[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]


                   RESOLVING ISSUES WITH CONFISCATED
                   PROPERTY IN CUBA, HAVANA CLUB RUM
                           AND OTHER PROPERTY

=======================================================================

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                     COURTS, INTELLECTUAL PROPERTY,
                            AND THE INTERNET

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 11, 2016

                               __________

                           Serial No. 114-62

                               __________

         Printed for the use of the Committee on the Judiciary
         
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                      COMMITTEE ON THE JUDICIARY

                   BOB GOODLATTE, Virginia, Chairman
F. JAMES SENSENBRENNER, Jr.,         JOHN CONYERS, Jr., Michigan
    Wisconsin                        JERROLD NADLER, New York
LAMAR S. SMITH, Texas                ZOE LOFGREN, California
STEVE CHABOT, Ohio                   SHEILA JACKSON LEE, Texas
DARRELL E. ISSA, California          STEVE COHEN, Tennessee
J. RANDY FORBES, Virginia            HENRY C. ``HANK'' JOHNSON, Jr.,
STEVE KING, Iowa                       Georgia
TRENT FRANKS, Arizona                PEDRO R. PIERLUISI, Puerto Rico
LOUIE GOHMERT, Texas                 JUDY CHU, California
JIM JORDAN, Ohio                     TED DEUTCH, Florida
TED POE, Texas                       LUIS V. GUTIERREZ, Illinois
JASON CHAFFETZ, Utah                 KAREN BASS, California
TOM MARINO, Pennsylvania             CEDRIC RICHMOND, Louisiana
TREY GOWDY, South Carolina           SUZAN DelBENE, Washington
RAUL LABRADOR, Idaho                 HAKEEM JEFFRIES, New York
BLAKE FARENTHOLD, Texas              DAVID N. CICILLINE, Rhode Island
DOUG COLLINS, Georgia                SCOTT PETERS, California
RON DeSANTIS, Florida
MIMI WALTERS, California
KEN BUCK, Colorado
JOHN RATCLIFFE, Texas
DAVE TROTT, Michigan
MIKE BISHOP, Michigan

           Shelley Husband, Chief of Staff & General Counsel
        Perry Apelbaum, Minority Staff Director & Chief Counsel
                                
                                ------                                

    Subcommittee on Courts, Intellectual Property, and the Internet

                 DARRELL E. ISSA, California, Chairman

                  DOUG COLLINS, Georgia, Vice-Chairman

F. JAMES SENSENBRENNER, Jr.,         JERROLD NADLER, New York
Wisconsin                            JUDY CHU, California
LAMAR S. SMITH, Texas                TED DEUTCH, Florida
STEVE CHABOT, Ohio                   KAREN BASS, California
J. RANDY FORBES, Virginia            CEDRIC RICHMOND, Louisiana
TRENT FRANKS, Arizona                SUZAN DelBENE, Washington
JIM JORDAN, Ohio                     HAKEEM JEFFRIES, New York
TED POE, Texas                       DAVID N. CICILLINE, Rhode Island
JASON CHAFFETZ, Utah                 SCOTT PETERS, California
TOM MARINO, Pennsylvania             ZOE LOFGREN, California
BLAKE FARENTHOLD, Texas              STEVE COHEN, Tennessee
RON DeSANTIS, Florida                HENRY C. ``HANK'' JOHNSON, Jr.,
MIMI WALTERS, California               Georgia

                       Joe Keeley, Chief Counsel

                    Jason Everett, Minority Counsel
                            
                            
                            C O N T E N T S

                              ----------                              

                           FEBRUARY 11, 2016

                                                                   Page

                           OPENING STATEMENTS

The Honorable Darrell E. Issa, a Representative in Congress from 
  the State of California, and Chairman, Subcommittee on Courts, 
  Intellectual Property, and the Internet........................     1
The Honorable Karen Bass, a Representative in Congress from the 
  State of California, and Member, Subcommittee on Courts, 
  Intellectual Property, and the Internet........................     3

                               WITNESSES

The Honorable Kurt Tong, Principal Deputy Assistant Secretary, 
  Bureau of Economic and Business Affairs, U.S. Department of 
  State
  Oral Testimony.................................................     3
  Prepared Statement.............................................     6
Mary Boney Denison, Commissioner for Trademarks, U.S. Patent and 
  Trademark Office
  Oral Testimony.................................................    10
  Prepared Statement.............................................    12
Rick Wilson, Senior Vice President, Bacardi-Martini, Inc.
  Oral Testimony.................................................    47
  Prepared Statement.............................................    50
William A. Reinsch, President, National Foreign Trade Council
  Oral Testimony.................................................    55
  Prepared Statement.............................................    58
Mauricio J. Tamargo, Poblete Tamargo LLP, former Chairman, 
  Foreign Claims Settlement Commission of the United States, 
  Department of Justice
  Oral Testimony.................................................    65
  Prepared Statement.............................................    68
Lilliam Escasena, Cuban Property Claimant, Miami, FL
  Oral Testimony.................................................    78
  Prepared Statement.............................................    80

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Material submitted by the Honorable Darrell E. Issa, a 
  Representative in Congress from the State of California, and 
  Chairman, Subcommittee on Courts, Intellectual Property, and 
  the Internet...................................................    15
Prepared statement of the Honorable Bob Goodlatte, a 
  Representative in Congress from the State of Virginia, and 
  Chairman, Committee on the Judiciary...........................    29

                                APPENDIX
               Material Submitted for the Hearing Record

Material submitted by Jaime Suchlicki, Emilio Bacadi Moeau 
  Distinguished Professor and Director, Institute for Cuban and 
  Cuban-American Studies, University of Miami; and Jose Azel, 
  Senior Research Associate, Institute for Cuban and Cuban-
  American Studies, University of Miami..........................    94
Response to Questions for the Record from the Honorable Kurt 
  Tong, Principal Deputy Assistant Secretary, Bureau of Economic 
  and Business Affairs, U.S. Department of State.................    99
Questions for the Record submitted to Mary Boney Denison, 
  Commissioner for Trademarks, U.S. Patent and Trademark Office..   106
Response to Questions for the Record from William A. Reinsch, 
  President, National Foreign Trade Council................109
                       deg.OFFICIAL HEARING RECORD
          Unprinted Material Submitted for the Hearing Record

Material submitted by the Honorable Darrell E. Issa, a Representative 
    in Congress from the State of California, and Chairman, 
    Subcommittee on Courts, Intellectual Property, and the Internet. 
    This material is available at the Subcommittee and can also be 
    accessed at:

    http://docs.house.gov/Committee/Calendar/
ByEvent.aspx?EventID=104453

 
RESOLVING ISSUES WITH CONFISCATED PROPERTY IN CUBA, HAVANA CLUB RUM AND 
                             OTHER PROPERTY

                              ----------                              


                      THURSDAY, FEBRUARY 11, 2016

                        House of Representatives

            Subcommittee on Courts, Intellectual Property, 
                            and the Internet

                       Committee on the Judiciary

                            Washington, DC.

    The Subcommittee met, pursuant to call, at 5:06 p.m., in 
room 2141, Rayburn House Office Building, the Honorable Darrell 
E. Issa (Chairman of the Subcommittee) presiding.
    Present: Representatives Issa, Goodlatte, Jordan, Poe, 
Chaffetz, Marino, DeSantis, Deutch, Bass, Richmond, and 
DelBene.
    Staff Present: (Majority) Joe Keeley, Chief Counsel; Eric 
Bagwell, Clerk; and (Minority) Jason Everett, Minority Counsel.
    Mr. Issa. The Committee will come to order.
    Today's hearing of the Subcommittee on Courts, Intellectual 
Property, and the Internet will be dealing with resolving 
issues with confiscated property in Cuba, which will include 
Havana Club rum and other property.
    The Subcommittee Ranking Member may be able to join us but 
has a conflict of interest, as will others. If they do attend--
if they are able to be here, we will take their openings 
statements at that point.
    I would like to welcome everyone here today and ask 
unanimous consent that the Chair be authorized to declare 
recesses of the Subcommittee at any time.
    Today we have two distinguished panels, and I would ask--I 
guess we'll swear them in, each panel.
    The witnesses have opening statements which will be entered 
into the record in their entirety. And I would ask, please, 
that during your 5-minute period that you summarize and stay 
within the 5-minute period. As you know, the red lights, green 
lights, and yellow lights will indicate go, hurry up, and stop.
    Before I introduce the witnesses, Committee rules require 
that all witnesses be sworn. So what I'd ask, that you please 
rise to take the oath and raise your right hands.
    Do you solemnly swear or affirm that the testimony you are 
about to give will be the truth, the whole truth, and nothing 
but the truth?
    Please be seated.
    Let the record reflect that all witnesses answered in the 
affirmative.
    Our first panel of witnesses will be the Honorable Kurt 
Tong, Principal Deputy Assistant Secretary of the Bureau of 
Economic and Business Affairs, United States Department of 
State; and Ms. Mary Denison, Commissioner for Trademarks for 
the United States Patent and Trademark Office.
    I'll now recognize myself for an opening statement.
    Today's hearing is on the integrity of the patent and 
trademark system.
    Over 50 years ago, the people of Cuba entered into an era 
of religious persecution, property seizures, and political 
oppression. Families who had worked for years to build a future 
for they and their families lost everything and were forced to 
flee the country or, worse than that, be imprisoned in Cuban 
jails.
    In response to Cuba's alliance with the then-Soviet Union, 
its totalitarian dictatorship under communism, America began a 
trade embargo to deny Castro and his allies the benefits of 
free trade.
    In 1999, American policy further prevented the recognition 
by the United States Government of trademarks seized by Cuba. A 
drafting error in section 211, or what has come to be known as 
a drafting error, made the legislation subject to a challenge 
by those who want to do nothing more than, in fact, trade with 
a dictator.
    To fix the drafting error, I have become an original 
cosponsor of the No Stolen Trademarks Honored in America Act of 
2015. The law simply would--the change in the law would simply 
take out references to a single country but, in fact, still 
cover the category that would include the wrongful taking of 
these trademarks.
    In the case of the Havana Club example, a family business 
was seized at gunpoint with no compensation. Forced into exile, 
the family was unable to restart their business on their own 
and chose to partner with Bacardi, another company. The Ricard 
business of France chose to partner with the Communist regime 
in Cuba and purchase and agree to distribute under the name 
``Havana Club'' throughout the rest of the world.
    The United States--and, I must say, the United States 
alone--chose not to allow the sale and, thus, the profiteering 
by the Cuban Government based on their theft. And let us 
understand clearly that we are still dealing with a Cuban-made 
product in which the people of Cuba work for maybe $20 a month 
to produce rum so the Cuban Government can sell it at a price 
that benefits their regime.
    So the technicality that, in fact, we have a French 
Government-owned, partially owned, enterprise that will testify 
indirectly today that they bought it and of course they're 
simply entering into business is, in fact, inaccurate. In the 
case of the trademark in dispute, it was not a French company 
partially owned by the country of France but, in fact, the 
Cuban Government that applied for the trademark--the very Cuban 
Government that had seized it illegally.
    With the passage of time, Cuban Americans also have sought 
to be repaid for stolen homes and businesses. On our second 
panel, we will have a former member of the claims board and a 
personal testimony of someone who is still trying to recoup 
that which was stolen from her family by this dictatorship.
    I'll now recognize the Ranking Member for her opening 
statement.
    Ms. Bass. Why, thank you, Mr. Chair.
    I thank our witnesses for coming today.
    And I will say--excuse me, let me take a minute here to 
wrestle with the microphone--I was pleased when the President 
announced that he was working to normalize relations with Cuba. 
This shift in policy is really long overdue for a country that 
is 90 miles away. And we've denied American businesses. This is 
an issue that has been big in California, frankly, because 
there's a lot of California businesses across many different 
categories that are willing and ready to be involved in this 
important market.
    I want to take the opportunity here to say what I think is 
at stake here. There are hundreds of U.S. companies with 
thousands of trademarks that are registered in Cuba. So I'm 
worried that American businesses rely on the validity of the 
treaties that we sign to protect their interests abroad. The 
General Inter-American Convention for Trade Mark and Commercial 
Protection, the IAC, is such a treaty, and it's been signed by 
10 countries, including the United States. And so I'm concerned 
that our actions will impact U.S. interests not only in Cuba 
but in eight other countries who could subsequently choose not 
to honor the IAC.
    With regard to some of the issues that have come up--that I 
know will come up, like expanding section 211, I agree that we 
risk doing more harm than good. I'm worried that when an entity 
as reputable as the National Foreign Trade Council tells me 
that we're about to violate a treaty that protects U.S. 
businesses--especially when considering that Cuba has 
consistently honored the IAC in favor of U.S. companies.
    So, for example, there's the Olin Corporation who sought to 
protect its famous rifle trademark, Winchester. And based on 
the IAC convention, Cuba ruled in favor of Olin over a non-U.S. 
company.
    So I'm concerned that by looking at this issue, really, 
when it's already in the judicial branch, that we run the risk 
of looking like we're trying to improperly influence an ongoing 
case. So those are my concerns, and I am hoping that through 
the testimony of the panelists that they can clarify this.
    Thank you. And I yield back.
    Mr. Issa. Thank you.
    And we now go to our panel of witnesses.
    Mr. Tong, you have an opening statement? The gentleman is 
recognized.

