Earlier this week, the United Sates Court of Appeals for the Federal Circuit vacated a ruling made by the USPTO Trademark Trial and Appeal Board (TTAB) in the 16-year-old battle between Cubatabaco, the state-run tobacco company for Cuba, and General Cigar Co. The decision was a large win for Cubatabaco and likely ensures years more worth of litigation on the matter.
(Cigar Law has posted the decision here.)
Cohiba is one of the 30-plus brands currently sold by Habanos S.A., the marketing and distribution company for all Cuban cigars. It is also a name used in the U.S., where an embargo prevents the sale of Cuban cigars, for a Dominican cigar made by General Cigar Co. It’s unique in the fact that it was developed by Cuba after the country’s 1959 Revolution, whereas most other active Cuban brand names were seized by the Cuban government and transferred to Cubatabaco.
With a few exceptions, most of the trademarks for active Cuban brands in the U.S. are owned by one of two companies: Altadis U.S.A. and its subsidiaries and General Cigar Co. Altadis U.S.A. is owned by Imperial Tobacco, a British firm who also owns half of Habanos S.A. through its Spanish subsidiary, Altadis S.A. In other words, on one side lies Habanos S.A. and Altadis U.S.A., on the other side its largest U.S. competitor—General.
General Cigar Co. began selling its own version of Cohiba in the U.S. in the late 1970s and filed trademarks for Cohiba in 1981 and 1995. In 1997, Cubatabaco filed its own application and sought the cancelation of General Cigar’s mark. It would then sue General in federal court over the mark. Five years later, a district court ruled partially in favor of Cubatabaco and cancelled General’s 1981 mark because of a lapse in registration. In 2004, the court cancelled General’s other trademark finding that Cubatabaco had acquired ownership in between the multiple registration dates.
That ruling was overturned on appeal. The decision, which ruled in favor of General, was based on the argument that the courts could not give Cubatabaco, a Cuban state-run corporation, the property of the trademark because it would be a violation of the Cuban Embargo. In what was otherwise a large win for General, the Second Court ruled that the Trademark Trial and Appeal Board should decide whether canceling General Cigar’s trademarks would violate the Embargo. General Cigar appealed that directive from the court, but lost. That meant the matter was sent back to the TTAB. In March 2013, the TTAB ruled Cubatabaco did not have standing because the Embargo would prevent it from selling or marketing the cigars, it has no real interest in the trademark itself.
This week’s decision challenged that notion. In an opinion written by Hon. Randall R. Rader, the Circuit Court found that Cubatabaco’s real interest is proven by the USPTO, which found that the trademarks were too similar.
“Because the USPTO refused Cubatabaco registration based on a likelihood of confusion with General Cigar’s Registrations, Cubatabaco has a real interest in cancelling the Registrations and a reasonable belief that the Registrations blocking its application are causing it damage. Cubatabaco therefore has a cause of action under the Lanham Act to seek cancellation of the Registrations.”
The court vacated the TTAB’s decision and advised future rulings to be consistent with its opinion regarding the questions of interest and standing. It also found that the Second Court and the TTAB did not fully address either of these matter and erroneously dismissed Cubatabaco’s complaints without proper evaluation.
Rader’s opinion indicated that Cubatabaco could request for the cancellation of General Cigar’s trademark.
As has traditionally been the case, the winners indicated they were pleased with the decision according to comments acquired by Law360, while the losers declined to comment. An email sent to General Cigar Co. requesting comment has gone unanswered.
There will inevitably be further litigation and a final ruling on this matter as a whole is likely years away thanks to appeals.
Patrick Lagreid contributed to this story.