Cuban Cigar Company Sues Michigan Cigar Shop

[Buena Fortuna]

PLYMOUTH, Mich. -- A cigar lounge in suburban Detroit is decorated with paintings and photos of famous people with a stogie: John F. Kennedy, Winston Churchill, even the 1950s Cuban revolutionary Che Guevara.

"We have only one thing in common," said owner Ismail Houmani, a U.S. war veteran, pointing at a cigar in the fingers of Guevara, a Marxist rebel.

Cuba, however, believes the shop has too much common with its own famous cigar business. Cuba's government-owned tobacco company is suing Houmani in federal court in Detroit, claiming the name of his four shops, La Casa De La Habana, is illegal because it's too similar to its own franchised shops, known around the world as La Casa del Habano.

Cuba, of course, can't do business in America because of a nearly 50-year-old trade embargo imposed after Fidel Castro, with Guevara's help, turned the Caribbean island into a socialist state. Nonetheless, Cubatabaco claims it still has a right to protect its U.S. trademark even if it can't export prized Cuban cigars to U.S. shores.

"I love cases like this," U.S. District Judge Stephen Murphy III told both sides last year. "I find it to be extremely interesting and challenging."

Houmani's lawyer, Brad Smith, wonders why Cuba would care about a Michigan cigar lounge. "Small potatoes," he said in an interview.

Cubatabaco's lawyer, David Goldstein of New York, said in court that a trademark must be protected or "what I have is a worthless piece of paper."

In Plymouth, a suburb west of Detroit, La Casa De La Habana has been open about a decade. A climate-controlled humidor displays dozens of cigars, some costing $38 each, from Honduras, the Dominican Republic and Nicaragua. There is walk-in business, but customers also can have their own gym-locker-sized humidor with a nameplate for $100 a month.

There are televisions, leather couches and an espresso bar. In downtown Detroit, Houmani runs a 7,000-square-foot location offering martinis, live music and local handmade cigars stuffed with imported tobacco.

"Over a cigar, you can meet some interesting people -- doctors, lawyers, judges, movie actors. They want to sit down and relax," said Houmani, 42, who immigrated to Toledo, Ohio, from Lebanon when he was 18. "I wanted to create something that's really unique."

He said he was thinking about Cuba's reputation for Latin jazz, rum and cigars when he chose the name La Casa De La Habana, which means "The House of Havana" in Spanish. Houmani notes that "Habano," the word used in the name of Cuban shops, refers to a Havana cigar.

"I'm not selling or advertising Cuban cigars," he said.

International agreements allow government-controlled businesses like Cuba's to register trademarks in the U.S., even when dormant under an economic embargo. Still, Smith said the lawsuit should be governed by a simple rule: "You use it or lose it."

A trademark expert at the University of Michigan law school believes Cubatabaco has a strong case for infringement.

"Cuba's got reason to hope that it will be able to enter the U.S. market within the foreseeable future," Jessica Litman said. "Its mark is pretty valuable, and the potential for confusion seems real."

The judge has urged each side to settle the dispute out of court. Houmani concedes he may have to change the name of his business, although he would prefer to keep "La Casa" in it. He has much admiration for Cuba's cigars, despite the lawsuit and that country's communist government.

"It's the best tobacco in the world because of the soil. It's God's gift to the Cubans," said Houmani, who has smoked Cuban cigars during trips to the Middle East. "As cigar makers, we don't look at political affiliations."


Copyright 2011 by The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

[TheRiddick]

Would like to know who contacted whom (made the first phone call), the NY lawyer or someone in Cuba, in deciding to pursue this. Business must be slow for NY lawyers? If I am open for 10 years now, shouldn't this weigh in on the case since Cuba was not pursuing the name infringement when the place opened?

[Blueface]

Originally Posted by TheRiddick

Would like to know who contacted whom (made the first phone call), the NY lawyer or someone in Cuba, in deciding to pursue this. Business must be slow for NY lawyers? If I am open for 10 years now, shouldn't this weigh in on the case since Cuba was not pursuing the name infringement when the place opened?

