Brussels, 06/08/2001 (Agence Europe) - On Monday, the World Trade Organisation rendered public the final report of the special group responsible for arbitrating in the dispute between the Union and the United States regarding the brand of rum "Havana Club" (see EUROPE of 9 and 10 July, p.9). This report, handed to Brussels and Washington last month under the seal of confidentiality, says that the Europeans are perfectly right in confirming the illegality of Section 211 of the American finance legislation in that, in concrete terms, it deprives holders of trade brands of the possibility of claiming their intellectual property rights in American law. The Union which had opted for a comprehensive approach in this case rather than focusing on the specific case of Pernod-Ricard - the holder of the brand -, nevertheless remains with "important questions relating to the system" and thus intends appealing against certain conclusions drawn by the panel. The United States will probably do likewise.
The report, that still needs the backing of the institution's Dispute Settlement Body, "comprises positive elements for the EU but also raises important questions relating to the system", says the Commission in a press release published the same day. Among the elements regarded as positive in Brussels is the contradiction established between Section 211 (designed to limit the rights of a holder of brand names or commercial denominations having previously been held by Cubans expropriated during the revolution) and Article 42 of the Multilateral Agreement on aspects of intellectual property rights affecting trade (TRIPS), which should enable Pernod-Ricard to turn to the American courts to secure the registration of its brand of rum in the United States. The Commission is also comforted in this sense by the explicit mention that is made in an American declaration stipulating that Section 211 is not applicable when a trade brand does not benefit from legal protection. According to the Commission, this means that this provision is not applicable to the "Havana Club" dispute as the "first Cuban owner of the brand, the Archebaia family, renounced its rights in 1973", or three years before Cubaexport bought it to sell it to the joint-venture Pernor-Ricard (Havana Club Holdings) in 1993. One may nevertheless expect this interpretation running up against most vigorous opposition from the American firm Bacardi, which largely used Section 211 to prevent its European rival exploiting the brand in the United States.
It is around there that the agreement between Brussels and Geneva stops. The panel indeed rejected all the other European arguments (violation of national treatment clauses, most favoured nation and protection conferred by the Paris Convention on brands, etc.), generally considering that it is up to the members of the WTO to freely decide whether or not to approve a brand. An interpretation of TRIPS that worries Brussels, as it seems to rule out commercial brands from the Agreement's field of application.