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Empresa Cubana Del Tabaco v. General Cigar Co., Inc.

United States Court of Appeals, Federal Circuit

June 4, 2014

EMPRESA CUBANA DEL TABACO, (doing business as Cubatabaco), Appellant,

Appeal from the United States Patent and Trademark Office, Trademark Trial and Appeal Board, in Cancellation No. 92025859.


DAVID B. GOLDSTEIN, Rabinowitz, Boudin, Standard, Krinsky & Lieberman, P.C., of New York, New York, argued for appellant. With him on the brief was MICHAEL KRINSKY.

ANDREW L. DEUTSCH, DLA Piper U.S. LLP, of New York, New York, argued for appellee. With him on the brief was AIRINA RODRIGUES.

Before RADER,[*] TARANTO and HUGHES, Circuit Judges. RADER, Circuit Judge.


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RADER, Circuit Judge.

Empresa Cubana Del Tabaco (d/b/a Cubatabaco) challenges the Trademark Trial and Appeal Board's grant of summary judgment to General Cigar Co., Inc. on the basis that Cubatabaco--a Cuban company--lacks standing to seek cancellation of General Cigar's two registrations for the trademark COHIBA adversely affect (the Registrations). Because this court finds that Cubatabaco has a statutory cause of action to petition the Board to cancel the Registrations, and that issue and claim preclusion do not bar Cubatabaco's Amended Petition to cancel the Registrations, this court vacates the Board's decision and remands for proceedings consistent with this opinion.


Both Cubatabaco and General Cigar manufacture and distribute cigars using the COHIBA mark. Empresa Cubana del Tabaco v. Culbro Corp., 399 F.3d 462, 464 (2d Cir. 2005). General Cigar, a Delaware corporation, owns two trademark registrations for the COHIBA mark for use in connection with cigars. J.A. 439, 482. The first, No. 1,147,309, issued on February 17, 1981 (First Registration) and the

Page 1272

second, No. 1,898,273, issued on June 6, 1995 for the mark in block letter format (Second Registration). Id.

Cubatabaco is a Cuban entity that owns the COHIBA mark in Cuba and supplies cigars bearing that mark throughout the world. Empresa, 399 F.3d at 464. The Cuban Assets Control Regulations, 31 C.F.R. Part 515 (CACR), prohibit Cubatabaco from selling cigars in the United States. The CACR generally prohibits a wide range of transactions with Cuban entities, including the importation of products of Cuban origin. See, e.g., 31 C.F.R. § § 515.201, 515.204. Of note, § 515.201(b) generally prohibits a " transfer of property rights . . . to a Cuban entity by a person subject to the jurisdiction of the United States."

The CACR is subject to exceptions. A general or specific license allows Cuban entities to engage in certain otherwise prohibited transactions. See, e.g., 31 C.F.R. § § 515.527(a)(1), 515.318. The CACR itself sets forth general licenses. For instance, § 515.527(a)(1) expressly authorizes Cuban entities to engage in transactions " related to the registration and renewal" of trademarks before the U.S. Patent and Trademark Office. Specific licenses, on the other hand, must be requested from the Department of Treasury's Office of Foreign Assets Control (OFAC). 31 C.F.R. § 515.318.

Here, Cubatabaco used a general license to attempt to register the COHIBA mark in the United States. Specifically, in January of 1997, Cubatabaco filed an application to register COHIBA for cigars and related goods. J.A. 711. Operating under the general license contained in 31 C.F.R. § 515.527(a)(1), Cubatabaco based its application on its registration of the same mark in Cuba, relying on Section 44(e) of the Lanham Act, 15 U.S.C. § 1126(e). Section 44(e) allows an applicant to rely on a foreign registration to register the same mark in the United States if the applicant has a bona fide intent to use the mark in commerce, and thus does not require actual use at the time of filing. J.A. 291. Cubatabaco also filed a petition to cancel the Registrations, which the U.S. Patent and Trademark Office cited as grounds for refusing registration to Cubatabaco because its mark created a likelihood of confusion. J.A. 307-08, 707.

Cubatabaco subsequently requested a special license from OFAC to commence litigation against General Cigar for its use of the COHIBA mark. In October of 1997, OFAC agreed and granted Cubatabaco a special license to " initiate legal proceedings in the U.S. courts and to otherwise pursue their judicial remedies with respect to claims to the COHIBA trademark." Empresa, 399 F.3d at 473-74. Shortly thereafter, on November 12, 1997, Cubatabaco sued General Cigar in the U.S. District Court for the Southern District of New York alleging trademark infringement and seeking, inter alia, to enjoin General Cigar's use of the COHIBA mark in the United States and to cancel General Cigar's competing Registrations. J.A. 486-502. A few weeks later, Cubatabaco requested that the Board suspend the cancellation proceedings pending the outcome of the district court action. The Board agreed and stayed the proceedings. J.A. 19, 733-34.

In June 2002, the district court granted partial summary judgment. Empresa Cubana Del Tabaco v. Culbro Corp., 213 F.Supp.2d 247, 286-87 (S.D.N.Y. 2002). The court cancelled the First Registration, finding that General Cigar had abandoned it during five years of non-use from 1987 to late 1992. Id. at 267-71.

In March of 2004, after a bench trial, the district court permanently enjoined General Cigar's ...

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