CIVC prevents soft drinks producer from using Champagne name

China

The Beijing Number 1 Intermediate People’s Court has recognised that the geographical indications (GIs) 'Champagne' and '香槟' ('Champagne' in Chinese) should be protected, even though they were not registered in China at the time the case was filed.

The plaintiff in this case, the Comité Interprofessionnel du Vin de Champagne (CIVC), was established in 1941, and is one of the first regional wine committees created in France. It was established by statute to manage the common interests of growers and Champagne houses. The CIVC sets strict norms, and only sparkling wines produced in the region of Champagne in France, using certain types of grapes and according to a certain process, have the right to be called 'Champagne'.

In the second half of 2011, the CIVC found out that Beijing Sheng Yan Yi Mei Trading Co Ltd was selling soft drinks under the names 香槟 and Champagne. The CIVC sued Sheng Yan Yi Mei before the Beijing Number 1 Intermediate People’s Court.

The court took a long time to formally accept the case, and even longer to make a decision. It finally rendered its judgment on February 10 2015, in favour of the CIVC.

The court held that, although Champagne was not registered as a trademark in China at the time the case was filed, it had already been established by the relevant administrative authorities that the denomination 'Champagne' is not the generic name of an alcoholic beverage, and must be protected as an appellation of origin.

Further, the CIVC had produced evidence that Champagne had gained a high popularity in China and that the relevant public was able to recognise this word as a GI identifying sparkling wines originating from Champagne, France. The following was added to the evidence produced before the court:

  • the wide promotion made by the CIVC and Champagne producers in China;
  • many articles published in domestic media, periodicals and newspapers; and
  • a variety of authoritative reference books.

The court also noted that, since joining the World Trade Organisation and becoming a party to the Agreement on Trade-Related Aspects of Intellectual Property Rights, China was committed to providing legal protection for GIs. The court held, therefore, that obtaining trademark registration as a collective or certification mark in China was not a pre-condition for legal protection.

The court ordered the defendant to cease selling the infringing products. No appeal was filed and the judgment is now final.

The main difficulty in this case was whether a name consisting of a GI could be protected in China without any kind of registration. It was the first time that such a straightforward question had been raised in a civil litigation. There were some precedents, but these were the results of specific notices issued by the State Administration for Industry and Commerce, not actual civil infringement actions.

In 2011, when the case was launched, the only legal ground was Article 16 of the Trademark Law:

"Where a geographical symbol of the goods exists in the trademark and the designated goods do not originate from the place indicated by the said symbol, thereby misleading the public, such a trademark shall be refused for registration and shall be prohibited to be used."

The court took almost three years to make a decision.

The registration of GIs in China is, of course, strongly recommended. There are three ways to achieve this:

  1. as a certification or collective mark at the Trademark Office;
  2. as a sui generis GI at the General Administration of Quality Supervision, Inspection and Quarantine; and
  3. as an agricultural product with the Ministry of Agriculture.

Clearly, the first method is the easiest, but still requires the submission of specific documentation. The other two methods can be achieved, on a case-by-case basis, but no detailed regulations have been issued (despite being announced) to explain how foreign GIs could obtain such protection.

A GI owner may also use the Law against Unfair Competition or the law for the protection of consumers to deal with malpractices affecting its name.

After the present case was filed, the CIVC – who had a preference for the sui generis type of protection (which is the French system) - filed an application with AQSIQ on January 17 2012, which was approved on April 11 2013. Meanwhile, the CIVC also obtained a registration for CHAMPAGNE, both in Latin and Chinese characters, as collective trademarks.

Filing for registration would be the recommended approach for all GI owners. Yet, the judgment in this case is an important reference for similar cases where a GI owner has not yet registered any IP rights in China and may rely only on Article 16 of the Trademark Law and on the evidence of the GI's reputation in China.

Lei Yongjian, Yang Minfeng and Tian Chi, Wan Hui Da Law Firm & Intellectual Property Agency, Beijing

The CIVC was represented by Wan Hui Da in this case

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