President Obama recently called on Congress to lift the U.S. embargo on Cuba. Cuba’s approximately 11 million residents located only 100 miles off the coast of Florida, and its growing popularity as a destination for U.S. tourism, has many companies chomping at the bit to seize this opportunity and a market that has been closed to U.S. companies for more than 50 years. While many estimate that the embargo will likely continue for more than a year, anyone preparing to do business in Cuba should include Cuban trademark applications and registrations in its preparations.
The thaw in diplomatic relations between Cuba and the U.S. changes the trademark landscape dramatically. While the embargo has not precluded U.S. companies from obtaining trademark registrations in Cuba, it has prevented those companies from doing business in Cuba. Moreover, Cuban trademark registrations are vulnerable to cancellation once use of the registered trademark is discontinued for three consecutive years. The inability to use the trademarks and this associated vulnerability to cancellation caused many companies to historically place limited value in registering their marks in Cuba.
That thinking appears to be changing given recent events. Importantly, Cuba is a first-to-file country and trademark registration is awarded to the first applicant to file. China has a similar system and a quick review of what has been happening in China illustrates what many expect for Cuba. In China, trademark opportunism abounds. It is not uncommon to see unrelated companies registering in China the well-known trademarks of others to sell those trademarks back to their owner for an exorbitant price or otherwise use those registrations as leverage when the trademark owner attempts to expand into China. It would be surprising not to see similar tactics in Cuba as relations improve.
U.S. companies hoping to avoid issues with using their own trademarks in Cuba are wise to consider filing Cuba trademark applications for those marks. Applications are not expensive and will take some time to be examined and issue. Further, any trademark registrations that issue will not be vulnerable to cancellation for three years after issuance. In other words, vulnerability should not be an issue provided the embargo is lifted in the next several years, which is suddenly a very imminent possibility.
DISCLAIMER: The information provided is for general informational purposes only. This post is not updated to account for changes in the law and should not be considered tax or legal advice. This article is not intended to create an attorney-client relationship. You should consult with legal and/or financial advisors for legal and tax advice tailored to your specific circumstances.