Havana Club Holding S.A.v.Jimmy Buffett

Trademark Trial and Appeal Board

Mar 13, 2003

No. 91116754 (T.T.A.B. Mar. 13, 2003)

NLO/AKL
Mailed: March 13, 2003
Opposition No. 91116754
HAVANA CLUB HOLDING S.A.
v.
JIMMY BUFFETT
Before Quinn, Walters, and Drost,
Administrative Trademark Judges.
By the Board:
Jimmy Buffett (“applicant”), seeks to register the mark
HAVANAS AND BANANAS on the Principal Register for “menu items,
namely, prepared alcoholic cocktails.”
1
Havana Club Holding,
S.A. (“opposer”) has opposed registration on the grounds that
the mark: (1) is primarily geographically deceptively
misdescriptive under Section 2(e)(3) of the Trademark Act
because the goods do not originate from Cuba; (2) disparages
and suggests a false connection with opposer within the
meaning of Section 2(a); and (3) dilutes opposer’s HAVANA CLUB
1
Application Serial No. 75/720,955, filed November 30, 1999,
reciting February 4, 1999 as the date of first use and first use
in commerce.
UNITED STATES PATENT AND TRADEMARK OFFICE
Trademark Trial and Appeal Board
2900 Crystal Drive
Arlington, Virginia 22202-3513
THIS OPINION IS NOT CITABLE
AS PRECEDENT OF THE TTAB
2
trademark
2
in violation of Sections 43(c) and 13. Applicant,
in his answer, denied the salient allegations of the Notice of
Opposition.
This case now comes up for consideration of applicant’s
motion for summary judgment. The motion has been fully
briefed. In his motion, applicant argues that opposer lacks
standing in this proceeding and cannot make a sufficient
showing to establish the essential elements of any of its
claims that applicant’s mark is primarily geographically
deceptively misdescriptive, disparages or falsely suggests a
connection with opposer, or dilutes opposer’s HAVANA CLUB
trademark.
Summary judgment is appropriate in cases where the moving
party establishes that there is no genuine issue of material
fact which requires resolution at trial and that the moving
party is entitled to judgment as a matter of law. Fed. R.
Civ. P. 56(c). An issue is material when its resolution would
affect the outcome of the proceeding under governing law.
2
Opposer, through its predecessors-in-interest, claims ownership
of the mark HAVANA CLUB for rum manufactured exclusively in Cuba,
and owns Luxembourg Registration No. 032424 (dated May 13, 1971)
for same. Opposer also claims ownership of two pending
applications in the United States Patent and Trademark Office
(USPTO) which were filed under Section 44(e) of the Trademark
Act: (1) Serial No. 74/673,898 for HAVANA CLUB for “rums
produced exclusively in the Province of La Havana, Cuba”; and (2)
Serial No. 75/409,541 for HAVANA CLUB and design for “rums
produced exclusively in the Province of La Havana, Cuba.” Action
on both applications is currently suspended.
3
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A
fact is genuinely in dispute if the evidence of record is such
that a reasonable fact finder could return a verdict in favor
of the nonmoving party. Anderson, 477 U.S. at 248. Under
Fed. R. Civ. P. 56, the nonmoving party must be given the
benefit of all reasonable doubt as to whether genuine issues
of material fact exist, and the evidentiary record on summary
judgment, and all reasonable inferences to be drawn from the
undisputed facts, must be viewed in the light most favorable
to the nonmoving party. See Opryland USA, Inc. v. Great
American Music Show, Inc., 970 F.2d 847, 23 USPQ2d 1471 (Fed.
Cir. 1992); Olde Tyme Foods Inc. v. Roundy's Inc., 961 F.2d
200, 22 USPQ2d 1542 (Fed. Cir. 1992).
In support of his motion for summary judgment, applicant
argues that opposer lacks standing to bring the instant
opposition because opposer’s claims to the HAVANA CLUB mark
are void in the United States as a matter of law.
