I blogged previously on the Southern District Court of New York decision in the COHIBA cse, wherein the Court held that the Cuban plaintiff had protectable trademark rights in the COHIBA mark in the U.S. after it showed evidence that its reputation here met the standard under Article 6bis of the Paris Convention for protection as a famous mark.

The Second Circuit has now reversed the District Court holding in Empresa Cubana v. Culbro, 04-2527 (2d Cir Feb 25 2005).  It does not reach the issue as to whether plaintiff’s mark is famous in the U.S. but instead holds that plaintiff, as a Cuban entity, cannot obtain property, that is to say protectable U.S. trademark rights, under the embargo against Cuba.  Thus the claims are dismissed.

This case may be correct on the law but raises concerns.

First, assuming that the lower court’s factual holding that COHIBA is a famous mark in the U.S. is correct, the outcome appears to serve neither the purpose of the embargo nor of the Lanham Act. 

Plaintiff was not seeking the right to use the COHIBA mark in the U.S., only to prevent defendant from using it.  Such an injunction would not bolster the Cuban economy in any meaningful way.  In the meanwhile, the U.S. consumer, presumably aware of the famous Cuban COHIBA mark, will be exposed to defendant’s COHIBA product (that had been marketed at times using Cuban imagery).

Second, there is the issue of equal treatment.  U.S. trademark owners have received the protection of foreign courts not only in the ‘reputation without use’ scenario (see my previous post) but even when external political forces may have prevented the trademark owner from satisfying local conditions otherwise necessary for protection under law.  For example McDonalds was able to protect its mark in South Africa against an interloper during McDonald’s non-use during the apartheid sanction period. 

Then there is the issue of retaliation.  Cuba has certainly appropriated the assets of Cuban businesses, which appropriations led to trademark conflict outside Cuba (such as the HAVANA CLUB matter).  However with regard to Cuban protection of U.S. famous marks, on paper at least, Cuba now offers greater protection to U.S. marks than the other way around.  Cuba is an adherent to the Paris Convention and, in theory, would grant 6bis protection to U.S. famous trademark holders (I would be interested from hearing from anyone who has instructed a 6bis action in Cuba – I came close once but the client changed its mind ). Furthermore, U.S. entities may obtain Cuban trademark protection despite the embargo (although not all owners of famous marks do so). 

Some day Castro will fall off the world’s stage.  We may at that time normalize trade relations with Cuba.  From a policy perspective, the U.S. would perhaps be better off until then if there was a no-use truce of the other country’s marks.  I think we lose out if there’s a free-for-all until then.