The unusual case of the Havana Club trademark

The owner of a famous trademark used on Cuban rum learned the truth of the old adage that alcohol and guns mix poorly.

From the 1930s to 1960, Jose Arechabala, a Cuban company, produced and exported delicious rum to the United States under the federally registered trademark HAVANA CLUB. But in 1960, soon after the revolution, with the serious end of a Cuban official’s submachine gun pointed at his head, the president of this company signed over all of its assets to the new Cuban government without any compensation. Included was the trademark.

By 1974, Arechabala’s federal registrations had expired and the new Cuban owner, a company called Cubaexport, registered the HAVANA CLUB mark in the United States in its name, even though it was not allowed by United States law to sell its rum here.

Years passed and Archabala sold whatever interest it retained in HAVANA CLUB to Bacardi, which filed an application to register the mark with the USPTO and petitioned the USPTO to cancel Cubaexport’s trademark registration. The USPTO denied Bacardi’s application to register the mark because of the existing Cubaexport registration and the TTAB denied its petition to cancel the registration.

Next, Bacardi sued the USPTO in the district court, and the case twice went up to the 4th Circuit Court of Appeals, with the last decision occurring in June 2026.

It was not an easy row to hoe for Cubaexport to renew its registration. Although it paid the renewal fee when it filed the application to renew, the fee was not accepted because Cubaexport did not possess the very specific license needed, issued by the Treasury’s Office of Foreign Assets Control. The license was a congressionally mandated prerequisite to engaging in any activity in the United States, including the registration of a trademark. That failure voided Cubaexport’s payment and its application languished for the next 10 years without action.

Over those 10 years, OFAC refused to issue the requisite license, but in 2016 it changed course and the license was issued. With the license in possession of Cubaexport, the USPTO approved its renewal application. All of this occurred despite the Cuban company not being allowed to sell its HAVANA CLUB rum in the United States.

At stake was the right in the United States to use the HAVANA CLUB mark on rum. The Cuban’s registration blocked Bacardi, who then chose to use a similar mark, ORIGINAL HAVANA CLUB, without protest by the Cubans. Cubaexport’s ostensible goal, though, was to preserve the right to do so should policies change and to prohibit anybody else from usurping the goodwill in the mark that Cubaexport claimed. Bacardi wanted to prevent the Cubans from using the mark in competition with it should the market open up to the Cubans.

When the USPTO agreed to renew Cubaexport’s trademark, following the issuance of a license by OFAC, Bacardi sued the USPTO under the Administration Procedures Act. Its case was dismissed and the court of appeals reversed and remanded. On remand, the district court held that the OFAC-issued license validated the renewal payment and application that sat for 10 years. Bacardi appealed again.

The appeals court held, in June, that because the OFAC license authorized Cubaexport to “engage in all transactions necessary to renew its trademark registration,” the license validated the earlier payment and effort to renew the registration.

A federal agency is required to “act reasonably and explain themselves reasonably.” The USPTO did so. An explanation does not have to be of ideal clarity to comply with this requirement. Here, the USPTO’s explanation was “brief but adequate.” The agency did not act arbitrarily or capriciously because it did not fail to explain the delay in deciding the renewal application. Bacardi was clutching at straws with this argument, but it had very little else to present. The court wrote that ‘’Bacardi took several more shots at the director’s decision. None landed.”

So here lies a nearly 100-year-old Cuban rum brand that for political reasons cannot be sold in the United States, but is nevertheless allowed to register a trademark that effectively blocks its original owner’s successor from using the mark in commerce in the United States, despite the fact that the mark was stolen from it by the current registrant, literally at gunpoint. Not only that, but because Congress embargoed sales of most Cuban products, the mark has not been used legally on products in the United States by the registrant, almost always a requirement for registration, absent “special circumstances” which, in this case, the USPTO found existed due to the delay in issuance of the license. Bacardi’s frustrations with the courts and the federal agency are palpable.

Some days all you can say is that the ball takes unexpected bounces. And you move on.

Jim Astrachan is a counsel to Corey Tepe LLC and has taught intellectual property law in the two Maryland law schools since 1999.