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China represents the single largest market growth opportunity for wine producing countries around the world. As a brand driven market, your trademark means everything. Given the importance of protecting your brands, what are the challenges facing a foreign brand owner in China?
Failure to register trademarks is one of the principal difficulties that foreign brand owners encounter in the Chinese market.
Some brand owners fail to protect their intellectual property as they mistakenly believe that registration in the home country protects them in China. Others underestimate or overestimate the risk of trademark abuse and believe there is little they can do about it. Still others believe that registration is expensive, time consuming and not worth the effort. For others still, business or wine exports may be expanding so rapidly that they unintentionally expose themselves by postponing registration.
Lafite is the best-known foreign wine brand in China, in part, the story goes, because a gangster in a Hong Kong movie once said that if it ain’t ’82 Lafite, it ain’t worth drinking. Translations of Lafite—La Fei / 拉 菲—are found not only on wine bottles but everywhere from bank ads to housing estates.
- Source: Grape Wall of China
Brand owners can take important steps to protect their trademarks and other intellectual property. We recommend that every prospective China business plan include a strategy to protect intellectual property. For those entities already operating in the Chinese market, review your intellectual property to ensure that your protection strategies are keeping up with your innovations and market expansion.
Registering a trademark allows your winery to leverage its brand and prevent others from using your brand or trying to confuse customers with a similar brand. It does take some time and modest resources to register a trademark in China but the alternative – exporting to China without a registered trademark – would leave your brand unprotected and open to considerable risk.
Your registered trademarks in your country are not protected in China unless registered in China. Therefore, if you see good opportunities in China and are looking to remain in the market for the medium to long-term, then it is important to have your trademarks secured right at the beginning. China is a ‘first-to-file’ country meaning that, all else being equal, whoever applies for a trademark first, will obtain the registration. Unless you can manage to do business without your existing brand, seriously consider registering your trademark in China. Also secure other rights such as domain names, company names, patents and copyrights.
Source: Instagram post @china_iplab (Zukhra|China corporate lawyer)
Protecting your intellectual property in China is not only a concern for those already selling in China, it is a concern even if you are not now selling your product in China as others may be leveraging your brand in China even if you are not in the China market.
Additionally, poachers use the Internet and attend large international trade shows to determine up and coming, i.e., potentially valuable brands and registered them in their own name with the hopes of obtaining a not so small fee to get them back. With the Internet, it’s not uncommon for pirates to file for trademarks and then attempt to prevent use by a brand owner.
Beyond Lafite, there is a wealth of chateaux with which the creative draw inspiration, from Latour to Petrus do Domaine Romanee-Conti–and sometimes several of these at the same time. A white from Romanée-Conti Made in southern France. By Lafite. Yes, a label claimed that.
- Source: Grape Wall of China
Please note that trademark registration systems are different in the People's Republic of China , Hong Kong and Macau. Registration in one will not afford protection in the other.
A trade mark is the IP right used to protect a brand. If you do not have a registered trade mark in China, your brand is not effectively protected, and is potentially vulnerable to trade mark squatters.
Mainland China has a first to file trade marks system. Trade mark squatters can take advantage of this by registering others’ trade marks in order to sell them to the original company at an inflated price, or sell their own products under that brand. The most effective way to avoid such bad faith trade mark filings is to register your own trade marks in China as early as possible. Consider registering if there’s even a small chance you may wish to export to China in future. A trade mark can be registered in China whether or not it’s being used, so you can apply ahead of entering the market, ideally before publicly revealing any new brand or label.
If your trade mark is a logo, you may also be able to seek copyright protection by filing to record the copyright with the Chinese copyright authorities. Copyright can be a useful additional tool to tackle bad faith trade mark registrations and enforce against infringers.