    TESTIMONY OF THE HONORABLE KURT TONG, PRINCIPAL DEPUTY 
 ASSISTANT SECRETARY, BUREAU OF ECONOMIC AND BUSINESS AFFAIRS, 
                    U.S. DEPARTMENT OF STATE

    Mr. Tong. Well, thank you, Chairman Issa, and thank you, 
Members of the Committee. And good evening. I appreciate the 
opportunity to testify today on topics related to confiscated 
property in Cuba, Havana Club rum, and other property.
    The protection of intellectual and real property rights is 
an important issue for American innovators, entrepreneurs, and 
businesses and deserves the close attention and vigorous 
efforts of multiple branches of the U.S. Government.
    In my testimony today, I will first describe briefly the 
role of the Department of State and, in particular, my bureau, 
the Bureau of Economic and Business Affairs, with respect to 
intellectual property enforcement and protection and 
international claims and disputes. I'll also provide an 
overview of the recent claims discussions with the Cuban 
Government. And then, finally, I'll discuss the State 
Department's role in the Havana Club matter.
    The Department of State's Economic Bureau uses economic 
diplomacy to advance the prosperity and security of all 
Americans by working hand-in-hand with other U.S. Government 
agencies and partners around the world to promote good economic 
policies as well as to negotiate and implement agreements that 
shape the rules of global commerce.
    One of the Department's foremost priorities is the 
promotion of innovation in the United States and around the 
world. We do this, in part, by advocating for effective 
protection and enforcement of intellectual property rights. 
Specifically, the Department uses diplomatic outreach and 
programs and bilateral and multilateral negotiations to ensure 
the interests of American rights-holders as well as to 
highlight the critical role of intellectual property rights 
protections in supporting economic growth and stability.
    We also devote substantial resources to supporting the 
development of a satisfactory climate for U.S. investment 
overseas, which includes assisting U.S. investors involved in 
investment disputes with foreign governments. In this regard, 
we work closely with the Department's Office of the Legal 
Adviser, which represents the United States and coordinates 
activities with respect to claims and international disputes.
    In the case of Cuba, the Department is continuing to 
advocate for the resolution of all outstanding U.S. claims and 
disputes in our bilateral relations. We launched government-to-
government claims talks in Havana on December 8th last year, 
and through these claims talks we are seeking compensation or 
some other form of appropriate redress from the Cuban 
Government for these longstanding U.S. claims.
    The U.S. delegation at the talks provided an overview of 
the U.S. claims against the Government of Cuba. These include 
almost 6,000 claims of U.S. nationals related to confiscated 
property that were certified by the Foreign Claims Settlement 
Commission as well as claims related to unsatisfied U.S. court 
judgments against Cuba, in addition to the claims of the U.S. 
Government.
    The meeting in Havana was the first step in what is 
expected to be a complex process, but the United States views 
the resolution of outstanding claims as a top priority.
    With this in mind, I would like to finally address the 
specific case of Havana Club, which is quite a different sort 
of matter than the unresolved U.S. claims issues that I just 
mentioned.
    As you may know, this case concerns a dispute between 
foreign actors--on one side, the Cuban state-owned enterprise, 
Cubaexport, which is in a joint venture with a French company, 
Pernod Ricard; and, on the other side, Bacardi and Company 
Limited, a company headquartered in Bermuda. These foreign 
companies are involved in pending Federal court proceedings in 
the United States with regard to their dispute over ownership 
of the Havana Club trademark in the United States.
    The Department of State's role in the Havana Club matter 
was to respond to a request from Treasury's Office of Foreign 
Assets Control, or OFAC, for foreign policy guidance. To be 
clear, our role in the Havana Club matter was not to adjudicate 
the ownership of the disputed trademark rights, which is a 
matter still before our Federal courts, and the Department took 
no position on that issue in its foreign policy guidance.
    To be a bit more specific, in November 2015, OFAC requested 
foreign policy guidance from the State Department with respect 
to an application from Cubaexport for a specific license 
authorizing all transactions with the U.S. Patent and Trademark 
Office related to Cubaexport's renewal and maintenance of the 
Havana Club trademark registration, including payment of 
necessary fees.
    The Department evaluated this referral in light of a number 
of factors, including: the particular facts of the case; the 
recent shift in United States policy toward Cuba; United States 
foreign policy with respect to key allies in Europe; and the 
U.S. approach with respect to trademark rights associated with 
confiscated property. After weighing these factors, the 
Department recommended issuance of the requested specific 
license.
    It is in the foreign policy interest of the United States 
that the relevant parties be able to reach a resolution in this 
longstanding dispute. As I mentioned, there are pending Federal 
court proceedings, and the denial of a license and the 
resulting expiration of the trademark registration may have 
rendered those proceedings moot, whereas granting the license 
will allow the parties to proceed toward adjudication of their 
respective legal claims in U.S. courts of law.
    In closing, I wish to reaffirm that the Department of State 
will continue to advocate for the effective protection and 
enforcement of intellectual property rights around the world, 
including and especially in Cuba. This effort is squarely in 
line with our enduring objective of the emergence of a 
peaceful, prosperous, and democratic Cuba.
    The Administration's approach to Cuba allows us to 
effectively engage with Cuba on seeking redress for U.S. 
claims, for protection of intellectual property rights, and a 
number of other matters in the national interest.
    Thank you, Mr. Chairman, and I welcome your questions.
    [The prepared statement of Mr. Tong follows:]
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                               __________
    Mr. Issa. Thank you.
    Commissioner?

 TESTIMONY OF MARY BONEY DENISON, COMMISSIONER FOR TRADEMARKS, 
                U.S. PATENT AND TRADEMARK OFFICE

    Ms. Denison. Chairman Issa and Members of the Committee----
    Mr. Issa. If you could pull it slightly closer. Your voice 
doesn't carry as well as the Secretary's.
    Ms. Denison. How's this? Is that better?
    Mr. Issa. Better.
    Ms. Denison. Thank you so much.
    I appreciate the opportunity to describe the U.S. Patent 
and Trademark Office's role with respect to the renewal of the 
Havana Club trademark registration today.
    The USPTO is charged with carrying out the trademark 
registration process consistent with the law so as to provide a 
stable marketplace for the sale of goods or services identified 
by the registered mark for the benefit of both consumers and 
owners.
    The USPTO receives more than 300,000 applications for 
trademark registration each year and administers a trademark 
register of more than 2 million active registrations.
    As a general matter, U.S. trademark law requires the 
submission of certain documents and the payment of appropriate 
fees to maintain and renew a trademark registration. The 
actions we took at the USPTO in this case were straightforward 
and consistent with the law.
    In 1974, Cubaexport applied for registration of the Havana 
Club trademark at the USPTO. The USPTO approved the 
registration in 1976 and renewed it in 1996. The transactions 
were authorized under an existing general license pursuant to 
the Cuban Assets Control Regulations.
    In October 1998, however, Congress included section 211 as 
part of the Omnibus Appropriations Act, which rendered that 
general license unavailable for transactions or payments for 
certain trademarks. As a result, when Cubaexport attempted to 
renew the Havana Club trademark registration in 2005, the 
Treasury Department's Office of Foreign Assets Control, known 
as OFAC, advised the USPTO and Cubaexport that a specific 
license would be required to authorize the payment of renewal 
fees. Cubaexport could not legally pay the required fees 
without an OFAC-specific license authorizing the transaction.
    Cubaexport applied for a specific license from OFAC, and 
OFAC denied the application. Because the requirements of 
trademark law could not be met without an OFAC specific license 
authorizing the fee payment, the USPTO was unable to renew the 
registration.
    Cubaexport then sought review of the USPTO's refusal by 
filing a petition with the USPTO, the same petition that we 
acted on in January. Because Cubaexport also sued OFAC over its 
decision not to issue Cubaexport a specific license authorizing 
the fee payment, the USPTO suspended action on the petition 
until that litigation was over. Cubaexport's challenges in 
Federal court were ultimately unsuccessful.
    In November of 2015, Cubaexport submitted a new specific 
license application to OFAC, and OFAC issued the requested 
license on January 11, 2016. On January 12, 2016, Cubaexport 
supplemented its USPTO petition to include an OFAC-specific 
license authorizing the 2005 payment of fees and all other 
transactions necessary to renew and maintain the Havana Club 
registration.
    Because Cubaexport had satisfied the requirements of the 
Trademark Act, the USPTO took action to accept the now-
authorized fee, to grant the petition, and to update the 
USPTO's records to reflect the renewed status of the Havana 
Club registration. This action does not, however, decide the 
Havana Club trademark dispute. The rights of all interested 
parties remain the same as they were before the action was 
taken.
    That concludes my statement, Mr. Chairman, and I would be 
happy to answer any questions. Thank you very much.
    [The prepared statement of Ms. Denison follows:]
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                                  __________
    Mr. Issa. Excellent.
    I now ask unanimous consent that the entire list of the 
6,000 certified recipients under the Foreign Claims Settlement 
Act be placed in the record.*
---------------------------------------------------------------------------
    *Note: The material referred to is not printed in this hearing 
record but is on file with the Subcommittee. Also, see Issa submission 
at:

      http://docs.house.gov/Committee/Calendar/
      ByEvent.aspx?EventID=104453
    Additionally, I ask unanimous consent that the June 11, 
1974, complete set of documents applying for the trademark by 
the country of Cuba entered by the law firm of Haseltine, Lake 
& Walters be placed in the record; the testimony of Ramon--and 
I apologize in advance for how I'm going to get this--
Arechabala, that Ramon's testimony of 2004 be placed in the 
record; The Washington Post article of February 1, 2016, 
``Failure in Cuba,'' be placed in the record. It is an 
editorial; and lastly, 0my letter yesterday to the Secretary 
Kerry and Lew, along with attached signatures of a number of 
other Congressmen, be placed in the record.
    Without objection, so ordered.
    [The information referred to follows:]
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    Mr. Issa. And I'd like to make sure the record indicates 
that the Ranking Member is not here as a result of a conflict 
of schedule--the interest being the schedule, not a conflict of 
interest.
    And, with that, I'd ask unanimous consent that all Members' 
opening statements be placed in the record.
    But, Mr. Chairman, would you like to ask a round of 
questions?
    Okay. In that case, I will go first and ask my list of 
questions.
    And, Commissioner, I probably only have one question--a 
couple of questions for you, fairly briefly. But one of them 
is--you didn't mention 2012. That was when all the cases were 
resolved. And the Commission could have vacated all the 
documents, correct?
    In other words, 2012, when the cases were decided, in the 
ordinary course, this application would have been gone, the 
trademark would have been available under common law and 
registration law. Isn't that true?
    You said you had held up--suspended this case while other 
cases were pending. But those cases were resolved, what, 2 
years ago?
    Ms. Denison. There was litigation that was pending----
    Mr. Issa. Just, when did the last piece of litigation end, 
to your knowledge?
    Ms. Denison. In 2012.
    Mr. Issa. Thank you. So litigation ended in 2012. Your 
excuse for holding up and keeping this in limbo so that the 
Administration could act ended in 2012. Isn't that true? You 
had no valid reason to leave this file open as it was, did you?
    Ms. Denison. Mr. Chairman, let me explain a little bit 
about the petition process.
    Mr. Issa. No, ma'am. I appreciate the petition process, but 
I only have 5 minutes.
    On what basis--there was a conflict known. There was a 
competing company that had purchased the rights from the 
family, was sharing the profits in those sales with the family. 
And they, in fact, also had valid applications, and they had 
been selling the product in common law since 1994.
    So, in 2012, on what basis did you keep this open so that 
could you could retroactively go back to 2005?
    Ms. Denison. Well, first of all, there is no set timeframe 
for us to issue a decision on a petition.
    Mr. Issa. Okay.
    Ms. Denison. We receive thousands of petitions every year, 
and some of them are acted on very----
    Mr. Issa. Well, I know you acted on this one in 3 days.
    Ms. Denison. And some of them are acted on in a matter of 
years.
    Mr. Issa. Okay. So let me just make one thing clear for the 
record. From 2012, any statement that you were waiting on a 
court case to end ended. And from 2012 until 2015, the case 
simply sat open, waiting for OFAC or somebody else to do 
something, because there was no--your basis for suspending had 
ended. Isn't that true?
    Ms. Denison. Actually, after the litigation ended, there 
was an extended period where there was back-and-forth between 
our office and OFAC before we could have acted. And----
    Mr. Issa. Yeah, but that wasn't the question, Commissioner. 
The question was--you said in your testimony that you held this 
in suspense because of a case. Now, that case went to the U.S. 
Supreme Court. Ultimately, they, by not granting cert, affirmed 
the lower court case, and it was over. The Supreme Court had 
spoken and essentially allowed the lower court. So there were 
no court issues left.
    So the fact that you were going back and forth with OFAC, 
all of that is a political question and answer, so to speak, to 
do what the current Administration--and, Mr. Secretary, I think 
you said it very well. You were trying to reach out to deal 
with Cuba, the relationship. So this became a tool, I would 
gather, in that negotiation. Isn't that correct, Mr. Secretary, 
that this was on the table as part of negotiations?
    Mr. Tong. The issue of Havana Club, to my knowledge, was 
not discussed in our conversations with Cuba regarding the 
normalization of diplomatic relations.
    Mr. Issa. Okay. So it was never on the table, you're 
saying, as far as you know.
    Mr. Tong. As far as I know.
    Mr. Issa. Okay.
    Commissioner, would you provide us with written 
communications and memos related to correspondence with other 
agencies outside the Patent and Trademark Office for purposes 
of the decision process related to the delay until 2015?
    Ms. Denison. Yes, I can. I'm not sure there is any.
    Mr. Issa. So it was just oral conversations, just chatter?
    Ms. Denison. To my knowledge, there is no written 
communication.
    Mr. Issa. Okay. Well, if you would check, I would 
appreciate it.
    Mr. Secretary, I've got a question for you. You said in 
your statement that your goal, the Administration's goal, of 
course, is to restore people, to strengthen personal property 
and the like.
    I'm going to use a little bit of demonstration. Here's two 
tangible bottles. This one is Cuban-made; it's empty. This one 
is American-made; it's full--or half-full, not by my 
consumption. These are tangible products.
    This one is made in Puerto Rico, where there are about 
1,400 workers, American workers, earning $40,000 or so a year. 
This is made in Cuba by people making about $20 a month. Now, 
under your decision, people making $20 a month are going to be 
shipping this to the U.S. and people in Puerto Rico making 
$40,000 a year are going to be laid off.
    If I take it to its logical conclusion, I could hold up 
bottles of Bacardi, which the Cubans have the exact same claim 
on, that they seized it, it was theirs, and they asserted 
around the world that it was there. Would you have the $100 
million that the Puerto Rican Government gets from Bacardi tax 
revenues every year and the 1,000-plus jobs eliminated by 
giving Bacardi back to Cuba as a question of renewing our 
policies? Is that on the table? And is there any real 
difference, from a foreign policy, of whether or not you give 
away one family's rights or another's?
    Mr. Tong. Thank you, Mr. Chairman.
    My understanding is that the economic impact of the patent 
or the trademark registration has not yet played out, that the 
ownership of the Havana Club trademark continues to be a matter 
before U.S. Federal courts and that that matter will be settled 
in U.S. Federal courts.
    Mr. Issa. Well, you know, the man who it was taken from has 
died. So I'm not sure that there will ever be justice in that 
economic impact. And the son is working for a company and not 
able to produce the product his family had produced since the 
thirties.
    But my time has expired. I have to be sensitive to all 
here. The gentlelady from California, Ms. Bass, is recognized.
    Ms. Bass. Thank you, Mr. Chair.
    I wanted to know if either witness could talk a little bit 
more about section 211 and the impact of that.
    You know, as I'm reading some of the material here, the 
Cuban Government has threatened to violate the trademark rights 
of U.S. companies because we haven't repealed section 211. And 
I guess there's some consideration about expanding it.
    So I'm wondering if you can talk a little bit more about 
that and, also, within the context of that, discussing the 
possible implications for U.S. business interests in the eight 
other countries who are part of the IAC. So I know, in some 
instances, it's viewed that we might be violating the 
international treaty or it will weaken our ability to protect 
U.S. intellectual property interests in the eight other 
countries.
    So perhaps you could comment about 211 and explain.
    Either one. Whichever.
    Mr. Tong. I guess I can start, and my colleague may want to 
amplify.
    Section 211 is a statute which is under--the interpretation 
of which comes to OFAC. So I can't speak on their behalf with 
regard to that interpretation. But my understanding is that a 
specific license can be granted regardless of the existence of 
section 211.
    With regard to the broader diplomatic elements of 
intellectual property rights protection, this is something that 
we obviously work on very, very hard with a lot of countries. 
And we're looking forward to the opportunity, as I said 
earlier, to pursuing the protection of intellectual property 
rights in a vigorous fashion in Cuba now that we have a better 
opportunity to pursue those protections.
    The question of section 211 has come up in the World Trade 
Organization, and the United States was, if you will, taken to 
dispute by--dispute settlement by the European Union some years 
ago with respect to section 211. And that was a longstanding 
point of disagreement between the United States and the 
European Union.
    Since the granting of the specific license and then the 
trademark to Havana Club, there has been a noticeable lessening 
of the European Union's level of interest in that issue. So, in 
a sense, we have made some progress in the overall strategy of 
intellectual property rights protection and cooperation with 
Europe as a result of this one specific case.
    Ms. Bass. Should it be repealed, that section?
    Mr. Tong. I don't have an Administration position to convey 
to you on that matter.
    Ms. Bass. Do you know of any instances in which Cuba has 
failed to honor its obligations under the IAC in relation to 
U.S. companies?
    Mr. Tong. I'm going to have to get back to you on that 
because that's a rather specific question and I'm not 
researched on it.
    Ms. Bass. Do you have any concern over the thousands of 
trademarks that are registered in Cuba from U.S. companies?
    Mr. Tong. Absolutely. My understanding is that there's 
somewhere in the range of 5,000 U.S. trademarks that are active 
in Cuba. And the protection of those trademarks is of great 
interest to the United States, and we need to pursue it 
vigorously.
    Ms. Bass. So one of the questions is, if we move toward 
closer and better relations with Cuba, are we in a better 
position to protect those trademarks than if we were to roll 
back the direction that the Administration is pursuing now?
    Mr. Tong. In the Administration's estimation, yes, we are 
in a better position to pursue this entire topic of 
intellectual property rights protection with Cuba based upon 
our recent approach. In fact, we've gotten some positive 
feedback from the Cuban Government with regard to their 
openness toward having detailed and specific conversations 
about intellectual property rights protection.
    Ms. Bass. Thank you.
    Would you like to add anything, Ms. Denison?
    Ms. Denison. I think he did a great job.
    Ms. Bass. Okay. I yield back my time.
    Mr. Issa. The gentlelady yields back.
    The Chairman of the full Committee, Mr. Goodlatte.
    Mr. Goodlatte. Thank you, Mr. Chairman. I appreciate your 
holding this hearing. I submit my opening statement for the 
record. And I'm happy to yield to you so you can continue your 
excellent line of questioning.
    [The prepared statement of Mr. Goodlatte follows:]
Prepared Statement of the Honorable Bob Goodlatte, a Representative in 
  Congress from the State of Virginia, and Chairman, Committee on the 
                               Judiciary
    At the core of the House Judiciary Committee priorities are the 
fundamental constitutional rights guaranteed to Americans such as 
freedom of speech, freedom of the press, freedom of religion, and 
freedom from having the government confiscate your property without 
compensation. Although the United States was initially one of only a 
few countries with such explicit guarantees for its citizens, more 
countries began to recognize such basic rights for their citizens as 
well. Decades after Soviet aggression created an Iron Curtain across 
Europe, Eastern Europeans rose up to reclaim their rights from 
governments that had long oppressed them.
    Cuba's version of the Iron Curtain arrived in the 1960s, bringing 
property seizures of churches, homes, and businesses while locking up 
and even executing those who objected. Many were forced into exile in 
America. Some of the property seizures were for properties and assets 
that were owned in whole or in part by Americans including homes, 
businesses, and financial investments. No one--American, Cuban, or 
otherwise--was compensated for the seizures of their property.
    In 1964, Congress directed the International Claims Commission, now 
known as the Foreign Claims Settlement Commission at the Department of 
Justice, to undertake a process to enable American citizens and 
businesses to submit evidence to prove their property seizure claims. 
Almost 6,000 claims submitted by Americans were certified with an 
estimated value in 1970's dollars of close to $2 billion dollars. No 
money has ever been paid by Cuba to settle these or other claims.
    Although these claims are grounded in numbers and paperwork, they 
reflect personal and direct losses to individuals and their families 
whether they were:

