Regulations Barred Renewal of Cuban Mark Registration

by Thomas Long, Legal Editor, CCH Trademark Law Guide  

A company owned by the Cuban government was barred from renewing its U.S. federal registration for the trademark HAVANA CLUB, for rum, under a 1998 amendment to regulations that prohibit most transactions between American and Cuban persons, the U.S. Court of Appeals for the District of Columbia Circuit has held. Barring the renewal was not an improper retroactive application of the 1998 amendment and did not violate the Cuban company’s due process rights.

As issued in 1963, the Cuban Assets Control Regulations contained an exception allowing Cuban-affiliated entities to register and renew U.S. trademarks. In 1976, acting under that exception, the company registered the HAVANA CLUB mark with the U.S. Patent and Trademark Office. In 1996, one of the company’s subsidiaries renewed the trademark.

In 1998, Congress modified the exception to the regulations and barred renewals of trademarks that had been first registered prior to 1998. As a result, the Department of the Treasury’s Office of Foreign Assets Control prohibited the company from renewing the mark when it came due for renewal in 2006.

The presumption against retroactivity did not apply to the 1998 amendment, according to the court. The regulations, as originally enacted, stated that exceptions were revocable at any time, so the company did not have a vested right to perpetually renew its mark. A law that merely upsets expectations based in prior law does not trigger the presumption against retroactivity, the court said.

The 1998 legislation satisfied the deferential substantive due process test, the court held. Because the case did not involve a fundamental right, the 1998 law comported with due process as long as it was rationally related to a legitimate government interest.

The 1998 law was rationally related to the legitimate government goals of isolating Cuba’s Communist government and hastening a transition to democracy in Cuba, in the court’s view. Any unfairness that might arise from applying the 1998 legislation to trademark renewals was eliminated by the fact that the Cuban Assets Control Regulations had clearly warned that exceptions for trademarks were revocable at any time.

Empresa Cubana Exportadora de Alimentos y Productos Varios, 9th Cir., ¶61,783.