Specifically, applicant alleges that due to the existence of
the Cuban embargo imposed by the United States government in
1963 and the finding of the court in Havana Club Holding, S.A.
v. Galleon S.A., 203 F.3d 116, 53 USPQ2d 1609 (2d Cir. 2000)
(“Galleon V”), opposer has no claim to the HAVANA CLUB mark.
Further, applicant asserts that, despite ownership of its
Luxembourg registration, opposer’s attempts to claim standing
through ownership of its two pending U.S. applications under
4
Section 44(e) are invalid under U.S. law because these
applications are for marks that are the same as or
substantially similar to a mark that was used in connection
with a business that was confiscated by the Cuban government.
Opposer contends that its two pending applications filed
under Section 44(e) of the Trademark Act provide standing in
this proceeding because they were filed prior to the
application being opposed herein. Opposer also contends that,
pursuant to the law of the case doctrine, the Board
“implicitly decided the issue of standing in favor of opposer”
when it denied applicant’s previous motion to dismiss under
Fed. R. Civ. P. 12(b)(6). Additionally, opposer asserts that
because it is a Luxembourg corporation, and not a “designated
national” under statutory law, it is not subject to the Cuban
embargo prohibitions found in U.S. law. Moreover, opposer
argues U.S. law expressly invests opposer with the right to
file and prosecute applications.
In reply, applicant argues that the Board never reached
the issue, nor entered a decision regarding opposer’s standing
in this matter and, hence, the law of the case doctrine is
inapplicable. Applicant recounts that the Board merely denied
applicant’s motion to dismiss following the submission of
opposer’s amended notice of opposition and applicant’s lack of
objection to the amended pleading. Also, applicant asserts
that opposer “hopes to out-fox this Board” into believing that
5
it does not fall within the purview of regulations
implementing the Cuban embargo by claiming it is “...merely an
innocent Luxembourg corporation....”
Applicant’s contention with regard to the court’s
ruling in Galleon V
3
is essentially a claim that res
judicata, in particular, issue preclusion, is appropriate in
this case.
Under the doctrine of issue preclusion (collateral
estoppel), once an issue is actually and necessarily
determined by a court of competent jurisdiction, that
determination is normally conclusive in a subsequent suit
involving the parties to the prior litigation.
International Order of Job's Daughters v. Lindeburg & Co.,
727 F.2d 1087, 220 USPQ 1017 (Fed. Cir. 1984). The
underlying rationale is that a party who has litigated an
issue and lost should be bound by that decision and cannot
demand that the issue be decided over again. Mother's
Restaurant Incorporated v. Mama's Pizza, Inc., 723 F.2d
1566, 221 USPQ 394 (Fed. Cir. 1983).
In order for issue preclusion to apply, the following
requirements must be met: 1) the issue to be determined must
3
See also Havana Club Holding, S.A. v. Galleon, S.A., 961 F.
Supp. 498 (S.D.N.Y. 1997) (“Galleon I”); Havana Club Holding,
S.A. v. Galleon, S.A., 974 F. Supp. 302 (S.D.N.Y. 1997) (“Galleon
II”); Havana Club Holding, S.A. v. Galleon, S.A., 49 USPQ2d (BNA)
1296 (S.D.N.Y. 1998) (“Galleon III”); Havana Club Holding, S.A.
v. Galleon, S.A., 62 F. Supp. 2d 1085 (S.D.N.Y. 1999) (“Galleon
IV”).
6
be identical to the issue involved in the prior litigation;
2) the issue must have been raised, litigated and actually
adjudged in the prior action; 3) the determination of the
issue must have been necessary and essential to the
resulting judgment; and 4) the party precluded must have
been fully represented in the prior action. Polaroid Corp.
v. C & E Vision Services Inc., 52 USPQ2d 1954 (TTAB 1999);
Mother's Restaurant, supra.
