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Australia’s Treasury Wine in China trademark victory

by Jamie Smyth19/01/2017  

Court revokes mark registered to individual using Chinese name of its premium Penfolds brand

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One of Australia’s oldest wine brands, Treasury Wine Estates, has won a victory against “trademark squatters” in China after a court revoked a mark registered using the Chinese name of its premium Penfolds brand. 

China overtook the US to become Australia’s biggest wine export market last year, and easily identifiable Chinese language names are important for the country's consumers, who are often relatively new to the drink. Treasury named its Penfolds brand Ben Fu, which loosely translates as “run towards wealth” in Chinese.

However, China trademarks are typically granted to the first applicant, making “squatting” a common headache for overseas companies. France’s Castel Wines lost a nine-year trademark battle against Chinese entrepreneur Li Daozhi over its Chinese name in 2015 and was forced to rebrand its products. 

Beijing's high court on Thursday cancelled a Ben Fu trademark covering wine registered by a Chinese individual named Li Shen in 2009. “We are absolutely thrilled with this decision,” said Robert Foye, Treasury's president and managing director for Asia. 

Although the company needs to obtain a new trademark before securing its exclusive use, Treasury’s application for Ben Fu is next in line for approval, said Dan Plane, a Hong Kong-based lawyer who has worked on the case. “Li had registered the mark and had not used it,” Mr Plane added, in contrast with Castel’s Chinese registrar who had sold wines using the trademark. 

Australian wine exports to China surged 51 per cent to $474m between October 2015 and September 2016, according to industry group Wine Australia. Treasury generated A$293.2m net sales revenue in Asia in the year to end June 2016, up 40 per cent from the previous year. Reflecting the importance of the market, Canberra last month sent its first intellectual property rights counsellor to its Beijing embassy.

“A lot of global brands underestimate the importance of the Chinese registered name, that's a big mistake to make,” said Fongyee Walker, a China-based wine specialist. Ben Fu is “a good translation which is easily recognisable?.?.?.?there a few names in China that people recognise, Penfolds is one of them,” she added.

The verdict comes weeks after China’s supreme court revoked trademarks registered by a sportswear company that used the Chinese name of former NBA star Michael Jordan after a dispute lasting years. 

The same court said this week that celebrity names cannot be registered as trademarks in ways that could deceive consumers. That ruling could ease the fears of public figures, including US president-elect Donald Trump, who has at least 45 pending trademark applications in China under his own name in an apparent attempt to protect against IP squatters.

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