Case study: Penfolds
Penfolds is one of Australia’s most renowned wine brands and one which has experienced phenomenal success in the China market. The Chinese character mark which has been used for Penfolds since its introduction in to the Chinese market in the early 1990s is奔富 bēn fù. However, Treasury Wine Estates, the owner of the Penfolds wine brand, did not seek to register this mark in its name until 2011 at which stage a trade mark squatter had already registered the mark in relation to wines. In a costly legal battle that has continued from 2011 to 2018, Treasury has finally invalidated the hijacker’s registered rights and is now successfully pursuing the registration of its own mark.
Lesson: consider selecting and registering both your English and Chinese trade marks prior to entering into the Chinese market or exhibiting at trade fairs.
Consider developing a Chinese language brand and protecting it through a registered Chinese trade mark. Your Chinese brand could be a transliteration and/or translation of your English brand, or a completely new name specifically for that market. It is often advantageous to consult with branding professionals to develop a brand that is appealing to Chinese consumers. Examples of Chinese language branding of Australian wines include:
Penfolds = 奔富 (bēn fù)
Jacob’s creek = 杰卡斯 (jié kǎ sī)
Yellow Tail = 黄尾袋鼠 (huáng wěi dàishǔ)
Case study: Castel
Castel wines, Europe’s largest wine producer, registered CASTEL as a trade mark in China, but didn’t develop or register a Chinese language trade mark. Castel’s Chinese partners used卡斯特 Kǎ sī tè, a transliteration of Castel, on back labels, advertising and customs documentation. An unrelated company registered卡斯特 Kǎ sī tè as a trade mark in China, and sued Castel for infringement. In a legal saga that ran from 2002 to 2016, Castel ultimately lost, and was fined for trade mark infringement. In addition, Castel had to develop a new Chinese language brand.
Lessons: be aware how your wine brand will be represented on Chinese labelling, advertising and customs documentation. Consider developing and registering a Chinese language trade mark in addition to your English brand and any logo marks.
China has millions of registered trade marks in force, so it’s important to check if someone else has already registered a mark identical or similar to your own. Identifying conflicts from the outset can help you in identifying bad faith filings, can help you in reducing the risk of infringing other trade marks and it can also save you a lot of time and money on your applications being rejected at the last moment.
As part of your research, you can do a preliminary search of the Chinese trade mark register for existing registrations and applications. You should consider consulting a trade marks attorney experienced in Chinese trade mark law for a professional search.
IP is a private property right, so you’re responsible for monitoring and enforcing your own IP. Monitor for infringing goods on e-commerce platforms such as Alibaba’s Taobao marketplace, and JD.com. If you find infringing goods, use the platform’s online IP protection portals to file take-down requests on infringing sellers along with evidence of your registered Chinese IP right (trade mark, copyright or other). If you’re encountering a large volume of infringing listings, it may be more efficient to engage a specialist online brand protection service to perform this work. Such services can be engaged through law firms or directly. Law firms and investigators can also document evidence of infringement and build a case to bring to local enforcement authorities.
Case study: Copycat Australian wines
Australian bulk wines exported to China may have labels that are deceptively similar to well-known Australian wines, such as Penfolds. Australian wine exporters should seek to understand how their customers will market their wines in China. Where possible, exporters should insist on their customers providing copies of consumer facing labels and review both English and Chinese character marks on the labels so they can assess if there are conflicts with Chinese character marks of known Australian brands, such as 奔富 bēn fù.
Under the Wine Australia Regulations 2018, Wine Australia may suspend an export license if an exporter’s actions in export markets are likely to affect adversely the reputation of Australian wine.
In conclusion, registration of your brands in China is imperative as China is a rapidly growing wine, beer and spirits consuming nation. Any plan for foreign distribution should include a strategy for foreign registration ahead of such distribution, especially in China. Protecting your brands intellectual property will cost significantly less then the investment in the labels and packaging itself (labels, closures, bottles, packaging, marketing materials, etc.). Take a closer look at your brands...consider protecting the investment. The investment may prove valuable should the emulators arrive. With so many factors to consider, it’s important that a company creates brands, labels and packaging that are memorable and protectable.