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April,
2005

TOBACCO INDUSTRY NEWS

Appeals Court Confirms General Cigar's Ownership of Cohiba Trademark in the U.S.
Cubatabaco Vows to Appeal, Claiming Battle isn't Over


General Cigar Co. has won back its ownership of the Cohiba trademark in the U.S. The Second Circuit Court of Appeals in New York ruled in February in favor of General Cigar Co., Inc. in a lawsuit filed by Cubatabaco in 1997 over trademark ownership of the Cohiba brand in the United States.

The Second Circuit held that "General Cigar's legal right to the Cohiba mark has been established as against Cubatabaco. General Cigar has a right to use the mark in the United States because it owns the mark in the United States."

As a result of the ruling, General Cigar will be able to continue to manufacture the Cohiba brand and market it in the U.S.

General Cigar received its first registration of the Cohiba trademark in the U.S. in 1981, and again in 1992. The company has sold its Dominican Cohiba cigar in the U.S. since the early 1980s.

Cubatabaco filed this lawsuit against General Cigar in 1997, claiming rights to the Cohiba name in the U.S., nearly two decades after General Cigar first applied for registration.

"We always believed we owned the U.S. rights to the brand and are pleased that the appeals court ruled in our favor," said Edgar M. Cullman, Jr., president and c.e.o. of General Cigar.

"Now that a federal court has confirmed our rights to the Cohiba brand, we intend to focus our attention on violation of our trademark by sellers of counterfeit Cohiba cigars sold in the U.S., " promised Cullman.


Philip Morris in deal for Indonesia's Sampoerna

The international wing of Philip Morris International unveiled a $5.2 billion bid in cash and debt for Indonesia's third-largest tobacco firm, PT HM Sampoerna Tbk.

Louis Camilleri, c.e.o. of Philip Morris' parent, New York's Altria Group, Inc., said the acquisition would give Philip Morris the No. 2 spot in Indonesia. The country is the fifth-largest market for smoking, having expanded 3.9% annually over the past 25 years.

In a two-stage bid, Philip Morris said it has acquired outright a 40% stake of Sampoerna from the company's major shareholders, paying about $2 billion in cash. For the remaining 60%, Philip Morris will launch a public tender offer in cash for the remaining shares. Sampoerna has been publicly traded since 1990.

The transaction is expected to close by June. Established in 1913 by a Chinese immigrant, Sampoerna is run by the founder's grandson. About 92% of Indonesians smoke up kretek cigarettes, made with clove and tobacco. Sampoerna has almost 20% of the country's market. The acquisition would add three manufacturing facilities and a national distribution network for Philip Morris in Indonesia.


Altadis U.S.A. Wins $3.5 Mil. Counterfeiting Claim

Ft. Lauderdale, FL - Altadis U.S.A. and their subsidiaries were awarded judgments totaling $3.5 million on March 25, 2005, by the United States District Court in Ft. Lauderdale, Fla.

The judgements stemmed from Altadis' counterfeiting and trademark infringement lawsuit against two now inactive Florida corporations - South Beach Cigar Factory, and Tabacaleras Cubanas S.A. Corp. d/b/a Cuba Habanos U.S.A. - and their principal owner Rodolfo Morejon. Altadis U.S.A.'s Cuban Cigar Brands, N.V. and Max Rohr, Inc. divisions received statutory damages of $2 million and $1.5 million respectively.

The lawsuit centered on counterfeiting and trademark infringement involving four of Altadis U.S.A.'s brands - Montecristo, Romeo y Julieta, H. Upmann, and Saint Luis Rey. In addition to the monetary award, the defendants are ordered to recall all counterfeit products, promotional, and packing materials and deliver them to Altadis U.S.A. for destruction. They are also permanently enjoined from engaging in any activities employing graphics that are "confusingly similar" to the above-mentioned registered trademarks.

The recent judgment is the latest in a series of awards to Altadis U.S.A. in their aggressive pursuit of counterfeiters in the cigar industry. "This was another important victory for Altadis, its distributors, consumers, and the entire industry as well," said Theo Folz, President and c.e.o. of Altadis U.S.A. He added: "In today's highly competitive world, protecting brand names and trade designs and controlling high standards of quality are critical for the successful marketing of brands, particularly those that have established a loyal following.

Folz stressed that Altadis U.S.A. will continue to pursue legal remedies against counterfeiters and those who sell counterfeit cigars.


Dimon, Standard Commercial Merger Approved

Farmville, NC - The respective shareholders of independent leaf tobacco merchants Dimon Incorporated and Standard Commercial Corporation approved the merger of the two companies in April. The companies expected to complete the merger by the end of the month, subject to financing considerations and other customary closing conditions. The combined company will be named Alliance One International, Inc. The new company's common stock is expected to trade on the New York Stock Exchange under the symbol "AOI" upon closing of the merger. Dimon Incorporated is the world's second largest independent leaf tobacco merchant, while Standard Commercial Corporation is the world's third largest independent leaf tobacco merchant. Each company has operations in more than 30 countries.


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