Pernod Ricard USA LLC v. Bacardi U.S.A., Inc.

505 F. Supp. 2d 245, 2007 U.S. Dist. LEXIS 61598, 2007 WL 2381016
CourtDistrict Court, D. Delaware
DecidedAugust 21, 2007
DocketCiv. 06-505-SLR
StatusPublished
Cited by3 cases

This text of 505 F. Supp. 2d 245 (Pernod Ricard USA LLC v. Bacardi U.S.A., Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pernod Ricard USA LLC v. Bacardi U.S.A., Inc., 505 F. Supp. 2d 245, 2007 U.S. Dist. LEXIS 61598, 2007 WL 2381016 (D. Del. 2007).

Opinion

MEMORANDUM OPINION

SUE L. ROBINSON, District Judge.

I. INTRODUCTION

Plaintiff Pernod Ricard USA, LLC (“plaintiff’) filed this action against Bacardi U.S.A., Inc. (“defendant”) for violation of § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), for allegedly false and misleading statements in the marketing and advertising of defendant’s “Havana Club” brand rum. (D.I. 1 at ¶ 1) The court has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1331. (D.I. 1 at ¶ 2) The court previously denied defendant’s motion for a change in venue to the Southern District of Florida because the asserted advantages of moving the case were insufficient to warrant a transfer. (D.I. 28 at 7) Currently before the court is defendant’s motion to dismiss count two of the complaint for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). (D.I. 12) For the reasons that follow, the court grants defendant’s motion.

II. BACKGROUND

The instant litigation stems from a business dispute about the sale of “Havana Club” brand rum between, on the one *249 hand, plaintiff and its joint venture partner, Empresa Cubana Exportadora De Ali-mentos y Productos Varios (“Cubaex-port”), and, on the other hand, defendant. Both plaintiff and defendant are leading importers and distributors of spirits throughout the United States and are direct competitors in this regard. (D.I. 1 at ¶ 6) In order to understand the issues before the court, the history of the dispute needs to be related. The court relies for its background facts, in part, on the opinion issued by the United States Court of Appeals for the Second Circuit in Havana Club Holding, S.A. v. Galleon S.A, 203 F.3d 116 (2d Cir.2000) (“HCH v. Gal-, león ”).

Plaintiff is a corporation organized and existing under the laws of the State of Indiana, with its principal place of business located in Purchase, New York. (D.I. 1 at ¶ 4) Plaintiff is the third largest producer, importer, and marketer of spirits in the United States by sales value, and the fourth largest by sales volume. (Id.) Plaintiff owns 50% of Havana Club International (“HCI”), a joint stock society organized under the laws of Cuba, and 50% of Havana Club Holding (“HCH”), a Luxembourg holding company that owns the “Havana Club” mark in certain countries outside the United States. HCH v. Galleon, 203 F.3d at 119. Defendant is a corporation organized and existing under the laws of the State of Delaware, with its principal executive offices located in Miami, Florida. (D.I. 1 at ¶ 5) Defendant distributes, inter alia, “Havana Club” brand rum, which is made in Puerto Rico. (D.I. 1 at ¶ 5, ex. A)

Before the Cuban revolution, Jose Are-chabala, S.A. (“JASA”), a Cuban corporation owned privately by members of the Arechabala family, produced “Havana Club” rum and owned the trademark “Havana Club” for use with its rum. JASA exported its rum to the United States until 1960, when the Cuban government seized and expropriated JASA’s assets. HCH v. Galleon, 203 F.3d at 119. Neither JASA nor its owners ever received compensation for the seized assets from the Cuban government. Id. at 119-20. In 1963, the United States imposed • an embargo on Cuba. Id. at 120.

From 1972 to 1993, Cubaexport, a Cuban state enterprise, exclusively exported “Havana Club” rum, primarily in Eastern Europe and the Soviet Union. Id. Cu-baexport registered the “Havana Club” trademark with Cuban authorities in 1974, and with the United States Patent and Trademark Office (“PTO”) in 1976 (Registration No. 1,031,651). Id. In 1993, Cu-baexport sought to reorganize and find a foreign partner for its “Havana Club” rum. business. Id. As a result, Havana Rum & Liquors, S.A. (“HR & L”) was formed under Cuban law and entered into a joint venture agreement with Pernod Ricard, S.A. (“Pernod”), a French company distributing liquor internationally. Id. Under a November 1993 agreement between Pernod and HR & L, HCI and HCH were formed. Id. Through a series of agreements, Cubaexport assigned trademark Registration No. 1,031,651 to HR & L, which subsequently assigned such to HCH. Id. A “license” authorizing the assignments was issued in 1995 by the Office of Foreign Assets,, Control (“OFAC”), an agency of the Secretary of the Treasury charged with administering the Cuban embargo. Id. By 1994, HCI was exporting rum under the “Havana Club” trademark through the exclusive license to that mark from HCH. Id. at 121. From 1994 to 1998, HCI sold over 38 million bottles of “Havana Club” rum, with approximately 30% of the sales in' Cuba (including sales to Americans traveling in Cuba), and the remainder exported to such countries as Spain, France, Germany, Italy, Canada, *250 Mexico, Bolivia and Panama. Id. In 1996, HCH renewed the United States registration of the “Havana Club” mark for a term of ten years. Id. Despite these business arrangements, however, because of the Cuban embargo, HCI’s “Havana Club” rum has never been sold in the United States. Id. HCI intends to export its rum to the United States as soon as legally possible. 1 Id.

In December 1996, HCH and HCI filed a lawsuit to enjoin Bacardi & Company 2 from using the “Havana Club” trademark, alleging violations of sections 32 and 43(a) of the Lanham Act. Id. Shortly thereafter, Bacardi purchased 3 the Arechabala family’s rights (if any) to the “Havana Club” trademark, the related goodwill of the business, and any rum business assets still owned by the Arechabala family. Id. at 120. The Second Circuit concluded that the Cuban embargo barred assignment to HCH of the “Havana Club” trademark registered in the United States, that United States courts are precluded by statute from enforcing whatever rights HCI might have to trademark protection, and that HCI lacked standing to assert its false advertising and unfair competition claims under the Lanham Act. Id. at 119. In addition to the litigation in the Second Circuit, there apparently is pending before the PTO and the United States District Court for the District of Columbia challenges to Cubaexport’s trademark. (D.I. 24 at 9)

Defendant officially launched its “Havana Club” brand rum in the United States in August 2006. (D.I. 1 at ¶ 7) Included within- its marketing program are assertions that it owns the rights to the “Havana Club” brand “in the United States as the successor to a company that marketed a Cuban Havana Club rum prior to 1960.” (Id.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Dille Family Trust v. Nowlan Family Trust
207 F. Supp. 3d 535 (E.D. Pennsylvania, 2016)
Classic Liquor Importers, Ltd. v. Spirits International B.V.
201 F. Supp. 3d 428 (S.D. New York, 2016)
Pernod Ricard USA LLC v. Bacardi U.S.A., Inc.
702 F. Supp. 2d 238 (D. Delaware, 2010)

Cite This Page — Counsel Stack

Bluebook (online)
505 F. Supp. 2d 245, 2007 U.S. Dist. LEXIS 61598, 2007 WL 2381016, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pernod-ricard-usa-llc-v-bacardi-usa-inc-ded-2007.