[House Report 118-232]
[From the U.S. Government Publishing Office]


118th Congress }                                          { REPORT 
                        HOUSE OF REPRESENTATIVES
 1st Session   }                                          { 118-232

======================================================================
 
               NO STOLEN TRADEMARKS HONORED IN AMERICA ACT OF 
                                  2023

                                _______
                                

 September 29, 2023.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

            Mr. Jordan, from the Committee on the Judiciary,
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 1505]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 1505) to modify the prohibition on recognition by 
United States courts of certain rights relating to certain 
marks, trade names, or commercial names, having considered the 
same, reports favorably thereon with an amendment and 
recommends that the bill as amended do pass.

                                CONTENTS

Purpose and Summary..............................................     2
Background and Need for the Legislation..........................     2
Hearing..........................................................     3
Committee Consideration..........................................     3
Committee Votes..................................................     3
Committee Oversight Findings.....................................     3
New Budget Authority and Tax Expenditures........................     4
Congressional Budget Office Cost Estimate........................     4
Committee Estimate of Budgetary Effects..........................     5
Duplication of Federal Programs..................................     5
Performance Goals and Objectives.................................     5
Advisory on Earmarks.............................................     5
Federal Mandates Statement.......................................     5
Advisory Committee Statement.....................................     5
Applicability to Legislative Branch..............................     5
Section-by-Section Analysis......................................     6
Changes in Existing Law Made by the Bill, as Reported............     6

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``No Stolen Trademarks Honored in 
America Act of 2023''.

SEC. 2. MODIFICATION OF PROHIBITION.

  Section 211 of the Department of Commerce and Related Agencies 
Appropriations Act, 1999 (as contained in section 101(b) of division A 
of Public Law 105-277; 112 Stat. 2681-88) is amended--
          (1) in subsection (a)(2)--
                  (A) by inserting ``or entity of the executive 
                branch'' after ``U.S. court'';
                  (B) by striking ``by a designated national''; and
                  (C) by inserting before the period ``that was used in 
                connection with a business or assets that were 
                confiscated unless the original owner of the mark, 
                trade name, or commercial name, or the bonafide 
                successor-in-interest has expressly consented'';
          (2) in subsection (b)--
                  (A) by inserting ``or entity of the executive 
                branch'' after ``U.S. court''; and
                  (B) by striking ``by a designated national or its 
                successor-in-interest'';
          (3) by redesignating subsection (d) as subsection (e);
          (4) by inserting after subsection (c) the following:
  ``(d) Subsections (a)(2) and (b) of this section shall apply only if 
the person or entity asserting the rights knew or had reason to know at 
the time when the person or entity acquired the rights asserted that 
the mark, trade name, or commercial name was the same as or 
substantially similar to a mark, trade name, or commercial name that 
was used in connection with a business or assets that were 
confiscated.''; and
          (5) in subsection (e), as so redesignated, by striking ``In 
        this section:'' and all that follows through ``(2) The term'' 
        and inserting ``In this section, the term''.

                          Purpose and Summary

    H.R. 1505, the No Stolen Trademarks Honored in America Act 
of 2023, introduced by Rep. Darrell Issa (R-CA), prohibits any 
executive agency, including the U.S. Patent and Trademark 
Office, from recognizing, enforcing, or validating any 
trademark that was used in connection with a business or asset 
that was confiscated without the consent of the original owner 
or successor-in-interest.

