Bacardi and choke: US ruling challenged in feud over rival rum from Cuba

Adrian Gatton reports on the latest twist in the decade-long fight for the rights to the Havana Club label
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The Independent Online

Bacardi, the rum giant privately owned by the eponymous and ultra-secretive family, has appealed against a decision by the US Patent Office dismissing its earlier bid to cancel the US trademark of its rival, the Cuban-made Havana Club rum.

Bacardi, the rum giant privately owned by the eponymous and ultra-secretive family, has appealed against a decision by the US Patent Office dismissing its earlier bid to cancel the US trademark of its rival, the Cuban-made Havana Club rum.

The challenge is the latest legal twist in the decade-long "rum wars" between the exiled, virulently anti-Castro Bacardis, and the Cuban government, which owns the US Havana Club trademark and also the (non-US) worldwide brand in a 50-50 joint venture with the French drinks giant Pernod Ricard.

At the end of March Bacardi USA applied in the US district court in Washington to force the US Patent and Trademark Office to cancel the trademark registration of Havana Club, owned by Cubaexport - a Cuban company - and to declare Bacardi the exclusive owner of the trademark in the USA.

In lodging its appeal, Bacardi has refused to accept the January decision by the US Trademark Trial and Appeal Board that left control of the brand with Cubaexport. Bacardi claims that the trademark was fraudulently obtained. Lawyers for Pernod Ricard maintain the trademark registration had lapsed and they snapped it up legally in the US in 1976. But so far sanctions and the ownership dispute prevent them selling the drink - marketed as authentic Cuban rum - in the US.

"We are the rightful owner of the brand," Pat Neal, spokes- woman for Bacardi USA, told The Independent on Sunday from Miami. "We want the court to declare that we are the exclusive owners of the brand so we can get back to business."

At stake is control in the US of the fastest-growing spirits brand in the world. "Havana Club has tremendous potential in the USA," said Tom Pirko president of Bevmark, a US food and drink consultancy firm that has advised Bacardi in the past. In only 10 years Havana Club has reached annual worldwide sales of two million, already equal to a tenth of the sales of its more established rival. US sanctions against Cuba currently prohibit sale of Havana Club in the US, but if those were lifted then the brand could grab a big share of the £1bn US rum market.

Bacardi's beef with Cuba goes back to the 1959 revolution, when the dynasty, which initially financed Fidel Castro, eventually fled from the country and later helped try to topple their erstwhile protégé. When the French joined forces with Cuba in 1993 via Pernod Ricard, Cuban Americans and Republicans alike were enraged.

The case is a bizarre mix of Jarndyce and Jarndyce, the court saga in Charles Dickens' Bleak House, and the comic political intrigues of Miami author Carl Hiassen. In earlier hearings, Jeb Bush, the US President's brother who is also Governor of Florida, was accused of lobbying the US government on behalf of Bacardi, which has donated $200,000 to Florida Republicans since 1998. The January ruling dismissed these claims but not before a sheaf of embarrassing emails had been released to the court.

Undeterred, Ms Neal explained that Bacardi was getting ready to launch its own Havana Club in the US. Meanwhile, last month, Pernod Ricard's joint venture with Cuba was extended for another 10 years.

The latest legal manoeuvre comes against the background of an equally protracted and bitter dispute - the dynastic feud involving Lisette Arellano Bisson, the daughter of the main Bacardi heiress, Vilma Schueg Ramirez de Arellano. After 13 years, this has erupted again as last month she filed another suit claiming she had been disinherited by the family.

Ms Bisson, 47, will shortly attempt to claim in a Miami court that she was fraudulently cut out of her inheritance. Last year the case was thrown out by a judge who complained that he had nearly gone blind from reading all the paperwork. Ms Bisson claimed he later went to work for a law firm connected to Bacardi. The heiress's daughter and her husband Randolph Bisson, a building contractor from Miami, are suing over lost Bacardi shares worth $200m. "I feel confident," said Mr Bisson. "The last chapter hasn't been written."

Amid this feuding, the drinks industry is eagerly awaiting a date when Bacardi will float and bring itself up to the size of the global players Allied Domeq and Diageo. At a stormy meeting in Bermuda last May, the Bacardi shareholders - mostly family members - created a new set of shares for public offer, albeit with minimal voting rights. There's a lot of pressure to IPO," said Mr Pirko at Bevmark. "Senior management is dragging the family into it." But so far no date has been agreed.

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