Havana Club. Here in the States, it’s a name that inspires awe among booze geeks as one of those forbidden bottles that everybody brings back from international trips. But in the rest of the world, it’s pretty much just another rum, available on the back bar and in cocktails almost everywhere.
What you may not have known is that there are two Havana Club brands, one of them sold exclusively in the U.S. And there’s a bitter legal battle between them that involves two of the largest spirits companies in the world, the Cuban government and the U.S. Department of the Treasury. It’s the booziest international trademark dispute in history, and it reveals why the American strategy of basically pretending Cuba didn’t exist on the international stage for the decades during and since the Cold War was probably not the soundest strategy, no matter your feelings about the Cuban Revolution. It also represents a potential roadblock in the changing relationship between America and our Communist neighbor to the south.
First, a bit of history: Jose Arechabala started a rum distillery in Cuba in the late 1800s, and his descendents created the Havana Club brand in the mid-1930s. At the same time, another Cuban brand, Bacardi, was one of the largest rum brands in the world, with distilleries in Puerto Rico and Mexico in addition to Cuba.
After the Cuban Revolution of 1959, the new Communist regime nationalized almost all Cuban companies and industries, distilleries included. In response, both the Arechabalas and Bacardi fled the island. Thanks to its established distilleries elsewhere, Bacardi was able to move its headquarters to Bermuda and continue production, growing to become the largest privately owned spirits company in the world today, with some 200 brands in its portfolio including Grey Goose Vodka, Angel’s Envy Bourbon and Bombay Gin.
The Arechabalas weren’t so lucky. They ended up in the U.S. but weren’t able to get their brand re-started. Havana Club disappeared for about a decade, until the 1970s, when the Cuban government started bottling a new Havana Club, selling it mostly domestically and in the Soviet Bloc.
In 1993, the Cuban government created a joint venture to sell Havana Club around the world with Pernod-Ricard, the French spirits giant that owns dozen of brands, from Martell Cognac to Jameson Irish Whiskey to Olmeca Altos Tequila. The Pernod-Ricard joint venture quickly spread Havana Club across the globe: It’s today sold in more than 120 countries—except the U.S.
And that’s where the trouble begins. Thanks to the American embargo, the post-Revolution version of Havana Club was (and is) illegal to import to or sell in the States. In the same year that the Pernod-Ricard joint venture was created, Bacardi made a handshake deal with the Arechabala family to purchase the rights to the Havana Club name. In 1995, Bacardi released its own version of Havana Club, a rum distilled in Puerto Rico using the Arechabalas’ original recipe and sold primarily in South Florida.
Lawsuits followed, and the Bacardi Havana Club disappeared for a time, but thanks to a 1998 piece of Federal legislation, commonly called the “Bacardi bill,” banning U.S. trademark registration for brands confiscated by governments (like, say, Havana Club by Cuba), Bacardi was able to continue claiming the American trademark and has sold its Havana Club on and off in the U.S. ever since.
In 2006, Pernod-Ricard again attempted to register the Havana Club trademark in the U.S., applying for a license from the Office of Foreign Assets Control (OFAC), an arm of the Treasury department that regulates trade with countries against which the U.S. has sanctions or embargoes. It was denied, including appeals all the way up to the Supreme Court.
But with the thawing of Cuban-American relations, Pernod-Ricard went back to OFAC early this year, and in a surprising reversal, the company was granted a license to claim the Havana Club trademark in the U.S. Today, there are ongoing lawsuits and petitions on both sides, and the Havana Club trademark in the U.S. is sort of in limbo.
Bacardi maintains that the Arechabalas have the right to the trademark in the U.S. (and the rest of the world as well) because it was confiscated illegally during the Revolution, and the company is planning to roll out its version of the brand nationwide in the coming months, with a “The Golden Age, Aged Well” campaign emphasizing Havana Club’s Cuban roots. “The United States trademark rules aren’t based on registration; they’re based on usage,” says Rick Wilson, Bacardi’s senior vice president for external affairs, and Bacardi’s Havana Club is the only one actually being sold in the U.S.
Pernod-Ricard, on the other hand, claims that the Arechabalas had abandoned the Havana Club trademark before Cuba brought it back, and that the current version of the rum is made in a distillery built after the Revolution and thus not illegally confiscated. When Havana Club was reborn back in the ‘70s, “there was no complaint or litigation at the time,” says Jerome Cottin-Bizonne, CEO of Havana Club International, adding that Pernod-Ricard has won litigation over Havana Club in every country besides the U.S. “It’s very strange to see a rum with a Cuban name that’s not produced in Cuba,” Cottin-Bizonne says. “Our Havana Club brand represents Cuba and Cuban culture because it’s made by Cubans.”
Bacardi doesn’t buy the abandoned-trademark argument, claiming that the Arechabalas had been trying to find someone to make their version of Havana Club ever since the Revolution. “The Cuban government promised to pay business owners they confiscated from and never did,” Wilson says. “It’s ludicrous for them to say, ‘you didn’t chase the thief fast enough to get your property back.’”
Now, will the Havana Club dispute interfere with the coming end of the embargo? Thankfully, probably not. Robert Katz, an international trademark attorney and partner at Eaton & Van Winkle, cites Germany after World War II as a somewhat analogous situation. There were lots of disputes over trademarks that had separate German and American versions during the war, including over drugmaker Bayer and piano company Steinway. “None of these stood in the way of reestablishing relations between the former Axis and the U.S.,” Katz says.
And that’s where we stand today. If it all sounds convoluted, that’s kind of the point I’m making. We won’t be going to war with Cuba over a rum trademark, and the dispute shouldn’t have very much geopolitical impact. But regardless of who wins and what version of Havana Club finds its way onto shelves near you, this dispute shows just how silly our government’s stance on Cuba has been. The island is just 90 miles from our shores, but until the last few years, the American stance on Cuba has been to just stick its fingers in its ears, pretending the country just didn’t exist, even as Americans flouted travel bans to visit, and as the end of the Cold War allowed at least some thawing of the relationship.
We could have recognized that Cuba continued to trade with the rest of the world and acknowledged that would have some effect on domestic markets, but we didn’t. We could have operated under the assumption that the embargo would end eventually and planned ahead accordingly, but we didn’t. Regardless of how you feel about the Revolution and what happened in the subsequent decades, completely ignoring Cuba’s existence wasn’t the optimal option. And for rum lovers, it’s just caused all kinds of confusion.
AND NOW, A WORD FROM SOME BARTENDERS