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Friday, 6 July, 2001, 20:08 GMT 21:08 UK
EU says it wins key point in rum row
Pernod-Ricard markets Havana Club in Europe
Pernod hopes to market "Havana Club" rum in the US
The European Union has said it has emerged victorious over a key intellectual-property-rights issue surrounding a brand of rum that a governing body claimed violated a World Trade Organisation (WTO) accord.

But conflicting reports have claimed the US has won this round, on 11 of 12 points in a row over who has the trademark rights to the rum brand.


I don't think it is quite correct to say one side has won, and one side has lost

EU spokesman

At the heart of the case is US legislation that grants companies who fled Cuba after the revolution the rights to any trademarks confiscated by the Cuban government.

The law, known as Section 211, bars registration of trademarks that were confiscated by Fidel Castro's Communist regime when it rose to power in 1959.

Rum row

The controversy involves French drinks company Pernod-Ricard in its battle over the copyright to the "Havana Club" brand.

The rights are also claimed by Bacardi, a Bermuda company, which used to be based in Cuba but fled when the Communists took control.

"The WTO found in favour of the EU's complaint on one of the principal points," said European Commission trade spokesman Anthony Gooch.

He said the US law violates a WTO agreement on intellectual-property rights by denying effective access to US courts for Pernod-Ricard to pursue its claim against Bacardi.

The EU has contended Section 211 breaches international trade law.

The EU has set about to dispel reports that it had lost the case, the decision of which will not be released by WTO panel until 6 August.

"I don't think it is quite correct to say one side has won, and one side has lost," Mr Gooch said, who added that the intellectual-property-rights issue is a key point.

"You could argue that there are certain other elements in the report that do not go in our favour, but that is an extremely important point in the whole case," Mr Gooch told reporters.

He said the EU would have to "weigh the merits" of an appeal in the case, after the decision is released in August.

"We'll have a couple of months to decide [whether to appeal] - as will the US," he said.

A commission official had indicated that other legal arguments in the case might have caused the WTO dispute panel to rule against it.

Cuban revolution

Bacardi, the world's biggest privately held drinks company, is the world's leading rum producer.

The $1.5bn (1bn) US rum market is the world's biggest, and Bacardi controls half of it.


Cuban rum, made in Bermuda
Cuban rum, made in Bermuda

Bacardi claims to have bought the rights to the Havana Club brand from the Arechabala family in 1997.

The Arechabala's Cuban rum factory was nationalised by the Cuban government in 1960.

Pernod-Ricard, meanwhile, had established a joint venture with a Cuban rum company to market Havana Club rum worldwide.

It took Bacardi to court when the company began to market a Bahamian rum in the US under the Havana Club brand, but a US court ruled against Pernod in February 2000.

Bacardi has called the EU's complaint "an unwarranted and reckless intrusion into a civil dispute between two business competitors".

Helms-Burton

The US legislation is one of a raft of measures designed to enforce a boycott of the Cuban economy.

Even if Pernod wins its case at the WTO, it will not be able to market its Cuban rum in the US until it lifts the total ban on Cuban imports that has been in place since 1962.

The EU has also objected to the Helms-Burton Act, which seeks to punish foreign companies that invest in Cuba by restricting their activities in the US.

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