In what may be the longest running trademark dispute in the United States, the U.S. Trademark Trial and Appeal Board (“TTAB”) in December 2022 ordered the cancellation of the COHIBA and COHIBA (stylized) registrations owned by General Cigar Co. Inc. (“General Cigar”), based on Article 8 of the Pan American Convention. However, the battle is far from over.

The TTAB proceeding was initiated by Cuban cigar company Empresa Cubana Del Tabaco d.b.a. Cubatabaco (“Empresa”), which owns registrations for COHIBA in Cuba but which has never sold Cohiba-branded cigars in the U.S. General Cigar, based in Richmond, Virginia, owns the U.S. trademark registrations for COHIBA.

Empresa first filed trademark registrations for the Cohiba mark in Cuba in 1969. In 1978, before the mark became famous in the United States, General Cigar started selling Cohiba-branded cigars in the U.S. It suspended the brand in 1987 but resumed it in 1992, by which time Cigar Aficionado had extolled the virtues of the Cuban Cohiba cigars. In 1995, General Cigar obtained U.S. trademark registrations for COHIBA. The Cuban Asset Control Regulations, which were first adopted in 1963, became statutory in 1996.

In 1997, Empresa received a special license from the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”) to engage in litigation with respect to the COHIBA trademark in the U.S. Empresa then sued General Cigar in the US. District court for the Southern District of New York, alleging trademark infringement and asking the court to cancel General Cigar’s COHIBA registrations.

The District Court allowed Empresa’s claim of trademark infringement. The court found that General Cigar lost its priority in the COHIBA mark by abandoning it in 1987 and not resuming use until 1992, by which time Empresa’s COHIBA brand had become famous in the US. The District Court ordered the cancellation of General Cigar’s COHIBA registrations, prohibited General Cigar from further use of COHIBA mark, and also ordered the recall of all goods being offered for sale by General Cigar under the COHIBA mark.

General Cigar appealed this decision to the Court of Appeals for the Second Circuit, which reversed the District Court’s finding of trademark infringement, vacated the cancellation of General Cigar’s registrations and vacated the recall ordered by the District Court. Empresa reiterated its argument based on the fame of its COHIBA mark in the United States. The Second Circuit ruled, however, that the Cuban Asset Control Regulations barred Empresa’s acquisition of the COHIBA mark.

The Second Circuit said that “granting this relief to Cubatabaco would entail a transfer from General Cigar to Cubatabaco of a “right, remedy, power, privilege, or interest with respect to [the COHIBA mark]… As it is exactly this brand of property right transfer that the embargo prohibits, we cannot sanction a grant of injunctive remedy to Cubatabaco in the form of the right, privilege, and power to exclude General Cigar from using its duly registered mark.” The Second Circuit then remanded the case to the District Court for further action in accordance with this decision.

Once the District Court proceedings concluded, the TTAB resumed the cancellation proceeding at issue. General Cigar filed a motion for summary judgment based on the grounds that Empresa lacked standing to pursue the cancellation proceeding and based on the fact that Empresa’s claims were prohibited by claim and issue preclusion.

The Board granted General Cigar’s motion for summary judgment and Empresa appealed to the Court of Appeals for the Federal Circuit. In 2014, the Federal Circuit noted that the Cuban Asset Control Regulations contain a general license authorizing Cuban entities to “engage in transactions related to the registration and renewal of trademarks.” Based upon that license, it held that the USPTO may consider a petition to cancel a trademark registration to protect a trademark in which a Cuban entity has an interest.

The case was remanded to the TTAB, where Empresa decided not to pursue the “well-known” mark doctrine claims, focusing instead on Article 8 of the Pan American Convention. That article allows a petitioning party to seek cancellation of another registration if (1) the petitioning party’s registration enjoys legal protection in another contracting state (in this case Cuba) before the respondent’s application filing date and (2) the respondent either had knowledge of the petitioner’s mark before filing the application or the petitioner used the mark in the US prior to the respondent’s filing date.

The TTAB found that Empresa had satisfied the elements of Article 8 of the Pan American Convention and granted the petition to cancel the COHIBA registrations owned by General Cigar.

This decision puts an interesting spin on cancellation proceedings because trademark law generally plays in favor of the first user of the mark in U.S. commerce. Empresa has never sold any products bearing the COHIBA mark in the US due to the Cuban Embargo. Empresa’s success in pressing its rights under the Pan American Convention adds a new layer of considerations that are important for trademark strategy in the United States.

For years, General Cigar has been sheltered from the effect of the Pan American Convention because of the Cuban Trade Embargo. That shield may be slipping away, and it has no relevance to brands that are registered in Latin American countries other than Cuba.

Thus, one lesson from the Cohiba dispute is that companies should take care not to adopt marks in the Unites States that they know to be registered to others in other countries. And to be most secure in pursuing trademark registration in the United States, it may sometimes be prudent to check for potentially conflicting registered marks in countries that are well- known for providing the goods of interest. For example, a company seeking protection for a new mark for use in connection with rum should do a search in all countries that are a party to the Pan American Convention in order to get a full understanding of the risk of committing to that mark in the United States and chance of obtaining a sound registration here.

General Cigar Co has been using the mark for many years so it’s not surprising that it is not taking this decision sitting down and has already filed an appeal. Since the TTAB decision doesn’t limit General Cigar’s use of the mark and General Cigar has been using the mark for many years, it is likely that it will continue selling the product, at least for now. It will be interesting to see what next steps the parties take and how the case will be decided on in the appeal.