Bacardi wins ‘Havana Club’ name battle

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A couple of weeks ago, Bacardi won a dispute against Pernod Ricard over the use of the brand name ‘Havana Club’ in the US Court of Appeals. The court ruled in favour of Bacardi, allowing the company to package and market its Havana Club rum in the US. This ruling follows an ongoing battle with Pernod Ricard, who opposed Bacardi’s sale of Havana Club rum in the US, calling the name ‘misleading’. This lawsuit is one of many various allegations made against Bacardi, which have been ongoing for the past 17 years.

In 2006 Pernod launched a lawsuit against Bacardi, accusing them of false advertising. Bacardi’s Havana Club rum is made in Puerto Rico, but is based on the original Cuban recipe from the creators of the brand, the Arechabala family. Pernod claimed that the ‘Havana Club’ brand would confuse customers into thinking that Bacardi’s rum was made in Cuba.

The U.S court of appeals has reconfirmed that there is no reason to conclude that Bacardi’s Havana Club label is misleading as Bacardi has accurately portrayed the geographic origin and Cuban heritage of the Cabana club. The front of the liquor bottle clearly states ‘Puerto Rican rum’, so as to not cause any ambiguity over the geographical origin of the rum. Instead the name reflects the Cuban heritage of the recipe.

Bacardi stated, “Bacardi USA commends the Appellate Court’s decision, which reaffirms that Bacardi has accurately portrayed both the geographic origin and the Cuban heritage of our Havana Club rum. The Bacardi Havana Club rum is based on the original Cuban recipe from the creators of the brand, which was legally purchased by Bacardi and is now produced in Puerto Rico. This is yet another Court decision supporting Bacardi’s legitimate right to use the name Havana Club for Puerto Rican rum with a prominent statement of origin on the packaging.”

Pernod Ricard is determined to keep fighting against the so-called ‘misuse’ of the Havana Club trademark. The General Counsel of Pernod Ricard, Ian FitzSimons, stated ‘we are determined to continue fighting for fair competition in the U.S. market where ownership of the ‘Havana Club’ trademark dates back to 1976’.

The company had commissioned a survey showing that 20% of U.S. rum consumers had been confused by the Havana rum bottle, evidence which the judge dismissed as being unhelpful.

A complicated History!

The dispute between the two companies in fact dates back before even the start of the Cuban Revolution in 1953, and has a long and complicated history. The ‘Havana Club’ trademark originally belonged to the Arechabala family, who produced ‘Havana Club’ rum in Cuba, which was exported for sale in the U.S. The family lost their company during the Cuban Revolution as the dictatorship took over their privately owned businesses, and in 1973 they were forced to give up their trademark without compensation. After the Cuban Revolution, the U.S started a trade embargo, prohibiting the trade of Cuban goods in the U.S, and meaning rum made in Cuba cannot be legally sold in the U.S.

The trademark was then purchased by Cubaexport from the Cuban government. Later, in 1993, Pernod Ricard, a French drinks company, entered into partnership with Cubaexport, securing exclusive rights to the mark. The first lawsuit was launched in 1996 by the Cuba/Pernod joint venture claiming fraud and deception by Bacardi who had begun distributing rum from the Bahamas in the U.S. under the name ‘Havana Club’. Bacardi produced their rum working with the Arechabala family, the original trademark owners, and had purchased from them whatever remaining rights the family had to the ‘Havana Club’ trademark. Notably, Cuban trademarks have grown in importance in anticipation of an end to the 1963 embargo.

Two years after the Havana Club Holding filed its complaint against Bacardi, legislation was introduced – ‘Section 211’ – forbidding registration in the US of trademarks belonging to Cubans before they went into exile, and leading the case against Bacardi to be dropped. So far this provision has only been applied to the Havana Club mark.

Bacardi unsuccessful in Spanish courts

Although Bacardi retained the ‘Havana Club’ trademark in the U.S, they were not as successful elsewhere. In Spain in 1999, Bacardi sued Pernod, claiming to be the rightful owner of the trademark. However, the Spanish courts sided with Pernod, holding that the Arechabala family neglected the mark by failing to challenge ownership, and leading to expiration of their rights.