United States: Battling Trademark Piracy In Cuba

The recent restoration of diplomatic relations between the United States and Cuba has sparked the interest of U.S. companies in protecting their intellectual property in Cuba. While an exception under current U.S. sanctions allows U.S. companies to file and maintain Cuban trademark registrations, many trademark owners have not seen any benefit in doing so until now, since other U.S. sanctions block the ability to trade. Although the embargo remains, the Obama administration has amended the Cuban Assets Control Regulations ("CACR") and Export Administrations Regulations ("EAR"), and further changes in policy are currently on the table. Trademark pirates have been quick to take advantage of the evolving landscape. As an example, an individual recently filed sixty-five Cuban applications for third-party logo trademarks that are well known in the U.S. and throughout the world. That person was not alone, and more are likely to follow.

After being inactive in Cuba for over half a century, or never having been present before, the best way for U.S. companies to deal with trademark piracy is to take pre-emptive action by securing Cuban trademark registrations. But for some trademark owners, it may already be too late. Since Cuba is a "first-to-file" country, it may seem at first glance that U.S. trademark owners without Cuban registrations have no recourse for preventing a pirate from stealing their spot on the registry. Fortunately, Cuban trademark law provides several means for challenging trademark applications under these circumstances, namely in the absence of a prior application or registration. This article addresses a number of grounds for opposing Cuban trademark applications, and the potential effects of the U.S. case, Empresa Cubana del Tabaco v. General Cigar Co., Inc., No. 13-1465 (Fed. Cir. 2014) ("Empresa Cubana"), on oppositions based on the General Inter-American Convention for Trade Mark and Commercial Protection (also known as the "Washington Convention" or the "Pan-American Convention").

Cuba is a party to almost all international intellectual property treaties, and local legislation has been structured to satisfy international obligations. When Cuba joined the World Trade Organization ("WTO") in 1999, it modified its trademark law by enacting Decree Law No. 203, which meets the requirements of the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS"). (Procedural regulations related to Decree Law No. 203 are provided under Resolution Number 63/2000.) As a contracting party to TRIPS, Cuba is also a party to the Paris Convention, which provides for the protection of famous trademarks under Article 6 bis. In compliance with the Convention, the famous-marks doctrine is implemented through Article 17.1 (d) of Decree Law No. 203, which prohibits registration of a trademark that is a total or partial reproduction of a notorious mark belonging to a third party, when their use could: (1) cause a risk of confusion or association with the notorious mark; (2)cause a risk of diluting the distinctiveness of the notorious mark or its commercial value or fame; or (3) unjustly benefit from the fame of the notorious mark.

Proving that a mark is famous in Cuba, however, can be somewhat challenging for U.S. companies, since the embargo prohibits them from using their marks in Cuba. Furthermore, because many Cuban nationals have limited Internet access, evidence of online marketing is given little weight, if any, unlike in many other countries where a trademark's online presence is considered an effective method of reaching international consumers. For this reason, lawyers need to be creative in arguing the fame of a U.S. trademark under the Paris Convention. In some cases, it might work to show that a trademark has been registered and used worldwide for an extended period of time, particularly in countries where Cuban nationals often travel. Further, a mark could be considered famous in Cuba if a particular sector of the Cuban population is familiar with the trademark. For example, it may be that those belonging to a particular profession have specialized knowledge of international brands within a certain industry, due to the nature of their work.

Cuba is also a party to the Pan-American Convention. Article 7 of the Pan-American Convention offers much broader protection than the Paris Convention, as it does not require that the senior trademark be famous. Under Article 7 of the Pan-American Convention, the owner of a trademark protected and used in one member state (the U.S.) may oppose an application for an interfering mark by a third party in another member state (Cuba), if the third party had knowledge of the existence and continuous use of the senior mark. (Grounds for cancelling a trademark registration are separately addressed in Article 8 of the Convention.) Thus, although the fame of a trademark may help to show that an applicant had knowledge of a senior mark, it is not essential. Moreover, the Pan-American Convention is self-executing, so the exact language of the treaty is directly enforceable in all member countries, including Cuba. Oppositions based on Article 7 have been successful in Latin America, particularly in Colombia and Peru. Although these decisions are not binding in Cuba, they may be persuasive.

