April 7, 2010 / 1:54 AM / 9 years ago

UPDATE 2-Pernod loses lawsuit on Bacardi's Havana Club rum

* Bacardi sale in US of Havana Club rum is allowed

* No trademark violation found

* Pernod likely to appeal (Adds comment from Bacardi)

By Jonathan Stempel

NEW YORK, April 6 (Reuters) - A U.S. judge rejected a lawsuit by Pernod Ricard SA (PERP.PA) to stop rival Bacardi Ltd from selling “Havana Club” branded rum in the United States.

Pernod is likely to appeal the ruling, the latest legal twist in a decades-long trademark dispute.

Both companies sell rum under the Havana Club name, Pernod outside the United States and Bacardi within it.

Tuesday’s ruling by U.S. District Judge Sue Robinson in Wilmington, Delaware, was the latest in more than 13 years of U.S. litigation between the companies over which company controls the trademarked name.

In its 2006 lawsuit filed federal court in Wilmington, Delaware, Pernod Ricard USA LLC claimed Bacardi USA Inc had no right to use the Havana Club trademark where it had begun in Florida selling rum under that name.

Pernod, which sold 3.4 million cases of Havana Club during its last fiscal year, also accused Bacardi of false advertising by misleading consumers into believing that its rum is made in Cuba, as Pernod’s is, when in fact it is made in Puerto Rico.

But Robinson concluded that Bacardi’s rum has a Cuban heritage, having derived from a family recipe first used in that country around 1930, roughly three decades before Fidel Castro took power.

In her 22-page ruling, Robinson also found that because Bacardi’s labels “truthfully (and prominently)” show that its rum is “distilled and crafted in Puerto Rico,” its labeling is neither false nor misleading.

Pernod showed “no evidence that today’s Havana Club rum product differs from the original pre-revolutionary Cuban rum in any significant respect,” Robinson wrote. “As the expression goes, ‘if it looks like a duck, swims like a duck and quacks like a duck, then it probably is a duck.”

Vincent Palladino, a partner at Ropes & Gray LLP in New York representing Pernod, said: “We are very disappointed in the ruling. We believe the judge committed fundamental errors on the law, and in all likelihood we will be appealing.”

A Bacardi spokeswoman in an emailed statement said the company applauds the decision. “This is yet another Court decision supporting Bacardi’s legitimate and rightful ownership of the Havana Club rum trademark and brand,” she wrote.

According to the ruling, Havana Club rum was developed by the Arechabala family in Cuba, where the family’s assets were seized by Castro’s government in 1960.

By the mid-1990s, a Cuban company had partnered with Pernod to export Cuban-made run under the Havana Club brand, except to the United States because of a U.S. trade embargo.

Bacardi, meanwhile, has said it bought the rights to the Havana Club trademark and remaining rum assets still owned by the Arechabala family in 1997.

The only Havana Club-branded rum sold in the United States is Bacardi’s, Robinson said.

Pernod Ricard USA is based in Purchase, New York, and Bacardi USA in Miami.

The case is Pernod Ricard USA LLC v. Bacardi USA Inc, U.S. District Court, District of Delaware, No. 06-505. (Reporting by Jonathan Stempel, editing by Leslie Gevirtz, Gary Hill)

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