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Wednesday, August 16, 2006

Are Two Havana Clubs Better Than One?

When the communists took control of Cuba the government seized control of private businesses and many of the island nation's wealthiest families fled to others parts of the Caribbean and the United States. The subsequent U.S. embargo against all Cuban products caused, among other things, the supply of Cuban cigars and rum to dry up. If you lived close to the Canadian border, as I did until about a year ago, or were lucky enough to take trips to Europe or the Caribbean, you could still sample these products. Now a major Puerto Rican rum producer says it has purchased rights to and has the original recipe for the famous Havana Club rum brand and is producing it for the American market.

Bacardi relaunched Havana Club in the United States this month. It says it purchased rights to the brand from the Arechabala family, which controlled Havana Club prior to the reign of Fidel Castro and his friends. Not so fast, says the French drinks giant Pernod Ricard, which has had a joint venture agreement with Cuba Ron since 1994 to market Havana Club around the globe. They say they have rights to the brand and plan to file lawsuits against anyone trying to use the Havana Club name.

In what sounds like a legal argument that could grow into the next Anheuser-Busch Budweiser from the U.S. versus Budejovicky Budvar Budweiser from the Czech Republic international trademark dispute, this one has a few interesting twists and turns. In 1974, the owners of the Havana Club brand allowed their trademark to lapse. The Cuban government immediately registered the trademark, but because of the embargo, have been unable to sell Havana Club in the U.S. The Arechabala family claims the rum produced in Cuba is not made with the original recipe and is not a very good rum. The U.S. Patent and Trademark Office told the Cuba government on Aug. 3 that the trademark they held in the U.S. was "cancelled/expired." Bacardi for its part says it is clearly labeling the Havana Club it produces as Puerto Rican rum so it will not mislead consumers.

While this dispute will continue to bubble along in the U.S. court system, the real interesting developments will come when either (a) Bacardi decides to try to market the "original recipe" Havana Club some place other than the United States, or (b) The U.S. lifts the embargo against Cuba and Pernod Ricard decides that it would like to sell the "Havana Club from Cuba" to a nation full of thirsty drinkers just 90 miles away.

Anyone care for a Cuba Libre?

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