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Bacardi To Start Selling Havana Club Rum Across The United States

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HAVANA CLUB
In this Oct 22, 2010 photo, bottles of Havana Club rum move along the assembly line at the company's factory in Havana, Cuba. Time and again U.S. courts have ruled against Cuba in its fight to control the U.S. rights to the trademark Havana Club, the island's flagship rum brand which is sold in more than 120 countries around the world, but not in the United States. | AP

The Rum War is over. Or, at least, the Battle of Havana Club.

For now.

On Wednesday, the clock runs out on Cuba's claim to the rum brand in the U.S.

That means rum drinkers in all 50 states may soon be able to raise a glass of the liquor for the first time. But it won't be Cuba's Havana Club.

Bacardi, the internationally known rum-making behemoth, plans to start selling its version of the Cuban liquor across the one country where Cuba can't.

As large an economic victory as it may be for Bacardi, it's also a symbolic triumph against the communist government that seized Bacardi's distilleries on the island when Fidel Castro came to power.

"This is not a question of market share. Rather, this comes from our own experience as Bacardi's assets in Cuba were illegally confiscated in 1960," Bacardi's vice president of corporate communications, Patricia M. Neal, told The Huffington Post in an email. "We are committed to defending the fundamental rights against confiscations without compensation."

Cuba and its global distribution partner, Pernod Ricard, vowed to continue fighting.

"Our position is to prevent this cancelation," Olivia Lagache, general counsel for Havana Club, told the Huffington Post in a phone interview from Paris, "and we will fight against any decision that could cancel the trademark."

Pernod Ricard will continue to be able to sell Cuba's Havana Club in more than 100 other countries -- including the United Kingdom, Italy, Spain, Germany, Canada and Mexico.

According to the company's website, the Havana Club brand is third in international rum sales and first among premium rums -- excluding the U.S.

The U.S., however, represents a sizeable and extremely desirable market.

"The largest rum market in the Americas, the US consumes more than four times the volume of the second-largest market, Cuba, in 2009," according to a market analysis by just-drinks.com.

Bacardi already sells its version of Havana Club in Florida.

"The Havana Club rum that Bacardi sells in the U.S. is based on the original recipe that the founders of Havana Club, the Arechabala family, created in Cuba in 1935, sold in Cuba and other countries and made famous," Neal wrote to The Huffington Post.

And, she added, "Bacardi plans to expand sales again nationwide in the near future."

Just as it did with Bacardi, Cuba forcibly took control of Havana Club's distillery in 1960. The 50-year-old U.S. trade embargo against the island, though, prevents Cuba from selling the rum here. In spite of that, Cuba has owned the Havana Club trademark in the U.S. since the 1970s, when the brand’s founding family let their registration lapse.

In the 1990s, Bacardi bought what it calls the "legitimate rights" to the brand from the Arechabala family which created Havana Club, and stepped up its legal battle in U.S. courts. In 1996, the U.S. tightened the embargo against Cuba to prohibit trafficking in property confiscated by Castro’s government, and barred entry of business executives who had dealings with assets related to the confiscations.

When Cuba went to renew the trademark registration for Havana Club in 2006, the U.S. blocked it. Cuba sued, and lost. On May 14, the U.S. Supreme Court declined to hear Cuba's appeal. Thirty days later, the U.S. Patent and Trademark Office can cancel the trademark.

Cuba has threatened to retaliate.

"The United States' disrespectful attitude in divesting the legitimate Cuban owners of the Havana Club brand can put at risk the brand and patent rights of American companies in our country," Maria de los Angeles Sanchez, director of Cuba's office of intellectual property, told the Associated Press. "Cuba reserves the right as a sovereign nation to act at the appropriate moment."

The greatest value for Bacardi may come if the embargo never ends, Jaime Suchlicki, director of the University of Miami’s Institute for Cuban and Cuban-American Studies, told The Huffington Post.

"It helps them in the United States because it keeps them from having a major competitor," Suchlicki said.

But, he added, if the embargo is ever lifted, it is sure to bring a renewed legal battle.

"The fight will be when there is no embargo. Cuba will say its Havana Club is the original," he said. "If they lose the brand, Cuba cannot sell it in the U.S."

CORRECTION: An earlier version of this article quoted Amy Federman, Bacardi's director of corporate communications. While Federman provided the statements to HuffPost, the quotes were spoken by Patricia M. Neal, vice president of corporate communications for Bacardi.

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