The dispute over who gets to use the word Mombacho on their cigars in the United States is over.
A lawsuit filed last year in the U.S. District Court for the Southern District of Florida by Tropical Tobacco, Inc.—doing business as AGANORSA Leaf—against three defendants—Tierra Volcan, Inc., Mombacho Cigars S.A. and Claudio Sgroi—has reached a settlement over usage of the name Mombacho.
In the document, which was published on Jan. 31, the sides agreed that Tabacalera Tropical, Inc. is the owner of the Mombacho trademark in the United States, and that Mombacho Cigars S.A. and Tierra Volcan, Inc. adopted and used the Mombacho trademark in connection with the sales of cigars in the United States, which was likely to create confusion with Tropical Tobacco’s registered trademark.
As such, Mombacho Cigars S.A. and Tierra Volcan, Inc. are prohibited from using the name Mombacho on cigars in the United States. This includes any “reproduction, counterfeit, infringement, copy or colorable imitation of the Mombacho trademark to identify any cigar sold or distributed in the United States,” as well as any other goods classified by the U.S. Patent and Trademark Office as International Class 34, under which tobacco products fall.
They are also prohibited from doing anything to damage Tropical Tobacco’s goodwill, reputation, and/or business, engaging in any conduct that is likely to mislead or confuse customers or the public, or any form of infringement on the Mombacho trademark.
The dispute over usage of the Mombacho name dates back several years, while the first use of the name on a cigar happened nearly two decades ago.
Tropical Tobacco, Inc. trademarked the Mombacho name in 2003 and was awarded a trademark by the U.S. Patent and Trademark Office (USPTO) in 2004; it was also awarded another trademark in 2012. It used the name on a cigar called the Mombacho Thermonuclear, though the current version is known as the Mombacho Miami.
Meanwhile, Mombacho Cigars S.A., entered the U.S. market under the name Tierra Volcán but eventually switched to Mombacho. In 2016 it asked the USPTO to cancel Tropical’s trademark, claiming that Tropical was no longer selling cigars under the Mombacho name and therefore had abandoned the trademark. Tropical Tobacco responded by saying that while the company was not selling many cigars under the Mombacho name, it was still selling some, a number that reached a low of two boxes in 2014.
The USPTO ruled in favor of Tropical Tobacco in 2018, but Mombacho Cigars S.A. said it would continue to sell its cigars in the U.S. using the Mombacho name. That will soon come to an end, as the settlement included a period of three months to liquidate any on-hand stock of cigars bearing the Mombacho name before they will have to be pulled from shelves.
In December, Mombacho Cigars S.A. announced that it would be rebranding to Favilli S.A. for its U.S.-bound products, getting that name from its factory in Granada, Nicaragua where it produces its cigars. The company has also posted a notice to its website that as of April 24, 2022, Mombacho-branded product will no longer be available in the U.S. However the company has not yet revealed the specifics of what its lines will be called or how the designs will change outside of some box photos.
“We look so forward to delivering a fresh, exciting and unique approach that we’ve been working on for the past year, and it’s nice to be in that place with an internationally recognized brand and mark,” said Jared Michaeli Ingrosso, president of Mombacho Cigars S.A. in a statement to halfwheel. “Of course, we operate in the USA as Favilli and have some special plans for the U.S., in addition to the already announced new lines and some repackaging. All while we continue to build and celebrate our business in Nicaragua and outside of the U.S. market. It is also nice to be able to focus on brand approaches in different ways for the market and with respect to any disputes, wish the Fernandez family the very best in continued excellence!”
Additionally, Tropical Tobacco, Inc. dismissed its claims against Claudio Sgroi, the former president and master blender of Mombacho Cigars S.A. and Tierra Volcan, Inc.
Financial terms of the settlement have not been disclosed.