Mindy Pava, the Cuban Conundrum: Proposing an International Trademark Registry for Well-known Foreign Marks

• Publication year: 2010

THE CUBAN CONUNDRUM: PROPOSING AN INTERNATIONAL TRADEMARK REGISTRY FOR WELL-KNOWN FOREIGN MARKS

INTRODUCTION

[A]voidance of consumer confusion is the ultimate end of all trademark law.1

Wealthy tourists who possess an affinity for slot machines, blackjack, and roulette may be familiar with the Casino de Monte Carlo. Since 1863, the casino, operating under its namesake trademark,2 has promoted the allure of Monaco. The casino’s trademark is registered in Monaco, but not in the United States.3 Seizing upon the lack of a U.S. trademark registration, operators of online gambling websites developed software that exhibited pictures of the Casino de Monte Carlo’s interior and exterior and alluded to Monte Carlo’s

distinctive geographical location, relying on the casino’s noteworthy features to advertise their own online products.4 The owners of the Casino de Monte Carlo trademark challenged this use of the mark when they became aware of these potentially infringing web sites.5 In International Bancorp, LLC v. Societe des Bains de Mer et du Cercle des Etrangers a Monaco, the Fourth Circuit determined whether a foreign trademark unregistered in the United States could still receive protection from infringement.6

In analyzing the dispute, the Fourth Circuit reasoned that, for the use of an unregistered mark in foreign trade to merit Lanham Act protection,7 the mark must be distinctive among U.S. consumers.8 The court determined that, even

1. Int’l Bancorp LLC v. Societe des Bains de Mer et du Cercle des Etrangers a Monaco, 329 F.3d 359, 381 (4th Cir. 2003).

2. Id. at 361.

3. Id.

4. Id.

5. Id.

6. Id. at 385 (“Until today, every court to address this issue has held that use of a foreign trademark in connection with goods and services sold only in a foreign country by a foreign entity does not constitute ‘use of the mark’ in United States commerce sufficient to merit protection.” (emphasis in original)).

7. The Lanham Act governs trademark law in the United States. 15 U.S.C. §§ 1051–1141 (2006). The test for trademark infringement is codified in 15 U.S.C. § 1125(a).

8. Int’l Bancorp, 329 F.3d at 363 (citing Sara Lee Corp v. Kasyer-Roth Corp., 81 F.3d 455, 464 (4th Cir. 1996)) (finding that the degree of protection received by a mark is directly related to its level of distinctiveness).

   without a demonstrated connection to use within the United States, a foreign mark deemed “famous” should be protected because trademark laws are designed to minimize consumer confusion.9 Accordingly, the Fourth Circuit held that the online gambling websites infringed the Monte Carlo casino’s

   trademark because the use of similar domain addresses and pictures of the actual casino would cause confusion among ordinary consumers.10

   
   

   In an analogous fashion to how Monaco’s noteworthy casino has helped bring fame to the principality, Cuba has achieved renown for its popular brands of rum and cigars. While Cuba’s products are distinctive among the cigar- smoking and rum-imbibing segments of the public, the U.S. court system has failed to provide Cuban trademarks with the same protections as the Casino de

   Monte Carlo in Monaco.11 The reason for this dissimilar treatment may be that

   Monaco possesses an open trading relationship with the United States,12 while Cuba has been considered an adversary for five decades.13

   
   

   The lack of protection for well-known Cuban marks stems from the trade embargo between the United States and Cuba.14 Both nations are members of treaties that embody international intellectual property principles,15 but U.S. courts have consistently ruled that U.S. domestic law codifying the embargo outweighs the treaty obligations of the United States in conforming to international intellectual property law.16 Realizing that Cuban marks tied to Castro’s communist government face strict restrictions in the United States, companies such as Bacardi and General Cigar have seized on this opening in

   
   

9. Id. at 381.

10 Id. at 381–82.

1. Compare Empresa Cubana del Tabaco v. Culbro Corp., 399 F.3d 462 (2d Cir. 2005), with Int’l Bancorp, 329 F.3d at 381.

2. The principality of Monaco encompasses less than one square mile, but became known for Hollywood glamour after actress Grace Kelly married Prince Rainier in 1956. Principality of Monaco, NATIONS ONLINE, http://www.nationsonline.org/oneworld/monaco (last visited Mar. 17, 2011). Monaco also was known as a tax haven where clients could place their assets to evade taxes in their home country, but the principality recently adopted international standards for banking openness after pressure from the United States and Europe. See David Jolly, As Tax Havens Acquiesce, Monaco Adopts Standards, N.Y. TIMES, Mar. 15, 2009, http://www.

   nytimes.com/2009/03/16/business/worldbusiness/16haven.html.