Issue preclusion is applicable in the instant proceeding.
The ownership rights of opposer to the HAVANA CLUB mark was an
issue actually litigated in Galleon V. This issue was raised,
litigated and actually adjudged in that case and opposer’s
ownership rights to HAVANA CLUB were necessary and essential
to the resulting judgment of the Second Circuit. Moreover,
absent any reason to assume otherwise, we find that opposer
was fully represented in the prior action. Accordingly, we
adopt the following factual findings of the Second Circuit
Court of Appeals regarding opposer’s mark and assignments as
recited in Galleon V.
Prior to the Cuban revolution, Jose Arechabala, S.A.
(“JASA”), a Cuban corporation formed by members of the
Arechabala family, produced HAVANA CLUB rum and owned the
trademark for use therewith. JASA exported the rum to the
United States until 1960, when Fidel Castro’s government
7
confiscated JASA’s assets, including the HAVANA CLUB mark.
4
In
1963, the United States government imposed an embargo on Cuba.
Beginning in 1972, Empresa Cubana Exportadora De
Alimentos y Productos Varios (“Cubaexport”), a Cuban state-run
organization established by the Cuban Ministry of Foreign
Commerce, exported HAVANA CLUB rum to Eastern Europe and the
Soviet Union. This state enterprise registered the HAVANA
CLUB and design mark with USPTO in 1976 under Registration No.
1,031,651.
Following an effort to reorganize, Cubaexport became
Havana Rum & Liquors, S.A. (“HR&L”) in 1993 and entered into a
joint venture agreement with the French company Pernod Ricard,
S.A., an international liquor distributor. An agreement
between these entities in 1993 created the opposer herein,
Havana Club Holding, S.A. (“HCH”) and Havana Club
International, S.A. (“HCI”). HCH is a Luxembourg corporation
and HCI is a joint-stock company organized under the laws of
Cuba.
In 1994, Cubaexport assigned U.S. Registration No.
1,031,651 (for the mark HAVANA CLUB and design) to HR&L, and
in a subsequent agreement HR&L assigned this registration to
4
On October 15, 1960, Cuban Law No. 890 ("Law No. 890") was
issued, expropriating for the Cuban government the physical
assets, property, accounts and business records of JASA. See DX
573A ("Law No 890") ("Nationalization is ordered by the forced
expropriation of all industrial and commercial corporations, as
well as the factories, stores, warehouses and other assets and
rights of same and the properties of the following natural
persons or companies").
8
HCH. After the reorganization, upon application by HCH in
June 1996, the USPTO renewed the registration of the HAVANA
CLUB mark for a term of ten years. In 1995, the Office of
Foreign Assets Control (“OFAC”) of the U.S. Department of
Treasury issued a license to Cubaexport approving the
assignments from Cubaexport to HR&L and from HR&L to HCH
(opposer). These assignments were nullified, however, when
OFAC revoked the license in 1997, pursuant to Section 515.805
of the Cuban Assets Control Regulations (“CACR”), 31 C.F.R.
Part 515.
5
The Second Circuit in Galleon V affirmed a holding of the
lower court that HCH (opposer herein)
6
did not have standing to
assert trademark rights in HAVANA CLUB against another rum
producer because the specific license to assign the mark to
5
On April 17, 1997, OFAC issued a Notice of Revocation stating
that "as a result of facts and circumstances that have come to
the attention of this Office which were not included in the
application of October 5, 1995, License No. C-18147 . . . is
hereby revoked retroactive to the date of issuance." See Havana
Club Holding, S.A. v. Galleon, S.A., 974 F. Supp. 302, 306
(S.D.N.Y. 1997).
6
Opposer acknowledges that it was in the position as plaintiff
in Galleon through the following statement: “…the reason why
Opposer amended its Notice of Opposition was to interpose
paragraphs 4 and 5, thus providing a Section 44(e) basis for
standing that is independent of Opposer’s old registration of the
HAVANA CLUB mark, whose assignment to Opposer was rejected in the
Galleon decision.” Opp. Brief, p. 5.
