U.S. courts end epic rum battle

As it lost a last-instance appeal after a decade-long battle in U.S. courts to keep the Havana Club trademark, Pernod Ricard SA registered a new brand for the United States with the U.S. Trademark and Patents Office.

On the day it learned the U.S. Supreme Court refused to reconsider the decision to strip Pernod Ricard and its Cuban joint venture partner of the Havana Club trademark, the Paris-based liquor giant announced it will activate the Havanista brand once the U.S. embargo ends.

Pernod Ricard is the worldwide marketer of Havana Club rum, in a joint venture with state company Corporación Cuba Ron. 

“The government of the United States is completely responsible for this,” the Cuban foreign ministry said in a statement two days after the ruling, calling it a “grave violation of the commitments of the United States in matters of industrial property.” The statement pointed out that Cuba has “invariably respected” 5,000 U.S. trademarks and warned of “negative consequences that could derivate from this fact for the reciprocal protection of industrial property.”

On May 24, Cuba filed a formal complaint before the World Trade Organization (WTO), which has repeatedly called on the United States to respect Cuban trademarks and patents.

Citing an obscure law — which competitor Bacardi had managed to insert into a budget bill in 1999 — a Washington appeals court last year blocked Pernod Ricard from renewing the Havana Club trademark registration in the U.S. after 35 years.

Section 211, which prohibits the recognition of Cuban trademarks that had been nationalized after the 1959 revolution, has been condemned by the WTO and the U.S Chamber of Commerce.

The Spanish high court last year rejected a similar challenge by Bacardi.

Pernod Ricard emphasized in a press release that the decision of the Supreme Court does not confer any right to the Havana Club trademark to a competitor. Even so, the company proceeded to register the new brand.

“If you like Havana Club, you will love Havanista,” said Jérôme Cottin-Bizonne, CEO of Havana Club International, the Cuban marketing joint venture between Pernod Ricard and Corporación Cuba Ron.

“Produced and bottled in Cuba, Havanista is a premium Cuban rum specifically aimed at the U.S market, which will be launched if the embargo is lifted,” the company said in a press release. “It will benefit from the same high-level production processes and quality requirements as the Havana Club range.”

Havana Club sales have grown ten-fold during the past 18 years and should reach a record 4 million cases this year, according to Pernod Ricard.

However, due mainly to declining sales in Cuba, Spain and Italy, sales of Havana Club rum stagnated during the first half of the 2011-12 financial year. During the first quarter, the number of cases sold had edged up 1 percent, but revenues declined 2 percent. The price/mix indicator for Havana Club decreased 3 percent, the largest decline of any Pernod Ricard brand in the quarter.

The stagnation comes after robust growth in 2010-11. Before the global financial crisis in 2008, Havana Club was one of the fastest-growing brands in Pernod Ricard’s stable.

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