While the future of doing business in Cuba remains uncertain, recent policy changes surrounding U.S. – Cuba relations has resulted in a more immediate opportunity to reevaluate registering trademarks in Cuba.
U.S. companies have had the ability to register a trademark in Cuba for many years as an exception to the embargo, as allowed under the Cuban Assets Control Regulations (CACR). The CACR, issued by the U.S. Department of the Treasury’s Office of Foreign Assets Control, permits companies wishing to file trademark applications the ability to do so, as well as the ability to maintain and litigate those registrations. Companies can file with relative ease through the same process used to file other international marks. Notwithstanding the exception, many companies have been hesitant to protect their rights because of the substantial likelihood that the marks will become vulnerable to cancellation. Under Cuban law, registrations are subject to attack for non-use after three years. Because U.S. companies have been prohibited from actually selling their products to Cuba under existing U.S. law, the marks would necessarily have been an easy target for cancellation for non-use. The only other option for U.S. companies is to file new trademark applications every three years, which can be an expensive undertaking.
However, with this policy shift – now may be the time for U.S. companies to reevaluate their stance on registering trademarks in Cuba, if for no other reason than to protect their future use of those marks. Brand hijacking, for example, is a concern for those embarking on business in Cuba. With an influx of American brands, trademark pirates will undoubtedly increase their efforts to appropriate U.S. trademarks, despite having no real ownership interest in the marks. Because Cuba is a “first to file” nation and requires no previous use of the mark to obtain registration, an application by an industrious trademark pirate would likely be accepted and would potentially take priority over a later application by the true owner of the mark.
Trademark piracy is not unique to Cuba. Companies regularly face similar issues in other “first to file” counties, such as China. A trademark owner suffering such misappropriation of its trademark faces a Hobson’s choice: use its mark in such country and be subject to potential infringement claims – or – be prepared to pay either for an expensive cancellation process or for a hefty ransom to the trademark pirate. Once a trademark is stolen, the rightful company-owner may be unable to use that mark in commerce without committing an act of infringement on the registered owner or without involving the company in expensive litigation to attempt to retrieve its rights.
For more information, please contact Alan Nemes or Joe Orlet.