Companies must ensure their intellectual property is protected when expanding to another country.

January 24, 2017

Co-authored by:
Maureen Treacy
Associate
+1.312.752.3353
mtreacy@stoutadvisory.com

In December 2014, the U.S. Government began lifting various financial and trade restrictions on Cuba in an effort to improve relations between the two countries. These acts opened the door for U.S. companies to consider expanding their market presence in Cuba. When entering a new country, one important consideration a company must make is how to protect its intellectual property (IP).

In Cuba, it is not unusual for non-brand owners to register trademarks that do not belong to them. For example, a Cuban lawyer currently living in the U.S. has applied for 65 trademarks, including brands such as Chase, the NFL, and Jetblue.[1] Instances like this put companies at risk of brand dilution as a result of third parties introducing products or services with nearly identical marks to the pre-existing brand. Third-party use could ruin the legitimate owner’s reputation among Cubans in this new market. Additionally, if a company loses the race to file for trademark registration, it may not be able to effectively operate in Cuba. With the potential of Cuba becoming a U.S. tourist hotspot, U.S. companies run the risk of losing new sales and raising confusion issues.

McDonald’s Preventative Strategy

McDonald’s is one of the 150 U.S. businesses that took a proactive stance on protecting its IP in Cuba and registered its trademarks in Cuba before U.S. financial and trade restrictions were loosened. Although McDonald’s first filed for trademark registration in 1985, it only recently began actively protecting the majority of its extensive trademark portfolio. In Camaguey, a city 300 miles east of Havana, Julio Manzini operates a restaurant with golden arches that was once named Cafeteria La McDonald’s Camagueyana. He changed the restaurant’s name and removed the golden arches after receiving a visit from a lawyer sent by McDonald’s.[2] Because of recent developments in U.S.-Cuba relations, it is much more feasible for companies like McDonald’s to begin operations in Cuba. Thus, it is imperative for U.S. companies with valuable IP to establish their brand by protecting them from potential consumer confusion.

While some companies like McDonald’s were proactive in protecting their IP, others deemed it unnecessary because of the export restrictions imposed by the U.S. trade embargo starting in 1960. The recent warming in diplomatic relations has caused more U.S. companies to consider entering the Cuban market. Consequently, the Cuban Office of Industrial Property (OCIP), similar to the United States Patent and Trademark Office, has seen an influx of IP applications in 2015 and 2016, including trademark applications from globally known companies such as Twitter and Uber. These companies see the value in protecting their IP because, while they’re not currently operating in Cuba, they may begin operations in the near future.

Registering IP in Cuba

Cuba is a first-to-file jurisdiction, meaning that priority is granted to whichever party files the application first, rather than the party that uses the IP in commerce first. This renders a company’s IP extremely susceptible to third-party ownership. When registering IP in foreign countries, it is important to understand the local procedures. In Cuba, there are two ways to obtain a trademark registration: 1) to file registration directly through the OCIP, or 2) to file registration through the Madrid Protocol.

Trademarks

To register trademarks through the OCIP, the applicant must provide the OCIP with its name, its address, an image of the trademark, the goods/services covered by the trademark, and the Nice Classification. The trademark is published six months after the filing date. A third party can oppose the trademark for two months after the filing date. The registration process typically takes about two years, and the trademark must be renewed every 10 years.

Alternatively, the Madrid Protocol is an international filing treaty that allows trademark holders to file for protection in multiple countries through one application. Once the application is filed, Cuba must determine if protection for the trademark is granted. Registering a trademark through the Madrid Protocol is likely the easier option for companies that have already registered their applications through this process in other countries.

Patents

Patents can also be registered through the OCIP for which applicants must provide: their name, address, and profession; a title and description of the invention, claims, and drawings; and a power of attorney. The applicant may also file a patent application through the Patent Cooperation Treaty (PCT). The PCT is an international system with more than 145 member countries, including Cuba. Similar to the Madrid Protocol, the PCT standardizes the process for filing patent applications in different countries.

What's Next?

Protecting IP is an emerging concern for U.S. companies that wish to expand into the Cuban market. With the recent dissolution of trade barriers between the U.S. and Cuba, companies must protect their brands and products to establish a foothold and avoid confusion in this emerging market. It will be interesting to see what events transpire between the U.S. and Cuba in the near future, especially with the uncertainty surrounding the Trump administration’s policy stance regarding Cuba.


  1. http://www.miamiherald.com/news/nation-world/world/americas/cuba/article114841918.html
  2. http://www.reuters.com/article/us-cuba-usa-trademarks-idUSKBN0TE2EJ20151126

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