Dec 9, 2013
Wine businesses are still risking their future by failing to protect their brand names in China.
China can be a harsh place to do business for wine companies. Brand owners have to choose their distributors wisely, think carefully about the products they put into market, and steel themselves for long and stamina-sapping sales trips into market. To cap it all off, they run the risk of having their brand name stolen away from them by unscrupulous locals who know how to exploit Chinese trademark law.
However this last issue is eminently avoidable, as Don St Pierre, CEO of ASC, the largest importer and distributor of wine in China, pointed out at the recent Wine Vision conference. He used the conference platform to issue an unvarnished warning to businesses that if they fail to register their name, both in English and Chinese, they could not only lose the rights to it but find themselves on the wrong end of a trademark lawsuit.“Registering your brand name in China is imperative,” he warned the audience.
On one level, the issue of trademarks in China is very simple. Rather than the “first to use” rule that generally prevails in Western law, China’s trademark law amounts to a “first to register” philosophy. The best strategy, according to St Pierre, is to register all your names early, including – and this is the crucial bit – your Chinese brand name.
St Pierre’s argument is that this parsimony and/or forgetfulness is not acceptable. The consequences of failing to register can be catastrophic: we have written several Network News stories about Castel’s long, bitter and ultimately unsuccessful attempt to win back the right to its Chinese brand name “Ka si te” (卡斯特). Other companies falling foul of this issue include Chateau Listran, Fortant (the example St Pierre used to illustrate his point), and the people behind Downton Abbey wine.
It’s not all one way traffic, and courts can rule in favour of the western brand owner even if they weren’t first in the queue at the trademark office – Hennessy recently won a landmark case against a trademark squatter who had registered “Hennessy XO” and Chateau Ausone also won a similar case.
The bottom line is that wine businesses (and by extension, their shareholders) cannot afford to run the risk of trading with an unregistered brand name in China. Help is at hand in the various law firms specialising in this area (Wine Intelligence used the Shanghai office of Anglo-American law firm Hogan Lovells to register its own brand marks). Wine Intelligence offers a China brand naming service, which helps firms find attractive, appropriate and available Chinese brand names to use. The professionalised end of the importer community in China will also be able to offer help and advice – and if they don’t, it may be a sign that they are not the sort of people you should be doing business with.
Source: Wine Intelligence
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