Hot Rum Toddy

With trade disputes over beef and bananas dragging on before the World Trade Organization, this seems a poor time for Washington to get into yet another potential conflict with its European Union allies, this time over the trademark of a Cuban rum.

Congress should heed the call of the U.S. Chamber of Commerce, which knows a bit about business, and repeal a provision of last year’s omnibus spending bill that specifically benefits the American-owned distillery Bacardi Ltd. The Bacardi provision, a bit of trade overkill if ever there was one, was sponsored by Florida Sens. Connie Mack (R) and Bob Graham (D). It prohibits U.S. courts from upholding any trademark connected with businesses confiscated by the Cuban government after Fidel Castro came to power 40 years ago. One of those trademarks is Havana Club, Cuba’s most famous and popular rum.

The dispute began in 1997, when the Bacardi company bought the rights to the Havana Club trademark from the Arechabala family, owners of the original Havana Club rum. Both the Bacardi and Arechabala families left Cuba when Castro took over in 1959. The Bacardis continued production of rum outside Cuba, and the Arechabalas got out of the business. The Castro government argues that the Arechabalas abandoned their trademark rights and that Havana claimed them, subsequently registering the brand with the U.S. Patent and Trademark Office and in 180 other countries.

At issue is far more than the Havana Club trademark. More than 400 American corporations have registered their trademarks in Cuba and are patiently waiting for the post-embargo or post-Castro era to do business there. Among the big names: Coca-Cola, McDonald’s and Calvin Klein. An April ruling by a federal district judge in New York upheld the congressional action. That calls into question America’s credibility as a trademark guardian.

These developments place American business on a collision course with the EU, since the French beverage giant Pernod Ricard S.A. has partnered with Cuba to distribute Havana Club worldwide, and EU officials say they’ll raise the issue at the World Trade Organization. At times like these, Congress should not be challenging our European allies over a Cuban rum trademark. It all revives that old refrain: “Rum and Coca-Cola, working for the Yankee dollah.”