Opinion ID: 6985047
Heading Depth: 2
Heading Rank: 2

Heading: Trade Name Protection Under the Inter-American Convention

Text: HCI contends that Bacardi infringed its rights under the IAC to protection of the “Havana Club” trade name. The IAC provides that any manufacturer “domiciled or established” in a signatory country that uses a particular trade name or commercial name may enjoin the use of that name in another signatory country that is “identical with or deceptively similar to” its trade name. IAC, art. 18, 46 Stat. at 2928-30. A trade or commercial name need not be a registered to be protected. See IAC, art. 14, 46 Stat. at 2926. Rights to trade names and commercial names arising under treaties may be asserted under section 44(b) of the Lanham Act, which provides: Any person whose country of origin is a party to any convention or treaty relating to trademarks, trade or commercial names, or the repression of unfair competition, to which the United States is also a party ... shall be entitled to the benefits of this section under the conditions expressed herein to the extent necessary to give effect to any provision of such convention, treaty or reciprocal law.... 15 U.S.C. § 1126(b). Section 44(g) of the Lanham Act adds, “Trade names or commercial names of persons described in subsection (b) of this section shall be protected without the obligation of filing or registration whether or not they form parts of marks.” Id. § 1126(g). The terms “trade name” and “commercial name” are defined as “any name used by a person to identify his or her business or vocation.” Id. § 1127. On October 21, 1998, before the bench trial in this case, Congress passed section 211 of the Omnibus Act, which provides in pertinent part: (b) No U.S. court shall recognize, enforce or otherwise validate any assertion of treaty rights by a designated national or its successor-in-interest under sections 44(b) or (e) of the Trademark Act of 1946 (15 U.S.C. 1126(b) or (e)) for a mark, trade name, or commercial name that is the same as or substantially similar to a mark, trade name, or commercial name that was used in connection with a business or assets that were confiscated unless the original owner of such mark, trade name, or commercial name, or the bona fide successor-in-interest has expressly consented. (c) The Secretary of the Treasury shall promulgate such rules and regulations as are necessary to carry out the provisions of this section. (d) In this section: (1) The term “designated national” has the meaning given such term in section 515.305 of title 31, Code of Federal Regulations, as in effect on September 9, 1998, and includes a national of any foreign country who is a successor-in-interest to a designated national. (2) The term “confiscated” has the meaning given such term in section 515.336 of title 31, Code of Federal Regulations, as in effect on September 9, 1998. 112 Stat. at 2681-88. Section 211(b) applies in this case. 10 This Court is a “U.S. court” Under section 211(b). 11 HCI is a “designated national” under section 211(b) because HCI is organized under the laws of Cuba, is domiciled in Cuba, and has its principal place of business in Cuba. See 31 C.F.R. § 515.305 (defining “designated national” to mean “Cuba and any national thereof including any person who is a specially designated national”). Applying section 211(b), the District Court ruled that it precluded HCI’s assertion of treaty rights under sections 44(b) or (e) of' the Lanham Act and thereby precluded HCI’s claims under the IAC. HCI disputes this ruling on several grounds. HCI first argues that it does not need sections 44(b) and (e) of the Lanham Act to assert its rights under the IAC because upon ratification, the IAC became law in the United States without the aid of additional legislation. See Bacardi Corp. of America v. Domenech, 311 U.S. 150, 161, 61 S.Ct. 219, 85 L.Ed. 98 (1940). This argument presumes that when Congress enacted section 44(b) of the Lanham Act, it intended to incorporate into law only those treaties that were not self-executing at the time. The original text of section 44(b) and the legislative history, however, suggest otherwise. When enacted in 1946, section 44(b) of the Lanham Act specifically incorporated the treaty rights of [plersons who are nationals of, domiciled in, or have a bona fide and effective business or commercial establishment in any foreign country, which is a party to (1) the International Convention for the Protection of Industrial Property ... or (2) the General Inter-American Convention for Trade Mark and Commercial Protection ... or (3) any other convention or treaty relating to trade-marks, trade or commercial names, or the repression of unfair competition to which the United States is a party.... Trademark Act of 1946, ch. 540, § 44(b), 60 Stat. 427, 442 (emphasis added). 12 Although the- Supreme Court had already ruled the IAC to be self-executing, see Bacardi Corp., 311 U.S. at 161, 61 S.Ct. 219, Congress specifically referred to the IAC in section 44(b) because Congress simply was not sure whether the trademark treaties had acquired the force of law. The Senate Report explained: These conventions have been ratified, but it is a question whether they are self-executing, and whether they do not need to be implemented by appropriate legislation. Industrialists in this country have been seriously handicapped in securing protection in foreign countries due to our failure to carry out, by statute, our international obligations. S. Rep. No. 79-1333 (1946), reprinted in 1946 U.S. Code & Cong. Serv. 1274, 1276. Accordingly, Congress intended the Lan-ham Act “[t]o carry out by statute our international commitments to the end that American traders in foreign countries may secure the protection to their marks to which they are entitled.” Id. (emphasis added). Indeed, referring