Thursday, November 26, 2015

With U.S.-Cuba detente, a battle over trademarks looms

With U.S.-Cuba detente, a battle over trademarks looms

When Julio Manzini decided two years ago to name his small restaurant
McDonald's after the famous fast-food chain (MCD.N), he had no idea it
could cause any trouble. He has since been frightened into removing the

"I don't even know what McDonald's tastes like, I just thought the name
was striking, like Shakira or something," he said at the lunch counter
of what used to be "Cafeteria La McDonald's Camagueyana" in the Cuban
city of Camaguey, about 300 miles (500 km) east of Havana.This month,
Manzini stripped "McDonald's" and the famous golden arches from his
handcrafted sign as a precaution after he claimed his establishment was
visited by a lawyer sent by the company.

The place is now simply called "Cafeteria La Camagueyana."

His counterfeit McDonald's illustrates a potential battlefront between
Cuba and the United States over trademark and intellectual property
rights as Cuba's economy opens up to more private enterprise and closer
ties with the United States.

The two countries restored diplomatic relations this year after half a
century of Cold War hostility and are now working to improve ties.
Trademark and intellectual property issues will be on the negotiating
table, both sides have said.

Both have grievances. The United States has denied Cuban companies the
same trademark protection enjoyed by brands from everywhere else,
forcing marquee names such as Havana Club rum and Cohiba cigars into
long, expensive court battles.

And while Cuba protects trademarks registered with the government, it
also tolerates or officially sanctions the resale of unlicensed music,
software and entertainment. State television routinely pirates American
movies and shows for broadcast.

In a socialist economy that only in recent years has allowed small-scale
private businesses, knowledge of trademark law is poor. Manzini said he
never thought to check with the Cuban Office of Industrial Property
(OCPI) to see if the McDonald's name was available. It is not:
McDonald's has registered trademarks in Cuba since at least 1985.

Despite the United States' 53-year-old trade embargo against Cuba,
companies from both countries have continued registering trademarks and
patents in the other.

Since 1966 about 1,500 U.S. businesses have filed nearly 6,000
trademarks in Cuba, including renewals, according to data from Saegis,
the online trademark database from Thomson Reuters.

Among them are Coca-Cola (COKE.O), Pepsi (PEP.N), Levi's [LEVST.UL],
Nike (NKE.N), Starbucks Coffee (SBUX.O), Pfizer (PFE.N), Intel (INTC.O),
Burger King, KFC and Goodyear (GT.O).

Another 1,355 trademarks of U.S. origin, including Walmart (WMT.N) and
Google (GOOGL.O), are protected under an international treaty known as
the Madrid Protocol, according to World Intellectual Property
Organization data.

Aside from the "special hamburgers" and "American coffee" on offer,
there is little that separates Manzini's hole-in-the-wall operation from
hundreds of other snack bars tucked in doorways across the island.

But he was likely violating trademark protections by using the
McDonald's name and the golden arches on his sign. He said he only fully
understood he could be in trouble after the lawyer visited the
restaurant recently while he was away.

"I'm really afraid. I don't even pull in 1,000 pesos ($40) a day,"
Manzini said.

McDonald's would have to complain to the OCPI to legally stop Manzini
and others, such as the "McDunald" cafe in the city of Santa Clara,
which also uses the golden arches on its sign.

A spokeswoman for McDonald's declined to comment except to say that "we
are committed to vigorously protecting our intellectual property."


More companies have registered their brands in Cuba since U.S. President
Barack Obama and Cuban President Raul Castro announced detente last
December, among them Twitter (TWTR.N), Uber [UBER.UL] and Segway.

"There has been an explosion of interest from U.S. companies," said
Jaime Angeles, an intellectual property lawyer and partner at Dominican
law firm Angeles & Lugo Lovaton who represents firms fighting for their
trademark rights in Cuba.

Some 192 U.S. trademarks were filed in Cuba in the first four months of
2015, compared to 78 in all of 2014, according to Saegis data.

A few U.S. companies have seen their brand names pursued by others in Cuba.

Gustavo Fuentes, a Cuban lawyer residing in the United States, has
applied for 65 trademarks, including famous brands such as John Deere
(DE.N), Chase (JPM.N), the NFL and Pixar.

Some companies are contesting those rights, including JetBlue Airways
Corp (JBLU.O), which announced plans for a New York-to-Havana charter
five months after Fuentes asked for the name JetBlue.

"We will vigorously protect our brand in Cuba," spokesman Doug McGraw said.

Fuentes declined to comment. The OCPI has yet to grant him any
trademarks, according to its public records.

Angeles, who represents eight of the U.S. companies, including
restaurant chain IHOP [DIN.UL] and pharmaceutical company Hospira, said
he was confident they would win the rights to their brands in Cuba.

"The Cuban system has all the legal tools to protect trademarks of any
country," he said, adding that companies should claim their trademarks
before someone else does. "Filing first is the cheapest protection you
can get."

Cuba has long struggled to protect its marquee brands under U.S. law,
including one statute that aims to protect owners of Cuban companies
nationalized after the 1959 revolution that brought Fidel Castro to power.

Bacardi, the former Cuban distiller that now makes rum in Puerto Rico,
controls Havana Club in the United States after acquiring the name from
its original pre-revolutionary owner. Everywhere else, Cuba and its
French joint venture partner, Pernod Ricard (PERP.PA), control the
rights to Havana Club.

"That is a restriction we put on trademarks only with respect to Cuba,"
said Jeremy Sheff, a law professor at St. John's University in New York.
"The U.S. treatment of Cuba is unique in all of international property law."

Cuba's famed Cohiba cigar brand has been fighting for its trademark for
19 years against a rival that won a major U.S. court case by citing the

(Reporting by Jaime Hamre; Additional reporting and Writing by Daniel
Trotta; Editing by Kieran Murray)

Source: With U.S.-Cuba detente, a battle over trademarks looms | Reuters

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