Havana Club Case
- Intellectual property
Published under the auspices of the Max Planck Foundation for International Peace and the Rule of Law under the direction of Rüdiger Wolfrum.
1 Although the WTO ruling in United States — Section 211 Omnibus Appropriations Act of 1998 (‘Havana Club’) concerns several provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (1994) (‘TRIPS Agreement’), the ruling stands out because it delineates the material scope of application of that Agreement. From the vantage point of the panel decision, it even amounts to an expansion of its scope. The panel tried to limit the scope of the TRIPS Agreement to the intellectual property rights mentioned in the section titles of Part II thereof. The Appellate Body, however, reversed this finding and clarified that the subject matters incorporated into the TRIPS Agreement by virtue of the general reference norm in Art. 2.1 form part of that Agreement.
B. Facts of the Case
2 The Havana Club case has to be seen in the context of the US—Cuba conflict. It has its origin in a dispute between the Bermuda-based company Bacardi Ltd and the France-based company Pernod Ricard SA on the use of the trademark and trade name ‘Havana Club’. In the United States, trademark and trade name owners who abandoned their rights after their businesses had been nationalized in the wake of the Cuban revolution could resort to Section 211 of the Omnibus Appropriations Act. It forbids the registration and renewal of these rights without the approval of the original holders. The European Union took legal action against this law before the WTO. Among other things, it claimed a violation of Art. 8 Paris Convention for the Protection of Industrial Property (‘Paris Convention’).
3 The essential question in the Havana Club case was whether trade names, as set out in Art. 8 Paris Convention, fall under the TRIPS Agreement. The outcome matters because the law enforcement under the TRIPS Agreement is much more advanced than the one under the Paris Convention, cf Art. 64.1 TRIPS Agreement (‘shall apply’) as compared to Art. 28 Paris Convention (‘may … be brought before the International Court of Justice’). The Panel answered the question in the negative. It drew on Art. 1.2 TRIPS Agreement that ‘[f]or the purposes of this Agreement, the term “intellectual property” refers to all categories of intellectual property that are the subject of Sections 1 through 7 of Part II’, excluding trade names (Report of the Panel 8.23 et seq), and on the introductory phrase of Art. 2.1 TRIPS Agreement ‘in respect of’, which the panel read as a limitation of the scope of the incorporated provisions from the Paris Convention (Report of the Panel 8.28 et seq).
4 As for Art. 1.2 TRIPS Agreement, the Appellate Body points out that one has to differentiate between ‘the subject of Sections 1 through 7 of Part II’ and ‘the titles of Sections 1 through 7 of Part II’, the former being broader, as Section 5 epitomizes which is entitled ‘Patents’ but speaks also of a ‘sui generis system’ for plant varieties (Report of the Appellate Body 335). Art. 2.1 TRIPS Agreement provides as follows: ‘In respect of Parts II, III and IV of this Agreement, Members shall comply with Articles 1 through 12, and Article 19, of the Paris Convention (1967).’ The negotiating history of this provision is not very instructive (Report of the Appellate Body 339). In sum, the Appellate Body concluded that Art. 1.2 TRIPS Agreement is not exhaustive (Report of the Appellate Body 335), a reading which the European Court of Justice incidentally endorses (cf European Court of Justice Dior  55). The Appellate Body based its argument on the fact that ‘Article 2.1 explicitly incorporates Article 8 of the Paris Convention (1967) into the TRIPS Agreement’ (Report of the Appellate Body 336). Furthermore, it elaborated that ‘[i]f the intention of the negotiators had been to exclude trade names from protection, there would have been no purpose whatsoever in including Article 8 in the list of Paris Convention (1967) provisions that were specifically incorporated into the TRIPS Agreement’(Report of the Appellate Body 338). Commensurate with the principle of effectiveness, which derives from the good faith (bona fide) principle in Art. 31(1) Vienna Convention on the Law of Treaties (1969), the reference in Art. 2.1 TRIPS Agreement to Art. 8 Paris Convention must have ‘meaning and effect’ (Report of the Appellate Body 338). In consequence, WTO Members are obliged to protect trade names.
