WASHINGTON (Reuters) -- Cuba, fighting a trademark war in which it
                 has lost the U.S. rights to its most famous brand of rum, is entitled to
                 start making Coca-Cola in retaliation, a legal expert said on Thursday.

                 But even though President Fidel Castro has threatened to make Cuban Coke,
                 the Communist-run island is not actually expected to do so.

                 The dispute puts at risk some 4,000 American trademarks registered in
                 Cuba, from Playboy and Aunt Jemima to Huggies and Weight Watchers.

                 The conflict was set off by a provision tucked into the U.S. Omnibus
                 Appropriations Act of 1998. Section 211 extended the four-decade-old
                 American trade embargo against Cuba to the realm of intellectual property.

                 The provision, proposed by a Florida senator, bars foreign companies using
                 property confiscated in Cuba from registering or exercising trademark rights in
                 the United States.

                 Its passage coincided with a court battle over the right to the famous Havana
                 Club brand of rum in the United States, the world's largest rum market.

                 Havana Club is internationally recognized as a Cuban product and is distributed
                 worldwide by a Cuban government joint venture with the French liquor
                 company Pernod Ricard. It competes with rums made by market leader
                 Bacardi, a Bermuda-based company founded by Cuban exiles.

                 Distilleries nationalized

                 Citing Section 211, a U.S. court ruled in 1999 that Bacardi could distribute rum
                 under the Havana Club name because Havana Club's distilleries were nationalized
                 after Castro's 1959 revolution.

                 Peter Weiss, a trademark expert at the independent Center for Constitutional
                 Rights, said the provision violated the U.S.-inspired 1933 Inter-American
                 Convention on Trademarks and other international rules, including the World
                 Trade Organization's TRIPs agreement.

                 "This is a substantial breach of an international convention by the United States,"
                 Weiss said at a conference on the issue. "Cuba has the legal basis to do the
                 same to American marks like Coke, Kool-Aid and Reebok," he said.

                 The measure caused friction with the European Union, which resorted to the
                 WTO. A panel is expected to rule by the end of this month on whether the U.S.
                 provision breaks international trade rules.

                 Defenders of Section 211 say it deals with property that was illegally
                 expropriated by the Cuban government.

                 Sen. Max Baucus, a Montana Democrat, introduced a bill to repeal Section 211
                 in the U.S. Congress in February. The U.S. Chamber of Commerce backs the
                 bill.

                 Like the Bacardi family, the Arrechavalas, owners of Havana Club, went into
                 exile after 1959. But unlike the Bacardis, they stopped producing rum.

                 The disused brand was claimed by the Cuban government, whose holding
                 company Cuba Exports registered it in the United States in 1976.

                 Eye on U.S.

                 Pernod Ricard has not lost sight of American consumers while it enjoys soaring
                 sales for Havana Club, by some measures the fastest-growing liquor brand in
                 the world.

                 The French-Cuban venture sold 1.4 million cases of the rum last year, up from
                 300,000 cases in 1993, in 80 countries, including Canada and Mexico. The
                 product is registered in 180 countries.

                 "We have great hopes for the United States once the political issue is resolved
                 and brighter minds prevail on both sides," said Mark Orr, Pernod Ricard vice
                 president for North America.

                 Moving either to protect their brand names or position themselves for the day
                 when the embargo is lifted, an increasing number of American firms are
                 registering trademarks in Cuba.

                 Recent registrations include Magic Johnson, Starbucks, Nike, Sbarro and United
                 Airlines.

                 Bacardi's owners are important financial contributors to the U.S.-based Cuban
                 exile movement against Castro and have backed such legislation as the
                 Helms-Burton act, which toughened the embargo in 1996.

                 Opponents of trade sanctions against Cuba say the trademark clause was
                 "sneaked" into the 1998 appropriations bill without debate and undermines
                 Washington' moral authority when it pushes to expand intellectual property
                 rights protection throughout the world.

                   Copyright 2001 Reuters.