Bacardi Corp. of America v. Domenech

Background

A Pennsylvania spirits maker licensed to use the Bacardi brands and bat logo under agreement with a Cuban company set up a plant in Puerto Rico and began operations on March 31, 1936. Those Bacardi trade marks were registered in the United States and Puerto Rico and had been used for many years outside Puerto Rico. Puerto Rico enacted laws in 1936–1937 that barred use of any brand, trade name, or trade-mark on rum manufactured in Puerto Rico if the mark had been used outside the island unless it had been used in Puerto Rico before February 1, 1936, or, by later amendment, had been used exclusively in the continental United States before that date. The spirits maker sued; the District Court enjoined the law, the Circuit Court of Appeals reversed, and the Supreme Court agreed to review the dispute.

Reasoning

The core question was whether Puerto Rico’s rule conflicted with the 1929 General Inter‑American Convention on trade marks, ratified by the United States and Cuba. The Convention requires that marks duly registered or legally protected in one member state be admitted and protected in the others after meeting local formalities. The Court read the treaty broadly and held Puerto Rico could not deny use of valid, registered foreign trade marks on rum made on the island just because the marks had been used abroad. The Court found the separate rule limiting bulk shipments fell within Puerto Rico’s police power over intoxicating liquors and did not violate the treaty.

Real world impact

The decision lets Bacardi and similar foreign‑origin brands use their valid, registered labels on rum made in Puerto Rico. Puerto Rico cannot block brand use solely because of foreign origin, but it may enforce limits on bulk exports and container sizes. The Court modified the lower courts’ orders to preserve the bulk‑shipping rule while removing the ban on using the petitioner’s trade marks.