specifically to “inter-American conventions,” Congress aimed to eliminate “these sources of friction with our Latin-Ameriean friends” and “facilitate mutual trade in this hemisphere” by ensuring the protection of their trademark rights in the United States. Id. 13 Therefore, HCI must assert its rights under the IAC pursuant to section 44(b) of the Lanham Act. Second, HCI argues that, because HCI’s rights to the “Havana Club” trade name existed before Congress enacted section 211(b), the District Court improperly applied section 211(b) retroactively. To determine whether section 211(b) may apply retroactively, we would normally first inquire “whether Congress has expressly prescribed the statute’s proper reach.” Landgraf v. USI Film Products, 511 U.S. 244, 280, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994). Since section 211 does not clearly indicate that it should be applied retroactively, the traditional presumption against retroactivity would likely apply. See id. In this case, however, we can apply section 211(b) to bar relief on HCI’s trade name claim because when an “intervening statute authorizes or affects the propriety of prospective relief, application of the new provision is not retroactive.” Id. at 273, 114 S.Ct. 1483 (emphasis added); see American Steel Foundries v. TriCity Central Trades Council, 257 U.S. 184, 201, 42 S.Ct. 72, 66 L.Ed. 189 (1921) (applying Clayton Act to injunction entered before its enactment because “relief by injunction operates in futuro and the right to it must be determined as of the time of the hearing”); Duplex Printing Press Co. v. Peering, 254 U.S. 443, 464, 41 S.Ct. 172, 65 L.Ed. 349 (1921) (same); Salute v. Stratford Greens Garden Apartments, 136 F.3d 293, 298 n. 2 (2d Cir.1998) (“When an intervening repeal of a 'statute affects the propriety of prospective relief, a court should apply the law in effect at the time it renders its decision.”). Because HCI seeks only injunctive relief, this Court can properly apply section 211(b). Third, HCI argues that section 211(b) does not apply when the trade name at issue has been abandoned. Section 211(b) precludes enforcement of rights under section 44(b) for a trade name “that was used in connection with a business or assets that' were confiscated unless the original owner of such mark, trade name, or commercial name, or the bona fide successor-in-interest has expressly consented.” 112 Stat. at 2681-88. By “confiscated,” section 211(b) refers to the nationalization, expropriation, or other seizure of property by the Cuban Government on or after January 1, 1959. See 31 C.F.R. § 515.336. It is undisputed that JASA used the “Havana Club” name until the Cuban government expropriated the business in 1960 and has not expressly consented to HCI’s use of the “Havana Club” name. Nevertheless,' HCI argues that JASA had abandoned its rights to the “Havana Club” trade name long before HCI started to use the-name (as “Havana Club International”) in 1994.. Despite the lack of an explicit abandonment defense, HCI urges this Court to construe section 211(b) to include an abandonment exception because (1) interpreting section 211(b) otherwise would abrogate the IAC, and (2) abandonment, as a defense that arises out of common law, must not be presumed to be abrogated by section 211(b) absent express indication of Congress’s intent to do so. However, we will, not create an abandon•ment exception to section 211(b). Section -211(b) requires only that a trade name “was used” in connection with a confiscated business or asset, not that -the trade name continues to be used. See United States v. Wilson, 503 U.S. 329, 333, 112 S.Ct. 1351, 117 L.Ed.2d 593 (1992) (“Congress’ .use of a verb tense is significant in construing statutes.”). Moreover, Congress knows how to enact an abandonment defense; it has already provided conditions under which any trademark, service mark, collective mark, or certification mark shall be deemed abandoned. See 15 U.S.C. § 1127. It is not likely that Congress wished to disadvantage a company that understandably ceased to use its trade name after the confiscation of its business. Fourth, HCI argues that it should be allowed to prove that the “Havana Club” trade name was never confiscated. Section 211(d)(2), incorporating by reference 31 C.F.R. § 515.336, defines “confiscated,” in pertinent part, as property, nationalized, expropriated, or otherwise seized by the Cuban government on or after January 1, 1959, “[without the property having been returned or adequate and effective compensation provided,” § 515.336(a)(1). See 112 Stat. at 2681-88. The District Court found that “all of JASA’s assets were taken and that it received no compensation.” Havana Club Holding IV, 62 F.Supp.2d at 1095 n. 8. HCI argues that it had no opportunity to conduct discovery to determine whether JASA had a positive net value at the time of expropriation, because Congress did not enact section 211 until well into the proceedings, and because the District Court implicitly denied its motion to conduct discovery on the matter by applying section 211. We disagree with HCI’s premise that no compensation is “adequate and effective” compensation under section 515.336(a)(1) where the confiscated business allegedly had no positive net value at the time of expropriation. The embargo’s definition of confiscated property contemplates only three ways in which property expropriated by Cuba can avoid becoming classified as “confiscated.” Cuba can either return the property, provide “adequate and effective compensation,” or settle the property claim pursuant to an international claims settlement agreement or other mutually accepted settlement procedure. See 31 C.F.R. § 515.336(a). Where Cuba has not returned JASA’s property, not made even a gesture toward compensation, and not settled the claim, the confiscation inquiry ends.