A Chinese court has increased damages awarded to Southcorp Brands, owner of the Penfolds wine brand, to 1 million yuan ($148,000) from 400,000 yuan after overturning a finding that had cleared a company of trademark-infringement liability.

A Chinese court has increased damages awarded to Southcorp Brands, owner of the Penfolds wine brand, to 1 million yuan ($148,000) from 400,000 yuan after overturning a finding that had cleared a company of trademark-infringement liability.
Southcorp Brands, the Australian owner of the Penfolds wine brand, holds registrations for the "Penfolds" and "Grange" trademarks, along with their Chinese equivalents "Benfu" and "Gelanxu," in Class 33 covering wine products in China.
The dispute concerned wine sold under “Gelanji Benf” and “Binfollde Gelangee,” which Southcorp argued were confusingly similar to its trademarks and likely to cause consumer confusion.
In an appellate ruling dated April 15 and published recently, the Shanghai Intellectual Property Court offers a notable example of how Chinese courts establish liability in complex trademark disputes involving multiple entities across a distribution chain.
Upholding part of the lower court's ruling, the Shanghai IP court found that a Shanghai-based wine distributor and a Penglai-based company that had registered the “Gelanji Benfu” mark and authorized the distributor to use it were jointly liable for trademark infringement. The Gelanji Benfu trademark was later revoked for non-use.
However, the lower court cleared Luzhou Huaijiu Shiguang Wine Sales and its sole shareholder, an individual surnamed He, of liability for infringing Southcorp’s trademarks, citing insufficient evidence.
The Shanghai IP court reached a different conclusion on appeal. Central to its ruling was China's civil-law "high probability" standard of proof, under which a court may find a fact established when the available evidence, considered as a whole, makes its existence highly probable.
Applying that standard, the court examined a series of interconnected facts pointing to Huaijiu Shiguang’s involvement in producing the accused products and concluded that the company was jointly liable for trademark infringement.
The court noted that several trademarks appearing on the packaging of the accused wine products had been filed by Huaijiu Shiguang, although the applications were later invalidated, withdrawn or rejected. Another mark owned by the company, "Binfollde Gelangee," was invalidated in May 2025 during the appellate proceedings.
According to the judges, the mark matched the product model listed in the Shanghai distributor's import declarations and closely mirrored the English wording used on the accused wine labels, differing only in stylization.
The court also cited a separate judgment by the Chengdu Intermediate People's Court, which found Huaijiu Shiguang and He liable for trademark infringement involving the same Binfollde Gelangee-labeled wine. The packaging in that case was nearly identical to the product at issue in the Shanghai proceedings.
Further linking the company to the infringing products, the front-label design closely matched a wine-bottle industrial-design patent owned by He, who was Huaijiu Shiguang’s sole shareholder during the period when the alleged infringement occurred.
Huaijiu Shiguang argued that the accused products had been produced before the company was established and before it applied for the disputed trademarks.
The court rejected that argument, noting that because the wine products were imported, the bottle markings reflected only the filling date and didn’t show when the products were relabeled and released onto the Chinese market. It further noted that evidence provided by Southcorp showed that all the accused products were circulating in China after Huaijiu Shiguang had been established.
Taken together, the evidence made it highly probable that Huaijiu Shiguang produced the accused goods, the court said. It therefore held the company jointly liable for trademark infringement and found its sole shareholder He jointly liable after he failed to prove a separation between the company's assets and his own.
Citing the reputation of the Penfolds trademarks, the scale of the infringement, the defendants' fault and Southcorp's enforcement costs, the court increased the damages award to 1 million yuan.