Beijing IP Court invalidates copycat of unregistered French GI

China

The Trademark Review and Adjudication Board (TRAB) and the Beijing IP Court recently invalidated a copycat of an unregistered French geographical indication (GI) in China by invoking Articles 10.2 (which prohibits a foreign geographical name known to the public from being registered as a trademark) and 10.1.8 (which prohibits a mark which has an unhealthy influence from being registered as a trademark) of the Trademark Law 2001.

Facts

The National Institute of Origin and Quality (INAO) – previously known as the National Institute of Appellations of Origin – is the French government bureau that regulates agricultural products with protected designations of origin. The INAO forms part of the Ministry of Agriculture.

Margaux is a wine-producing region and protected designation of origin within Haut-Medoc, Bordeaux. Margaux is a village situated in the middle of this production area; its leading chateau is Chateau Margaux.

On April 26 2012 Chinese winery Yantai Médoc Châteaux Wine Ltd (烟台梅多克庄园葡萄酒有限公司 in Chinese characters) applied for registration of the trademark MARGAUX YINGGUI (玛歌·鹰贵 in Chinese characters) in Class 33, covering goods such as aperitifs, wine, liqueurs, alcoholic beverages (excluding beer), sparkling wines and brandy. The mark was registered on July 28 2013.

On December 30 2014 the INAO filed an invalidation action against the trademark before the TRAB on the grounds that:

  • Margaux is a French GI (Article 16 of the Trademark Law 2001);
  • Margaux is a foreign geographical name known to the public (Article 10.2 of the law); and
  • the disputed mark had an 'unhealthy influence' (Article 10.1.8 of the law).

Decisions

The TRAB partially dismissed the INAO's arguments, finding that:

  • Margaux was not registered as a GI in China; and
  • the INAO had failed to adduce sufficient evidence that Margaux fulfilled the substantial requirements of a GI, as outlined in Article 16.2 of the Trademark Law 2001 (since the disputed trademark was registered in 2013, before the third revision of the law took effect).

However, the TRAB held that the INAO's remaining grounds (ie, that Margaux is a foreign geographical name and that the mark had an unhealthy influence) were tenable and invalidated the disputed mark on November 19 2015.

The TRAB invalidation decision was upheld by the Beijing IP Court on July 27 2016.

The court echoed the TRAB's reasoning that:

  • Margaux is a well-known French wine-producing region and a foreign geographical name known to the public;
  • the first part of the litigious mark (玛歌) is the Chinese transliteration of 'Margaux', which has not attained a distinctive meaning other than being a geographical name; and
  • use of the litigious mark in respect of wine is likely to mislead the relevant public that the wine comes from Margaux, which is likely to have an unhealthy influence.

The court invoked Articles 10.2 and 10.1.8 of the Trademark Law 2001 to invalidate the mark.

Comment

This case is interesting because the court gave the following explanation in its judgment.

Article 10.1.8 of the Trademark Law 2001 is customarily used as a fall-back provision if a brand owner cannot reply on another absolute ground. Further, Article 10.1.7 of the Trademark Law 2001 previously prohibited trademarks that were deceptive because they had "the nature of exaggeration and fraud in the advertising of the goods". Where a trademark was considered to be deceptive but 'exaggerated advertising' did not apply, Article 10.1.8 was a convenient fall back. This legislative gap was closed by the third amendment to the law which removed the exaggerative prerequisite of Article 10.1.7, which now refers only to 'deceptive' trademarks.

As regards Yantai Médoc's counterargument citing the exception clause at the end of Article 10.2 ("where a trademark using any of the above-mentioned geographical names has been approved and registered, it shall continue to be valid"), the court stated that such clause was first introduced in the Trademark Law 1993. As such, it is applicable only to geographical name trademarks that were registered before the law's implementation. Therefore, this exception did not apply to the disputed trademark, which was registered in 2013.

The case was included as one of the Beijing IP Court's exemplary cases published at the press conference for its two-year anniversary.

The case is still pending, as Yantai Médoc later appealed the decision before the Beijing High Court.

Mei Huang, WAN HUI DA - PEKSUNG IP Group, Beijing

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