Bacardi Loses Appeal Against Cuban Government in Long-Running ‘Havana Club’ Rum Dispute

A June 8, 2016, file photo shows bottles of Cuban Havana Club rum displayed on the bar at the Rum Museum in Havana, Cuba. (Photo: AP Photo/Desmond Boylan, File)

Alcohol giant Bacardi has lost its latest appeal in a long-running dispute over Havana Club rum, a brand name that was controversially split between two owners in the wake of the Cuban Revolution.

On Tuesday, the Virginia-based 4th US Circuit Court of Appeals rejected Bacardi’s challenge against the US Patent and Trademark Office, maintaining that the Cuba-owned Cubaexport has retroactive trademark rights to the decades-old spirits brand.

Under the current agreement, Bacardi produces Havana Club in Puerto Rico, where it has an exclusive foothold within the American market. Cubaexport, meanwhile, works with Bacardi rival Pernod Ricard to export its version of the rum to international consumers.

In a statement shared by Reuters, Bacardi said that it was “disappointed that the court granted the Cuban government a 10-year grace period for renewing a trademark that was stolen in ​the first place.”

The spirited debate has been over 60 years in the making. In 1959, Havana Club was among hundreds of Cuban brands nationalized and subsequently operated by the local government. The rum was predominantly sold within its home country until 1993, when French firm Pernod Ricard inked a 50:50 deal with officials to begin exporting the spirit abroad.

A year later, Bacardi inked a separate deal with the descendant of José Arechabala, the founder of Havana Club, to acquire his family’s 1930s-era recipe. Both Bacardi and Cubaexport claim to produce the “original” version of the rum — legally (and politically) speaking, it’s all a matter of perspective.

The two parties came to a head in 2016 after the USPTO allowed Cuba to retain international rights to Havana Club. Bacardi argued that Cubaexport had failed to pay a renewal fee over a decade prior. The court, however, contended that Cubaexport had attempted to pay the fee but was rejected by the Treasury’s Office of Foreign Assets Control. OFAC then granted a retroactive approval of the payment, setting the stage for the current legal battle between two international spirits firms and the Cuban government.

The brunt of the dispute is yet to come. An act passed by the Biden administration in 2023 forbade US agencies from enforcing or validating trademarks seized during the Cuban Revolution. Coincidentally, Cubaexport’s trademark is set to expire later this month, and Bacardi claims that the “No Stolen Trademarks” act will put an end to further renewals.