Better yet, how dare they try to use our courts to uphold infringement of trade names when they illegally seized the cigar companies from their rightful owners.

[TheRiddick]

Originally Posted by Blueface

Better yet, how dare they try to use our courts to uphold infringement of trade names when they illegally seized the cigar companies from their rightful owners.

Unfortunately, not many judges these days are schooled in history and morals... Would be nice to see the judge ask plaintiffs to produce documentation proving that Cuba compensated the families whose businesses were seized in order to validate today's infringement claims as legal and enforceable. But I know the judge won't...

[HK3-]

Wow, just wow.

[akumushi]

While Cuba is obviously hypocritical when it comes to copyright infringement, does it really make it alright to say that because Cuba did it, Americans should do it back to them? While many of the old marcas; Partagas, Romeo y Julieta etc. are old names that were stolen from the people who owned the farms stolen in the revolution, in recent history most of the intellectual property "borrowing" has been going the opposite direction. Some of the more recent marcas like Cohiba are creations of Cubatobacco/Habanos S.A. and IMO, it's just as tacky and bad for the industry when businesses and manufacturers from the U.S. and the "other islands" steal Cuban trademarks than when the Cubans blatantly steal other's ideas. If the embargo does get lifted, it will only make what would have already been a huge legal nightmare even bigger, more expensive and uglier for everybody in the business. That kind of rip off marketing confuses a lot of new consumers who are already trying to navigate a dizzying array of choices no matter who is doing it.

[MarkinAZ]

I love the idiotic comment "and the potential for confusion seems real." I don't see any confusion what so ever between the names myself. So I'm wondering where the piss ant country of Cuba gets off by filing a frivolous lawsuit?

More important, I would think that some State and/or Federal statute would have tolled by now, since Mr. Houmani has been using an independant name for his businesses during the past 10 years.

It will be interesting to see what steps Mr. Houmani's commercial insurance carrier will take in this matter...

[TheRiddick]

Clayton, do you know any cigar smoker in USA who is confused by the name of the retailer in Michigan and thinks Cuban cigars are sold there? Neither do I.

Unfortunately, as in most technological lawsuits, judges know (almost) nothing about a subject on hand (see various lawsuits on Facebook ownership as in blatant and brazen takeover of someone else's idea. Also, see Andressen's actions in regard to Netscape years ago, judges were stupid in each case, there are more similar cases out there). In any business there are subject matter specialists, yet our judicial system fails to understand that.

I also find it strange that a country that does not respect our laws nevertheless finds it convenient to sue someone in a USA court using OUR laws. Another point a judge will most likely miss on. The judge should tell them to move the lawsuit where it may matter, Havana proper, not that anyone there will be confused by a retailer in Michigan, either.

I still call "ambulance chaser" in NY lawyer and pretty much sure he is the one to instigate the matter.

[Neens]

Originally Posted by MarkinCA

I love the idiotic comment "and the potential for confusion seems real." I don't see any confusion what so ever between the names myself. So I'm wondering where the piss ant country of Cuba gets off by filing a frivolous lawsuit?

More important, I would think that some State and/or Federal statute would have tolled by now, since Mr. Houmani has been using an independant name for his businesses during the past 10 years.

It will be interesting to see what steps Mr. Houmani's commercial insurance carrier will take in this matter...

I'm with you on the confusion part. The cuban owned shops can't open on US soil so there can't be any confusion. But it doesn't matter how long Mr. Houmani has been in business, all the matters is who the trademark was granted to first. You could be running a business for 30 years and I opened last week with the same name, if I get a federal trademark and you haven't filed for one I can start up a law suit which would make you close or change your name.

[TheRiddick]

Originally Posted by Neens

I'm with you on the confusion part. The cuban owned shops can't open on US soil so there can't be any confusion. But it doesn't matter how long Mr. Houmani has been in business, all the matters is who the trademark was granted to first. You could be running a business for 30 years and I opened last week with the same name, if I get a federal trademark and you haven't filed for one I can start up a law suit which would make you close or change your name.

