Trademark Law in Cuba and the Dilemma for Non-Native Rights Holders

Despite the fact that President Obama eased some of the country’s travel and trade restrictions in connection with former Cold War foe Cuba before the end of his Presidential tenure, the broad embargo against Cuba – which was first implemented in 1958 and was subsequently broadened over the years – is still in effect. Although the U.S. trade embargo largely prevents U.S. brand owners from doing business in Cuba, an long-standing exception carved into the embargo allows U.S. companies to obtain trademark registrations in Cuba and to litigate or take other steps to protect their trademarks from infringement in Cuba.

This is an interesting paradox, particularly given how trademark law works in the U.S. As you may know, in order to acquire trademark rights in the U.S. – either in accordance with federal or state law – an individual or entity must actually use the mark in commerce. As such, trademark rights are not acquired by merely filing an application with the U.S. Patent and Trademark Office; they are acquired as a result of use, which is why the U.S. is labeled as a First to Use – as opposed to First to File – jurisdiction.

Like China, Cuba has opted to adopt a First to File regime, thereby recognizing that a trademark is an intangible asset of an enterprise, as opposed to a right that must be earned in order to be enjoyed.

Such a system often proves unfavorable for non-native entities. As we have learned from the widespread trademark infringement, bad faith trademark filings, and cybersquatting that take place in China, removing the “use” requirement from the equation stands to give rise to an industry of native individuals that seek to profit from the registration of trademarks that rightfully belong to non-native parties. Companies, such as Hermes, Dior, Costume National, DSquared2, Apple, and Facebook, have all struggled in Chinese courts to reclaim trademark rights in their names from native Chinese businesspeople, who were either using their trademarks to sell counterfeit goods or holding on to the IP rights in hopes of selling them off for a profit.

Pre-emptive actions by trademark holders are often recommended in connection with First to File jurisdictions. However, non-native holders of trademarks will be pleased to know that the Cuban Trademark Office has put provisions in place to assist in the reclaiming of trademarks that resulted from bad faith filings.  (That is not to say that such provisions will result in the fair and/or timely adjudication of trademark oppositions, as many parties have learned the hard way in China).

While the “bad faith” filing of a trademark applicant is not listed as a ground for opposition (a proceeding that may be initiated before a trademark is registered), Article 57 of the Decree Law No. 203 on Trademarks and other Distinctive Signs states that a trademark registration can be canceled (a post-registration proceeding) if (a) the mark is famous "in Cuba” AND (b) the application was filed in bad faith.

In terms of opposing a pending trademark application before it is registered, Article 17.1 states that an opposition may be filed when it is evident that a trademark application was filed to “perpetrate or strengthen an act of unfair competition.”

Still yet, Cuba is a party to almost all international intellectual property treaties, and local legislation has been structured to satisfy international obligations. For instance, Cuba has ratified the Pan-American Trademark Convention of 1929, which specifically contemplates the use in bad faith of a trademark by way of a knowledge requirement, designed to protect national rights against foreign registrants.

As a contracting party to the Agreement on Trade-Related Aspects of Intellectual Property Rights, Cuba is also a party to the Paris Convention, which provides for the protection of famous trademarks under Article 6 bis. In compliance with the Convention, the famous marks doctrine is implemented through Article 17.1 (d) of Cuba’s Decree Law No. 203, which prohibits registration of a trademark that is a total or partial reproduction of a notorious mark belonging to a third party, when their use could: "(1) cause a risk of confusion or association with the notorious mark; (2) cause a risk of diluting the distinctiveness of the notorious mark or its commercial value or fame; or (3) unjustly benefit from the fame of the notorious mark."

Note: of these various types of protections in place, those afforded by the Pan-American Trademark Convention will likely prove to be the strongest option for US trademark holders. Proving that a mark is famous in Cuba, as is required by Articles 57 and 17.1 (d) of Decree Law No. 203, can be somewhat challenging for US companies, since the embargo prohibits them from using their marks in Cuba. It remains to be seen how this IP dilemma is addressed as U.S.-Cuba relations continue to evolve.