Just as Bacardi was about to grab the much-touted Havana Club brand once and for all, the Cuban government has stepped in with a new argument to the U.S. Patent and Trademark Office as to why it should keep the rights to the famous rum’s name.

With the USPTO moving to declare the Havana Club registration expired as mid-June, Havana asked the agency to freeze all actions because it says the embargo prohibits “transfers” involving property owned by Cuban nationals. Canceling the registration would result in such a transfer, Cuba claims.

“An administrative agency action that terminates a Cuban national’s property rights…constitutes a ‘transfer’ that is blocked by the Cuban Assets Control Regulations,” said a letter to USPTO from the Castro government’s New York-based attorneys, Debevois & Plimpton LLP.

The lawyers argue that cancellation of the Havana Club brand should remain suspended until the embargo is abolished.

“The next question is ‘what is the USPTO going to do?’” said Patrick Ross, spokesman for the patent and trademark office. “I don’t know.”

In 2006, the USPTO moved to cancel Cuba’s right to the Havana Club name because the embargo prevented Havana from paying a renewal fee of a couple of hundred dollars.

Since then, Cuba and its Havana Club partner, French drinks conglomerate Pernod Ricard, have fought in federal courts the Treasury Department’s decision to reject Cuba’s request for a license that would allow it to pay the renewal fee. Cuba eventually lost its legal battle with Treasury’s Office of Foreign Assets Control (OFAC).

When the Supreme Court declined to hear an appeal on May 14, the registration was to be cancelled in 30 days. But Cuba’s latest petition to the USPTO gives it more time.

The USPTO usually takes about three months to decide these types of appeals, but in this case a decision could come sooner.

The fight over the Havana Club name, coveted by rum giant Bacardi, has gone on for more than 10 years, ever since supporters of the embargo in Congress won approval of a measure in an omnibus spending bill — known as Section 211 — that made it difficult for Cuba to pay for registrations of patents and trademarks.

After approval of Section 211, Bacardi began to produce its own aged “Havana Club” rum and distribute it in small quantities in Florida.

“Bacardi already owns rights for the Havana Club rum mark in the United States through use of the mark on sales of rum,” said Patricia M. Neal, spokeswoman for Bacardi USA Inc.

Neal also said Bacardi filed a federal application to register the Havana Club name in the United States in 1994 “in order to obtain the further protections that a federal registration brings.” She told CubaNews “our application is pending … and we fully expect that federal registration will be obtained.”

Cuba first registered the Havana Club brand in the United States in 1976. It later transferred the registration to Cubaexport, when the state-run company teamed up with Pernod Ricard to distribute the premium rum worldwide.

But it was a Cuban family, the Arechabalas, that originally sold Havana Club rum in the United States in the 1930s. Cuba says the Arechabalas allowed their registration to lapse after they went into exile and stopped producing rum.

Bacardi, however, says it purchased the rights to the brand from the Arechabalas in the 1990s. But because Cubaexport had the registration at the patent and trademark office, Bacardi has been unable to register the brand.

Bacardi appears confident it’ll soon be able to do so.

“Cubaexport has never sold a product in the United States containing the Havana Club name and therefore does not have any common law rights,” Neal said. “It will also no longer have a federal registration since, as a matter of law, the United States Patent and Trademark Office will formally cancel the registration of Cubaexport for the mark in due course.”

The biggest obstacle Cubaexport has had in renewing its registration of the Havana Club brand has been the State Department, not OFAC or the Patent and Trademark Office.

The State Department under President Bush ordered OFAC not to approve a license to Cubaexport that would have allowed it to spend money on the renewal. “It was a policy decision not to grant the license in 2006 and we’re sticking to it,” a State Department official said.

If it loses the Havana Club registration, Cuba has threatened to retaliate by stripping protection on U.S. trademarks currently protected on the island.

“The United States’ disrespectful attitude in divesting the legitimate Cuban owners of the Havana Club brand can put at risk the brand and patent rights of American companies in our country,” warned Maria de los Angeles Sanchez, director of Cuba’s office of intellectual property.

It isn’t the first time such threats have emanated from Havana.

Shortly after Congress first approved the legislation that hurt Cuba’s ability to register brands in the United States, Fidel Castro also said Cuba could retaliate by ignoring the brand and patent rights of U.S. companies, even to the extent of producing “Cuban Coca-Cola.”