Bacardi and Company Limited v. John Squires
The Fourth Circuit affirmed the district court's grant of summary judgment to the PTO and Cubaexport following APA review of the PTO Director's decision to grant renewal of Cubaexport's HAVANA CLUB trademark registration. Bacardi challenged the PTO's 2016 acceptance of Cubaexport's 2005 renewal filing—submitted during the statutory renewal period but accompanied by a fee payment lacking required authorization from the Office of Foreign Assets Control under the Cuban Assets Control Regulations. After OFAC denied Cubaexport's initial license application, the PTO examiner refused renewal in 2006 and refunded the payment. Cubaexport petitioned the Director for review, and while that petition was pending, obtained a 2016 OFAC license that specifically authorized "transactions . . . including those related to Cubaexport's submission filed with the USPTO on or about December 14, 2005, and the payment referenced therein." The Director then approved the renewal, finding the fee payment "effective as of December 14, 2005." The court held that the Director acted within statutory authority under 15 U.S.C. §§ 1058 and 1059 because the OFAC license retroactively validated the 2005 payment under 31 C.F.R. § 515.502(a), which permits licenses to authorize prior transactions if they "specifically so provide," and § 515.203(c), which renders licensed transfers valid and enforceable "to the same extent as [they] would be valid or enforceable but for" the embargo. The court also rejected Bacardi's arbitrary-and-capricious challenge, finding the Director's explanation adequate and Bacardi's challenge to delay in the petition proceedings forfeited.
The decision turns on the court's interpretation of the temporal scope of payment under the Lanham Act's renewal provisions and the legal effect of retroactive regulatory authorization. The Fourth Circuit rejected Bacardi's argument that "payment" requires both tender and the payee's acceptance, reasoning that the statutory text conditions renewal on acts "the registrant must perform"—payment and filing—not agency acceptance, and that a subsequent refund "does not erase the registrant's timely tender, or its legal effect, if the tender is ultimately validated." The court treated the OFAC license as changing the legal status of the 2005 transfer, rendering it a valid payment for statutory purposes even though the PTO had previously rejected and refunded it. This holding gives significant weight to intervening changes in regulatory authorization during pendency of administrative review, applying the principle that agencies must act "under the law as it existed when [the] order . . . was entered" rather than at the time of the initial examiner decision. The court distinguished between final agency action subject to APA review (the Director's 2016 decision) and non-final examiner determinations, and found no obligation for the Director to reconcile the decision with the PTO's interim treatment of the payment or to explain delay that occurred during stayed proceedings.