9
opposer was nullified by OFAC’s revocation of the license and
because the Cuban embargo did not authorize the assignment.
7
Turning to the issue of standing before us in this case,
we note that standing is a threshold inquiry directed solely
to establishing a plaintiff's interest in the proceeding.
8
The
purpose in requiring standing is to prevent litigation where
there is no real controversy between the parties, where a
plaintiff is no more than an intermeddler. American Vitamin
Products, Inc. v. DowBrands, Inc., 22 USPQ2d 1313 (TTAB 1992).
To establish standing, it must be shown that a plaintiff has a
"real interest" in the outcome of a proceeding; that is,
plaintiff must have a direct and personal stake in the outcome
of the opposition. See Ritchie v. Simpson, 170 F.3d 1092, 50
USPQ2d 1023 (Fed. Cir. 1999); and Jewelers Vigilance
Committee, Inc. v. Ullenberg Corp., 823 F.2d 490, 2 USPQ2d
2021, 2023 (Fed. Cir. 1987) ("it is in the pleading stage of
the opposition proceeding that the opposer must plead facts
7
Galleon V, 53 USPQ2d at 1611. The Board notes that as a result
of the Galleon V decision, the recordation of assignments of U.S.
Registration No. 1,031,651 from Cubaexport to HRL and from HRL to
HCH have been invalidated by the Commissioner for Trademarks.
Current PTO records indicate that ownership of said registration
remains with Cubaexport [i.e., the original registrant]. See
Trademark Assignment Records, Reel 2398 Frame 0855.
8
Section 13 of the Trademark Act, 15 U.S.C. § 1063, sets forth the
foundation for establishing standing in an opposition proceeding,
stating in relevant part:
Any person who believes that he would be damaged by the
registration of a mark upon the principal register ... may,
upon payment of the prescribed fee, file an opposition in the
Patent and Trademark Office.
10
sufficient only to show a personal interest in the outcome of
the case beyond that of the general public").
As a preliminary matter, we determine that applicant is
correct in stating that the Board never reached the issue of
standing, nor entered a decision regarding opposer’s standing
in this matter. Hence, the law of the case doctrine is
inapplicable.
The most common way to demonstrate standing is by proving
ownership of a relevant U.S. trademark registration or a
common law mark. Opposer’s standing may be rooted in
enforceable rights despite the existence of the strictures of
the Cuban embargo and the relevant regulations surrounding its
implementation.
The CACR, 31 C.F.R. Part 515, implements the U.S. embargo
against Cuba.
9
Unless authorized, the embargo prohibits, with
respect to property in which a Cuban national or entity has an
interest, (1) "all dealings in, including, without limitation,
transfers, withdrawals, or exportations of, any property . . .
or evidences of ownership of property by any person subject to
the jurisdiction of the United States"; (2) "all transfers
outside the United States with regard to any property or
9
The CACR was implemented in 1963 under Section 5(b) of the
Trading with the Enemy Act of 1917, as amended, 50 U.S.C. App. 1-
44. The Cuban Liberty and Democratic Solidarity Act (“LIBERTAD
Act”), Pub. L. No. 104-114, 110 Stat. 785 (1996), was passed by
Congress in 1996, which subsequently codified the regulations
implementing the embargo.
11
property interest subject to the jurisdiction of the United
States"; and (3) "any transaction for the purpose or which has
the effect of evading or avoiding any of the prohibitions
[above].” Id. at Section 515.201(b) and (c). The embargo
defines "property" to include trademarks. See id. at Section
515.311.
In the Galleon V decision, the court found that the party
who is opposer herein has no rights to U.S. Registration No.
1,031,651 for the mark HAVANA CLUB and design because the
specific license granted to Cubaexport to assign the mark to
opposer was nullified by the OFAC’s revocation of the specific
license and because CACR does not authorize the assignments.
