Pernod Dealt Setback by U.S. Supreme Court on Havana Club

Posted on Monday, 05.14.12

Pernod Dealt Setback by U.S. Supreme Court on Havana Club
By Greg Stohr and Clementine Fletcher

Pernod Ricard SA, which sells Havana Club rum in every country except
the U.S., was dealt a blow in efforts to sell the liquor in the American
market after the U.S. Supreme Court decided not to intervene in a clash
over rights to the name.

The justices today left intact a U.S. government agency's rejection of a
bid by Cuba's state-owned Cubaexport to renew its U.S. trademark on the
Havana Club name.

Pernod has an agreement with Cubaexport dating to 1993 under which it
can sell Havana Club in countries other than in the U.S., where it is
prevented from doing so by an embargo on goods produced in Cuba. The
Coral Gables-based Bacardi U.S.A. has sold a Puerto Rican- made rum
under the Havana Club name in Florida since 2006.

"Bacardi U.S.A., Inc. applauds the U.S. Supreme Court for affirming the
Appellate Court decision," Patricia Neal, a Bacardi spokeswoman said in
a statement. "The effect of the U.S. Supreme Court's refusal to
intervene is that the Cuban government's registration is considered
expired and cancelled. U.S. courts have also consistently ruled that the
Cuban-French venture Havana Club Holding has no rights to the HAVANA
CLUB trademark in the U.S. "

Pernod and Bacardi Ltd., based in Hamilton, Bermuda, have been fighting
since 1994, when Bacardi applied for a U.S. trademark for its rum.
Paris-based Pernod, which has been trying to position itself to sell rum
in the U.S. under the Havana Club name should the American embargo on
Cuban goods be lifted, said today in an e-mailed statement that it would
instead start selling a new rum, Havanista, in the U.S. if the ban is
revoked.

Havanista is "specifically aimed at the U.S. market" and will "benefit
from the same high-level production processes and quality requirements
as the Havana Club range," Pernod said.

Pernod Ricard won't speculate on "if and when the embargo will be
lifted," Chief Executive Officer Pierre Pringuet said today on a
conference call.

The U.S. Treasury Department's Office of Foreign Assets Control refused
to renew Cubaexport's trademark, relying on a 1998 law making trademarks
confiscated by the Cuban government unenforceable. A federal appeals
court in Washington upheld the decision. The law has been applied only
to the Havana Club mark.

A different federal appeals court ruled against Pernod on a separate
issue in August. It said consumers wouldn't be confused into thinking
Bacardi's Havana Club rum was made in Cuba because the label says it is
made in Puerto Rico.

Pernod said today it won't pursue further appeals against the ruling,
which has cost "several million dollars."

Pernod sells the Havana Club brand in more than 120 markets outside the
U.S., it said. The Supreme Court's action doesn't confer any right to
the trademark on any third party.

Pernod shares fell 1.3 percent to 78.69 euros as of the 5:30 p.m. close
of trading in Paris today.

Miami Herald Business Writer Elaine Walker contributed to this report.

http://www.miamiherald.com/2012/05/14/2799321/pernod-dealt-setback-by-us-supreme.html