In a trade fight with strong political overtones, Cuba has filed legal challenges in the United States against Bacardi and General Cigar Co. for the rights to the Havana Club rum and Cohiba cigar trademarks.

At stake are tens of millions of dollars in international sales of Cuba's best-known rum, as well as cigars once made exclusively for President Fidel Castro and now often ranked as the world's best.

But the twin challenges also mark a new aggressiveness by Havana and U.S. companies that may signal a belief that Washington might soon lift its embargo on Havana and open the huge U.S. market to Cuban goods.

``When companies begin to be aggressive on trademark issues, it usually means they believe there will be, sooner rather than later, a market for the products,'' said John Kavulich of the New York-based U.S.-Cuba Trade and Economic Council.

There's also bad blood between Havana and Bacardi-Martini USA, the Cuban exile-owned rum empire that lobbied for the Helms-Burton law, which allows exiles to sue for properties seized by the Castro regime.

Complex case

The twin Cuban challenges, filed 22 days apart in late 1996 and early 1997, are wrapped in a complex skein of laws, rules and regulations involving trademark rights, international treaties and the U.S. embargo.

Lawyers for Havana, Bacardi and General Cigar all declined comment, but trade experts said the Cohiba case is simpler and probably will be decided on the basis of which side can prove the earliest commerce in the brand.

Culbro Corp., parent of General Cigars, began registering Cohiba cigars with the U.S. Patent and Trademark Office (USPTO) in 1978. But Culbro apparently has produced only limited quantities of the cigars and sold them only in a limited number of stores, U.S. cigar industry sources said.

Cuba never registered the brand in the United States, though it could have. The U.S. embargo allows Cuban firms to register so-called intellectual property like brand names or logos with U.S. agencies.

`Famous name' claimed

But Havana, in a Jan. 15 petition to the USPTO to cancel Culbro's trademark, claimed Cohibas fall under the category of ``famous name'' -- brands such as Xerox that under international law and treaty cannot be taken by anyone else, even in the absence of a trademark registration.

Cuba claims it began making Cohibas in 1960 and selling them in diplomatic stores in Havana in 1967. But its Cohibas were made only for Castro and visiting dignitaries, and were not commercially available until 1981, U.S. cigar industry sources said. Some Cuban cigar advertisements cite 1982 as the year when ``Cuba's best-kept secret'' went public.

``What Culbro did [in registering Cohiba] here was a `midnight raid,' but it may win because the Cubans must prove they had a product on the market,'' said one Washington lawyer who watches U.S.-Cuba trade issues.

Experts say Cuba appears to have a much stronger case in its Dec. 23 suit in New York federal court against Bacardi-Martini USA, the world's leading rum maker, and three distributors.

Simmering disputes

That case is also more significant, they added, because it goes to the heart of simmering disputes between Cuban exiles and Havana over the rights to trademarks registered in pre-Castro Cuba.

``Whenever the embargo goes, there will be a mad rush to see who has the rights to products here and in Cuba,'' said Pamela Falk, who teaches international trade at the law school of the City University of New York.

Cubaexport S.A. went to the USPTO in Washington in 1976 and registered Havana Club, a rum brand that Castro seized from the Arechabala family in 1960. Legally blocked from using the also-seized Bacardi name abroad, Cuba has made Havana Club its top export brand in Europe, Canada and Mexico.

Bacardi spokesmen say Bacardi began negotiating with the Arechabalas to buy the Havana Club name ``long ago'' but declined to give a date, adding that the company began production in 1995 and finalized the deal with the Arechabalas last month.

While U.S. courts have upheld the right of exiles to brands they owned in Cuba, holders must produce goods or risk losing their marks. It's not known whether Havana Club was produced anywhere outside Cuba between 1960 and 1995.

Bacardi's lawyers first argued that Cubaexport committed fraud in 1995 when it obtained a U.S. Treasury permit to transfer the trademark to Havana Club Holding, a joint Cuban venture with French liquor giant Pernod-Ricard.

Argument tossed out

Judge Shira Scheindlin tossed out that argument March 10, ruling that Treasury's Office of Foreign Asset Control had the power to issue such a permit.

Scheindlin has yet to rule on Cuba's request to order Bacardi to stop selling Havana Club. But in her March ruling, the judge made several seemingly critical remarks on the U.S. embargo.

``The wisdom of maintaining the Cuba embargo . . . some 35 years after its inception has come under serious attack from many camps and on many grounds in recent months,'' the judge wrote, although the legality of the embargo is not at all involved in the court case.

Despite the embargo, U.S. companies have registered and maintained some 400 trademarks in Cuba since 1963, and Cuban and U.S. lawyers have battled over such rights many times in third countries.

U.S. firms that own such famous Cuban cigar brands as H. Upmann, Montecristo and Por Larrañaga are fighting a major case in French courts against Havana's Cubatabaco.

A French court ruled in favor of the U.S. firms in 1992, but an appeals court overturned that decision in 1995. The case is now under final review by France's highest appeals court.

Copyright © 1997 The Miami Herald