Info Service on WTO and Trade Issues (Feb16/01)
3 February 2016
Third World Network
US move on Havana Club doesn't resolve dispute, say EU and Cuba
Published in SUNS #8167 dated 27 January 2016
26 Jan (Kanaga Raja) -- The European Union and Cuba have joined in
telling the United States at the WTO Dispute Settlement Body (DSB)
on Monday that the US issuance of a specific licence to the Cuban
government agency Cubaexport for the renewal of the trademark registration
of the Havana Club rum brand in the US did not resolve and end the
The dispute over the Havana Club rum brand trademark in the US dates
1999, and a ruling of the WTO Appellate Body in 2002 against the US
that its related legislation violated the WTO TRIPS agreement.
On Monday, the US told a regular meeting of the DSB, on its agenda
item of surveillance of implementation of recommendations adopted
by the DSB, that the US Patent and Trademark Office had recently issued
a specific licence to the Cuban government agency Cubaexport for the
renewal of the trademark registration of the Havana Club rum brand
in the US.
The US added, in its statement at the DSB, that "these important
steps resolve a longstanding issue of concern to the European Union
While welcoming this development, the European Union, which had brought
a dispute against the US over this issue back in 1999, as well as
Cuba, however, considered the dispute to be still unresolved, and
called for Section 211 of the US Omnibus Appropriations Act, the subject
of the dispute, to be repealed. Only such repeal, the two said, would
fully comply with the WTO ruling and the DSB recommendation in adopting
According to trade officials, at the DSB meeting on Monday, Bolivia,
Ecuador, Brazil, Zimbabwe, Mexico, Vietnam, Nicaragua, China, Angola,
Argentina, Venezuela, India, Peru, Jamaica, Uruguay, Russia and El
Salvador voiced support for Cuba.
They welcomed the recent positive developments in this dispute, with
most of them saying that Section 211 should be repealed and that the
issue should remain on the DSB agenda until it is fully resolved.
The dispute concerned a complaint raised by the European Communities
over Section 211 of the US Omnibus Appropriations Act of 1998 that
prohibited the registration or renewal of trademarks and trade names
used in connection with businesses or assets that were confiscated
by the Cuban government after the January 1959 revolution.
The law had provided that "no US court shall recognize or enforce
any assertion of such rights".
The dispute was raised by the European Communities in 1999 on behalf
of a European company (Pernod Ricard, a joint venture partner of Havana
Club Holding together with the Cuban government agency Cubaexport)
that was operating in Cuba.
The subject of the dispute was the use of the Havana Club rum brand
in the United States by the American company Bacardi.
In a ruling issued on 2 January 2002 (WT/DS176/AB/R), the Appellate
Body had found, among others, that some parts of Section 211 of the
Omnibus Appropriations Act violated the national treatment and most-favoured-nation
obligations under the TRIPS Agreement.
According to information posted on the WTO website, following the
expiry of the fourth extension of the reasonable period of time on
30 June 2005 to implement the ruling, the European Communities and
the United States had notified the DSB of their Understanding whereby
the European Communities agreed not to request, at this stage, authorization
from the DSB to suspend concessions or other obligations pursuant
to Article 22.2 of the DSU.
Following from this, the United States has been providing status reports
on its progress in the implementation of the DSB recommendations in
At the DSB meeting on Monday, under the agenda item of surveillance
of implementation of recommendations adopted by the DSB, the US said
it is pleased to announce "significant positive developments"
in relation to the Havana Club trademark at issue in the Section 211
The US noted that action on a petition for renewal of the Havana Club
trademark was suspended in 2006 pending the final disposition of certain
litigation. That litigation has since concluded, it said.
The US further said that earlier this year, on January 11, 2016, it
had issued a specific licence to Cubaexport that allowed it to pay
fees for the renewal of the US trademark registration (for the period
Two weeks ago, added the US, the US Patent and Trademark Office granted
the petition to renew the trademark registration. Therefore, the Havana
Club trademark was successfully renewed.
According to the US, that office is currently processing the trademark
holder's renewal application for the period 2016-2026.
