## Facts

- Prior to the Cuban Revolution, the Arechabala family produced and sold “Havana Club” rum in Cuba and exported it to the United States.
- In 1960, the Cuban government expropriated the Arechabala business without compensation.
- In 1976, a Cuban government entity obtained a U.S. trademark registration for “Havana Club” for rum.
- In 1994, Cuban interests in the mark were assigned to a joint venture involving Pernod’s corporate affiliate; OFAC approved the assignment in 1995.
- Bacardi obtained asserted rights from the Arechabala family and sold rum in the United States under the “Havana Club” name, with the rum produced in Puerto Rico.
- Bacardi’s bottle prominently displayed “Havana Club” and Cuban-themed imagery, but also included statements identifying the product as “Puerto Rican Rum” and identifying Bacardi’s U.S. business information.
- Pernod sued Bacardi under Lanham Act § 43(a)(1)(B), alleging the label falsely or misleadingly implied the rum was made in Cuba.
- The district court entered judgment for Bacardi, finding the label not false or misleading as to geographic origin; Pernod appealed.

## Issues

1. Whether Bacardi’s “Havana Club” label constitutes false or misleading advertising of geographic origin under Lanham Act § 43(a)(1)(B) when the label is evaluated as a whole.
2. Whether a reasonable consumer could be misled into believing the rum was made in Cuba despite express statements on the label identifying Puerto Rican origin.

## Decision

- The Third Circuit affirmed judgment for Bacardi.
- The court held that, considering the label as a whole, no reasonable interpretation could deem it false or misleading regarding geographic origin.
- The court concluded the label’s express statements of Puerto Rican origin defeated claims of literal falsity and implied misleadingness based on the brand name and imagery.

## Legal Principles

- A Lanham Act § 43(a)(1)(B) false advertising claim requires evaluating the advertisement or label in its full context; isolated words or images are not assessed in isolation.
- A place-evoking brand name does not, by itself, amount to an actionable factual claim that the product is made in that place.
- Clear, accurate, and prominent origin disclosures on a label can preclude a finding that the overall presentation is likely to mislead reasonable consumers about geographic origin.
- Where a label affirmatively states the product’s true origin, a plaintiff must still show that the label as a whole is likely to mislead; speculation based on evocative branding is insufficient.

## Conclusion

The Third Circuit held that Bacardi’s use of “Havana Club” with Cuban-themed branding did not violate Lanham Act § 43(a)(1)(B) because the label, read as a whole, clearly identified the rum as Puerto Rican and therefore could not reasonably be understood as falsely or misleadingly claiming Cuban origin.


Pernod Ricard USA, LLC v. Bacardi U.S.A., Inc., 653 F.3d 241 (3d Cir. 2011)