President Obama’s recent policy-changes on US-Cuban relations present exciting new possibilities for American companies. Only 90 miles from Florida and with over 11 million people, Cuba represents a significant, untapped marked for American exports. Just as promising, Cuban exports such as premium cigars and rum have incredible market potential in the U.S.—creating possibilities for American companies in everything from importing to sales and distribution. For example, Habanos S.A., the leading Cuban cigar maker,
expects to immediately gain 25 to 30 percent of the U.S. premium cigar market if and when the Cuban embargo ends.*
The possibility of liberalized American trade with Cuba creates both new obstacles and new opportunities for U.S. companies; including issues related to intellectual property protection. In a little publicized exception to the Cuban embargo, U.S. companies can currently apply for patents, trademarks and copyrights in Cuba. Moreover, under 31
C.F.R. 515.528, American companies can file and prosecute infringement oppositions, defend infringement actions, and pay maintenance fees. This means that even American companies which are currently prohibited from operating in Cuba can still protect their Cuban IP.
One challenge (or benefit, depending on your company’s position) to building a strong Cuban trademark portfolio is Cuba’s “first-to-file” trademark system. Unlike in the United States, Cuban trademark applicants’ do not need to show the intent to use or use of a mark in Cuban commerce. Rather, a simple filing (again, even without intent to use) is sufficient to “stake out” trademark rights. This means that American companies contemplating an eventual expansion into Cuba can act immediately in securing Cuban trademark rights—without concerning themselves over the embargo’s current effects on “use” in Cuba. However, Cuba’s first-to-file system also means that trademark “squatters” can register American brands in Cuba with the intent to “ransom” these marks to U.S. companies at some future time.
As frigid U.S.-Cuban relations show the first signs of what may be a coming thaw, American companies considering future Cuban ventures would be wise to act swiftly in registering trademarks. Under the intellectual property exceptions to the Cuban embargo, Grimes LLC is able to help clients obtain Cuban trademark registrations. If your company is considering whether to protect its brand in Cuba, call us today for a free consultation.
*In the interest of full disclosure, Grimes LLC represents Altadis U.S.A.—the American operation of the Imperial Tobacco Group PLC which jointly owns Habanos S.A. together with the Cuban government.
