Cuba is famous for cigars, and COHIBA brand cigars are arguably the most famous Cuban cigars in the world. But because of the Cuban embargo, COHIBA brand cigars cannot be legally sold or imported into the United States. But as recently decided by the Federal Circuit, the Cuban owners of the COHIBA mark still have a right to seek cancellation of a competitor’s registration of the same mark in the United States.

Empressa Cubana del Tabaco (d/b/a “Cubatabaco”) is the maker of the original COHIBA brand cigar, which it markets throughout the world (but not directly in the United States). Cubatabaco obtained a Cuban trademark registration on COHIBA for cigars in 1969, and has been selling them outside of Cuba since at least 1982. In 1981, General Cigar obtained a registration for COHIBA in the United States, and sold cigars under that brand until 1987. In 1992, General Cigar relaunched a COHIBA cigar in the United States, and has sold cigars under that brand ever since.

In 1997, Cubatabaco filed an intent-to-use application to register COHIBA for cigars in the United States, and at the same time filed petitions in the Trademark Trial and Appeal Board to cancel General Cigar’s registrations for the same mark for the same goods. Later that year, it commenced trademark litigation against General Cigar, and stayed the TTAB proceedings. Eventually, Cubatabaco prevailed in its litigation, and General Cigar was ordered to transfer all its trademark rights to Cubatabao. However, the Second Circuit reversed Cubatabaco’s initial trial court victory, and held that the Cuban embargo (as enacted in US statutory law) prohibited Cubatabaco from obtaining a transfer of the trademark rights as it sought in court, and dismissed all of its claims. Empresa Cubana del Tabaco v. Culbro Corp. (2nd Cir. 2005). General Cigar then asked the district court to dismiss the stayed cancellation proceedings, but the district court refused to do so. General Cigar appealed, and this time the Second Circuit upheld the trial court’s decision not to dismiss those proceedings. Empresa Cubana del Tabaco v. Culbro Corp. (2nd Cir. 2008).

So Cubatabaco resumed its cancellation proceedings in the TTAB. The TTAB decided that Cubatabaco lacked standing to pursue cancellation, based on the Second Circuit’s decision that Cubatabaco was prohibited by law from obtaining transfer of the COHIBA mark, so accordingly it also should not be allowed to cancel the mark.

The Lanham Act states that cancellation proceedings can be pursued by “any person who believes that he is or will be damaged . . . by the registration of a mark.” 15 U.S.C. s. 1064. The Federal Circuit reversed the TTAB, essentially finding that even if Cubatabaco could not obtain transfer of the mark COHIBA, its foreign registration (along with the PTO’s denial of its application to register the same mark) gave it a sufficient interest to seek cancellation of the mark. Of course, as discussed here before, use of a mark must be “lawful” in order to obtain federal trademark registration. Given that it is still illegal for Cubatabaco to sell its product in the United States, this seems to be an instance of lots of smoke with no real fire. Unless the United States’ embargo ends while this matter is still pending, Cuban COHIBA will never be legally sold in the United States and Cubatabaco can never validly establish its brand here. Nonetheless, this opinion may open the door for other foreign trademark holders to seek cancellation of US-registered marks even before their product or services are available domestically.