          Businesses whose shipments of merchandise were never 
        paid for

          Family homes of those forced into exile in America

          Family businesses such as the Arechabalas

          Retirees who were counting on their investments in 
        Cuban businesses to provide for their income

    Reflecting the direct personal impact upon families, one of our 
witnesses here today is from a family that was forced into exile, 
leaving everything they had worked for behind in order to live in exile 
in Florida.
    The Administration has long been interested in restoring diplomatic 
relations with Cuba, believing that reopening relations would lead to 
greater freedoms for Cubans. However, its tactics have been nothing 
short of bizarre. Just one year ago tomorrow, Congresswoman Ileana Ros-
Lehtinen and I sent a letter to the Bureau of Prisons demanding answers 
to the Administration's efforts in facilitating the artificial 
insemination of the wife of a convicted Cuban spy, Gerardo Hernandez, 
even though he was convicted on 13 counts, including conspiracy to 
commit murder. The answer from the Bureau of Prisons was less than 
illuminating. Only a few months ago, Gerardo Hernandez's sentence was 
commuted by President Obama after which he returned home to a 
triumphant meeting with Fidel Castro where he was unrepentant for his 
crimes.
    Since the reopening of U.S.-Cuban diplomatic relations last summer, 
it appears little has changed for Cubans not favored by the regime. In 
September, members of a dissident group known as the Ladies in White 
were arrested as they traveled to see the Pope to advocate for human 
rights. In December, they were arrested again as they protested in 
support of basic human rights on the day known as United Nations Human 
Rights day.
    This Administration has failed to aggressively seek compensation 
for property seized by Castro's regime and failed to stop the 
persecution of Cubans advocating for basic human rights. Meanwhile it 
has assisted a convicted Cuban spy to artificially inseminate his wife 
from a U.S. prison, something no other federal prisoner has been 
allowed to do.
    Today's hearing will help shed light on the Administration's 
response, or lack thereof, to the confiscation of property, including 
trademarks, by the Castro regime. I look forward to the witnesses' 
testimony.
                               __________

