Pernod Ricard SA

the world's No. 2 spirits maker, lost a U.S. appeals court ruling on Tuesday over the right to use the name Havana Club on rum sold in the U.S. market.

The ruling is the latest twist in an ongoing saga between Pernod Ricard -- which sells Havana Club rum made in Cuba outside the United States -- and privately held Bacardi USA, which sells a product called Havana Club, not made in Cuba, within the United States.

The rum made in Cuba cannot be sold in the United States due to a trade embargo.

The ruling, handed down by a U.S. Appeals Court in the District of Columbia, affirms an earlier court decision that found that the U.S. Treasury Department's Office of Foreign Assets Control was right in prohibiting Cubaexport, a Cuban state-owned company, from renewing the Havana Club trademark, which came up for renewal in 2006.

The prohibition is due to a 1998 law banning renewals of certain trademarks, including the one Cubaexport has held since 1976. The ruling on Tuesday has no impact on Bacardi.

Bacardi, which is also trying to register the Havana Trademark in the United States, said it was thrilled with the decision, and said the effect of the decision is that the Cuban government's registration is expired and canceled.

Pernod said it strongly disagrees with the decision, but is encouraged by the dissenting opinion of one judge, who called the decision unsound doctrinally.

Pernod said it vowed to work with Cubaexport to seek a rehearing and to continue to defend the trademark in the United States.

(Reporting by Martinne Geller, editing by Matthew Lewis and Carol Bishopric)

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