Cuban Licensing Requirement

Licensing Requirement For Cuban Company's Application to Renew Trademark in 2011

United States views on international law (based on the document “Digest of U.S. Practice in International Law”): On March 29, 2011, the U.S. Court of Appeals for the District of Columbia Circuit affirmed the lower court's decision granting summary judgment for OFAC in Empresa Cubana Exportadora de Alimentos y Productos Varios d/b/a Cubaexport v. OFAC, 638 F.3d. 794 (D.C. Cir. 2011). Cubaexport had registered its HAVANA CLUB trademark with the U.S. Patent and Trademark Office (“PTO”) in 1976, and an affiliate of Cubaexport renewed it in 1996 under a general license in the Cuban Assets Control Regulations authorizing transactions related to the registration and renewal of trademarks. 31 CFR § 515.527(a). In 1998, Congress modified that regulatory authorization to exclude registration and renewal of trademarks connected to confiscated properties. Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999, Pub. L. No. 105-277, § 211(a)(1), 112 Stat. 2681, 2681–88 (1988) (“Section 211”). In seeking renewal of the trademark, Cubaexport did not initially rely on the general license provision, and instead sought a specific license from OFAC to authorize payment of the registration fee. OFAC declined to grant the specific license based on foreign-policy guidance provided by the State Department and other factors. PTO accordingly denied Cubaexport's request to renew the trademark registration. Cubaexport filed suit against OFAC in federal district court, and the court granted summary judgment for OFAC. For earlier developments in the case, see this world legal encyclopedia in relation with the year 2009 at 648–49, World Encyclopedia of Law 2007 at 828–30, and World Encyclopedia of Law 2006 at 1006–15.

The majority opinion of the D.C. Circuit rejected both of Cubaexport's main arguments invoking the presumption against retroactivity and the substantive due process doctrine. The court found the presumption against retroactivity inapplicable because the Cuban Assets Control Regulations had long stated that the Secretary of the Treasury's authorization to register and renew trademarks notwithstanding the general prohibition on transactions involving Cuban-owned companies could be revoked at any time. As to substantive due process, the parties agreed that the 1998 Act did not involve a fundamental right. The court found that the 1998 Act was rationally related to the legitimate government goal of isolating Cuba's government and hastening a transition to democracy. The Court also disagreed with Cubaexport's contention that OFAC's actions were arbitrary and capricious in violation of the Administrative Procedure Act, 5 U.S.C. § 706(2)(A). In particular, the court rejected Cubaexport's complaint that OFAC should not have relied on the State Department's guidance: “The State Department and OFAC are parts of a single Executive Branch headed by one President… [T]he State Department is an active participant in the Nation's foreign policy, and the Cuban embargo is of course a tool of foreign policy.” 638 F.3d. at 803. Judge Silberman dissented, opining that the 1998 Act should apply only when a trademark is initially registered after 1998. Id. at 806.***

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See Also

• Sanctions
• Export Controls
• International Restrictions
• Litigation

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Notes and References

1. *** Editor's note: On January 27, 2012, Cubaexport filed a petition for certiorari in the Supreme Court of the United States. The United States filed a brief opposing certiorari on April 2, 2012. On May 14, 2012, the Supreme Court issued an order denying certiorari.