"These important steps resolve a longstanding issue of concern
to the European Union and others," the US maintained.
The US further said that it has notified the EU of these positive
developments. "In light of this step, we are moving this dispute
into a more cooperative phase that we hope may create conditions for
achieving a final resolution of this dispute."
As part of its collaboration with the EU, the US said that it will
be providing the EU directly with information and updates regarding
this matter going forward.
The US said it expects that these recent positive developments also
will be welcomed by other WTO Members.
In its statement at the DSB, the EU considered the grant of a specific
licence by the US Office of Foreign Assets Control (OFAC) to constitute
a "very positive step".
"However, we do not consider the issue to be resolved in the
meaning of Article 21.6 of the DSU. To resolve the issue, the US would
have to repeal Section 211."
The EU further said that although the issue has not been resolved,
in view of this positive development, and for the time being, the
EU does not consider it necessary that the US would provide monthly
reports for the agenda of regular DSB meetings.
However, the EU said that it retains all its rights in relation to
In light of the US statement that it is not in full compliance, it
is understood that should this item be re-inscribed on the agenda
upon request by the EU, it would appear as a point 1 item, it said.
The EU said that its agreement to the removal of this item from the
agenda of regular DSB meetings, despite the fact that the issue has
not been resolved, is subject to this understanding.
The EU said it further understands that the US agrees to confer closely
with the EU to achieve the full resolution of this dispute.
In its statement, Cuba said it recognises that the renewal of the
registration of the trademark of Cubaexport by the US Patent and Trademark
Office "is a just and positive step" of the US administration
as it recognised the rights of a Cuban company as the owner of the
However, Cuba noted that while Section 211 remains in effect, it prevents
recognition by the US courts of Cuban trademarks and patents, and
thus under this law, there is the possibility that the registration
can be cancelled at any time by a decision of a US court.
Cuba said that while Section 211 remains in force, it will continue
to demand its repeal.
Cuba also rejected the request made by the EU (for the conditional
removal of this agenda item from the DSB surveillance agenda) at this
meeting, since the object of the dispute, Section 211, is still in
force, without any change, which means that the resolutions adopted
by the DSB in relation to this Act, remain unfulfilled.
Hence, the monitoring of the implementation of such resolutions must
be kept on the agenda of the DSB meetings, as provided for in Article
21.6 of the DSU, said Cuba.
In an intervention on this issue, China said that the prolonged non-compliance
is highly inappropriate with the principle of prompt compliance under
the DSU, in particular since the interests of a developing country
member are seriously affected in this dispute.
China therefore urged the US to implement the DSB rulings and recommendations
without any further delay.
According to trade officials, when the Chair of the DSB, Ambassador
Harald Neple of Norway, concluded the discussion by saying that the
"DSB may revert to this matter", Cuba requested an explanation
as to why the Chair had used the term ‘may'.
The Chair replied that it was for the EU to decide on putting the
matter back on the agenda (under the agenda item of surveillance of
implementation of recommendations), although any member has the right
to put the issue under another agenda item.
Cuba said that it officially requests that the issue be put on the
DSB agenda until it is fully resolved.
Meanwhile, under Other Business, the Chair reported on the current
workload of the Dispute Settlement System.
According to trade officials, he said that concerning appeals, the
Appellate Body is currently dealing with one appeal.
Based on the projected dates for the circulation of the next panel
reports, the Appellate Body can expect that up to three appeals may
be filed in the first quarter of 2016.
Concerning panels and arbitrations, the Chair said that there are
currently 20 active panels (including two compliance panels under
Article 21.5 of the DSU).
He said that he was counting multiple disputes that are being considered
simultaneously by the same panel as one. For example, the Australia
- Tobacco Plain Packaging panels, which are in fact four active disputes,
are counted as a single panel in the report.
The Chair also said that the Rules Division and the Legal Affairs
Division are working together to reduce the queue of panels awaiting
availability of staff to assist the panels that have been composed.
In the last two months, a number of panels in the queue as of October
2015 have been assigned staff and established their timetables.
As of today, there are four composed panels awaiting staff to assist
them, and that there are eight panels at the composition stage, said
the Chair. +