Havana Rights: How Lifting the Cuban Embargo Could Affect Trademark Rights to the Cohiba Brand

BY DIANA JORDAN — Few trademarks rival the exclusivity of the Cohiba brand. But who should profit from the brand name cigars’ fame and notoriety? To resolve this decades-old dispute, American cigar manufacturer General Cigar and its Cuban counterpart, Cubatabaco, have decided to once again duke it out in classic American fashion—through litigation.

In 1972, Cubatabaco obtained a Cuban registration of the trademark “Cohiba” for its cigars, which it later registered in 115 countries. Notably absent from these 115 countries was the island’s northern neighbor—a result of the 1960 Cuban Assets Control Regulations, more commonly known as the Cuban embargo. In 1981, General Cigar capitalized on this ban by obtaining a U.S. registration for the “Cohiba” trademark for its cigars.

Although Cubatabaco filed a trademark infringement lawsuit against General Cigar in 1997, the dispute remained undecided for nearly ten years. In 2005, the United States Court of Appeals for the Second Circuit held that Cubatabaco could not cancel General Cigar’s registration because this would have resulted in a transfer of prohibited proprietary rights to the mark under the Cuban Assets Control Regulations. General Cigar’s seeming victory was further solidified the following year when the Supreme Court of the United States denied Cubatabaco’s petition for writ of certiorari.

However, after a favorable change in New York law for Cubatabaco, an injunction was entered against General Cigar, which led to another appeal to the Second Circuit in 2008. That court deferred to the Trademark Trial and Appeal Board, and in 2013, the Board once again denied Cubatabaco’s petition to cancel General Cigar’s trademark based on lack of standing in light of the Cuban Assets Control Regulations.

But in June 2014, Cubatabaco’s luck took a favorable turn when the Federal Circuit reversed the Trademark Trial and Appeal Board. The Federal Circuit determined that “[t]he Second Circuit never issued a final judgment on the merits of Cubatabaco’s cancellation claims,” referring to its 2008 decision. The Federal Circuit also held that select Lanham Act provisions, as well as exceptions to the Cuban Assets Control Regulations, gave Cubatabaco standing to cancel General Cigar’s registration.

Even though the Supreme Court denied Cubatabaco’s certiorari petition in 2006, a new petition filed by General Cigar on October 31, 2014, may pique the Supreme Court’s interest. In addition to resolving a circuit split between the Second and Federal Circuits, the Supreme Court should grant certiorari if Congress upholds President Obama’s decision to lift economic restrictions on Cuba to determine how this executive action will impact Cubatabaco’s standing claim. The Supreme Court has even granted Cubatabaco two extensions to file its response, the second of which came after President Obama’s announcement in December.

While it remains to be seen what impact, if any, an embargo lift would have on both American and Cuban companies, the power to end the embargo lies with Congress, leaving President Obama executive authority to only ease certain restrictions. This is an opportune time for the third branch to weigh in on the legal implications of the President’s action, if only for intellectual property purposes, for companies interested in resuming or commencing business relations with Cuba. It appears the longstanding litigation between the two cigar competitors will soon come to an end, determining who will get smoke in their eyes once and for all.

Leave a Reply

Your email address will not be published. Required fields are marked *