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Donald R. Dinan

Abstract

The United States-Cuba “Havana Club” trademark dispute has been one of the more controversial and potentially divisive cases before the World Trade Organization ('WTO') to date. In that case, the European Union ('EU') filed a complaint against the United States alleging that a law which prohibited the registration and enforcement in the United States of a Cuban trademark, 'Havana Club' rum, which was licensed to the French company, Pernod-Ricard, S.A. ('Pernod-Ricard'), was in violation of the WTO Agreement, which protected the intellectual property rights of WTO Members and their nationals. The case intertwined enforcement of the U.S. Cuban embargo; U.S. domestic politics, particularly in the state of Florida; U.S. national security concerns with U.S. trade obligations under the WTO; and U.S. relations with the EU. Essentially, the EU was asking the WTO to invalidate the U.S. law, which had been passed by the U.S. Congress to implement the Cuban embargo and to protect the national security of the United States. If the WTO rules that a country's law violates a WTO Agreement, then that country has to change the law, pay compensation, or suffer retaliation. An adverse ruling by the WTO could have had the effect of nullifying the U.S. law and overturning the Federal Court of Appeals decision upholding it. This would have caused serious repercussions in the United States and could have led to calls for the United States withdrawal from the WTO, or at least to demands for fundamental changes to the WTO's powers. It also could have led to a trade war with the EU. This Article will analyze the controversy before the U.S. courts and the WTO, and the structure of the WTO and its dispute settlement system. In particular, the Article will review the decision of the U.S. Court of Appeals for the Second Circuit, which upheld the U.S. law, and the ruling of the WTO Dispute Panel, which upheld and struck down portions of that law. The Article will also review the decision of the WTO Appellate Body, which affirmed the right of the United States not to enforce trademarks that had been confiscated, while also ruling that the U.S. law was discriminatory in its effect on foreigners, and thus, in violation of the WTO agreements. The Article will also discuss the political ramifications of the case for the United States, both internationally and domestically. The true importance of the Havana Club case is that it shows the interplay between domestic politics, international politics, and international trade law. This Article will argue that intellectual property rights and their international enforcement are dictated to a large degree by the interests of the intellectual property right holders and by politics, rather than by the application of a normative system of law adopted and applied on the basis of sound legal principles.

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