO appeals judges have given the United States until Dec. 31 to comply or face sanctions. But the bill faces formidable political obstacles. It’s strongly opposed by members of the Cuban-American congressional delegation from Miami, led by Republican Rep. Ileana Ros-Lehtinen. In addition, President Bush and Democratic presidential candidates currently are vying to win the support of Miami’s Cuban-American community. Bacardi did not respond to a request for comment. COMPETING CLAIMS Section 211 was enacted in 1997 as Bacardi waged its legal war with HCH Holdings, a joint venture between French spirits titan Pernod Ricard and CubaExport, a company owned by the Cuban government. The dispute is over the rights to the well-known Havana Club rum label. Castro nationalized Cuban businesses in 1960, but that had no impact on U.S. trademark rights. So, after the former owners in exile let that trademark lapse in 1973, Cuba registered the Havana Club trademark with the U.S. Patent and Trademark Office in 1976. HCH now sells Havana Club rum in more than 80 countries, and has become a competitor to Bacardi, though it sells only 1.2 million cases a year worldwide compared with Bacardi’s 20 million cases. Because of the U.S. embargo on Cuba, Havana Club is not sold in the United States. Bacardi, with $5 billion in annual sales, is a Bermuda-based multinational whose U.S. operations are headquartered in Miami. It announced in 1995 that it was claiming the Havana Club brand name. Bacardi contended that it purchased the trademark from the original owner, Jose Arechabala S.A. in 1996, as part of a blanket purchase of “everything the Arechabalas owned,” said Charles S. Sims, a partner at Proskauer Rose in New York who represents HCH. The Arechabalas, who fled from Cuba to Spain, made no public statements about the sale. Bacardi has contended that the trademark was rightfully sold to them because it had been used in connection with a business that was confiscated by Cuba. Pernod Ricard contends Bacardi paid $1.5 million to the Arechabalas for a trademark the Arechabalas did not own. Section 211 prohibits U.S. courts from enforcing the trademark rights of companies that were expropriated by foreign governments. In June, a bipartisan group of House members, led by Reps. Charles Rangel, D-N.Y. and Jeff Flake, R-Ariz., introduced the U.S.-Cuba trademark bill, HR 2494, to repeal that prohibition. The most immediate impact would be to remove a barrier that has prevented HCH Holdings from protecting its rights to the Havana Club name in U.S. courts. The bill would also require the U.S. Patent and Trademark Office to establish a shadow registry of U.S. trademarks in Cuba. Joining the repeal chorus are some important industry and trade groups in Washington D.C., including the Grocery Manufacturers of America and the National Foreign Trade Council. Another significant member of the repeal coalition is CapNet, which bills itself as the political voice for the nation’s technology industry, including companies such as Microsoft, AOL Time Warner, and AT&T. “HR 2494 is important to the technology community and to all those who rely on and value the international protection and recognition of intellectual property rights,” said CapNet executive director Tim Hugo in a letter to Congress. Among the tech industry’s concerns is that without the bill Cuba will become a haven for cybersquatters who misappropriate trade names for profit. An aide to Ros-Lehtinen told the Miami Daily Business Review in July that the repeal bill would “give the Castro regime an out for all of the infringement, all the violations of U.S. trademarks.” A call to the congresswoman’s office Tuesday was not returned before deadline. Supporters of the repeal say that’s nonsense. “Take away the rhetoric about Castro, and what 211 says is that political considerations trump trademark considerations,” Reinsch said in an interview. “These companies are very concerned about that.” EUROPEAN TRADE COMPLAINT Section 211 was born in virtual secrecy in October 1998 when it was inserted with no public debate into a 3,000-page omnibus appropriations bill for fiscal year 1999. Then U.S. Sen. Connie Mack, R-Fla., came up with the idea. His colleague, Sen. Bob Graham, D-Fla., supported the move. At the time, HCH Holdings was suing Bacardi for infringing the Havana Club trademark that Cuba had registered with the U.S. Patent and Trademark Office in 1976 after the previous owners let it lapse. The case never got to trial. A federal judge in New York later dismissed the case on the basis of � 211. Section 211 only involves Cuban trademarks. And international trade experts say it was written specifically to help Bacardi in its dispute with Havana Club Holdings. The law benefits no other company, Reinsch said. Until � 211 was passed, despite decades of enmity and the U.S. trade embargo against Cuba, the United States and Cuba cooperated on protecting trademarks, Reinsch said. Under the new law, though, Cuban trademarks were discriminated against “by prohibiting their renewal and denying their holders access to legal redress in U.S. courts,” Reinsch said in the letters to Rangel and Flake. In October 2000, the European Union filed a complaint with the World Trade Organization on France’s behalf. In 2001, the World Trade Organization ruled in favor of the Europeans, holding that � 211 was inconsistent with the Trade-Related Aspects of Intellectual Property Rights, or TRIPS, agreement because trademark owners were entitled to defend their rights in U.S. courts. That ruling was upheld on appeal last year. Treaty agreements oblige the U.S. to abide by WTO rulings. The WTO appeals judges have given the U.S. until Dec. 31 to comply or face sanctions. In response, the bipartisan Cuba Working Group in the House came up with the U.S.-Cuba Trademark Protection Act of 2003. “We believe the only way to fully protect our trademarks is to comply fully with out international obligations through the complete repeal of Section 211,” Reinsch wrote. The bill currently is awaiting further action in the House Judiciary Committee’s subcommittee on courts, the Internet and intellectual property. It has 11 co-sponsors, none from Florida. The most recent was Rep. James E. Clyburn, a South Carolina Democrat who signed on two weeks ago. The prospects for passage of the bill are hazy. “I think we’ve got all the merit, but the other side has got some politics,” Reinsch said. “Bacardi has important friends on the Hill.”

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