                Background and Need for the Legislation

    Prior to the 1959 Communist coup in Cuba, two of the 
primary makers of Cuban rum were the Arechabala and Bacardi 
families.\1\ The Arechabala family's main rum brand was Havana 
Club, which became one of the most popular brands of rum in the 
world.\2\ When the Castro regime overthrew the Cuban 
government, it began seizing businesses and confiscating 
property, including that of both the Arechabala and Bacardi 
families.\3\ The state-owned Cuban rum industry began producing 
rum under the Havana Club trademark and began exporting it 
worldwide (except the United States due to the trade 
embargo).\4\
---------------------------------------------------------------------------
    \1\Paul Senft, The Havana Club Trademark War (Sep. 14, 2016), 
https://distiller.com/articles/havana-club-trademark-war.
    \2\Id.
    \3\Id.
    \4\Id.
---------------------------------------------------------------------------
    In 1995, Bacardi acquired all rights in the ``Havana Club'' 
trademark from the Arechabala family and began producing rum in 
the United States under that brand.\5\ In 1993, Pernod Ricard, 
a French spirits company, entered into a joint venture with the 
state-owned Cuban rum industry with control over the 
confiscated ``Havana Club'' trademark.\6\ The joint venture 
then began producing rum under that brand for much of the 
international market outside of the United States.\7\ 
Eventually, Bacardi and Pernod Ricard began decades-long 
litigation over their competing claims on the ``Havana Club'' 
trademark, which resulted in a victory for Bacardi in 2012.\8\
---------------------------------------------------------------------------
    \5\Id.; see also Blake Brittain, U.S. trademark agency beats 
Bacardi lawsuit over Cuba's `Havana Club,' Reuters (Apr. 7, 2022).
    \6\Id.
    \7\Id.
    \8\Id.
---------------------------------------------------------------------------
    However, in 2016, the Obama Administration recognized the 
claim of the Pernod Ricard-Cuban government on the ``Havana 
Club'' trademark, which allowed them to renew the trademark and 
to restart litigation against Bacardi.\9\ Bacardi sued the U.S. 
Patent and Trademark Office over their recognition of the 
Pernod Ricard-Cuban government claim to the trademark, but the 
case was dismissed in 2022.\10\
---------------------------------------------------------------------------
    \9\Id.
    \10\Brittain, supra note 5.
---------------------------------------------------------------------------
    To resolve this long-running controversy, the No Stolen 
Trademarks Honored in America Act of 2023 would prohibit any 
executive agency, including the U.S. Patent and Trademark 
Office, from recognizing, enforcing, or validating any 
trademark that was used in connection with a business or assets 
that were confiscated without the consent of the original owner 
or successor-in-interest. This bill would prevent anyone from 
using U.S. agencies to benefit from intellectual property 
stolen from its rightful owner.

                                Hearings

    For the purposes of clause 3(c)(6)(A) of House rule XIII, 
the following hearing was used to develop H.R. 1505: 
``Oversight of the U.S. Patent and Trademark Office,'' a 
hearing held on April 27, 2023 before the Subcommittee on 
Courts, Intellectual Property, and the Internet of the 
Committee on the Judiciary. The Subcommittee heard testimony 
from the following witnesses:
           The Honorable Kathi Vidal, Undersecretary of 
        Commerce for Intellectual Property and Director of the 
        United States Patent and Trademark Office.
    The hearing addressed a number of topics related to patent 
and trademark law, including trademarks and businesses 
confiscated by the Cuban Government after the 1959 Communist 
revolution.

                        Committee Consideration

    On May 24, 2023, the Committee met in open session and 
ordered the bill, H.R. 1505, favorably reported by voice vote, 
a quorum being present.

                            Committee Votes

    In compliance with clause 3(b) of House rule XIII, the 
Committee states that no recorded votes were taken during 
consideration of H.R. 1505.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of House rule XIII, the 
Committee advises that the findings and recommendations of the 
Committee, based on oversight activities under clause 2(b)(1) 
of rule X of the Rules of the House of Representatives, are 
incorporated in the descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives does not apply where a cost estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974 has been timely submitted prior to filing of the report 
and is included in the report. Such a cost estimate is included 
in this report.

               Congressional Budget Office Cost Estimate

    With respect to the requirement of clause 3(c)(3) of rule 
XIII of the Rules of the House of Representatives and section 
402 of the Congressional Budget Act of 1974, the Committee has 
received the enclosed cost estimate for H.R. 3496 from the 
Director of the Congressional Budget Office:




    H.R. 1505 would prohibit the use of a trademark that is the 
same as or similar to one used in connection with a business or 
asset that was confiscated by the government of Cuba. CBO 
estimates that implementing the bill would increase 
administrative costs for the Patent and Trademark Office (PTO) 
by less than $500,000 to review trademark applications for a 
small number of applicants. However, PTO is authorized to 
collect fees in amounts sufficient to offset its annual 
appropriation. Assuming appropriation actions consistent with 
that authority, CBO estimates that the net increase in 
discretionary spending for PTO would be negligible.
    H.R. 1505 would impose private-sector mandates as defined 
in the Unfunded Mandates Reform Act (UMRA) by expanding an 
existing prohibition on the recognition or enforcement of 
trademarks associated with businesses or assets confiscated by 
the Cuban government. CBO expects that the prohibition would be 
likely to arise in only a small number of cases and the 
associated costs would be small. Additionally, if PTO increases 
fees, the bill would increase the cost of an existing mandate 
on private entities required to pay those fees. CBO estimates 
that the cost of the mandates would not exceed the private-
sector threshold established in UMRA ($198 million in 2023, 
adjusted annually for inflation). Because UMRA applies solely 
to the United States, any costs arising in international 
markets would not be associated with the mandate. The bill 
would not impose any intergovernmental mandates.
    The CBO staff contacts for this estimate are Matthew 
Pickford (for federal costs) and Andrew Laughlin (for 
mandates). The estimate was reviewed by H. Samuel Papenfuss, 
Deputy Director of Budget Analysis.
                                         Phillip L. Swagel,
                             Director, Congressional Budget Office.