3. The Cuban Asset Control Regulations, 31 C.F.R. § 515 (2011) (codifying the trade embargo against Cuba).

4. Id.

5. See discussion of the Paris Convention and Trade Related Aspects of Intellectual Property Rights,

   infra Parts II.B.1, II.B.2.

6. See, e.g., Empresa Cubana del Tabaco, 399 F.3d at 476–77 (finding that granting the injunctive relief sought would effect a transfer of property rights to a Cuban entity in violation of the embargo, and that this limitation on judicial authority applies to Lanham Act and Paris Convention claims).

   the marketplace and trademarked their own versions of Havana Club rum and Cohiba cigars.17 When the United States lifts the trade embargo with Cuba, trademark questions regarding several of these disputed marks will remain.18

   
   

   The analysis of the U.S.-Cuba trademark disputes can provide guidance for the future in weighing how a country should balance its international politics with its obligations under intellectual property law. This Comment argues that countries set a dangerous precedent when they rely on temporary political considerations to block well-known foreign trademarks or interfere with internationally agreed-upon intellectual property rights. This Comment searches for a feasible solution that would prevent a country from violating international intellectual property treaties by registering its own version of a well-known foreign mark—thus leading to consumer confusion about the source and origin of the mark—simply because a political relationship has deteriorated between the country of registration and the country of the foreign mark’s origin. Because avoidance of consumer confusion is the ultimate purpose of trademark law, this Comment advocates for an international, centralized registration system for well-known foreign trademarks. This international registry would provide protection for well-known foreign marks in a worldwide marketplace and not subject the marks to retaliatory actions during wars, embargoes, or other conflicts.

   
   

   First, in Part I, this Comment analyzes relevant trademark law in discussing how a mark achieves the “well-known” status that entitles it to enhanced protection under international law based on intellectual property principles. The Comment also examines recent attempts to provide well-known marks with greater international protection and describes the European Union’s innovative trademark approach. Next, Part II explores the two most famous trademark disputes of the past decade between the United States and Cuba. The analysis explains how U.S. courts relied on domestic law rather than on international intellectual property treaties in ruling on the disputes—a decision- making process that could be the subject of scrutiny once the current trade embargo between the two nations ends. In Part III, this Comment addresses the implications of applying a separate standard to well-known trademarks

   
   

7. See id. at 476 (focusing on the dispute over registration of the Cohiba mark for cigars); Havana Club Holding, S.A. v. Galleon S.A., 203 F.3d 116, 119–22 (2d Cir. 2000) (discussing the history of the disputed Havana Club rum mark).

8. See Will Weissert & Michael Felderbaum, Trademark Wars: US Goods Carry Famous Cuba Brands,

   MIAMI DAILY BUS. REV., Aug. 28, 2009, http://www.dailybusinessreview.com/PubArticleDBR.jsp?id= 1202465773636&hbxlogin=1.

   originating in Cuba, and discusses how this approach places the United States at odds with other countries. Finally, this Comment assesses how adding a proposed amendment calling for international trademark registration to the Trade Related Aspects of Intellectual Property Rights (“TRIPS”) agreement19

   would affect the ongoing U.S.-Cuba trademark controversy.

   
   

   1. WELL-KNOWN MARKS: LEVELS OF PROTECTION AT HOME AND

      INTERNATIONALLY

      
      

      1. An Exception to the Territoriality Principle Within the United States?

         
         

         The territoriality principle serves as an important tenet of trademark law by providing that a trademark maintains a separate existence in every country where it is registered.20 The doctrine allows each country to determine its own statutory scheme for applying trademark rights.21 In the United States, exclusive trademark rights can be claimed only through priority of use under the Lanham Act, which means that the mark must be used in conjunction with

         the sale of goods or performance of services within the United States’s borders.22 Foreign use generally is not sufficient to establish priority of use within the United States.23 The priority of trademark rights in the United States, therefore, does not rely on priority of use anywhere in the world.24

         
         

         The well-known marks doctrine, however, serves as an exception to the rule that only priority of use establishes trademark rights within the United States. In his treatise on trademark law, Professor J. Thomas McCarthy defines the well-known marks doctrine as follows: “If a mark used only on products or services sold abroad is so famous that its reputation is known in the United

         States, then that mark should be legally recognized in the United States.”25

         
         

9. Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, 33 I.L.M. 1125

   (1994) [hereinafter TRIPS].

10. See Grupo Gigante S.A. de C.V. v. Dallo & Co., Inc., 391 F.3d 1088, 1093 (9th Cir. 2004); 5 J. THOMAS...