    Mr. Issa. Well, I'm going to continue somewhat, but I'm 
going to change a little bit.
    Commissioner, H.R. 1627, you've seen the legislation that 
proposes changes to 211, correct? And it does eliminate any 
specific reference to Cuba. And it makes 211 essentially an 
impediment to those who would steal somebody's property and 
then try to--in another country and then gain use of it here.
    Do you have any questions or doubts about its validity 
under WTO?
    Ms. Denison. I'm sorry, could you----
    Mr. Issa. H.R. 1627, you can implement it if it's passed by 
the Congress, right? The Trademark Office hasn't issued any 
objections or anything that would cause us to think you have a 
problem----
    Ms. Denison. I understand there are a number of proposals 
pending, and there is no Administration position on any of 
them, to my knowledge.
    Mr. Issa. Well, that's why you're a Commissioner. Have you 
read it, and do you have any problem with it?
    Ms. Denison. I am not authorized to state a position 
without the Administration position being----
    Mr. Issa. I'll remember that when we talk about the 
independence of commissions.
    Mr. Secretary, since they've sent you here, you mentioned 
that you were concerned about 211. You mentioned that 
essentially giving this trademark back to Cuba ameliorated 
friction between us and our French partners and so on.
    Where does the family get compensation for your benefit? 
You got the benefit. You've improved relationships. The 
original owners got screwed, right? Are you planning to make 
them whole in return for the benefit you got?
    Mr. Tong. Well, my understanding is that the trademark----
    Mr. Issa. You traded real property that belonged to 
somebody.
    Mr. Tong. Thank you, Mr. Chairman.
    The trademark in question is being litigated in U.S. courts 
as of this date.
    Mr. Issa. Okay.
    Well, let me go through a question. Commissioner, I hope 
you can answer this without going back. And I'm not sure you 
can. But, in 1974, the Cuban Government applied for a 
trademark, and it was granted. There was an embargo at that 
time. They could not legally give you $35. Where did they get 
permission to give you the $35?
    And I understand that some law firm submitted it and 
somebody in Luxembourg did it. But the mark went to Cuba; 
therefore, it was clearly Cuban money.
    On what basis did you grant them the trademark, to your 
knowledge? What was your legal authority to take that $35 then?
    Ms. Denison. Thank you for the question.
    When Cubaexport applied for the trademark application in 
1974, they were allowed to proceed under the general license 
provision of the Cuban Asset Control Regulations. So there was 
no problem accepting money.
    Mr. Issa. You had no problem accepting their $35.
    Ms. Denison. That is correct.
    Mr. Issa. Okay. Well, we'll check into that. That's not 
what we're told.
    Additionally, instead of an intent to use, they filed based 
on having a trademark in Cuba. They simply submitted an 
attached trademark from Cuba and said, ``This is our 
application for the same,'' correct?
    Ms. Denison. Yes.
    Mr. Issa. Okay.
    Now, interesting thing about trademarks, if anybody other 
than Cuba applied for a trademark, let's say Darrell Issa, and 
then went more than a decade of not selling one single drop, 
one single bottle, would their trademark still be valid and 
enforceable?
    Ms. Denison. It might be if they could show--there's a 
section of the statute that is called excusable non-use. And, 
in certain situations, use is not required. So, for example, if 
there's an embargo----
    Mr. Issa. Well, let me go through that, because embargo was 
exactly what was in place. At the time of the application, 
there was an embargo. So they filed saying they were going to 
do something that they couldn't do legally and can't do today. 
Isn't that true?
    Ms. Denison. No, that's not correct.
    Mr. Issa. Can they ship to the United States today, madam?
    Ms. Denison. No, they cannot, but----
    Mr. Issa. Could they ship to the United Stats in 1974?
    Ms. Denison. No.
    Mr. Issa. Has there been any period of time between 1974 
and today in which they could ship to the United States?
    Ms. Denison. No.
    Mr. Issa. Do you ordinarily accept and provide trademarks 
excluding others when, in fact, they're not entering commerce?
    Ms. Denison. We have to honor our treaty obligations. And 
this was filed under a treaty obligation----
    Mr. Issa. Okay.
    Now, the family----
    Ms. Denison [continuing]. Known as section 44(e).
    Mr. Issa. Right. The family, through Bacardi, has tried to 
renew their activity and, in fact, has an application pending. 
And the only thing working against them is that, when they had 
no money, extenuating circumstances, they were unable to file 
their renewal, and they were poor and destitute because all of 
their assets had been seized.
    Isn't there a provision in the law that would have allowed 
the family to be able to renew their trademark in 1974, 1975, 
1976 and, in fact, say that these circumstances prevented it, 
and that circumstances was, in fact, the confiscation of our 
assets and so on? Isn't it within the power of the Trademark 
Office? You could have made a decision to renew their trademark 
too, Couldn't you?
    Ms. Denison. Are you referring to the trademarks previously 
owned by the Arechabala family?
    Mr. Issa. Yes.
    Ms. Denison. They could have claimed excusable non-use.
    Mr. Issa. So, my last quick point. In 1974, the trademark 
was not codified, right?
    Ms. Denison. In 1974, the Arechabala family did not have 
any registrations on the U.S. Register. Is that your question?
    Mr. Issa. No. In 1974, they entered into what had been a 
latent--never mind. You know what? I'll wait for additional 
time. I don't want to take from other Members. The gentlelady 
from Washington has been patiently waiting.
    Ms. DelBene. Thank you, Mr. Chair.
    And thanks to both of you for being with us today.
    Commissioner Denison, in your testimony, you note that the 
PTO's decision to accept the authorized fee payment and the 
most recent Havana Club petition in no way decides the Havana 
Club trademark dispute. So I wondered if you could elaborate on 
why this is and comment on the distinct roles that the PTO and 
the courts have in resolving such a dispute.
    Ms. Denison. Thank you very much. And, by the way, we 
appreciate your participation in the Trademark Caucus.
    Ms. DelBene. Thank you.
    Ms. Denison. So when the Trademark Office is presented with 
documents for renewal, we look at the documents; we do not 
examine ownership at that point in time because of treaty 
obligations that we have which restrict our ability to examine 
ownership in the post-registration renewal period. And we only 
look at the ownership if, in fact, there is someone who sends 
the documents in does not match the name in our records. So we 
don't have resources to investigate the ownership, and people 
are required to declare under penalty of perjury that they own 
it.
    So what happens is, if there is a dispute, people file 
cancellations. And so, in fact, that is what has happened here. 
Bacardi has filed a cancellation proceeding, and that is now in 
Federal court. So we are not the ultimate arbiter of ownership. 
That is where we hope the ownership dispute will be resolved, 
in the Federal court case that is now pending between Bacardi 
and Cubaexport.
    When you get a registration, you just get a presumption of 
ownership. And then, when it's challenged in court, that can be 
rebutted.
    Ms. DelBene. Thank you.
    Secretary Tong, in your view, has the Administration's 
decision in any way dictated an outcome in the trademark 
dispute?
    Mr. Tong. Thank you for your question.
    No. In our view, this trademark dispute will be settled in 
Federal court.
    Ms. DelBene. And in terms of any intervention that Congress 
might do, what are your concerns about that at this point in 
time? If either of you have concerns.
    Mr. Tong. Well, I'm not sure I have any particular concerns 
to express beyond the fact that--to once again express the 
really strong determination of the Administration to make the 
protection of intellectual property rights and the pursuit of 
the legitimate claims of U.S. nationals who have had their 
property confiscated by Cuba--our, you know, very vigorous 
pursuit of both of those initiatives going forward. And we 
believe that, you know, recent circumstances and events have 
strengthened our capability to do so.
    Ms. DelBene. Commissioner, do you have any additional 
comments on that either?
    Ms. Denison. No.
    Ms. DelBene. Okay.
    Thank you both for your time.
    And I yield back, Mr. Chairman.
    Mr. Issa. Would the gentlelady yield just to a clarifying 
question you had?
    Ms. DelBene. Yes, I yield.
    Mr. Issa. Thank you.
    When you said U.S. nationals, would those include people 
only at the time of the seizure in 1960, or would it include 
all of the Americans who exist today who fled afterwards and 
whose assets were seized while they were still Cuban nationals?
    Mr. Tong. Yeah, thank you for that question. I think it's 
an important point of clarification.
    Our claims talks that began last December are pursuing 
three areas. The first and most important is the claims of some 
6,000 U.S. nationals, the total value of approaching $2 
billion, a very significant amount. The second is claims of the 
U.S. Government. And the third--I'm afraid I've forgotten right 
now, but I'm sure it's also very important.
    But the----
    Mr. Issa. It could be Cuban nationals who are now 
Americans.
    Mr. Tong. But the Foreign Claims Settlement Commission, Mr. 
Chairman--I think this is an important point--has, under 
statute, only been able to accept the petitions of people who 
were U.S. nationals at the time of the property being taken.
    Mr. Issa. So the Bacardi family and all the other families 
involved who fled Cuba after a dictatorship seized their assets 
are not covered by anything you're doing today is what you're 
saying.
    Mr. Tong. Under the current laws and statutes that we have 
to work with, the Foreign Claims Settlement Commission is----
    Mr. Issa. No, no. I apologize. I'm on the gentlelady's 
time. But the question was are you pursuing on their behalf, 
not something about the claims. You certainly have the right to 
bring up a whole host of families, including, to be honest, the 
Bacardi family, who can't sell Bacardi rum in Cuba, not just 
Havana Club and their family.
    So the question--I just want to make sure the gentlelady's 
question, which you answered, was answered, that, if I 
understand correctly, no, you are not dealing with those who 
came to America escaping persecution. We have, you know, a 
person on the next panel that fits that description. That's why 
I asked.
    Mr. Tong. So I will take your question and concern back to 
the State Department. I think it's--my understanding is that, 
again, we are pursuing, first and foremost and at this point 
exclusively, the property of the people who were U.S. nationals 
at the time of confiscation.
    Mr. Issa. Thank you.
    Mr. Marino?
    Mr. Marino. Thank you, Chairman.
    The question I'm going to ask I would like each of you to 
respond to, if you would, please.
    Has anyone from the Administration, the Obama 
administration, whether it's the White House, whether it's 
State, anyone that you work for, anyone you work with, has 
anyone said to you that this issue cannot be part of or get in 
the way of the reinstating of diplomatic ties between the U.S. 
and Cuba?
    Secretary?
    Ms. Denison. No.
    Mr. Marino. Or Commissioner. Go ahead.
    Ms. Denison. Sorry I answered first.
    Mr. Marino. That's all right.
    Ms. Denison. The answer's no.
    Mr. Marino. No?
    Mr. Secretary?
    Mr. Tong. Again, to my knowledge, in the course of the 
conversations that the U.S. Government had with the Cuban 
Government about the resumption of diplomatic relations, as far 
as I'm aware, the matter of Havana Club did not come up.
    Mr. Marino. Do you know if there were any communications 
with anyone else in the White House pursuing this matter within 
any other department or agency in the U.S. Government?
    Mr. Tong. Again, to my knowledge, there was no quid pro 
quo, and this was not a question of negotiation, that the 
Havana Club matter is a matter of U.S. regulatory action and 
then now, after that regulatory action, now it's a matter 
before the U.S. courts.
    Mr. Marino. Commissioner?
    Ms. Denison. I'm sorry, could you repeat the question?
    Mr. Marino. Do you know of any communication, if there 
exists, between the White House and any other department or 
agency concerning the issue with this patent?
    Ms. Denison. Yes. There were communications from the White 
House to the USPTO staff at some point regarding what the 
procedure was for the petition.
    Mr. Marino. And do you know where that communication went 
and what was the intent behind it?
    Ms. Denison. I don't know what you mean by where it went 
or----
    Mr. Marino. Well, the White House communicates to staff at 
USPTO, right?
    Ms. Denison. Yes.
    Mr. Marino. What was their request, or what were their 
instructions?
    Ms. Denison. To the best of my knowledge, there were no 
instructions. It was an inquiry, and we provided information.
    Mr. Tong. Mr. Marino, can I provide a clarification?
    Mr. Marino. Please.
    Mr. Tong. I don't want to leave you with the impression 
that the Cuban Government has never raised the Havana Club 
issue with us, because they have raised it with us.
    Mr. Marino. I'm sure.
    Mr. Tong. But it was--and that won't surprise any of us. 
But it was not, to my knowledge, a matter of negotiation or of 
any quid pro quo in the discussions with Cuba.
    Mr. Marino. Now, Mr. Secretary, you said that State is 
seeking claims. For whom is State seeking claims, specifically?
    Mr. Tong. We're seeking compensation from the Cuban 
Government.
    Mr. Marino. For whom?
    Mr. Tong. On behalf of 6,000-odd U.S. nationals who were 
U.S. nationals at the time that their property was confiscated.
    Mr. Marino. And how is that going?
    Mr. Tong. Well, it just got started, and obviously it's 
going to be a complex process. I know we were, at the initial 
meeting, able to lay out the full scope of our claims and the 
rationale behind them and have that initial discussion. But 
we're asking for compensation, so it will be a--I don't want to 
handicap the process for you, sir.
    Mr. Marino. When you say you're asking for it, is there 
going to be some restrictions concerning Cuba if they do not 
agree to compensate these people? Is there going to be any 
retaliation from the U.S. Government that you know of?
    Mr. Tong. I don't want to comment on the negotiations per 
se, and perhaps we can follow up and have a--the people that 
are directly involved in those negotiations could have a 
conversation with your staff----
    Mr. Marino. Okay.
    Mr. Tong [continuing]. To explain more about the course and 
the strategy of those negotiations.
    Mr. Marino. Now, a question for the two of you I have, in 
34 seconds: Do you think either State or USPTO or you 
personally have the responsibility of raising the issue with 
the Administration pursuant to the Administration's move to 
begin diplomatic ties again with Cuba and raise the issue with 
the White House over this issue concerning the patent?
    Ms. Denison. I did not think I had any obligation to raise 
it with the White House, no.
    Mr. Marino. You knew of the existing complications in this 
case? People claiming to have ownership and then----
    Ms. Denison. I am aware that there are a number of people 
claiming ownership in the Havana Club mark. We have pending 
applications not just from Bacardi. There is also--and I 
apologize if I mispronounce it--the Arechabala family. There is 
a pending application from them. There was a pending 
application filed last year by somebody named Mr. Solar. I 
think he abandoned recently. But, anyway, there are multiple 
parties claiming ownership.
    Mr. Marino. All right.
    My time has expired. Thank you.
    Mr. Issa. Just to follow up very--just one thing. You did 
mention to the gentleman from Pennsylvania communications with 
the White House. But then, earlier, you said there was no 
document. Is this all oral communication?
    Ms. Denison. Yes.
    Mr. Issa. Okay.
    Ms. Denison. To the best of my knowledge.
    Mr. Issa. Okay. Can you be provide us memos and any other 
information that may exist related to the--you know, in your 
business, everyone does a memo for the record. Could we have 
any of that that exists so we could understand the context?
    Ms. Denison. Yes, Mr. Chairman, if it exists.
    Mr. Issa. Thank you.
    We now go to the gentleman from New York, Mr. Jeffries.
    Mr. Jeffries. Thank you.
    And I thank the witnesses for their presence here today.
    Commissioner Denison, I want to go over some issues related 
to the excusable non-use doctrine, some of which you may have 
already covered, and then build upon that to the extent time 
permits.
    Just so that I'm clear, to obtain and maintain a trademark 
registration, the mark owner has to show use. Is that correct?
    Ms. Denison. In order to get a registration to begin with, 
most people have to show use in commerce. There are certain 
exceptions, though, to honor our treaty obligations. And so, in 
those cases, those people would not have to show use in 
commerce to obtain a registration.
    However, everyone has to show use in commerce, as a general 
rule, between the fifth and sixth year of the registration 
date. The exception is if you can prove excusable non-use, 
which is provided for in the statute. And we did talk about it 
a bit earlier.
    Mr. Jeffries. Now, let me ask about that. In the case of 
excusable non-use, am I correct that it's a temporary doctrine 
in its application?
    Ms. Denison. There's no restriction on it in the statute.
    Mr. Jeffries. Okay. Now, under U.S. trademark law, non-use 
of a trademark for 3 consecutive years, as I understand it, 
creates a rebuttable presumption of non-use. Is that right?
    Ms. Denison. That's a different concept. That is rebuttable 
presumption of abandonment.
    Mr. Jeffries. Right. But that relates to non-use, correct?
    Ms. Denison. It does. It's sort of a complicated legal 
interpretation, though.
    Mr. Jeffries. Okay. And it's 3 years, which is what creates 
the rebuttable presumption, true?
    Ms. Denison. Yes.
    Mr. Jeffries. Okay.
    Now, how does that legal concept work in the context of a 
trademark that's been registered since 1976 but has never 
actually been used in the context of U.S. commerce?
    Ms. Denison. Well, the excusable non-use part of the 
statute--I'm going to have to ask my legal team for an opinion 
on this, but I think that the excusable non-use can trump any 
claim of abandonment.
    Mr. Jeffries. Okay. I'd be interested----
    Ms. Denison. I can get back to you on that, though. I'd 
like to consult.
    Mr. Jeffries [continuing]. In some clarification.
    Ms. Denison. That's a complicated legal question you asked 
me.
    Mr. Jeffries. Okay. No, thank you. Well, I should thank my 
staff for that complicated legal question, actually.
    Let me----
    Mr. Issa. It was a good one.
    Mr. Jeffries. Let me explore a different concept. Now, it's 
my understanding that there's a principle under law which I 
guess technically is referred to as geographically deceptively 
misdescriptive goods. Is that correct? It's kind of an awkward 
phrase, but that's the concept, correct?
    Ms. Denison. Yes, there is such a concept.
    Mr. Jeffries. Now, in terms of that concept, could you just 
elaborate on--I believe there are four factors connected to 
that principle in the statute, one of which--I think the one 
that grabs my attention is--or the two that grab my attention 
are: one, the primary significance of the mark is geographic; 
and, two, purchasers would likely believe that the goods or 
services originated in the place named in the mark.
    Is that correct, in terms of two of the factors, two of the 
four factors connected to this principle?
    Ms. Denison. That sounds right. I don't have the statute in 
front of me, but that sounds generally correct.
    Mr. Jeffries. I'd be interested, you know, sort of, in your 
opinion, as it relates to the Havana Club mark--and this was an 
issue that some of us explored when we were in Europe as the 
Judiciary Committee related to the concept of champagne in 
France and understanding what's the difference between 
champagne and sparkling wine.
    In the context of the Havana Club mark, is it your 
understanding--I believe it's correct--that the Havana Club rum 
was actually made in either Puerto Rico or the Bahamas. Is that 
right?
    Ms. Denison. Excuse me. Whose Havana Club are you----
    Mr. Jeffries. The Bacardi rum.
    Ms. Denison. My understanding is it is not made in Cuba.
    Mr. Jeffries. Correct, that it was made in Puerto Rico or 
the Bahamas. And----
    Ms. Denison. I honestly don't know where it's made. I think 
it may have been made in Puerto Rico, but I did not know it was 
made in the Bahamas.
    Mr. Jeffries. Okay. Right. We might be able to clarify that 
if time permits with the second panel. But what I'd be 
interested in----
    Mr. Issa. The gentleman, for the record, it says ``San 
Juan, Puerto Rico'' on the bottle.
    Mr. Jeffries. Okay.
    Mr. Issa. The bottle's open if you want to inspect.
    Mr. Jeffries. It's tempting.
    And so my time has expired, but if the Chair would permit, 
I'd be interested in your thoughts on the--your views as it 
relates to this particular concept of geographic deception as 
it relates to a Havana-related mark put onto the market by 
Bacardi with the rum actually being made in San Juan, Puerto 
Rico.
    Ms. Denison. Thank you for your question.
    I believe that when we were examining the Bacardi 
application many years ago that that was raised as an issue in 
the Bacardi application, the fact that it could possibly be 
geographically misdescriptive, deceptively misdescriptive, if 
the rum was not, in fact, being made in Havana.
    Mr. Jeffries. And, as far as you know, that's an open legal 
question?
    Ms. Denison. Well, the application is still pending.
    Mr. Jeffries. Okay. Thank you.
    Thank you, Mr. Chair.
    Mr. Issa. Thank you.
    We now go to the gentleman from Texas, Mr. Poe, for his 
round of questioning.
    Mr. Poe. Thank you, Mr. Chairman. I think you cut my mike 
off. Maybe you did that on purpose.
    Mr. Issa. Well, mine is working, but I really didn't touch 
yours. See if maybe the--try the next one down. We haven't done 
anything.
    Ron, does your work?
    Mr. DeSantis. Yep.
    Mr. Issa. It's just you, Ted.
    Mr. Poe. I'm sure it is. It always is.
    This issue--as maybe some of you know, I used to be a 
judge. And the more I hear about this specific case, the more 
I'm glad that I tried criminal cases, you know, bank robberies, 
kidnappings, murder cases.
    Be that as it may, let me see if I can look at this from a 
big-picture situation. Cubaexport is the Cuban Government. Is 
that correct?
    Ms. Denison. Yes.
    Mr. Poe. And it's really the military portion of the Cuban 
Government that runs a company. And if you want to export 
something out of Cuba, you work through Cubaexport, which is a 
government military-run corporation that sometimes partners 
with other people throughout the world, like the French in this 
particular case, to sell a product abroad. Is that a fair 
statement?
    Ms. Denison. I'm not prepared to opine on Cubaexport.
    Mr. Poe. Well, this whole thing is about Cubaexport. You 
don't know anything about Cubaexport?
    Neither one of you know anything about Cubaexport?
    This isn't a gotcha question. I'm just trying to lay the 
foundation of who the people are we're talking about in this 
case.
    Mr. Tong. Yeah. Thank you, sir.
    Cubaexport is a state-owned corporation. So it is owned and 
managed by the Cuban Government.
    Mr. Poe. Cuban Government, primarily the military.
    So what happened? When the revolution happened, the Cuban 
Government swoops in and steals property from Cuban nationals 
and foreign nationals, foreign corporations, and nationalizes 
the property, makes it theirs. Then they set up another 
corporation, called Cubaexport, to run these companies like 
Bacardi and sell stuff abroad. They partnered with the French 
in this particular case.
    And this dispute is whether or not the United States, the 
trademark, and they should still be allowed to sell or not sell 
and whether Bacardi and Puerto Rico can sell or not sell. I 
mean, is that a generally rough statement of what's going on in 
this particular case?