                Committee Estimate of Budgetary Effects

    With respect to the requirements of clause 3(d)(1) of rule 
XIII of the Rules of the House of Representatives, the 
Committee adopts as its own the cost estimate prepared by the 
Director of the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974.

                    Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of House rule XIII, no provision 
of H.R. 1505 establishes or reauthorizes a program of the 
federal government known to be duplicative of another federal 
program.

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
House rule XIII, H.R. 1505 would prohibit any executive agency, 
including the U.S. Patent and Trademark Office, from 
recognizing, enforcing, or validating any trademark that was 
used in connection with a business or asset that was 
confiscated without the consent of the original owner or 
successor-in-interest.

                          Advisory on Earmarks

    In accordance with clause 9 of House rule XXI, H.R. 1505 
does not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits as defined in clauses 
9(d), 9(e), or 9(f) of House rule XXI.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act (Pub. L. 104-
1).

                      Section-by-Section Analysis

    Section 1. Short Title. This section sets forth the short 
title of the bill as the ``No Stolen Trademarks Honored in 
America Act.''
    Section 2. Modification of Prohibition. This section 
prohibits the executive branch from recognizing, enforcing, or 
validating any trademark that was used in connection with a 
business or assets that were confiscated without the consent of 
the original owner or successor-in-interest.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

    SECTION 211 OF THE DEPARTMENT OF COMMERCE AND RELATED AGENCIES 
                        APPROPRIATIONS ACT, 1999


  Sec. 211. (a)(1) Notwithstanding any other provision of law, 
no transaction or payment shall be authorized or approved 
pursuant to section 515.527 of title 31, Code of Federal 
Regulations, as in effect on September 9, 1998, with respect to 
a mark, trade name, or commercial name that is the same as or 
substantially similar to a mark, trade name, or commercial name 
that was used in connection with a business or assets that were 
confiscated unless the original owner of the mark, trade name, 
or commercial name, or the bona fide successor-in-interest has 
expressly consented.
  (2) No U.S. court or entity of the executive branch shall 
recognize, enforce or otherwise validate any assertion of 
rights [by a designated national] based on common law rights or 
registration obtained under such section 515.527 of such a 
confiscated mark, trade name, or commercial name that was used 
in connection with a business or assets that were confiscated 
unless the original owner of the mark, trade name, or 
commercial name, or the bonafide successor-in-interest has 
expressly consented.
  (b) No U.S. court or entity of the executive branch shall 
recognize, enforce or otherwise validate any assertion of 
treaty rights [by a designated national or its successor-in-
interest] under sections 44 (b) or (e) of the Trademark Act of 
1946 (15 U.S.C. 1126 (b) or (e)) for a mark, trade name, or 
commercial name that is the same as or substantially similar to 
a mark, trade name, or commercial name that was used in 
connection with a business or assets that were confiscated 
unless the original owner of such mark, trade name, or 
commercial name, or the bona fide successor-in-interest has 
expressly consented.
  (c) The Secretary of the Treasury shall promulgate such rules 
and regulations as are necessary to carry out the provisions of 
this section.
  (d) Subsections (a)(2) and (b) of this section shall apply 
only if the person or entity asserting the rights knew or had 
reason to know at the time when the person or entity acquired 
the rights asserted that the mark, trade name, or commercial 
name was the same as or substantially similar to a mark, trade 
name, or commercial name that was used in connection with a 
business or assets that were confiscated.
  [(d) In this section:] (e)
          [(1) The term ``designated national'' has the meaning 
        given such term in section 515.305 of title 31, Code of 
        Federal Regulations, as in effect on September 9, 1998, 
        and includes a national of any foreign country who is a 
        successor-in-interest to a designated national.]
          [(2) The term] In this section, the term 
        ``confiscated'' has the meaning given such term in 
        section 515.336 of title 31, Code of Federal 
        Regulations, as in effect on September 9, 1998.

                                  [all]