French winemaker Lafite wins trademark infringement case

French winemaker Chateau Lafite Rothschild won a recent court case in Shanghai, concerning trademark infringement of its signature Lafite brand.

The Shanghai Intellectual Property Court ordered the defendants - Shanghai Mellowines Development Co Ltd and its parent company Shanghai Safe International Logistics - to stop their trademark infringement and pay Chateau Lafite Rothschild 2 million yuan ($316,200) in damages as well as expenses.

The case provides an example of protecting an unregistered well-known trademark in China.

The legal wrangle can be dated back to the 1990s when Lafite wine first entered the Chinese market.

Originating from the Bordeaux region in France, the wine shot to fame in China due to its unique flavor, quickly growing in popularity and attracting a large price tag.

Its producer, Chateau Lafite Rothschild, owned by Domaines Barons de Rothschild (Lafite), was granted the English trademark Lafite in China in 1997, one year after its filing.

Yet the company didn't file a trademark application for Lafite's Chinese version with the State Administration for Industry and Commerce until almost a decade later.

The delay sowed the seeds for future trademark disputes.

After SAIC publicized the preliminary announcement in 2014, the application was rejected during the statutory period, so was subject to the investigation by the authorities.

The SAIC Trademark Review and Adjudication Board decided in 2017 to grant Chateau Lafite Rothschild the trademark.

Before it gained the trademark, Chateau Lafite Rothschild found Mellowines selling imported wine under the name of Chateau Moron Lafitte in May 2015, both on the Shanghai company's official website and its shop on Tmall, a major online retail platform in China.

Also, the Shanghai wine seller used an expression on the packaging of its Lafitte wine to term its origin which looked similar to the Chinese trademark that the French company had yet to obtain.

Thus Chateau Lafite Rothschild filed a complaint against the two defendants with the Shanghai Intellectual Property Court, claiming 5 million yuan in damages.

According to the court, the issue in the case was if the Chinese version of Lafite could be recognized as an unregistered well-known trademark, which would determine whether the defendants had the intention for infringement.

Under the current legal framework in China, trademark owners cannot claim their rights dating back to the period running from the expiration date of the preliminary examination notice in the filing process to that of the trademark approval, when others use an identical or similar mark for the same or similar goods.

Yet it allows an exception where users with ill will can be held liable for damages.

The court found the Lafite registered trademark enjoys high reputation in China. Its Chinese version, though still pending trademark approval at the time, had also established a stable corresponding bond with Lafite and become well-known to wine consumers in the country before the claimed infringement.

Mellowines, as a professional wine importer and distributor, which has traded in the plaintiff's products - Carruades de Lafite and Chateau Lafite Rothschild - should have been clearer about the correspondence between the Lafite trademark and its Chinese version, yet failed to take reasonable avoidance measures in translating Lafitte wine.

Thus the court that using a similar mark violated the rights to the unregistered well-known trademark of Lafite's Chinese version.

Given investment ties between the two defendants, and logistics and warehousing services provided to Mellowines, Shanghai Safe International Logistics was ruled liable for contributory infringement.

(China Daily 03/15/2018 page17)