Thus, opposer cannot have standing based on that registration.
Similarly, opposer’s standing based on claims of
ownership of the Luxembourg registration for the mark and its
two pending United States applications fails as a matter of
law. Opposer is explicitly barred by statute from bringing
this opposition based upon a trademark that is the same
or substantially similar to a trademark used in connection
with a business that was confiscated by the Cuban government.
We note that on October 21, 1998, Congress passed Section 211
of the Department of Commerce Appropriations Act 1999, as
included in the Omnibus Consolidated and Emergency
Supplemental Appropriations Act 1999 [hereinafter “Section
211]. See Pub. Law 105-277, 112 Stat. 2681.
12
This statute limits the registration and renewal of, and
the assertion of trademark and trade name rights in, marks
that were used in connection with property confiscated by the
Cuban government. The statute, in relevant part, provides:
(2)(b) No U.S. court shall recognize, enforce or
otherwise validate any assertion of treaty rights by a
designated national or its successor-in-interest under
sections 44(b) or (e) of the Trademark Act of 1946 (15
U.S.C. 1126(b) or (e)) for a mark, trade name or
commercial name that is the same or substantially similar
to a mark, trade name, or commercial name that was used
in connection with a business or assets that were
confiscated unless the original owner of such mark, trade
name, or commercial name, or the bona fide successor-in-
interest has expressly consented.
Opposer argues that because the Board is not a “U.S.
court,” we are not bound by the restrictions of this
provision. We disagree. While it is true that the Board is
not a “U.S. court,” it is also true that any judicial review
of our decision will be to a “U.S. court.” See Section 21 of
the Trademark Act. If opposer would be barred from asserting
its rights in that court, it would not have standing to assert
them before the Board. It would make no sense to ignore
opposer’s statutorily imposed inability to assert its rights
in any judicial review and render a decision that opposer
could not appeal or defend on the merits.
Opposer also contends that it does not fall within the
parameters of subsection (b) of Section 211 because it is not
by definition a “designated national or its successor-in-
interest.” We again disagree. Section 211 states:
13
The term “designated national” has the
meaning given such term in section 515.305
of title 31, Code of Federal Regulations, as
in effect on September 9, 1998, and includes
a national of any foreign country who is a
successor-in-interest to a designated
national.
We turn to 31 C.F.R. Section 515.305 which defines a
“designated national” as “Cuba and any national thereof
including any person who is a specially designated national.”
A “specially designated national” is defined in 31 C.F.R.
Section 515.306 and includes “any partnership, association,
corporation or other organization which on or since [July 8,
1963]
10
has been owned or controlled directly or indirectly by
the Government or authorities exercising control over a
designated foreign country or by any specially designated
national.”
Opposer is a Luxembourg corporation, but it is 50% owned
by the Cuban entity HR&L, and therefore, is a “designated
national.”
11
Because it is half owned, and therefore
indirectly controlled, by a designated national, under Section
515.306, opposer is a specially designated national. As a
specially designated national, opposer is validly deemed a
“designated national” for purposes of Section 211.
Consequently, because opposer’s pending Section 44(e)
10
This is the “effective date” established under 31 C.F.R.
Section 515.201(d).
14
applications are for the same or a substantially similar mark
as the mark confiscated by the Cuban government and because
opposer has not provided any evidence of any express consent
by the original owner of the mark, opposer's claimed rights to
the pending applications at issue cannot be recognized,
enforced, or validated under U.S. law. Opposer’s rights to
ownership of these marks in the United States, therefore, fail
despite the fact that these applications were filed before the
mark being opposed.
12
Additionally, we note that under 31 C.F.R. Section
515.528,
13
designated nationals are precluded from filing and
prosecuting any applications for blocked trademarks.
14
Thus,
opposer’s contention that the Cuban embargo regulations
11
We note that the relevant restrictions of the Cuban embargo
apply to a Cuban national or entity regardless of the degree or
amount of ownership interest involved. 31 C.F.R. § 515.201(b).
