## Facts

- Before the Cuban Revolution, José Arechabala, S.A., produced rum under the “Havana Club” mark in Cuba.
- In 1960, the Cuban government expropriated Arechabala’s assets without compensation.
- A Cuban state enterprise later obtained a U.S. registration for “Havana Club” (1976).
- In the 1990s, Cuban entities and Pernod Ricard structured transactions that purported to assign the U.S. registration to Havana Club Holding, S.A. (HCH), with Havana Club International, S.A. (HCI) as the Cuban producer selling “Havana Club” rum outside the United States.
- Because the transactions involved Cuban interests, they implicated the Cuban Assets Control Regulations (CACR) administered by OFAC and required OFAC authorization.
- OFAC issued a specific license for a “Havana Club” transaction, then later revoked it retroactively.
- Bacardi acquired claimed residual “Havana Club” rights from the Arechabala family and began distributing rum in the United States under the “Havana Club” name.
- HCI had never sold rum in the United States due to the embargo.

## Issues

1. Whether the CACR and the Cuban embargo rendered void an assignment of a U.S. trademark registration involving Cuban interests, eliminating enforceable rights in the assignee.
2. Whether treaty-based trade name protections under the Inter-American Convention could be enforced despite later-enacted federal restrictions tied to Cuban expropriations.
3. Whether a Cuban producer barred from selling in the United States had standing to bring a Lanham Act § 43(a) false advertising claim based on a competitor’s U.S. marketing.

## Decision

- The court affirmed judgment for defendants.
- The court held the CACR barred the assignment of the U.S. “Havana Club” registration to HCH absent a valid OFAC license; the retroactive revocation left the assignment void.
- The court held statutory restrictions enacted in 1999 precluded reliance on the Inter-American Convention to enforce “Havana Club” trade name rights connected to Cuban expropriations.
- The court held HCI lacked standing under Lanham Act § 43(a) because it could not lawfully sell in the U.S. market and alleged injury depended on speculative future market entry.

## Legal Principles

- Transactions transferring property interests in which Cuba or Cuban nationals have an interest are prohibited under the CACR unless authorized by OFAC; without valid authorization, the purported transfer is legally ineffective.
- Retroactive revocation of an OFAC license can eliminate the legal basis for a previously authorized transaction, leaving no enforceable rights derived from that transaction.
- When a later-enacted federal statute conflicts with treaty-based rights in domestic litigation, the statute controls to the extent of the conflict.
- Lanham Act § 43(a) standing requires a non-speculative commercial injury connected to U.S. commerce; inability to participate legally in the U.S. market defeats claims resting on competitive harm in that market.

## Conclusion

The Second Circuit concluded that the Cuban embargo regime invalidated the plaintiffs’ claimed U.S. trademark title, Congress limited treaty-based enforcement tied to Cuban expropriations, and a Cuban producer excluded from the U.S. market could not sue for false advertising based on conjectural future competition.


Havana Club Holding, S.A. v. Galleon S.A., 203 F.3d 116 (2d Cir. 2000)