This came up as a result of heavy lobbying by Bacardi and was designed in order to prevent Pernod-Ricard from being able to enforce its rights to the trademark 'Havana Club' in the US. Section 211 of the OAA deals with trademarks, trade names, and commercial names which are similar or substantially similar to trademarks, trade names and commercial names used in connection with businesses or assets sequestered by the Cuban Government on or after July 1, 1959. This intended to prevent the registration and enforcement in US of trademarks requisitioned by Cuba. It is assumed that this provision was crafted specially to prove the US position before the WTO.
Dispute before the WTO
After much deliberation the district Court ruled against HCH and HCI in June 1999, further to which the European Union (EU) requested sessions under the Understanding on Rules and Procedures Governing Settlement of Disputes (DSU) at WTO. These consultations occurred between EU and US between September – December 1999. In February 2000, the Second Circuit issued its ruling upholding the District Court decision. Despite various consultations, EU and the US were unable to come to agreeable terms. Therefore in June 2000, EU requested the establishment of a Panel under Article 6 of the DSU and Article 64.1 of the TRIPS Agreement, alleging that Section 211 of the OAA was in violation of the TRIPS Agreement. In November 2000, the Dispute Settlement Body (DSB) established a Panel to adjudicate the dispute and recommended that US bring its domestic legislation into conformity with its obligations under the TRIPS Agreement. US denied that Section 211 of the OAA was inconsistent with its obligations under the TRIPS Agreement and requested the Panel to reject the claims of the EU in their entirety. The Panel found only one violation, i.e. Article 42 of the TRIPS Agreement by the US, with EU losing 11 out of 12 arguments in their complaint. On a cross appeal by the EU against the US, the Appellate Body held that Section 211 was not in violation of the TRIPS Agreement representing a major victory for the US.
But the Appellate Body specifically stressed that Section 211 (a) (2) was inconsistent with National Treatment provision under Article 3.1 of the TRIPS Agreement and Article 2 (1) of Paris Convention, as well as the Most Favoured Nation provision under Article 4 of the TRIPS Agreement. The Appellate Body reiterated that the National Treatment and MFN are two of the most important principles under the international agreements for IPR. These two are imposed so as to obligate every country to comply with them.2 While the Panel had disagreed with this contention in their ruling,