    Mr. Tong. I mean----
    Mr. Poe. Or not?
    Mr. Tong. The case is certainly a matter--the trademark 
dispute is definitely one between--and you'll be hearing from 
them in your next panel, I believe--Cubaexport, which is a 
state-owned Cuban corporation, and Bacardi, which is not.
    Mr. Poe. Okay.
    And so we're in a position where Congress is considering 
under legislation to weigh in on this particular case, and we 
make a verdict, we'll make a verdict based upon the legislation 
filed by the Chairman, or we let it play out in the judicial 
system, in the courts, the Federal courts, where this 
particular case is now.
    I mean, is that right? The case is in Federal court?
    Mr. Tong. The case certainly is in Federal court.
    And, sir, if I can make one observation on that, as someone 
who is charged with the promotion of intellectual property 
rights overseas, it's a matter of pride in explaining the 
strength of the United States intellectual property rights 
system that we do have a court system that operates well and 
considers the merits of each case in a proper fashion.
    Mr. Poe. All right.
    Mr. Tong. And I must say that I'm confident that our court 
system will provide the most high-quality judgment in this case 
compared to those of any other country.
    Mr. Poe. And I generally have the belief and feeling that 
if something is in the court system the court system ought to 
settle the issue, and Congress should really stay out of it, as 
a general rule. I'm not talking about this particular case.
    But we are dealing with the Cuban Government now and trying 
to open it up and be more--let's see--have a better 
relationship with Cuba nationally. And my concern is similar to 
one that Mr. Marino, who used to be a Federal prosecutor, said. 
We're dealing with Cuba, and my belief is we do a lousy job 
when it comes to dealing with someone that's an adversary. The 
Iranian deal is a perfect example, in my opinion. I think that 
was a bad deal for the United States.
    Now we're dealing with Cuba. Are we dealing with them 
through strength or through weakness in our political dealings 
with Cuba?
    Of the 6,000 claims--you know, the Cubans, they don't take 
back convicted criminals that are ordered deported back to 
their country. They don't take them back. You know, China 
doesn't take them back either. And it's very difficult to deal 
with the Cuban Government on a level playing field.
    So are we giving up our strength in dealing with Cuba 
diplomatically over these claims, over this case, over the 
other cases that include Americans, that don't include 
Americans, that include Cubans, in your opinion? Or are we 
fighting for, you know, what we want to be fair in the outcome 
of our relationship with Cuba and what they have done in the 
past to steal everybody's property?
    Mr. Tong. I think you've raised an important matter here, 
sir. And, yes, the U.S. Government is pursuing the claims of 
U.S. nationals against the Cuban Government with great vigor 
and, we believe, in an intelligent fashion, which is by 
creating an environment where we can actually engage with the 
Cuban Government and seek resolution of those claims across the 
table, presenting our case clearly and scientifically to the 
Cuban side.
    And I must say that, in the estimation of the 
Administration, the fact that we have faith in the fairness of 
our own court system to adjudicate this trademark dispute 
actually adds to our legitimacy and strength in pursuing that 
conversation with Cuba. We don't agree with Cuba on everything, 
by any means, but a demonstration of confidence in our 
democratic system adds to our strength in pursuing these 
claims.
    Mr. Poe. I would agree with your comment about our judicial 
system. It is the absolute best in the world.
    But I yield back to the Chairman.
    Mr. Issa. Mr. Poe, where would you put the Cuban judicial 
system in that hierarchy of best to worst?
    Mr. Poe. Well, first of all, it's a misnomer. It's not a 
Cuban judicial system; it's just a system. So it's not much of 
a justice system, but it's just a system.
    Mr. Issa. Thank you.
    And, with that, we go to the gentleman from Florida, Mr. 
DeSantis.
    Mr. DeSantis. Thank you, Mr. Chairman.
    Mr. Tong, you were talking about trying to create 
conditions to get results here, but the President's policy 
change was announced, I believe, in December of 2014. So, since 
that point, how many certified claims have been paid by the 
Cuban Government to U.S. citizens?
    Mr. Tong. None yet, sir.
    Mr. DeSantis. That's what I thought.
    And when you have discussed the issue--I think in your 
testimony you said that they have been provided an overview of 
nearly 6,000 certified claims--how did the Cuban Government 
officials respond to that?
    Mr. Tong. I was not a participant to those negotiations, so 
I don't think----
    Mr. DeSantis. Do you know if any commitments were made?
    Mr. Tong. They listened to the presentation of the U.S. 
claims, and we're beginning a complex process of pursuing them 
with great vigor.
    Mr. DeSantis. So that's a way to say ``no,'' I think, that 
there were no commitments made, correct?
    Mr. Tong. We're still just getting started in this 
conversation.
    Mr. DeSantis. Well, I get that. I just think that when 
you're dealing with a regime of this nature, from their 
perspective, they've received all these concessions, I mean, a 
lot of cash they're going to end up getting, and they really 
haven't done anything for us. And I think that they're just 
gonna keep doing this and try to pocket concessions. So I think 
that this has been a mistake in approach.
    Now, let me ask you this, Commissioner. As a general 
matter, seized trademarks, should those be registered to those 
who seized them or to their rightful owners?
    Ms. Denison. The situation with Havana Club is that we 
registered it because they were permitted to pay under the----
    Mr. DeSantis. I understand. But I'm just saying, as a 
general matter, when you have a trademark that's seized, is it 
better that the person who seized it is recognized or is it 
better that the person who originated it is recognized? Will it 
be better policy?
    Ms. Denison. It's not my job to opine on the law that you 
have put into place. Congress has put into place section 211. 
So if there were another situation and another special license 
were issued, I would be in a situation where I had to take the 
money.
    Mr. DeSantis. Well, I'm glad you mentioned 211. What type 
of legal analysis, if any, did the Patent and Trademark Office 
undertake before departing from the precedent, the longstanding 
precedent, following the language of 211 with respect to this 
issue?
    Ms. Denison. I think it's important for you to understand 
that section 211 is administered by OFAC. And so, once we 
received the specific license--we were not involved with the 
OFAC decision to issue a specific license. But once we received 
the specific license, the law had been complied with, and we 
didn't have an option, we had to issue the renewal.
    Mr. DeSantis. So you did not do any separate legal analysis 
for that reason. Is that what you're saying?
    Ms. Denison. Correct.
    Mr. DeSantis. Okay.
    Well, Mr. Chairman, I appreciate you calling this hearing. 
I think it's something that's very frustrating to see, you 
know, the Cuban Government seizing all this property. This has 
been going on for decades. And it seems like they're going to 
get away with a lot of this stuff, and, you know, I think 
that's a real tragedy. But I know we have the next panel coming 
up, and so I will yield back.
    Mr. Issa. Will the gentleman yield for just 1 second?
    Mr. DeSantis. For 1 second.
    Mr. Issa. Mr. Secretary, did you do a legal analysis? They 
asked the Commissioner, but since you folks--you and OFAC--was 
there a legal analysis done by State, who effectively made this 
happen while tying the hands of the PTO? Ms. Denison has made 
it clear she had no choice. You had a choice. What was your 
legal analysis for it?
    Mr. Tong. We also followed the guidance of OFAC in the 
interpretation of----
    Mr. Issa. So I need to get OFAC here to find out if they 
did a legal analysis?
    Mr. Tong. Yes, sir.
    Mr. Issa. Okay. Well, I guess that's what the empty chair 
is for.
    Thank you, Mr. DeSantis.
    We now go to Mr. Deutch, another gentleman from Florida.
    Mr. Deutch. Thank you, Mr. Chairman.
    I apologize. I had another meeting. But I'd just like to 
walk through a couple of points.
    Secretary Tong, as the Administration moves toward 
normalization, there's been broad recognition, widely 
discussed, that confiscated and disputed property claims have 
to be resolved, and I absolutely agree with that.
    What I am confused about is, how was it that we decided 
before any of the many claims, many claims that are out there 
that have been the focus of much discussion, before any of 
those claims are resolved, that we would toss aside this 
heavily disputed trademark? Why was Havana Club marked first on 
the list?
    Mr. Tong. Our handling of the Havana Club registration--the 
State Department's role, to be very specific, was to provide 
foreign policy guidance to OFAC in its decision about whether 
to grant a specific license that provided Cubaexport the 
ability to pay a fee, which would allow them to register a 
trademark.
    Mr. Deutch. Right.
    Mr. Tong. It----
    Mr. Deutch. And you had said--I'm sorry. But you had said 
earlier, or you said in your testimony that--specifically, 
you'd said that State's role was not to adjudicate the 
ownership of the disputed trademark rights and the Department 
took no position on that issue.
    Mr. Tong. Correct.
    Mr. Deutch. But how is it that granting of an OFAC license 
is not taking a position on the issue?
    And here's the question. Here's why I rushed back here as 
quickly as I could. Shouldn't we clearly bar the recognition of 
any sort if the mark was used--if the mark that's used was used 
in connection with a confiscated business and the original 
owner hasn't consented? And aren't we just legitimizing the 
confiscation and then telling the original owners to take their 
objections to court?
    And I hope that it's not going to be a broader reversal of 
what has been U.S. policy, to not recognize any interest in 
confiscated property. And I also hope that it's not a 
foreshadowing of the process that might be used in future Cuban 
confiscated property claims resolution.
    Mr. Tong. So there was a lot in what you said.
    Mr. Deutch. There was. I realize that.
    Mr. Tong. Our action, the State Department action, again, 
was to issue foreign policy guidance that then informed the 
decision to allow a trademark registration. That trademark 
registration is now a matter of dispute in U.S. Federal court.
    So the U.S. administration action, in particular the State 
Department action, in this regard, as I said, was not to 
adjudicate this claim, but, rather, it creates a situation 
where it will be adjudicated----
    Mr. Deutch. Right, but----
    Mr. Tong. If I could----
    Mr. Deutch. No, but I just want to follow up on that point. 
But that gets to the question I asked. Isn't that just 
essentially legitimizing the confiscation and then telling the 
original owners just simply take your case to court?
    Mr. Tong. Well, in the question of broader claims of U.S. 
nationals against the Cuban Government, I've stated several 
times this evening that we are pursuing those with great vigor 
and, we believe, with an astute strategy, sitting down directly 
with the Cuban Government to address these claims of 6,000 
people, worth close to $2 billion. And we will pursue those 
claims with great energy and vigor and determination.
    That is a separate matter in a different channel and an 
entirely different matter than the question of a trademark 
registration for a disputed trademark.
    Mr. Deutch. But how is the--ultimately, we're talking about 
these claims, and, in all cases, we're talking about the 
confiscation of property, right? So, I mean, in those cases 
where we're talking about the confiscation of property, why is 
it different in this case with the confiscation of a trademark 
versus the others?
    Mr. Tong. One of the differences in this case--and there 
are several in terms of the type of matter to be decided, 
again, not by the State Department. But one of the difference 
is that, in this case, the property which was confiscated that 
this trademark is associated with was that held by a U.S 
national at the time of confiscation. So, under the law that 
we're operating under, it doesn't become a matter for us to be 
pursuing through the claims discussions. So that is one of the 
differences.
    I just would encourage Members of Congress to consider the 
broader game here, which is the pursuit of the claims of U.S. 
nationals, worth in the billions of dollars, against a 
government that will not necessarily go easily into recognizing 
these claims. So we are going to go after those with great 
energy, and we should.
    Mr. Deutch. I do--and my time is up, but I do--I appreciate 
the suggestion and your urging that I consider those. I 
consider those very seriously. That's why I am concerned about 
the possible precedential value--the possible precedent that's 
being set in the way this claim was handled, almost with the 
appearance that this one will cast aside to perhaps give us 
some greater leverage as we discuss these others. That's my 
concern.
    But I yield back, Mr. Chairman.
    Mr. Issa. Thank you.
    And I'll be brief, because I know we have a second panel.
    One, isn't the $2 billion the original value? Isn't it $7 
billion or $8 billion? Isn't there interest----
    Mr. Tong. On the----
    Mr. Issa. You may not be claiming it, but the value of 
money over a lifetime plus.
    Mr. Tong. I'm not certain of the facts of that to answer--
--
    Mr. Issa. Well, aren't the 6,000 claims----
    Mr. Tong [continuing]. Question. We'll get back to you on 
that.
    Mr. Issa. The 6,000 claims were about $2 billion at the 
time that they were certified. So we're going to assume that 
they're a multiple of that at some point.
    But let me just--I have to, to be honest, call you out on 
something that I'm--I'm concerned, the way you said it. You 
said ``the broader game.''
    Now, this country welcomed tens of thousands of Cuban 
refugees to our shores. Those tens of thousands of Cuban 
refugees, including those who spent time in prisons and fled, 
those who died--some of them died on the boats, and some made 
it here. Those Americans, you've said repeatedly, are not part 
of your calculation. Isn't that true?
    And, please, don't tell me about international law. I just 
want the straight answer.
    Those tens of thousands of Cubans who fled to our shores, 
who we granted asylum and citizenship from a totalitarian 
dictatorship that oppressed them, that had no rule of law, they 
are not part of the current negotiations that you are trying to 
work with the Cubans. And yet you used the word ``broader 
game.''
    Isn't that the broader game? Isn't the broader game justice 
for the tens of thousands here and the hundreds of thousands 
still in Cuba, that they get their rights? Isn't that the 
broader game for America?
    Mr. Tong. Well, Mr. Chairman, as I've stated previously, 
the Foreign Claims Settlement Commission has recognized the 
claims of people who were U.S. nationals at the time of 
confiscation, and we're pursuing those claims vigorously 
through the negotiations.
    Mr. Issa. Well, doesn't your responsibility, your position, 
Secretary, include taking steps to eliminate trafficking in 
stolen U.S. property?
    Mr. Tong. Yes, sir.
    Mr. Issa. So U.S. property is sitting there, perhaps a home 
that--a U.S. citizen in 1960, and certainly homes and 
businesses of U.S. citizens today. That's where rum is being 
produced. It's where Coca-Cola copy is being produced. It's 
where cigars are being produced.
    So anything that we allow to come, including Havana Club 
rum, very, very possibly is coming from assets seized 
illegally, held by Americans. And your responsibility is to see 
that that doesn't get trafficked, isn't it?
    Mr. Tong. Our responsibility is to uphold and implement 
U.S. law on all these matters.
    Mr. Issa. So, again, I'll go to the Commissioner.
    And, please, this is within your jurisdiction. And I would 
ask that you use the level of career professionalism and not 
tell me that somebody I haven't yet brought before this 
Committee is the person to ask.
    We talked earlier, and the round of questioning was rather 
interesting. The first question: There's abandonment, and then 
there's an inability to ship the goods, to in fact use your 
trademark, correct? Okay.
    The original trademark holder, who's one of the still 
applicants, that family, their assets--and they're American 
citizens today--their assets were seized in Cuba. Their 
product, if their assets were lawfully returned to them, could 
be made in Cuba and shipped from Cuba, couldn't it?
    Well, I won't ask you to hypothecate that.
    Ms. Denison. I can't.
    Mr. Issa. Right. But the fact is they have a factory, or 
had a factory, in Cuba. If they didn't have to flee as refugees 
recognized by us, for asylum recognized by us, after a 
totalitarian dictatorship jailed them unlawfully, oppressed 
them, if they hadn't fled here, they could still be there. If 
they could be there, then they could ship from Cuba.
    So in the question about Havana Club and origin, once Cuba 
returns to rule of law, once it returns to where the family can 
regain what was taken by it in no different matter than the 
Nazis took things--this government nationalized. They took 
assets. They gave no compensation. So the fact is Havana Club 
has a factory in Cuba, except it belongs to someone who is an 
American citizen.
    So is there, within your recognition, a circumstance in 
which--as long as a military junta holds on to the asset that 
makes the alcohol, that family is unable to secure the money 
for their trademark or to ship from their native country of 
Cuba because their factory is being held by a military 
dictatorship. Isn't that every bit as valid a reason for the 
family not to be able to ship product and, thus, reclaim their 
trademark?
    You know, the Cubans say we can't ship--the Cuban 
Government says we can't ship because we have an embargo. But 
this family can't ship because the Cuban Government took their 
factory, their distillery, and still holds it today.
    Ms. Denison. I believe I stated earlier that they could 
have preserved their registrations by claiming excusable non-
use back in the fifties.
    Mr. Issa. But you have the right to waive any limit to go 
back and find those circumstances. You don't have--you 
mentioned you didn't have time limits. If the family came to 
you today and said, we want to reclaim it because we have been 
unable to ship from our country of Cuba, from our factory, 
because a dictatorship has taken it and seized it, you have the 
ability to grant that today. There's no time limit on that, is 
there?
    Ms. Denison. I don't have the ability to do that today 
because there is a blocking registration.
    Mr. Issa. Oh. Oh, that's right, because you were ordered by 
the State Department to grant a registration to the Cuban 
Government that seized their asset.
    Ms. Denison. I was not----
    Mr. Issa. The same State Department that's not going to 
protect the rights of those refugees and asylumees and their 
families, the tens and thousands of Cuban Americans who fled 
Cuba or were imprisoned and then got out of Cuba on a boat. 
They won't protect them. And you've granted a trademark to the 
Cuban Government that did that, and that's going to block it 
today? Is that your testimony?
    Ms. Denison. I was not ordered by the State Department to 
do anything.
    Mr. Issa. Well, you provided the legal information 
necessary to compel you to give it. Because you said you had no 
choice once OFAC delivered that.
    Ms. Denison. The Department of Treasury----
    Mr. Issa. I'm sorry, Treasury.
    Ms. Denison [continuing]. Is where OFAC is.
    Mr. Issa. Treasury.
    Ms. Denison. Yes. So once the OFAC----
    Mr. Issa. I apologize for saying OFAC. Treasury. Thank you.
    Ms. Denison. Once----
    Mr. Issa. The problem is we have State here telling us that 
this is the bigger game that we need to understand.
    Ms. Denison. I understand that. I'm just a very small part 
of it, and I got a license from OFAC, and so then I followed 
the law.
    Mr. Issa. Right. You had no choice but to provide a 
trademark to a dictatorship that seized their assets and that 
now blocks the original owners, who had it seized from them, 
and whose children and grandchildren are fairly destitute today 
comparatively because, of course, they don't have the assets to 
make their distilled spirits.
    Ms. Denison. Is there a question?
    Mr. Issa. Well, ``yes'' would be fine.
    Ms. Denison. I had no choice but to renew registration 
number 1031651.
    Mr. Issa. Well, thank you.
    I think, although the record is not complete, it is 
certainly complete as to what the broader game is by the State 
Department and the fact that you had no choice but to grant an 
injustice by renewing to a dictatorship that seized some of 
these assets their trademark, which will now, I predict, be 
used in Federal court for the presumption in favor of Cuba.
    And that is what you have done here today, or have done. 
You have changed the presumption in the court. I will tell you, 
your testimony, Mr. Tong, that you don't think it's going to 
change the presumption, I don't think you're right. I think it 
will change the presumption. It shouldn't. And certainly I hope 
Congress passes a resolution hoping that the courts will 
recognize that your actions should in no way change the 
presumption of who has the actual right and who has had the 
right to that trademark since the 1930's.
    Ms. Denison. Mr. Chairman, the presumption has been in 
place since 1976. So we have maintained the status quo.
    Mr. Issa. I hear you. But no one was shipping any product; 
today, this product is being sold in at least 19 states. And 
notwithstanding the renewal--there's certainly 19 states' worth 
of common law rights, rights that in the ordinary course would 
not be stopped. And I would presume that the Cuban Government 
will seek to stop Bacardi in court. They will try to stop the 
sale of this even while they cannot sell the product.
    We'll see how it works out. The one thing I know is the 
lawyers will get rich, the Administration will move on, and the 
thousands and thousands of Americans whose parents and 
grandparents fled Cuba will feel undercut if you're only 
looking at 6,000 people who may have lost a stock or a bond but 
were Americans sitting here. And I hope this Administration 
will reconsider the broader game and understand that the 
broader game includes all Americans, not just those who were 
Americans in 1960.
    If you have any closing comments, I certainly want to hear 
them.
    And, with that, this panel is dismissed, and we'll take a 
5-minute recess while we set up the next panel.
    Ms. Denison. Thank you.
    [Recess.]
    Mr. Issa. I want to welcome all of you back.
    And I take pleasure in introducing our second distinguished 
panel of witnesses. Once again, the witnesses' written 
statements will be entered into the record in their entirety.
    And I would ask that you summarize your testimony in 5 
minutes or less. To help us stay within the time, you see the 
lights. You know how the lights work. I will say no more.
    Before I introduce the witnesses, pursuant to the 
Committee's rule, I would ask you all to please rise to take 
the oath and raise your right hand.
    Do you solemnly swear or affirm that the testimony you're 
about to give will be the truth, the whole truth, and nothing 
but the truth?
    Please be seated.
    Let the record indicate that all witnesses answered in the 
affirmative.
    Our second panel of witnesses today includes Mr. Rick 
Wilson, senior vice president at Bacardi-Martini, Incorporated; 
Mr. William Reinsch, president of the National Foreign Trade 
Council; Mr. Mauricio Tamargo, attorney at law of Tamargo LLP 
and former chairman of the Foreign Claims Settlement 
Commission, which certainly was talked about by the previous 
panel; and Ms. Escasena, a Cuban property claimant from Miami, 
Florida.
    And, just for the record, are you one of the 6,000 that is 
in that stack that was referenced earlier?
    Ms. Escasena. No, I'm not.
    Mr. Issa. Okay. So you are a claimant but not certified. 
You lost property but are not recognized. I just want to make 
that for the record.
    And, with that, I will go down the list, starting with Mr. 
Wilson.

