A U.S. judge has rejected a Cuban suit against the Bacardi rum empire over a trademark, raising the odds that Havana might retaliate by refusing to protect U.S. brands on the island.

The ruling Wednesday capped a complex legal battle over the trademark of Cuba's top-selling rum, Havana Club, that pits Havana against two exile families whose distilleries it seized in 1960.

At the heart of Judge Shira Scheindlin's ruling in New York was a measure approved by the U.S. Congress last year to deny legal protection to the trademarks of properties seized by President Fidel Castro's government.

Cuba blamed the law on Bacardi lobbyists and threatened in January that it would stop protecting the 3,000 to 4,000 U.S. trademarks registered in Cuba, including McDonald's and Victoria's Secret, if it lost the case.

That would mean anyone in Cuba could register U.S. brands like Pizza Hut and McDonald's, do business under those names and even force the U.S. owners to buy them back if the U.S. embargo is ever lifted.

Hailed as victory

Bacardi welcomed Scheindlin's ruling as a victory for the Arechabala family, which manufactured Havana Club rum in Cuba until Castro's regime seized all privately owned distilleries in 1960.

``After 40 years, the Arechabala family was able to defend itself and justice was done, said Jorge Rodriguez, Bacardi-Martini U.S.A. vice president for corporate communications.

Scheindlin's 37-page ruling made no mention of the legality of Castro expropriations and said only that the case presented ``an interesting irony, with Cuban and exile-owned firms registered in Havana, Luxembourg, Liechtenstein, the Bahamas and Delaware doing battle in a U.S. court.

At stake in the case were not only tens of millions of dollars in foreign sales of Cuba's top rum, but a mutual U.S. and Cuban respect for trademarks that had survived 40 years of Cold War animosity.

Two-year-old suit

Cuban-owned Havana Club Holdings filed suit against Bacardi in early 1997, two years after Bacardi began U.S. distribution of a Havana Club brand of rum distilled in Bacardi's plant in Puerto Rico.

Bacardi argued it had bought the trademark from the Arechabalas. Cuba argued that the Arechabalas did not own the name and that the U.S. Patent and Trademark Office had recognized Havana Club as a Cuban brand in 1976.

Cuba won the first round, but lost the second early last year over a murky effort to win U.S. recognition for its sale of a 50 percent share of Havana Club to the French liquor firm Pernod Ricard in 1995.

Havana seemed likely to win the third round until Florida's senators, Democrat Bob Graham and Republican Connie Mack, introduced a brief amendment in September to the huge spending bill that governs federal spending.

The measure mandated that no U.S. court could protect the trademarks of any properties confiscated by the Castro government unless their original owners gave express consent.

Overrides treaties

Scheindlin ruled that the measure, contrary to Cuban arguments, overrides all U.S. obligations under international treaties to protect legally registered intellectual properties.

Cuban officials could not be reached for comment on the ruling, and Havana's lawyer in New York, Michael Krinsky, did not return Herald phone calls.

But U.S. experts who have been following the case said the ruling could sow chaos and confusion in an area of international relations that is already sensitive -- respect for intellectual properties.

Cuban National Assembly President Ricardo Alarcon warned in January that Havana could stop protecting U.S. trademarks registered in Cuba, in essence throwing the doors open to misappropriation of trademarks.

``Cuba has a booming tourism industry, and someone might want to open a McDonald's, said Pamela Falk, a professor of international trade and business law at the City University of New York.

Cuba could also file a complaint against Washington before the World Trade Organization in Geneva in hopes of overturning the Graham-Mack measure, Falk added.