• Submitted by: manso
• Politics and Government
• 08 / 05 / 2011

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South Florida Business Journal - by Paul Brinkmann. Date: Thursday, August 4, 2011, 4:30pm EDT. A federal appeals court in Philadelphia has ruled that Bacardi USA’s use of Havana Club labels for rum made in Puerto Rico does not represent false advertising.

The U.S. Court of Appeals for the 3rd Circuit in Philadelphia ruled Thursday that the label is not false advertising because it clearly says the rum is made in Puerto Rico and, “taken as a whole, the label could not mislead any reasonable consumer.”

The court upheld previous rulings against Pernod Ricard USA LLCbizWatch Pernod Ricard USA LLC Latest from The Business Journals Labatt USA sold to NYC investment firmCDC to run Seagram’s program in Bay areaAngostura plans U.S. HQ in region, which is trying to enforce licenses to the Havana Club name that were granted to it by the Cuban government. Pernod Ricard sells Havana Club rum outside the U.S.

Fidel Castro’s revolutionary government seized the former Havana Club distilleries and assets, without compensation, from the Arechabala family in 1960. The government eventually sold or granted the use of the name and family recipes to Pernod Ricard.

But, decades later, Bacardi paid the Arechabala family, in exile, for the name and recipes. Bacardi began selling Havana Club rum, made in Puerto Rico, in 2006.

Pernod Ricard alleged false advertising, and provided a survey that said 13 percent of consumers who viewed the label believed the rum was made in Havana or Cuba.

But the Philadelphia court, and other courts, ruled that the phrase “Havana Club” is not a misleading statement of geographic origin, under the U.S. Lanham Act, when considered in the context of Bacardi’s label.

“It appears that this false advertising dispute is a proxy for the real fight the parties want to have, which is over the right to the exclusive use of 'Havana Club' as a trademark,” said the opinion released Wednesday.

The courts have ruled that “reasonable consumers” would not necessarily conclude that the rum was made in Cuba, despite Pernod Ricard’s survey evidence.

In March, another appeals court ruled that the U.S. Office of Foreign Assets Control acted lawfully in denying Pernod Richard’s Cuban business partner, Cubaexport, a license for renewal of the trademark.

“We disagree with the court's decision, which is unfair to consumers in the United States who are being deceived by a product labeled “Havana,” which has no connection whatsoever with Cuba," Pernod Ricard attorney Ian FitzSimons said in a statement Thursday. "It is important to note that this decision does not grant any right in the 'Havana Club' trademark to Bacardi"

Source: www.bizjournals.com/southflorida/news/2011/08/04/