   TESTIMONY OF RICK WILSON, SENIOR VICE PRESIDENT, BACARDI-
                         MARTINI, INC.

    Mr. Wilson. Thank you, Mr. Chairman, Committee Members. 
Good afternoon--or good evening, I guess. My name is Rick 
Wilson, and I'm senior vice president of external affairs for 
Bacardi.
    I'm here today to testify about the recent decisions of 
OFAC and the PTO, which issued a license and a trademark 
registration for the illegally obtained and now-expired Havana 
Club mark 10 years after the statutory deadline. These 
decisions are unprecedented and shocking because they undo 
decades of U.S. law and policy by sanctioning Cuba's efforts to 
capitalize on and traffic in stolen assets.
    This dispute has a long history, and I will not go through 
all the facts, and I ask the Committee to look at my written 
comments.
    I do have to say a few words a little bit about history. 
You know, the Bacardi and the Arechabala families were both 
very similar companies. They originated in Cuba in the mid-
1800's. We both created rums and operated in a similar fashion 
until 1960, when armed forces of the Cuban Government, under 
the leadership of Fidel Castro, forcibly seized the company's 
assets in Cuba without compensation, throwing family members in 
jail or forcing them to flee the country.
    And I just have an example. And we have the original, by 
the way, in our office. This is actually the front page of the 
newspaper that talks about the confiscations. And on the last 
page, actually, is the list, which have been circled, of the 
Arechabala company and the Bacardi company, in case there's any 
doubts.
    Unlike the Arechabala family, the Bacardi had assets 
outside of Cuba and successfully stopped Cuba from selling rum 
under the Bacardi name around the world. We had to fight them 
in a number of places. Unfortunately, the Arechabalas did not 
have those assets outside of Cuba and were unable to continue 
their business.
    After losing the fight for the Bacardi brand, the Cuban 
Government, they lied in wait. And in 1976, you heard earlier, 
after the family's U.S. trademark registration understandably 
lapsed, Cuba fraudulently registered the mark for itself.
    Years later, then it sought an OFAC license, by the way, to 
transfer that illegally obtained registration to that joint-
venture company you heard about earlier half-owned by Pernod 
Ricard, a French liquor company that today is the second-
largest spirit company in the world. OFAC, back then, properly 
denied that request.
    However, the Cuban Government would be faced in 2006 with 
another need to renew its illegally obtained registration. But, 
this time, a very important law had been passed by Congress, 
called section 211, which specifically requires confiscators 
and their successors to seek a specific license to obtain or 
renew a trademark registration for Cuban confiscated 
trademarks.
    Cuba applied for such special license, and OFAC refused to 
grant it back then, stating, and I quote, ``We have received 
guidance from the State Department informing us that it would 
be inconsistent with U.S. policy to issue a specific license 
authorizing transactions related to the renewal of the Havana 
Club trademark.'' And indeed it was, and indeed it still should 
be.
    As a result of OFAC denying this license application, the 
PTO denied the trademark renewal, stating that the registration 
will be canceled expired. Again, this, as was stated earlier, 
2012, all the litigation regarding that ended.
    The Cuban Government sued the U.S. Government during this 
timeframe, and OFAC specifically defended its decision to deny 
the license application all the way to the Supreme Court, which 
declined to hear the case.
    That should have been the end to the matter. However, in 
unprecedented fashion and for unknown reasons, the PTO refused 
to remove the canceled mark from its register for years. And, 
recently, on January 11, 2016, OFAC unbelievably reversed 
course and granted Cuba a license which purports to authorize 
payment of this long-overdue filing fee from 2006.
    So, within 24 hours of learning about this decision, a 
speed which is likely unmatched in the chronicles of 
administrative law, the PTO granted Cuba's 2006 petition to 
renew its trademark. Granting a specific license to renew 
Cuba's invalid registration allows the Cuban Government to 
illegally maintain its claim of title to United States property 
which is acquired through the forcible confiscation of the 
Arechabalas' assets and forced exile of its founders. Indeed, 
intellectual property law is undermined, not strengthened, when 
states recognize rights in confiscated marks.
    Whether the Cuban embargo is strengthened or weakened, it 
will always be important to ensure that the United States does 
not become a party to Cuba's illegal confiscation of private 
property. Recognizing Cuba's ownership of the U.S. Havana Club 
registration, as OFAC and PTO have now done, will only serve to 
legitimize Cuba's thievery.
    What occurred was a forcible confiscation at gunpoint. For 
decades, the U.S. has prevented Cuba and its business partners 
from profiting off of the United States Havana Club 
registration. It should continue to do so.
    Well-settled U.S. law and policy, as reaffirmed by section 
211, ensures that the U.S. will always protect the creators and 
owners of intellectual property, like us, and not reward those 
rogue states, like Cuba, which use force of arms to steal such 
property and enrich itself at the expense of its citizens. The 
sudden and unexplained decision of OFAC and the PTO to permit 
Cuba's renewal of the Havana Club mark flies in the face of 
these legal and policy principles, and this action should be 
retroactively revoked.
    Thank you very much.
    [The prepared statement of Mr. Wilson follows:]
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                               __________
    Mr. Issa. Thank you.
    Mr. Reinsch.

          TESTIMONY OF WILLIAM A. REINSCH, PRESIDENT, 
                 NATIONAL FOREIGN TRADE COUNCIL

    Mr. Reinsch. Thank you very much, Mr. Chairman.
    My name is Bill Reinsch. I'm the president of the National 
Foreign Trade Council, which represents 200 American companies 
engaged in global commerce.
    The NFTC strongly supports the Obama administration's 
efforts to place relations between the United States and Cuba 
on a more normal footing. Resolving satisfactorily the 
legitimate claims of U.S. citizens who had their property in 
Cuba confiscated by the Castro government is essential to 
creating the conditions in which a normal relationship with 
Cuba can thrive and endure. Constructing new impediments and 
perpetuating those that already exist will only complicate this 
process and make it more difficult to secure the recompense 
that U.S. property holders have sought for decades.
    Tonight, I want to focus my testimony on an important 
intellectual property issue that, if not resolved correctly, 
will adversely affect our country's standing in international 
organizations, our ability to lead the global effort to protect 
intellectual property rights, and our efforts to protect the 
property of U.S. citizens and companies doing business in Cuba 
in the years ahead. And that is section 211.
    As the Committee is aware from its hearing on this subject 
in March 2010, where I also had the honor of appearing, section 
211 was found in 2002 to be in violation of U.S. WTO 
obligations. Some 14 years later, the United States remains in 
noncompliance. Section 211 also has put the United States in 
violation of its obligations under the General Inter-American 
Convention for Trade Mark and Commercial Protection.
    On behalf of the NFTC, I want to express our support for 
repeal of section 211, which is contained in--a provision for 
which is contained in a number of different bills, which I 
enumerate in my statement.
    I also want to express my opposition, I'm sorry to say, Mr. 
Chairman, to your bill, H.R. 1627, which purports to address 
this problem in a different way but, in fact, would only 
exacerbate it.
    Repeal of section 211 would remedy the U.S. breach of its 
WTO obligations and the Inter-American Convention--and my 
written statement provides details about that--while it would 
also remove any pretext for the Cuban Government to remove 
protection of trademarks currently registered in Cuba by U.S. 
companies.
    At present, there are more than 5,000 U.S. trademarks 
registered in Cuba by over 400 U.S. companies. Many of these 
companies look forward to the opportunity to sell their 
products in Cuba, and they will want to know with certainty 
that their trademarks will be protected by Cuba as they build 
their plans to develop that market.
    Repeal of section 211 also would restore the traditional 
U.S. leadership role on intellectual property issues which has 
been compromised by our failure to comply with the WTO ruling. 
This has provided over the past decade a convenient excuse for 
other WTO member countries, such as China and India, to ignore 
U.S. calls to improve their IP laws.
    Repeal of section 211 would confirm the U.S. commitment to 
providing high standards of IP protection, including our 
commitment not to assign trademarks based on political 
criteria. It would also reaffirm that resolving trademark 
disputes are properly the responsibility of the Patent and 
Trademark Office and the courts based on the merits and not on 
political considerations.
    Section 211 has no benefits for the U.S. business community 
and is far more likely to cause significant damage. If it's 
maintained in law, it could provide, as I said, a pretext for 
Cuba to withdraw protection for U.S. trademarks currently 
registered in Cuba by American companies. It could also become 
one more roadblock to the efforts of the United States to reach 
agreement with the Cuban Government on a satisfactory 
resolution of the outstanding claims that will be the topic of 
the next two witnesses.
    H.R. 1627, another proposal short of full repeal, we 
believe, will make things worse. For the benefit of a single 
company, the proponents of section 211 and H.R. 1627, in 
effect, are asking the Congress, one, to make it more difficult 
for U.S. companies to enforce their trademarks and tradenames 
in U.S. courts against claims of ownership; two, to keep U.S. 
companies exposed to the risk of retaliation abroad and the 
type of injury that they suffered in South Africa in a 
comparable situation; and, three, to continue putting U.S. law 
at cross-purposes with longstanding principles of U.S. 
trademark law and important IP and trade policy objectives of 
the U.S. business community and the U.S. Government. And my 
written statement has further details on those points, as well.
    H.R. 1627 would seek to apply section 211 to both U.S. 
nationals and foreign trademark holders. However, such an 
amendment has significant drawbacks when compared with repeal, 
the main one being that it would not address any of the 
inconsistencies of 211 with the Inter-American Convention. In 
addition to the risk to U.S. companies abroad, such a partial 
approach would also lead to increased litigation and legal 
uncertainty at home.
    In sum, section 211, even if amended by H.R. 1627, would 
continue to benefit only a single company and provide no 
benefits for U.S. business. Instead, it would make it more 
difficult for U.S. companies to enforce their trademarks and 
tradenames in U.S. courts against counterfeiters and infringers 
and keep U.S. companies exposed to the risk of legal 
uncertainty and retaliation abroad. For NFTC members, this is a 
bad bargain that harms both U.S. business and U.S. national 
interests.
    Instead, we urge Congress to repeal section 211 in its 
entirety. Repeal is the only action that will provide full 
compliance with all current U.S. trade obligations and deny 
other governments any rationale for suspending their treaty 
obligations or retaliating against the trademark and tradename 
rights of U.S. businesses. This is all the more important as 
the United States moves to reestablish a normalized 
relationship with Cuba. Repeal of section 211, we believe, is 
an essential element of establishing that relationship.
    Finally, Mr. Chairman, I want to reiterate what Secretary 
Tong and Ms. Denison said, and that is to note that repeal 
would not take sides in the underlying dispute over the Havana 
Club trademark and it would not settle that question. Rather, 
it would return that dispute to the Patent and Trademark Office 
and the courts, where we believe it belongs. Experience shows 
that the courts are more than capable of reaching a just and 
equitable resolution of that dispute based on the merits.
    Thank you for the opportunity.
    [The prepared statement of Mr. Reinsch follows:]
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                               __________
    Mr. Issa. Thank you. And just, as we go on, you do also--
one of the 200 companies you represent does, in fact, currently 
hold the trademark, correct?
    Mr. Reinsch. I'm sorry?
    Mr. Issa. The maker of Havana Club is one of the 200 
members of your consortium?
    Mr. Reinsch. If you're asking me if Pernod Ricard is one 
of----
    Mr. Issa. Yes.
    Mr. Reinsch [continuing]. Our members, the answer is yes.
    Mr. Issa. Okay. I just want to make sure that, you know----
    Mr. Reinsch. Yes.
    Mr. Issa. It's not the 199 as much as it's the one.
    Mr. Reinsch. Well, no. Our members are the U.S. subs, in 
some cases.
    Mr. Issa. Yes.
    Mr. Reinsch. I would argue that there's 200 American 
companies, but there are other companies as well.
    Mr. Issa. We'll see.
    Mr. Tamargo.