Not sure about that, at least not based on last 10 years' worth of court cases. In theory that may be true, but only in theory. Operating under a name establishes your "trademark" whether you filed for one or not. It doesn't make much effort to prove to courts that you have been operating under Name X for 30 years and no matter if someone else just opened and trade marked the name, the name is still yours and your customers know you under that name. Whether you filed for a trademark or not, you used it first. It will cost you to fight it, but you'll win (and may counter sue to recoup your legal costs as well).

Take a look at internet domain names property rights, the courts have settled that issue some time ago. Only because I registered domain name under apple.com (or any other well known name) does not make it mine.

[akumushi]

Greg, I think this went on for ten years because the other shops were in small towns around Michigan and the guy just opened a huge location in Detroit with much fanfare that obviously caught someone's attention. It certainly could have been some sleazy laywer, but it's more likely it was somebody within Altadis/Habanos noticiting the news about a new "world class LCDH" in Detroit. I agree that the confusion part makes no sense... NOW. But I'm pretty sure that Cuba is hoping to be selling cigars in the US market within the next ten years. Now, imagine a United States where the Embargo was lifted, and you ask your wife to go to the La Casa Del Habano and pick you up a Cohiba Robusto, and she brings you back a dominican Cohiba Robusto from La Casa De La Habana. Now the confusion is obvious, sure, this is not the way things are now, but if Cuba litigates now and sets a precident that they still have legitimate interest in U.S. copyrights, their battle will be easier down the road. This is a business decision that makes sense, even if you think the Cuban governent are hypocritcal @$$holes for doing it (I'm not going to disagree with you there!) I saw one of these stores near my in-laws house in Ann Arbor, and I think he also stole the tobacco leaf logo of the LCDH, and in other ways tried to make his stores look like and LCDH. It's not just a coincidence. Now, does this make it less ironic that communist bandits are crying crocodile tears over someone else playing their game? No, it's pretty silly when you think about it, but like I said, I think it's in poor taste when ANYONE rips someone else off, and lately in the cigar industry its been everyone else ripping off Cuba. Sure, payback's a b!tch and all, but think of this as Cuba playing a warmup game for the legal clusterf0ck that the lifting of the embargo will entail.

[MarkinAZ]

Originally Posted by TheRiddick

Operating under a name establishes your "trademark" whether you filed for one or not. It doesn't make much effort to prove to courts that you have been operating under Name X for 30 years and no matter if someone else just opened and trade marked the name, the name is still yours and your customers know you under that name. Whether you filed for a trademark or not, you used it first. It will cost you to fight it, but you'll win (and may counter sue to recoup your legal costs as well)....

That is exactly the direction I was thinking of, in that Mr. Houmani has been using the name "La Casa De La Habana" for the last 10 years, and has established precedent and/or ownership and use of the business name.

I'm sure if we have some BOTL's/SOTL's who's JD and expertise is in this area, some case law would be interesting for them to provide here on this thread...

La Casa De La Habana translates to "The House of Havana" and La Casa del Habano tranlates to "The House of the Havana Cigar."

[357]

To be fair, I don't think LCDH was the official distributor of all Cuban cigars before the embargo. I am young and I don't know it for fact, but I would guess that the Cuban government created it as their means of distribution. Meaning that LCDH was not a privatly owned enterprise stolen via nationalization. I understand the Cigar brands were, but that is not at issue in this case. I agree with Greg's sentiment. If I were a judge presiding over this case, I would take as much of the history into account as I could.

I think they do have a legal claim to LCDH if it was not stolen. But then the argument remains that the two names are different. One means house of Habano (cuban cigars), while the other means house of Havana (a city).

The argument could be made that no government has the right to own a private (for profit) business. I know it happens, but I do not believe it is legal under our law.

[akumushi]

Originally Posted by MarkinCA

That is exactly the direction I was thinking of, in that Mr. Houmani has been using the name "La Casa De La Habana" for the last 10 years, and has established precedent and/or ownership and use of the business name.

I'm sure if we have some BOTL's/SOTL's who's JD and expertise is in this area, some case law would be interesting for them to provide here on this thread...

La Casa De La Habana translates to "The House of Havana" and La Casa del Habano tranlates to "The House of the Havana Cigar."

