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Cubatabaco, the Cuban cigar company that produces the famous Cohiba cigar, cannot stop a U.S. company from selling cigars of the same name, a federal appeals court ruled Thursday. The unanimous ruling from the 2nd U.S. Circuit Court of Appeals reversed a ruling last year that gave Cubatabaco rights to the Cohiba trademark in the United States under the “famous marks doctrine,” even though it had never registered the mark here. The 2nd Circuit held that since Cubatabaco is barred from selling its cigars by a U.S. embargo against Cuba, it cannot acquire property rights in U.S. trademarks. The court also rejected arguments that Cubatabaco was entitled to relief because use of its famous mark in the United States caused consumer confusion. “None of United States law, the facts in this case, or international treaties warrants such acrobatics in this case,” Judge Chester J. Straub wrote for the court in Cubatabaco v. General Cigar Co., Inc., 04-2527-cv. General Cigar Co. Inc., registered the name Cohiba in the United States in 1981 but abandoned the mark in 1987. As the popularity of cigars began to rise, though, the company registered the mark again and reintroduced its Cohiba line of cigars. Cubatabaco sued, alleging that its cigars were famous enough to afford it protection under the “famous marks doctrine.” In March 2004, Southern District Judge Robert W. Sweet agreed. The judge canceled General Cigar’s trademark, awarded Cubatabaco judgment for trademark infringement and barred General Cigar from using the mark. General Cigar appealed and won a stay from the 2nd Circuit. The circuit agreed to expedite the appeal, and said it would ask the U.S. government for its opinion on the matter. In November, the Justice and Treasury Departments asserted that the regulations of the Cuban embargo barred Cubatabaco’s acquisition of a U.S. trademark and required the reversal of Judge Sweet’s finding of trademark infringement. But, the government said, the regulations did not stop Sweet from canceling General Cigar’s trademark registration and enjoining them from selling cigars by the name “Cohiba.” Given Sweet’s factual findings about the fame of the mark and “strong evidence” that General Cigar was trading off that fame, the government said, canceling General Cigar’s registration was appropriate relief. The 2nd Circuit disagreed, saying it did not find the argument persuasive. “To allow Cubatabaco to prevail on a claim of unfair competition against General Cigar and to obtain an injunction prohibiting General Cigar from using the mark would turn the law of trademark on its head,” Judge Straub wrote. He added: “Cubatabaco cannot obtain relief on a theory that General Cigar’s use of the mark causes confusion, because, pursuant to our holding today, General Cigar’s legal right to the COHIBA mark has been established as against Cubatabaco. General Cigar has a right to use the mark in the United States because it owns the mark in the United States.” The court said it need not decide the issue of whether an entity that has not used a trademark on products in the United States can acquire a U.S. trademark through the famous marks doctrine. Maureen E. Mahoney of Latham & Watkins in Washington, D.C., represented General Cigar. Michael Krinsky of Rabinowitz, Boudin, Standard, Krinsky & Lieberman represented Cubatabaco.

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