Surprising to some is the fact that Australia is one of the top five or six selling countries of wine in the world. Annually, it exports over 400,000,000 bottles and consumes domestically about the same amount, according to the online magazine, Australia Top.
Some of the most popular brands are Penfolds, Yellow Tail, Jacob’s Creek, and Lindeman’s. America used to be Australia’s main market but it’s been overshadowed recently by China and Hong Kong.
While every wine distributor wants volume, which it can get in spades from the world’s largest country, that same distributor also faces some real challenges from its potentially biggest market. The aforementioned Penfolds has discovered that, to its dismay.
About five years Penfolds decided to really target the Chinese market. Apparently, Penfolds translated into Chinese is Ben Fu. And someone else had already trademarked Ben Fu in China. Li Chen (also known as Li Daozhi), a Spanish-Chinese seller of wine in China, trademarked Ben Fu in 2009, three years before Penfolds tried to get a Chinese trademark for its own name.
So, in order to be able to sell its wine in China, it had to convince a Chinese court to cancel Chen’s trademark registration. Li Chen, it turns out, is a veteran of wine trademark wars in China. In 2002, Chen bought the trademark for a certain Chinese mark that, according to Liuming International, is a transliteration of the French name, Castel. According to Webster’s, transliteration is the writing of the letters of one language in the letters of another.
Castel is a huge company that most folks in the USA probably don’t know. But, according to Wikipedia, Castel is the largest wine producer in Europe and the number three wine brand in the world. It also sells massive amounts of beer and soft drinks.
Castel sued Chen to get that trademark cancelled. At the same time, it sold some wine in China under its name, which was the same as Chen’s pre-existing trademark. After nine years in various Chinese courts, Castel lost and was ordered to pay Chen over $5,000,000. Castel eventually changed the name under which it does business in China.
A side note. In the USA, one is entitled to trademark a name if it is the first user of that name. The Patent and Trademark Office will research to see if there are any prior users. That research will often expand beyond America’s borders. In China, trademark application works differently. There, it’s who’s the first to file for the trademark in China, not the first worldwide user. Castel, along with other brands famous in US like New Balance, learned that lesson the hard way.
This is the environment Penfolds found. It argued that since Chen wasn’t using the Ben Fu trademark, it should be considered abandoned and available to Penfolds. After four years, Beijing’s High People’s Court ruled that Chen did not have any genuine use for the trademark, thereby cancelling the mark. Now that doesn’t mean Penfolds automatically has the right to use its own name on its wine bottles in China. What it won was the right to apply to do so. Let’s see if they actually get that. Isn’t international trade fun?