As U.S. sanctions on Cuba continue to thaw, some long standing disputes have been reignited.  Perhaps chief among them is the decades-old battle over the trademark for “Havana Club” rum.

The original distillery that produced Havana Club rum was expropriated by the Castro regime in the 1960s.  After the original distiller’s trademark registration had lapsed, the Cuban government registered the mark in the United States in 1976.  The Cuban government assigned its rights in the mark to spirit producer Pernod Ricard in 1993.  Meanwhile, distiller Bacardi Ltd., which had fled Cuba in the 1950s, acquired rights to the Havana Club mark from the family of the original distiller in 1994.

After litigation in U.S. courts over the right to use the mark ensued, U.S. Congress passed the Omnibus Appropriations Act in 1998, which included Section 211, known as the “Bacardi Act.” Section 211, which was reportedly crafted at the behest of Bacardi, protected the trademarks of companies which had been expropriated by the Cuban government and, in turn, solidified Bacardi’s claim to the Havana Club mark through its connection to the original distillers.  In 2001, the World Trade Organization found that Section 211 was illegal because it was aimed at a single country, Cuba. The United States has, however, largely ignored the WTO ruling.

As part of the recent reduction of restrictions on Cuba, Pernod Ricard (through a joint venture with Cubaexport) has been been permitted to renew the Havana Club once owned by the Cuban government.  In a recent letter to the U.S. Treasury Secretary and the U.S. Secretary of State, twenty-five members of Congress demanded an explanation as to how OFAC has permitted Cubaexport-Pernod Ricard to renew the Havana Club mark in light of Section 211.  The members of Congress, largely representing Florida districts, are particularly concerned the U.S. government is ignoring Section 211 and is instead choosing to recognize the rights once held by the Castro regime which expropriated the goodwill of the brand decades ago.  Neither the Department of Treasury nor the State Department has yet issued a response.

The Havana Club saga is a cautionary tale which demonstrates that even though formal U.S. regulations are being scaled back, the broader relationship between the countries remains politically charged and full of pitfalls.  Navigating both the black letter regulations and the larger landscape of Cuban-U.S. relations requires skilled advocates and patience as “normalization” continues to take root.