Opinion ID: 521946
Heading Depth: 1
Heading Rank: 1

Heading: Of Vanilla Beans and Prune Macerations

Text: 2 In 1872 a Cuban business was established to manufacture a high quality rum under the name Ron Matusalem. In 1944, Alvarez, Camp y Cia obtained a United States trademark registration for the trademark Matusa. In 1948, Ron Alvarez Camp, S.A., assignee of Alvarez, Camp y Cia obtained a registration for the trademark and corporate logo Matusa. 3 Prior to his death in 1955, Claudio Alvarez Lefebre, majority owner of Ron Alvarez Camp, wrote in a book his secret formulas for making rums sold under the trademark Ron Matusalem. Following his death, ownership of the business and the trade secrets passed to his wife and children. In the late 1950's and early 1960's the family members fled from Cuba to Miami, bringing the trade secrets with them. 4 In 1961, two corporations were created to carry on the family's rum making enterprise: Matusa, a Florida corporation, was incorporated on May 4, 1961; and Compania Licorera Oriente (Licorera), a Puerto Rican corporation, was incorporated on May 9, 1961. On May 16, 1961, Ron Alvarez Camp granted a franchise to Licorera, giving it essentially worldwide rights to make and sell Ron Matusalem rums under Ron Alvarez Camp's trademarks. The franchise provided that the nature and quality of the rums sold under the trademarks were subject to the control of Ron Alvarez Camp, and gave Ron Alvarez Camp the right to terminate the agreement upon the failure of Licorera to comply with its provisions. 5 On June 14, 1961, Ron Alvarez Camp assigned to Matusa all of its trademarks worldwide, its trademark registrations and good will, and all of its rights under the franchise agreement with Licorera. The effect of this assignment was to substitute Matusa for Ron Alvarez Camp as the trademark and trade secret owner for all legal purposes outside of Cuba. In 1964, Ron Matusalem, Limited (Limited) was incorporated in the Bahamas, and on October 20, 1964, Licorera granted it an exclusive sub-franchise to manufacture and distribute Ron Matusalem rums in all countries of the world except Cuba. In the sub-franchise agreement, Matusa was given the rights to receive royalties, to control the quality of the rums produced by Limited, and to terminate the sub-franchise for specific breaches. Although Limited's territories were exclusive and worldwide (excepting only Cuba), Licorera reserved the right to grant similar sub-franchises in the future covering any country or territory except the British Isles, Europe, Canada, Bermuda and the Bahamas. If any such sub-franchise were granted, that franchised territory would be excluded thereafter from Limited's sub-franchise. 6 In 1967, Inc. was incorporated in Puerto Rico and Licorera granted it a sub-franchise covering all countries of the world, with the exception that Inc. could not use the trademarks in Cuba, the British Isles, Europe, Canada, Bermuda or the Bahamas without the permission of Limited. Under the terms of the sub-franchise, Inc. was to pay to Matusa royalties equaling ten percent of its annual net profit. As in the sub-franchise granted to Limited, Matusa was expressly given the right to terminate Inc.'s sub-franchise for specific breaches of its terms. 1 7 In 1978, United Liquors Corporation (United) was incorporated. United took over many billing and invoicing functions that Matusa had previously performed for Inc. in the United States. 2 8 From the time of the incorporations of Matusa, Licorera, Limited, and Inc., until September, 1981, all the corporations were operated under the coordinated direction of three people; Gerardo Abascal, Sr., Gerardo Abascal, Jr., and Ricardo Abascal. Gerardo Sr. is the son-in-law of Claudio Alvarez Lefebre. Gerardo Jr. is his son and Ricardo is his brother. Between mid-June and late September, 1981, the Abascals were dismissed from their positions as principal officers of Matusa, Licorera and Limited. The Abascals retained control over Inc., while the plaintiff's side of the family controlled Matusa, Limited and Licorera. 3