Bacardi Loses Second Legal Battle Against US Government Over Contested Havana Club Rum Trademark

Bottles of Havana Club rum are seen in Scandlines Border Shop at a ferry dock in Puttgarden, Germany, at 3rd July 2013. (Photo: Marcus Brandt/picture-alliance/dpa/AP Images)

On Friday, Reuters reported that a Virginia court has once again ruled against spirits conglomerate Bacardi amid the company’s ongoing fight over the “Havana Club” rum trademark. The move comes a little over a month after former President Biden signed legislation many speculated would give Bacardi the upper hand over the Cuban government and rival spirits firm Pernod Ricard.

According to a court filing, U.S. District Judge Leonie Brinkema granted requests from the U.S. Patent and  Trademark Office and Cubaexport to dismiss Bacardi’s trademark suit against the two parties. Bacardi last appealed the decision in June; the company now plans to appeal again.

The long-simmering dispute dates back to the Cuban Revolution. In 1959, Havana Club rum was among hundreds of Cuban brands nationalized and subsequently operated by the local government. In 1993, French firm Pernod Ricard inked a lucrative 50:50 deal with officials to begin exporting the rum abroad.

A year later, Bacardi made a deal with the descendant of José Arechabala, the founder of Havana Club, to acquire the original recipe.

“Havana Club” as we know it today exists in a tepid limbo. Under the current arrangement, Bacardi produces its version of Havana Club in Puerto Rico, marketing the product largely to American consumers. Pernod Ricard, meanwhile, exports the Cuban-made version of Havana Club to international markets. Due to the ongoing U.S. trade embargo against Cuban goods, the two products never meet on American liquor store shelves.

Tensions came to a head in 2016 after the USPTO allowed Cuba to retain the international rights to Havana Club rum. Bacardi claims that Cubaexport, a firm owned by the Cuban government, failed to renew its trademark in 2006. Bacardi has now fought in appeals courts for nearly a decade to reverse the USPTO’s decision.

“In this case, the Cuban government was afforded the unprecedented grace period of 10.5 years to cure its deficiencies, for a trademark that was confiscated without compensation, no less. We will appeal to right this wrong,” Bacardi said in an email to Bottle Raiders.

Judge Brinkema’s decision on Friday comes as a surprise development in the dispute.

At the beginning of December, former President Joe Biden signed legislation banning the recognition of trademarks confiscated by the Cuban government under Fidel Castro. The law, titled “No Stolen Trademarks Honored in America Act of 2023,” was broad in scope but specific in intention. Though the act itself makes no mention of brand names, a congressional report clarified that the fight over Havana Club was the main pretext for the ruling.

The legislation provoked immediate reactions from Pernod Ricard and Cuban officials.

“The so called ‘Stolen Trademarks Act’ signed by Biden modifies the law into an aggressive measure against #Cuba, precisely with the purpose of opening up the door, in violation of International Law, to the theft of Cuban Trademarks that are legally registered in that country,” Cuba foreign minister Bruno Rodriguez Parilla wrote on X. 

Judge Brinkema’s ruling, however, appears to contradict Biden’s act, which specifically forbade federal courts from recognizing seized Cuban trademarks. Whether this has to do with the change of presidential administrations or some other cause is unclear.