President Barack Obama’s recent announcement of sweeping new rules directed toward normalizing relations between Cuba and the United States, followed by a call to Congress to lift the embargo against Cuba, raises some important considerations for trademark owners in the United States. At the forefront of these considerations is whether trademark holders should register their marks in Cuba.
Implementation of the President’s recommendation may be slow to manifest due to the 1992 Cuban Democracy Act (the “Torricelli Law”) and the 1996 Cuban Liberty and Solidarity Act (“Helms-Burton Act”), which limit the authority of the executive branch to dismantle or end the embargo. However, this does not prevent trademark holders from beginning the process of trademark registration in Cuba, and it is advisable for businesses currently making use of the marks in the Caribbean and Latin America, or businesses who wish to extend use of their marks to Cuba consider doing so for the following reasons.
First, persuasive business reasons exist for filing a registration in Cuba, including existing economic opportunities and the substantial increase in U.S. tourism that will result from the embargo lift. One study by the Peterson Institute for Economics predicts “merchandise exports to Cuba could reach $4.3 billion annually” if the embargo is lifted.
Second, the nature of trademark law in Cuba incentivizes registration as soon as possible. Cuba has a first-to-file trademark system, meaning that unlike the United States where rights arise from use of the mark in commerce, the first party to register will be the party with rights, with an exception made for famous marks. Accordingly, early registration will prevent the risk of having to deal with trademark squatters, who may register well-known marks in bad faith in attempt to sell them to the true trademark holder at a profit or worse, register the marks and to use them, unfairly benefiting from the investment and goodwill built in the mark by the true trademark holder.
Third, it has recently become less costly to register trademarks directly in Cuba. Among the changes to U.S. restrictions, President Obama has loosened banking and credit restrictions so that U.S. applicants may pay directly for registration without having to use third party agents, thereby reducing cost.
On the flip side, there is a risk that if the embargo does not lift within the next few years, marks registered now may go abandoned or even be cancelled by third parties through trademark litigation procedures. As in the United States, non-use of a mark after three years can result in abandonment, and applications can also be lost if another party files a petition to formally oppose the application for the mark. There are some who report that it has been rare for marks to be challenged by third parties in Cuba on this basis, however, this may not be predictive if there is an incentive to do so in light of an impending embargo lift.
Another consideration for U.S. trademark holders before filing in Cuba is whether their rights are sufficiently protected in the U.S. Trademark holders making interstate use of a mark should consider the benefits of U.S. federal registration, which include the ability to record U.S. registrations with U.S. Customs and Border Protection and prevent the import of infringing products into the U.S. if and when the embargo is lifted.
Before proceeding, these and other issues need to be carefully weighed and considered in light of the most recent political developments as well as any licensing, distribution, enforcement, and risk factors individual to each would-be applicant.
If you have any questions, or for more information on international trademark registration, contact Claire Foley Hawkins directly.
Foster Garvey’s International practice group comprises a cross-disciplinary group of attorneys practicing in areas ranging from business transactions, immigration, maritime, government regulatory work, transportation and logistics and estate planning. The group members include bilingual and multicultural attorneys who are well-versed in handling these subject matters in a cross-border context. A number of attorneys have been actively practicing in the international arena since the early 1970s.