12
This decision has no practical effect on these pending
applications because they are not within the Board’s
jurisdiction. Our consideration of these applications falls only
within the context of determining the issue of standing in this
opposition proceeding.
13
31 C.F.R. Section 515.528 reads, in relevant part:
(a) The following transactions by any person who is not a
designated national are hereby authorized:
(1) The filing and prosecution of any application for a
blocked foreign patent, trademark or copyright, or
for the renewal thereof;
(2) The receipt of any blocked foreign patent,
trademark, or copyright;
(3) The filing and prosecution of opposition or
infringement proceedings with respect to any blocked
foreign patent, trademark, or copyright, and the
prosecution of a defense to any such proceedings....
15
“expressly” invest opposer with the right to file and
prosecute applications and “thus with the precise predicate
for standing” in this proceeding also fails as a matter of law
given opposer’s status as a “designated national.”
Although Section 13 of the Trademark Act
15
establishes a
broad class of persons who may be considered proper opposers,
we find that no material issue exists as to whether opposer
falls within said class as a person capable of filing an
opposition in this instance. With regard to opposer’s claim,
under Section 2(e)(3) of the Trademark Act, that applicant’s
mark “HAVANAS AND BANANAS” is primarily geographically
deceptively misdescriptive of rum drinks not originating from
Cuba, it is clear that opposer has no standing to pursue this
claim just as it had no standing to pursue its false
designation of origin claim under Section 43(a) in Galleon V.
The Second Circuit affirmed the District Court’s holding that
opposer had no standing because the Cuban embargo prevented
opposer from selling its rum in the United States, and thereby
14
31 C.F.R. Section 515.528 states that the term “blocked foreign
patent, trademark, or copyright” as used in the section means
“any patent, petty patent, design patent, trademark or copyright
issued by any foreign country in which a designated foreign
country or national thereof has an interest, including any
patent, petty patent, design patent, trademark, or copyright
issued by a designated foreign country.”
15
Section 13 of the Act, which provides:
Any person who believes that he would be damaged by the
registration of a mark upon the principal register may, upon payment
of the prescribed fee, file an opposition in the Patent and
Trademark Office, stating the grounds therefor....
16
from suffering commercial injury because of Bacardi's actions;
and quoted the District Court, as saying: "Any competitive
injury plaintiffs will suffer based upon their intent to enter
the U.S. market once the embargo is lifted is simply too
remote and uncertain to provide them with standing." Galleon
V at 122; cf. The Joint Stock Society v. UDV North America,
266 F.3d 164, 60 USPQ2d 1258 (3rd Cir. 2001).
As to its claim of dilution, the absence of a proprietary
right to the HAVANA CLUB trademark weighs against standing.
Section 43(c)(1) states that “[t]he owner of a famous
trademark shall be entitled...to obtain such...relief as is
provided in this subsection.” Because opposer has no
ownership rights to the mark, any attempt to calculate the
dilution to said mark is unwarranted.
Similarly, with regard to the its claim involving Section
2(a), opposer’s attempts to assert that applicant’s use of the
HAVANAS AND BANANAS mark may disparage or falsely suggest a
connection with opposer’s persona or identity is ill founded.
Opposer’s lack of proprietary rights to the HAVANA CLUB mark
having thus been established, we are aware of no reason why
the creation of a name or identity brought about by the mere
addition of an entity designator (Holding, S.A.) to a
trademark owned by another should, in effect, confer standing
on opposer in this instance.
17
Opposer cannot demonstrate any real interest in the
outcome of this proceeding and lacks standing to assert the
claims alleged in this proceeding. Accordingly, applicant’s
motion for summary judgment is granted and the opposition is
dismissed.
16
16
In view of our finding regarding opposer’s lack of standing we
need not address the issues with respect to opposer’s substantive
claims.