D. Implications of the Case
5 It is disputed whether the results of the Havana Club case are applicable to other subject matters, in particular the international protection against unfair competition. Wadlow does not particularize the individual provisions of the Paris Convention referred to, but wants to apply them en bloc to Part II of the TRIPS Agreement, containing the substantive law (Wadlow 2-072). He underscores that the negotiators did not go into detail when drafting Art. 2.1. To bolster his argument, he refers to Section 1 of Part II and states ‘that the Paris Convention has no application at all to copyright or copyright-related rights’. However, the referred provisions can also apply independently, and not only in conjunction with the intellectual property rights regulated in Part II. As the Appellate Body found, the introductory phrase ‘in respect of’ does not condition the obligations of the WTO Members under the Paris Convention (Report of the Appellate Body 337). Thus, the protection of trade names has to be ensured ipso facto, irrespective of other safeguards for intellectual property. In my view, the findings of the Appellate Body are generalizable and have implications for other categories of industrial property within the meaning of Art. 1(2) Paris Convention as well. The Australia — Tobacco Plain Packaging case is likely to bring clarification in this regard. In the final analysis, Part II of the TRIPS Agreement concretizes and, in part, extends the Paris Convention, cf Arts 2.2 TRIPS Agreement, 19 Paris Convention (so-called ‘Paris plus’).
- D Jakob ‘Wem gehört “Havana Club”’? — Stationen eines hochprozentigen Handelskrieges — Zugleich: Bericht über den Report des WTO-Streitschlichtungspanels vom 6. August 2001, WT/DS176/R, und den Report des Appellate Body vom 2. Januar 2002, WT/DS176/AB/R’ (2002) 51 Zeitschrift für Gewerblichen Rechtsschutz und Urheberrecht Internationaler Teil 406–414.
- T Cottier and FM Abbott ‘Case: United States — Section 211 Appropriations Act of 1998 (“Havana Club”)’ in T Cottier Trade and Intellectual Property Protection in WTO Law: Collected Essays (Cameron May London 2005) 285–308.
- S Heim ‘Der Schutz von Handelsnamen unter dem TRIPS-Übereinkommen — Zugleich eine Anmerkung zur Entscheidung Anheuser-Busch EuGH, Rs. C-245/02’ (2005) 54 Zeitschrift für Gewerblichen Rechtsschutz und Urheberrecht Internationaler Teil 545–558.
- S Lester ‘Panel Report: United States — Section 211 Omnibus Appropriations Act of 1998 (WT/DS176/R) / DSR 2002:II, 683’ (WorldTradeLaw.net Dispute Settlement Commentary, 25 March 2006) <http://www.worldtradelaw.net> (20 February 2017).
- S Lester ‘Appellate Body Report: United States — Section 211 Omnibus Appropriations Act of 1998 (WT/DS176/AB/R) / DSR 2002:II, 589’ (WorldTradeLaw.net Dispute Settlement Commentary, 25 March 2006) <http://www.worldtradelaw.net> (20 February 2017).
- BM Hoekman and MM Kostecki The Political Economy of the World Trading System: The WTO and Beyond (3rd edn OUP Oxford 2009) 388–389.
- C Wadlow The Law of Passing-off: Unfair Competition by Misrepresentation (4th edn Sweet & Maxwell London 2011) 2-066–2-072.
- Joined Cases C-300/98 and C-392/98 Parfums Christian Dior v Tuk Consultancy and AsscoGerüste GmbH and Rob van Dijk v Wilhelm Layher GmbH  ECR I-11307.
- Paris Convention for the Protection of Industrial Property (signed 20 March 1883, entered into force 6 July 1884) 828 UNTS 107.
- Vienna Convention on the Law of Treaties (adopted 23 May 1969, entered into force 27 January 1980) 1155 UNTS 331.
- WTO Agreement on Trade-Related Aspects of Intellectual Property Rights, Including Trade in Counterfeit Goods (signed 15 April 1994, entered into force 1 January 1995) 1869 UNTS 299.
- WTO United States — Section 211 Omnibus Appropriations Act of 1998 — Report of the Appellate Body (1 February 2002) WT/DS176/AB/R.
- WTO United States — Section 211 Omnibus Appropriations Act of 1998 — Report of the Panel (1 February 2002) WT/DS176/R.