 TESTIMONY OF MAURICIO J. TAMARGO, POBLETE TAMARGO LLP, FORMER 
 CHAIRMAN, FOREIGN CLAIMS SETTLEMENT COMMISSION OF THE UNITED 
                 STATES, DEPARTMENT OF JUSTICE

    Mr. Tamargo. Thank you, Mr. Chairman and Members of the 
Subcommittee. It is an honor to appear before you today.
    I commend this Subcommittee for convening this hearing and 
for including certified claims against Cuba. I hope the 
Subcommittee continues to play an active role in the long-
overdue settlement of these Americans claims.
    Over 55 years ago, the Communist Government of Cuba 
confiscated real and personal property of thousands of 
Americans and others living and doing business in Cuba. To this 
day, that chapter represents the largest confiscation of 
American property in history, and there has been no progress in 
settling the claims or addressing other potential Cuban debts, 
as called for under U.S. law.
    Caveat emptor, or buyer beware, is generally the rule in 
international commerce but not when a foreign government 
injures an American or confiscates his or her property. In 
those cases, it is the responsibility and the expectation that 
the U.S. Government will do all it can to achieve justice for 
its own nationals. Under international law, all countries are 
expected to do the same for their own nationals.
    The confiscation of American property by Cuba was so 
significant that the U.S. Government enacted certain trading 
restrictions regarding Cuba, which have become known as the 
Cuban embargo. The U.S. Congress has repeatedly declared that 
this embargo will not be lifted until the American certified 
claims are paid and settled by Cuba. That was the promise made 
by the U.S. Government to the claimants. Unfortunately, both 
Democratic and Republican administrations have weakened the 
sanctions on Cuba without securing concessions or commitments 
from Cuba regarding the claims.
    I am encouraged but guarded by the ongoing negotiations 
between the United States and Cuba regarding the possible 
settlement of American claims and related issues. There are 
5,913 certified claims against the Government of Cuba, the last 
two of which the Commission certified under my chairmanship. 
When all claims are certified, they are valued at $1.8 billion. 
Today, they are valued at $7 billion to $8 billion. And I thank 
the Chairman for that clarification question to the Secretary, 
because, with interest, they were valued closer to $8 billion. 
No American claims program has been left pending and unsettled 
for this long.
    Under international law, the Cuban Government can 
confiscate property, but the U.S. has a right to fair 
compensation for its citizens. I believe the U.S. should agree 
to nothing less than full amount of value for their claims plus 
100 percent of the interest. Cuba can and should pay this 
price. Cuba should not get a free ride for stealing American 
property, sometimes by force, and without compensation.
    A few recommendations to the Congress.
    First and foremost, these certified claims were the reason 
the embargo was created in the first place, and Congress must 
not pass any legislation which further eases the embargo unless 
these claims are settled.
    The U.S. gets only one shot at this. We have only two 
things Cuba wants: access to credit and access to the U.S. 
marketplace. If the Congress gives those away or allows them to 
be given away without getting these claims paid, then the 
Congress will have failed to stand up for these American 
families and companies. It is also inviting other countries to 
take more American property.
    Second, I urge the Congress to enact legislation granting 
limited authority to the Foreign Claims Settlement Commission 
to update the certified claims with the current claim-holder of 
interest for each claim.
    As I explained, claims programs are not designed to go 
unpaid for 55 years. Multiple generations of claim-holders have 
come and gone, and it will possibly take years to ascertain the 
identity of the current claimants. Not only is it good 
governmental housekeeping with no additional cost to the 
taxpayer, but it also sends a strong message to Cuba.
    Thirdly, although I am optimistic that the certified claims 
will get paid, you never know. We've been waiting for 55 years, 
and we may get more of the same status quo. Therefore, I 
propose the following.
    We know the current American trade and travel business with 
Cuba is trespassing on American property. We know this because 
a runway expansion at Jose Marti Airport was built on land 
subject to a certified claim. And the same is also true of most 
other Cuban air and sea ports, including the Port of Mariel and 
much of its infrastructure. They all are on land which is the 
subject of an American claim. And there may be other debts by 
other Americans and foreign nationals.
    If these talks fizzle out, Congress should consider 
enacting a trespass penalty of 10 percent on all transactions 
with Cuba. That would be on all trade, travel, commerce, 
remittances, toll calls, gifts, flyover fees, port duty, 
everything.
    The proceeds collected by this trespass penalty would go 
into a fund which would pay all certified claimants their full 
amount, including interest. This trespass penalty would not 
release Cuba of its debt, but now the debt would be owed to the 
U.S. Government instead of the individual claimants. Those 
doing travel and trade with Cuba should consider this trespass 
penalty as the cost of trafficking in stolen property.
    The current and seemingly never-ending waiting by the 
claimants is unacceptable and intolerable. It is the 
responsibility of the Congress to end this embarrassing 55-year 
wait by our fellow Americans.
    Fourth, I recommend and urge all American families and 
companies that are holding certified claims to become engaged 
in this discussion. Write your Congressman, your Senator, the 
President, the State Department, and continue writing and 
calling until these claims are settled.
    American taxpayers are owed compensation by Cuba. They need 
to demand that their claims be settled. And if they're not 
going to be settled, they should be paid by the trespass 
penalty. It is wrong to continue to hold claimants hostage to 
this seemingly never-ending battle over Cuba policy. It is 
unfair to many American families who did nothing but 
courageously go to Cuba to build a business or try to start a 
new life.
    Thank you, Mr. Chairman and Members of the Subcommittee.
    [The prepared statement of Mr. Tamargo follows:]
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                               __________
    Mr. Issa. Thank you.
    Ms. Escasena.

