Last month the Trade Trial Appeal Board (TTAB) of the United States Patent and Trademark Office (USPTO) rejected a motion to dismiss for lack of standing a petition by Cuban cigar makers to cancel a trademark registration by a Dominican cigar company. This ruling is remarkable as it shows that despite the restrictions contained in the Cuban Assets Control Regulations (CACR), a Cuban company may have standing in the U.S. to seek a cancellation of a U.S. registered trademark, particularly when alleging that the registration is geographically deceptively misdescriptive,

The holding in question, came down in Corporacion Habanos S.A. v. Rodriguez, T.T.A.B., No. 92052146, 8/1/11, in which Juan E. Rodriguez obtained a registration, listed on the secondary register, for the term “Pinar del Río” for cigars made in the Dominican Republic. Corporacion Habanos S.A. d/b/a Habanos S.A. and Empresa Cubana del Tabaco d/b/a Cubatabaco are Cuba-based cigar companies who had obtained a registration for “Pinar del Río” in 2003 under the Lisbon Agreement for the Protection of Appellations of Origin and Their International Registration of 1958.

Habanos and Cubatabaco petitioned to cancel the Pinar del Río mark, based on a number of reasons including that the registration was fraudulent, that the mark was deceptive under 17 U.S.C. §1052(a), and that it was primarily geographically deceptively misdescriptive under 17 U.S.C. §1052(e)(3). Rodriguez moved to dismiss for lack of standing.

The TTAB rejected Rodriguez’s argument that under Empresa Cubana del Tabaco v. Culbro Corp., 478 F. Supp. 2d 513 (S.D.N.Y. 2007), Cubatabaco could not have standing to seek cancellation of the registration unless Cubatabaco itself was attempting to register a mark that was likely to be confused with the registered mark.

However, the TTAB found that the issue in the Culbro line of cases was whether acquiring a priority right under Trademark Act Section 43(a), was a transfer of property to the Cuban plaintiffs which had to be specifically licensed, which was not an issue in this matter. The board also emphasized that because The United States Department o the Treasury Office of Foreign Assets Control (OFAC) had specifically granted Cubatabaco a license to pursue its petition, the matter should be allowed to proceed.

Moreover, the TTAB held that, despite the Cuban embargo the Cuban petitioners had standing based on enforceable rights, in that Cubatabaco claimed use in commerce throughout the world and widespread dissemination of the assertion that its cigars were also made in Cuba.

While the CACR generally prohibits transactions in the United States involving property, including trademarks, in which Cuba or a Cuban National has an interest, a general license found at 31 C.F.R. § 515.527 authorizes transactions related to the registration and renewal of trademarks in which Cuba or a Cuban national has an interest. However, this general license does not extend to the cancellation petition on the grounds that a trademark is geographically deceptively misdescriptive.

As a result, OFAC issued a specific license to Cubatabaco to petition for cancellation of Rodriguez’s registration. That license was later amended in response to an OFAC license amendment application, which Cubatabaco filed following the filing of Rodriguez’s motion to dismiss in an effort to clarify that they were authorized to file and prosecute a cancellation petition. As dictated previously by the courts, obtaining an OFAC specific license to bring this cancellation proceeding related to Cuban trademarks, is a jurisdictional requirement, rather than an element of either standing or grounds for cancellation. See, e.g. Cubaexport v. United States Department of Treasury, 516 F.Supp.2d 43, 48 (D.D.C. 2007) (OFAC license required to authorize transactions relating to Cuban trademarks).

It’s not everyday that we get to hear a judge’s take on OFAC regulations. These types of cases help to clarify licensing policy and make the sanctions regulations more transparent and easier to navigate. Although, it may make sense for OFAC to amend the general license at 31 C.F.R. §515.527 to include filing and prosecution of cancellation petitions before the USPTO, I don’t foresee it happening anytime soon. The aforementioned Cubaexport decision was rendered nearly four (4) years ago and OFAC has yet to amend the general license at 515.527 to include those types of actions in relation to trademarks. Nonetheless, it certainly seems that OFAC’s current licensing policy is geared towards authorizing the filing and prosecution of cancellation petitions. This is good news for those Cuban parties seeking to protect their U.S. registered trademarks.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.