How the Cuban Trademark Office will apply the Pan-American Convention in deciding oppositions by U.S. companies is difficult to predict. An ongoing case in the U.S., Empresa Cubana (noted above), may affect how the Cuban Trademark Office interprets the treaty. Both parties in this case manufacture and distribute cigars under the COHIBA trademark, Empresa Cubana del Tabaco ("Empresa") being a nationally-owned Cuban company, and General Cigar Co., Inc. ("General Cigar") a U.S. company. By way of background, the U.S. Patent and Trademark Office rejected a trademark application by Empresa for COHIBA based on General Cigar's prior registrations for COHIBA. Empresa filed an infringement action against General Cigar seeking, inter alia, to cancel General Cigar's registrations under Article 8 of the Pan-American Convention. Whether or not the registrations will be cancelled under the Convention has not yet been decided, since the matter was originally dismissed based on lack of standing. The case has been remanded to the Trademark Trial and Appeal Board of the U.S. Patent and Trademark Office ("TTAB") to decide the arguments under the Pan-American Convention, and at this writing we await a decision. Although the COHIBA case does not directly involve an opposition filed under Article 7, the outcome could well reflect the U.S.'s stance on whether the Pan-American Convention is enforceable and whether the rights of Cuban trademark owners will be recognized in the U.S. The TTAB's decision could have a lasting impact on the rights of U.S. trademark owners in Cuba, since the Cuban Trademark Office may choose to decide oppositions based on the Convention in a reciprocal manner.

Copyright infringement can also be the basis for an opposition in Cuba. Under Article 17.1 (h) of Decree Law No. 203, a mark cannot be registered when use of the applicant's trademark would infringe a third party's copyright. Since Cuba is also a contracting party to the Berne Convention, it is not necessary to obtain a copyright registration in Cuba in order to enforce the copyright. Furthermore, under the Berne Convention, a copyrighted work recognized in one member country (the U.S.) must be recognized in another member country (Cuba), and afforded the same protections as nationally-owned copyrighted works. This basis for opposing could be useful when dealing with applications for design marks/logos, as in the case of the trademark pirate who filed sixty-five Cuban applications for logo trademarks, mentioned above.

In Cuba, as a general principle of law, a trademark cannot be registered in bad faith. Furthermore, there is a presumption of good faith when a trademark application is examined, absent proof to the contrary. Although "bad faith" is not specifically listed as a ground for opposition in Decree Law No. 203, it is addressed in Article 57, which states that a trademark registration can be cancelled if the trademark is famous in Cuba and the application was filed in bad faith. Along these same lines, Article 17.1 of Decree Law No. 203 provides that an opposition can be filed when it is evident that a trademark application was filed to perpetrate, facilitate or strengthen an act of unfair competition.

We cannot predict with any certainty how the Cuban Trademark Office will approach the issue of trademark piracy as relations between the U.S. and Cuba continue to evolve. For this reason, when filing an opposition, it is best to assert all grounds available in a given case, in the hope that one of them will provide a basis for deciding in favor of the legitimate owner. As mentioned above, to avoid this issue entirely, it is important for U.S. companies to take pre-emptive action in Cuba by registering any trademarks that could be targeted by pirates. In addition to the piracy threat, when the Cuban market becomes available to U.S. companies, the Cuban Trademark Office will likely be flooded with applications, which may result in additional unanticipated obstacles. Given Cuba's well-developed legislation on the protection of trademarks, its high participation in international treaties, and the Cuban Trademark Office's apparent reputation for fairness, we have reason to hope that the first trademark pirates will be stopped in their tracks, deterring others from following in their footsteps.

This article was first published in the June, 2015 issue of Managing Intellectual Property.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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