La Casa Del Habano first opened in 1990, so, assuming Cubatobacco filed for a U.S. trademark then, they would still have precident, I don't think Altadis would have filed suit if they didn't have that trademark already registered, but time will tell as the case unfolds. I'm sure none of us are experts on the details of this case. Remember that this probably isn't going to be a suit filed by the Cuban Government directly, but most likely by Altadis/Habanos S.A., a company with legitimate business interests in the United States.
For me, the interesting part of this is not "oh how dare Cuba," but what is an obvious increase in activity by Altadis/Habanos S. A. in exercising their claim on U.S. trademarks. They clearly anticipate a lifting of the embargo, or they would not be putting out millions to lay out the economic and legal groundwork for the introduction of their product into the U.S. market, because that is what this case is really about. First, it was the Montecristo (Altadis) Vs. Tatuaje case, which they seemed to win a easy victory. This was a no brainer for them to start with because Altadis has been selling Dominican Montecristos in the U.S. for years and had a valid U.S. trademark before it bought Habanos. But now, they are going out on a limb by starting what will really be a make it or break it case for them. This case is a probe, testing to see if U.S. courts will uphold their interests in brands started by the Cuban government. If they lose this case, it is going to be very hard for them to hold onto a lot of their branding and trademarks when the embargo lifts. If they win this case, then expect many more lawsuits from this company.
It's interesting that they are pushing so hard in this direction, ramping up for introduction to the U.S. market, you've got to wonder whether it's wishful thinking on their part, or whether they know something the rest of us don't.

[MarkinAZ]

Originally Posted by akumushi

It's interesting that they are pushing so hard in this direction, ramping up for introduction to the U.S. market, you've got to wonder whether it's wishful thinking on their part, or whether they know something the rest of us don't.

...Do you think they (Altadis/Habanos SA) have an "insider" with the US Gov't on some future event regarding trade and the lifting of the embargo?

[akumushi]

Originally Posted by MarkinCA

...Do you think they (Altadis/Habanos SA) have an "insider" with the US Gov't on some future event regarding trade and the lifting of the embargo?

No, but they certainly have enough money to hire a competent lobbyist or two. With Castro very likely to die within the next decade, and with U.S. antagonism in foreign policy shifting away from Marxist states to Islamic theocracies, the climate is certainly right for an end to the embargo. In fact, as long as they don't go all Kim Jong Il on us and start pursuing nuclear weapons, a lifting of the embargo is likely, if not assured in the long run, say 10-20 years. I don't know exactly what kind of game of dice Altadis was playing when they bought into Habanos, but you can bet that one of their long term goals is to break the embargo and have sole distribution rights of Cuban tobacco in the U.S, and they will throw a lot of money at the problem until they solve it, because there is so much potential for profit there that they would be idiots not to do so.

[Commander Quan]

Is the US gov't going to arrest the Lawyer representing Cuba under the Trading with the Enemy Act?

Originally Posted by akumushi

With Castro very likely to die within the next decade

Every president since Kennedy has thought the exact same thing.

[akumushi]

Originally Posted by Commander Quan

Is the US gov't going to arrest the Lawyer representing Cuba under the Trading with the Enemy Act?


Every president since Kennedy has thought the exact same thing.

Yes, but he is 85 years old, well beyond the average life expectancy of men in even the most developed countries like Japan, and even if he makes it into the centenarian club, that still leaves him dead at the latest in 20 years. He's not some kind of God or vampire, he's going to die. He's freaking old, so it's going to be relatively soon.
As to your first question, I already pointed out that the lawsuit is being filed by the company owned by the Cuban government, Habanos S.A. which is in turn partially owned by a foreign company, Altadis, that has no obligation not to trade with them, but which also has legitimate interests in the U.S due to its umbrella corporation, Imperial Tobacco. So, the lawyer is not representing the Cuban government directly but rather the aforementioned corporations, and should thus be clear of that law.

[landhoney]

Originally Posted by akumushi

He's not some kind of God or vampire, he's going to die.

Devil?

[akumushi]

Originally Posted by landhoney

Devil?

OK, you got me there