                TESTIMONY OF LILLIAM ESCASENA, 
               CUBAN PROPERTY CLAIMANT, MIAMI, FL

    Ms. Escasena. Thank you, Mr. Chairman, and thank you to the 
Members of the Committee.
    Mr. Issa. I think maybe pull your mike a little closer.
    Ms. Escasena. A little bit closer?
    Mr. Issa. Yeah, please. Thank you.
    Ms. Escasena. Thank you for giving me this wonderful 
opportunity to tell my story.
    I am a Cuban-born and American citizen. My family left Cuba 
in 1960. They silently planned their exodus for fear of 
persecution. They also had to plan financially how they would 
survive this exile.
    No matter how terrified they were of their immediate 
future, their mentality was that this would not be permanent 
and that they would return to their beautiful island once 
again.
    My grandfather, Federico, on my mother's side came from a 
humble beginning. He was born in Caibarien las Villas, lost his 
dad at the age of 9, and in order to help his mother provide 
for him and his four siblings, he worked on the docks after 
school every day. He would finish high school before he began 
working full-time.
    While his future looked promising, the financial crisis in 
1929 left him jobless. He took all the savings he had, his 
experience and contacts, and became a steamship agent, opening 
his own office as a customhouse broker in Caibarien and some 
years later in Havana. He would then open sub-agencies in every 
key port in Cuba and an office on Wall Street.
    In 1938, his success in Cuba would get him recognized by 
the U.S. and make him a consular agent. My grandfather had 
finally built a name for his family and their future 
generations.
    My father, Manolin, started at the age of 10 working 
alongside his dad to help create and build the family business. 
My grandfather, Manolo, started a company of explosives that 
would later be contracted for mining and the creation of roads 
throughout the entire island. Their growth and success would 
soon move their main factory and operations to Havana. The 
business continued to flourish, and my father continued making 
large investments, aiding the growth and expansion.
    Castro's regime of terror started by confiscating property 
from big landowners, arresting and accusing innocent 
individuals of being against the government, sending these 
individuals to the firing squad without a trial. Castro would 
stop at no cost.
    The Cuban reality came knocking at my parents' front door, 
literally, when Castro's men came searching for my father at 
gunpoint. Their demands were simple. They would take my 
father's business, his factory, equipment, and offices, and all 
of the land.
    My grandfather, Federico, was stripped of his four homes in 
Miramar, his business, commercial property, and all other 
equipment from which he ran his operation. Currently, my house 
where I was born is an embassy, for the record. Not only did 
Castro steal physical property that belonged to my family, but 
also destroyed the legacy that they worked their whole lives to 
build and someday pass on to the children and grandchildren. 
And even though the Castro brothers and others said they would 
pay the family for this, they never did.
    My family was not the only one to suffer this fate. 
Hundreds of thousands of Cuban families and Americans were 
forced to leave their homeland and everything they built.
    After over 55 years, the same Communist dictator continues 
to destroy the beautiful island that more than a million Cuban 
Americans used to call home. The time is long overdue for the 
U.S. Government to acknowledge and demand restitution for all 
the Cuban Americans and so many other victims of Cuban 
communism.
    We have pledged our allegiance to this beautiful country 
and ask our country help us secure justice. While the 
properties that were stripped from us may hold a monetary 
value, the pain and suffering of my parents and my entire 
generation is far greater than any dollar amount. My parents 
longed to return to Cuba, the country that they adored, to 
smell the ocean in Varadero, to walk El Malecon, to feel free 
once again in their ancestral homeland. They passed never being 
able to fulfill these dreams.
    Although my parents couldn't fulfill these dreams, I am 
here to see their dreams out for them and for every Cuban 
American family. These dreams are not driven by money. They are 
driven by the need for justice, the same kind of justice the 
U.S. advocates to the people of this country.
    Today, I feel you have offered our family and others like 
it an opportunity to help start to right this wrong and begin 
to heal very old wounds. You honor the memory and sacrifice of 
our families, and for that, we thank you. Please, help all 
victims of Cuban communism seek justice. Thank you.
    [The prepared statement of Ms. Escasena follows:]
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                               __________
    Mr. Issa. Thank you. That's a very compelling story.
    We now go to the gentleman from Florida, Mr. DeSantis.
    Mr. DeSantis. Thank you, Mr. Chairman. Thank you for the 
testimony of the witnesses.
    You know, this policy is frustrating because you have a 
country and a regime that has been hostile to us since its 
inception at the revolution. They confiscated all this 
property. No one's ever been given recompense for that. They've 
tortured people. They've imprisoned people for political 
purposes. During the Cold War, they would export guerilla 
fighters to do our enemies' bidding.
    And so now we are, with this regime, they're harboring one 
of the FBI's most wanted terrorists, Joanne Chesimard. And so 
we do this change in policy and what are we getting? I think 
Mr. Tamargo said we should not give them a free ride. 
Unfortunately, I think the Administration is doing exactly 
that.
    All this property should have been paid as the price of 
negotiation. And, yet, we're showing, basically, we're 
providing Castro, the Castro brothers a road where they can get 
away with this, because they're getting some of the cash and 
credit they need. They're getting the lifeline that they need. 
But we, you still have Joanne Chesimard there. You still have 
all these claimants who had their property seized. And so I 
think it's very, very frustrating. And you even have outlets 
like The Washington Post editorializing, hey, this is not 
working, the Castro brothers are not changing.
    Let me ask you, Ms. Escasena, has the Administration 
listened to your concerns?
    Ms. Escasena. Not to my knowledge.
    Mr. DeSantis. So do you feel a sense of betrayal that 
they're not listening to you or doing anything for you?
    Ms. Escasena. I feel that he has not reached out to any of 
us, any of the Cuban Americans, and has not heard our stories.
    Mr. DeSantis. Now, Mr. Wilson, the State Department 
testified, you were here for that, and they basically said, 
look, the courts are going to resolve this issue in terms of 
the Havana Club Rum. But hasn't this issue already been 
resolved?
    Mr. Wilson. Yes, yes, Mr. Congressman DeSantis. There's 
been tons of litigation already, and actually unfair 
litigation, that we and the Arechabalas have had to endure for 
years. And yes, with this action, we're going to end up having 
to do more litigation and attempt to make sure that the wrong 
is righted. But the problem is, and I think it was stated 
earlier in the first panel, why should families like the 
Arechabalas have to resort to litigation? Why?
    And that's why Section 211 was passed, because there's a 
bright line rule there not to recognize those confiscatory 
measures. Look at the Arechabalas. They were put out of 
business. Their family lawyer was put in jail for 18 years. 
They didn't have advice. They didn't know how to do things in 
America. And now they're going to be resorted to have to go 
through expensive litigation? That's not fair.
    And I'm concerned that our government starts their path 
down to resolve these confiscations, and the first one they 
start with is to recognize the rights to the confiscator who 
took the rights from that family. My God.
    Mr. DeSantis. It's not providing great incentives for 
future behavior, I mean, that's for sure.
    Mr. Tamargo, you mentioned, and I think this is a good 
point, you're talking about expanding commerce with the Castro 
regime. So someone pulls into a port. That port very well may 
likely have been seized by a private property owner. Someone 
staying in a hotel, that may very well have been seized 
property.
    So some people have this argument that, oh, you're opening 
it up, you can create more market, and this is how economies 
change and societies change. But free enterprise depends on the 
rule of law, and this is basically conducting commerce on the 
backs of confiscated property. So it's really undercutting the 
rule of law because the regime is going to now profit even more 
based on the actions they took. Do you agree with that?
    Mr. Tamargo. I certainly do, Congressman. It's worth 
pointing out that the licensing that Treasury is issuing for a 
lot of this commerce and travel and trade and shipping is using 
confiscated property that has not been compensated, and that's 
contrary to U.S. law. And they simply issue the license, but 
they don't inquire or drill down in the application enough to 
bring that to light. And that's how they're able to issue this 
license without having to admit that they're in violation of 
the law.
    Mr. DeSantis. Well, I appreciate the testimony. I mean, the 
bottom line is this is a major change in policy. We've seen the 
Cuban regime benefit.
    And here's the thing: They've been trading with all these 
other countries for this whole time. Has that benefited the 
people of Cuba? No, it doesn't, because the money goes to the 
military, the intelligence services, and the regime. It doesn't 
go to the Cuban people.
    And so this is a benefit to the Castro brothers. And for us 
not to get even one claim paid before we've gone down this 
road, I obviously think it's bad policy.
    But I really appreciate the Chairman calling the hearing, 
and Congress needs to stay engaged in this issue. I yield back.
    Mr. Issa. Thank you. And thank you for your insightful 
questions.
    I'll now recognize myself for a few questions.
    Mr. Tamargo, you're an expert in the area of these claims, 
and you worked on it, and I thank you for your efforts with the 
Commission, for a very long time.
    You proposed essentially Congress acting to reopen. Could 
you elaborate a little bit more on that? I want to make sure I 
understand it. Because it does seem like the only way to get 
justice--and I'm going to take Mr. Reinsch a little bit to task 
here. If I understood him correctly, he sort of called our 
treatment of South Africa when it was an apartheid as a failed 
policy that didn't work. And I'm old enough----
    Mr. Reinsch. That was not what I said. But we can discuss 
it later.
    Mr. Issa. Well, when you referenced it as not going down 
the road of South Africa, I must tell you, I'm very proud that 
America and the world went down a road with South Africa and 
forced a change.
    So as we look at forcing a change, if this Administration 
won't do it, or at least accounting for that change, would you 
go through the benefits of reopening and properly assessing the 
claims.
    Mr. Tamargo. Yes, thank you, Mr. Chairman. This is a 
proposal that we've been advocating for a while now. The 
Commission, when it adjudicated these claims, it completed its 
work in 1972, and by statute its authority ended over the 
claims. And the claimant is the one responsible for keeping his 
own records current. But that was 50--you know, 40 years ago.
    Mr. Issa. So what you're saying is people die.
    Mr. Tamargo. People die.
    Mr. Issa. There's probate. The only way to really know that 
the $7 billion or $8 billion, who is entitled to it, would be 
to essentially allow the Commission to reopen and evaluate who 
they are.
    Mr. Tamargo. While I was there as chairman, we did try to 
unofficially update the records as best we could. We did 
research. We contacted claimants. We reached out with outreach 
efforts. And we did a fraction of updating. But even that is 
unofficial. And we don't have the authority to require 
documentation that would prove their actual ownership. And I 
suspect that many of the claimants of record have conflicting 
interest in the same claim, because nobody knows for sure, 
there is no authority to determine who was the actual claimant.
    That normally gets sorted out by the Treasury Department 
when it's distribution time. When the offending country pays 
the settlement amount, then this distribution happens at 
Treasury. But the claims programs don't go 55 years unpaid. So 
we're in a new situation here.
    And when and if there is a settlement with the government 
of Cuba, it'll take quite a bit of effort for Treasury to find 
out who are the appropriate recipients of these certified claim 
amounts and it will just take too long. I mean, I believe this 
is time being wasted.
    The Commission has the expertise to do this updating of the 
records. It's already budgeted. They have a staff. They could 
be doing this under their own authority. And they could be, 
with limited reopening of the program, not to revisit the 
amounts or anything, but simply the identity of who the 
certified claimant is supposed to be. And that would be what I 
would propose.
    Mr. Issa. So unless we want to go to Ancestry.com to find 
out all of this, we must find a way to make sure that the 
records stay current so that, if there's a disagreement, it can 
be adjudicated by a family. Because, I mean, we all understand 
that mom left everything to you but didn't name that asset. 
When you die, who is to say that your siblings' children aren't 
going to make the claim since it wasn't named in the will, just 
as an example.
    Mr. Tamargo. That's a very good example. These family 
probate matters get very complicated. And Treasury normally 
would sort through that, but they only do, like--they don't 
have this many of them to do. I suspect there's going to be 
5,000 of them or maybe 5,500 of them to do and it'll just be 
quite an undertaking. The probate cases would have to be 
probably opened in many cases to begin a probate process that 
never was done because there were no assets at the time.
    Mr. Issa. And, Ms. Escasena--I apologize, one of my worst 
things is pronunciation of names. And with a name like Issa, go 
figure. You mentioned, though, that your family home was large 
enough that today it's an embassy. It's an embassy of whom?
    Ms. Escasena. It's the Embassy of Belize.
    Mr. Issa. Okay. Now, an embassy is sovereign land of the 
country that occupies it. So if I'm to understand, the Cuban 
Government at gunpoint took your family home and has sold it 
and made it a sovereign asset of another country. So Belize 
took, you as an American, they took your land, and they sold it 
to another country that now occupies it and considers it their 
embassy, their sovereign land. That's your testimony?
    Ms. Escasena. Yes. That's what it appears. We found out 
actually last year that it was an embassy.
    Mr. Issa. And it's a small amount of the assets that were 
taken, but meaningful.
    Ms. Escasena. Correct.
    Mr. Issa. Mr. Wilson, I'm going to ask you a little tougher 
question. The Bacardi family at the time of the revolution were 
Cubans. Is that correct?
    Mr. Wilson. Yes, sir.
    Mr. Issa. They were Cuban citizens?
    Mr. Wilson. Yes.
    Mr. Issa. They had assets outside of Cuba, but they resided 
disproportionately in Cuba, correct?
    Mr. Wilson. Yes, most, I'm sure most. It's a large family. 
It's much larger now. But most, for sure.
    Mr. Issa. Okay. So the corporation was based in Cuba, 
correct?
    Mr. Wilson. Correct.
    Mr. Issa. So I just want to make sure I understand--I'm 
holding up Havana Club, but I could be holding up a bottle of 
Bacardi--I want to make sure I understand this as best you can 
legally. If it was legal to take this from one family, then 
whatever the legality of their already selling everywhere in 
the world, 80 percent of the world's economy is not the United 
States, they're already selling this in 80 percent, is there 
any legal difference in your mind between what they did to one 
family and what they would have, could have, and, if we're to 
believe the State Department, essentially should have done to 
the Bacardi family, which is they should have your company's 
name and be selling it and reclaim it, at least in America, 
based on the fact that they took it, therefore, they should 
have it? Am I missing something in the understanding of 
property rights?
    Mr. Wilson. No, Mr. Chairman, you're not. And they 
attempted very much to do that same thing to Bacardi. They very 
much did. They tried to. They produced a product and called it 
Bacardi and tried to sell it around the world.
    Fortunately, Bacardi had assets outside of Cuba, and so it 
could produce its Bacardi rum product and go to those same 
countries and fight in litigation and within the governments. 
And we won. Yes, we did. We were fortunate enough to be in that 
position. But many other Cuban families, like the Arechabala, 
were not in that position and are still not in that position.
    Mr. Issa. And the Arechabala family, I want to understand 
this, because I think it's important to make the record 
complete. You did not wholly acquire the rights to Havana Club, 
you have a license agreement effectively, don't you? They 
receive a benefit from every bottle sold.
    Mr. Wilson. We do have a--we have a Commission agreement 
with them. I prefer not to go into the details.
    Mr. Issa. No, and we don't need to know the details. The 
point is, the Picard Company of France, they offered to buy it. 
They knew that there was a right, and they offered to buy it 
from the Arechabala family. But, apparently, they were only 
willing to pay a de minimus amount and said, you know, we 
already have the rest of the world, but we'll give you a little 
something for the U.S., is my understanding.
    Mr. Wilson. Yes. Or something similar to that, yes.
    Mr. Issa. The late owner came to your company's principals 
and negotiated a deal that he felt for his family was fair. Is 
that correct?
    Mr. Wilson. That is correct, sir.
    Mr. Issa. And that arrangement continues today as the 
Bacardi family expands the sales that you began in 1994.
    How many States are you currently selling in?
    Mr. Wilson. It goes up and down, but we've been, over the 
last 10, 12 years, we've sold in roughly 18 different States. 
But it goes up and down.
    Mr. Issa. Okay. And you're unable to sell in the rest of 
the world because Cuba, what they stole they got to keep by an 
agreement with the French company to distribute it, right?
    Mr. Wilson. Yes. The Cuban joint venture is selling that 
product throughout the rest of the world, really off of the 
unfair, illegal confiscations in Cuba, because that's obviously 
where it started, as I mentioned earlier.
    Mr. Issa. Right. They obviously get all the assets.
    I did a little looking before this hearing, and Cuba 
exports about $5 billion of goods, some sugar, obviously Cuban 
cigars, and rum. They import about $15 billion. Now, the 
arithmetic of that befuddled me a little, so I did a little 
checking. Apparently, what they import is the value, but they 
actually don't pay for it. A great deal of it comes from 
countries, such as Venezuela, that essentially it's a subsidy.
    So with 80 percent of the world's market available to this 
totalitarian dictatorship, this last remaining bastion of 
Stalinism other than North Korea, they basically have $5 
billion of economy selling the whole rest of the world. So when 
Mr. Reinsch, on behalf of 200-plus companies he represents, 
talks about 4,000 trademarks that might be in peril, those 
trademarks, U.S. company trademarks, how many dollars of sales 
are there in Cuba by U.S. companies today, to your knowledge?
    Mr. Wilson. I don't have that number. But my----
    Mr. Issa. Would zero be a pretty round number, since 
there's an outright embargo and we're not selling?
    Mr. Wilson. I don't know specifically, Mr. Chairman. But 
there are some very small AG or medical----
    Mr. Issa. Right, I know there's a small amount of 
exemptions. Which brings up the point of if you applied for a 
license, since you have the worldwide rights for Bacardi, would 
they recognize your trademark application in Cuba?
    Mr. Wilson. Well, we do not own the Bacardi trademark 
there. Cuba Rum Corporation owns our trademark in Cuba.
    Mr. Issa. Oh, okay. So they only recognize American marks 
unless, of course, they've already confiscated it.
    To your knowledge, has Coca-Cola been able to sell there? 
Didn't they seize all the Coca-Cola assets? Isn't that part of 
the, Mr. Tamargo, isn't Coca-Cola a major claimant in those 
6,000?
    Mr. Tamargo. Yes, they are. That's one of the top 10 or 15 
claims.
    Mr. Issa. And the operation there was owned by the Coca-
Cola Company, right?
    Mr. Tamargo. Yes, it is.
    Mr. Issa. So it was a U.S. company. Had it been a franchise 
or some other agreement, they wouldn't get a penny, right? They 
wouldn't be on your list of 6,000?
    Mr. Tamargo. Well, they wouldn't have been certified as an 
American claim. It would have been not an American claim. But 
it was an American company, so they were certified for, I 
think, $27.5 million.
    Mr. Issa. Okay.
    Now, I'm just going to close with a question. And this is 
not intended to conflate the two, to say that these things are 
equal. But when you were dealing with these injustices, your 
Commission, didn't it come out of basically the war crimes of 
World War II.
    Mr. Tamargo. Yes. The Commission is over 50 years old. 
Before those years, it was comprised of two commissions, the 
War Claims Commission and the International Settlement 
Commission. And they were merged together to create the Foreign 
Claims Settlement Commission.
    Mr. Issa. Okay. So I want to go through the Commission, 
because we are going to look at legislation that falls under 
this Committee related to that. Essentially, your legacy is 
that you are--your Commission is, in fact, the commission that 
looked at the confiscation by the Nazis--the Japanese too--but 
by the Nazis, the Italians, et cetera, in World War II.
    Now, you weren't empowered to take care of victims of the 
Holocaust unless it was an American family? How did that work?
    Mr. Tamargo. The Commission did conduct a small Holocaust 
program, and it was back in the 1990's. It was comprised of 
mostly American POWs, when captured by the Germans, who were 
put in Holocaust camps.
    Mr. Issa. The work camps and so on.
    Mr. Tamargo. Correct.
    Mr. Issa. Okay.
    Mr. Tamargo. Otherwise, the Holocaust----
    Mr. Issa. Were separate.
    Mr. Tamargo [continuing]. Were separate.
    Mr. Issa. But you did work with essentially assets that 
were stolen from Americans in that period of time in Italy, in 
France, in Germany, in Japan?
    Mr. Tamargo. Yes, sir.
    Mr. Issa. Okay. So your recognition is that these countries 
committed crimes, took money, took assets without any payment. 
And, ultimately, we made whole, as you said earlier, in some 
cases, by an appropriation from Congress, but we made whole the 
victims or we didn't quit with those countries. In other words, 
we didn't let Germany off the hook or Japan off the hook unless 
there was a resolution agreed and an agreement of who paid 
what, correct?
    Mr. Tamargo. That's absolutely correct, Mr. Chairman. All 
claims programs were settled. The American claimants were 
compensated. And it was a condition of the offending country 
having normalized trade relations with us.
    Mr. Issa. So this Administration is ignoring the history of 
your Commission, the history of it, by normalizing relations 
with absolutely no agreement other than we've agreed that we're 
going to begin talking. They have no agreement whatsoever to 
take care of those 6,000 people that you represent in some ways 
here today and the perhaps tens of thousands of Cuban Americans 
who were not Americans in 1960.
    Mr. Tamargo. It is possible that they are working toward a 
negotiated settlement which would result in the compensation of 
the claimants. That is my hope. But what really I suspect holds 
them to that effort is the Congress needs to--the embargo, for 
the most part, cannot be lifted, the remaining parts of the 
embargo won't be lifted without congressional action. And the 
Congress won't accept, I would hope, a bad deal that does not 
give justice to the certified claimants.
    Mr. Issa. So presuming the President with the stroke of a 
pen and a phone call doesn't somehow do it, there is one and 
only one tool left to force the Castros to properly compensate 
for what they did, at least as to American persons, 55 years 
ago, and that's the embargo.
    Mr. Tamargo. Yes, sir. That is what I believe is the only 
thing that would bring them--that has actually brought them to 
the table right now. Because their other, their subsidized 
trading partner of Venezuela is faltering, as is their other 
trading commerce is faltering, and they would need this embargo 
to be lifted.
    Mr. Issa. Well, I'm not a businessman the way I once was, 
but when I was a full-time businessman and I looked at--if I 
looked at $5 billion out and $15 billion in, I would, as you 
say, be looking to change an arrangement. The one amazing thing 
I think that we all recognize is, unless Cuba changes and 
allows their people to be empowered, even with access to an 
additional 20 percent of the world's market, I don't believe 
they can ever compete globally or even feed their people 
properly.
    I want to thank all of you for your testimony. As in the 
last panel, we will leave the record open for 5 days. There may 
be additional questions from Members who could not make it here 
this evening.
    This was a reschedule, and I appreciate all of you being 
able to meet the reschedule. But it wasn't at an ideal time for 
a hearing.
    Additionally, I would welcome any supplemental remarks you 
may have or information you want to put in, including matters 
for the record.
    And with that, you have my thanks. And we are adjourned.
    [Whereupon, at 7:33 p.m., the Subcommittee was adjourned.]

                            A P P E N D I X

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               Material Submitted for the Hearing Record

      Material submitted by Jaime Suchlicki, Emilio Bacadi Moeau 
  Distinguished Professor and Director, Institute for Cuban and Cuban-
 American Studies, University of Miami; and Jose Azel, Senior Research 
 Associate, Institute for Cuban and Cuban-American Studies, University 
                                of Miami
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  Response to Questions for the Record from the Honorable Kurt Tong, 
 Principal Deputy Assistant Secretary, Bureau of Economic and Business 
                   Affairs, U.S. Department of State
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


       Questions for the Record submitted to Mary Boney Denison, 
     Commissioner for Trademarks, U.S. Patent and Trademark Office*
---------------------------------------------------------------------------
    *Note: The Committee did not receive a response to these questions 
at the time this hearing record was finalized and submitted for 
printing.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


     Response to Questions for the Record from William A. Reinsch, 
               President, National Foreign Trade Council
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                 [all]