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Chateau Lafhateau Lafite Rothschild V. Trademark Review and Adjudication Board and Nanjing Gold Hope Wine Industry (2016) ZGFXZ No. 34, SPC

CHATEAU LAFITE ROTHSCHILD V. TRADEMARK REVIEW AND ADJUDICATION BOARD AND NANJING GOLD HOPE WINE INDUSTRY (2016) ZGFXZ No. 34, SPC

 

Cause of action: Administrative case regarding a trademark dispute

 

Collegial panel members: Wang Yanfang | Qian Xiaohong | Du Weike

 

Keywords: connection, dispute procedure, trademark, trademark similarity

 

Relevant legal provisions: Trademark Law of the People’s Republic of China (as amended in 2001), article 28

 

Basic facts: In the retrial of an administrative case of a dispute over a trademark between claimant company Chateau Lafite Rothschild (hereinafter “Chateau Lafite”) and, as respondents,  the Trademark Review and Adjudication Board of the State Administration for Industry and Commerce (hereinafter the “TRAB”) and Nanjing Gold Hope Wine Industry (hereinafter “Gold Hope Company”), the latter had applied to register Trademark No. 4578349 “Chateau Lafei” (hereinafter “the disputed trademark”) on April 1, 2005. The disputed trademark was approved for use on products falling within Class 33 of the International Classification of Goods and Services for the Purposes of the Registration of Marks, including wine, alcoholic beverages, fruit extracts (alcoholic), distilled alcoholic beverages, cider, alcoholic liquid, alcoholic beverages containing fruit, rice alcohol, highland barley alcohol and cooking alcohol, and Gold Hope Company was registered as the owner of the exclusive right to use the trademark. The date on which Chateau Lafite registered its trademark “LAFITE” (hereinafter “the cited trademark”) was October 10, 1996, which trademark was approved for use on Class 33 products – that is, alcoholic beverages (except for beers) – and Chateau Lafite held the exclusive right to use that registered trademark./// Within the statutory time limit, Chateau Lafite filed with the TRAB an application opposing the disputed trademark on the grounds that it violated article 28 of the Trademark Law of the People’s Republic of China. The TRAB rendered its Decision on Trademark No. 4578349 “Chateau Lafei” Dispute [2013] SPZ No. 55856 (hereinafter “Decision No. 55856”) on September 2, 2013, and cancelled the disputed trademark on the grounds that it violated article 28.

 

Dissatisfied with the ruling, Gold Hope Company instituted administrative proceedings. The Beijing No. 1 Intermediate People’s Court affirmed the TRAB’s decision.

 

Still dissatisfied, Gold Hope Company lodged an appeal. At second instance, the Beijing Higher People’s Court held that it was difficult to affirm that the cited trademark had established a market reputation on China’s mainland before the registration date of the disputed trademark and whether or not the relevant public was able to distinguish the cited trademark “LAFITE” from the disputed trademark “Lafei”. The disputed trademark had been registered and used for as long as 10 years, and it had established a stable market position. Thus, from the perspective of maintaining that established and stable market position, the registration of the disputed trademark in this case was to be sustained. The Beijing Higher People’s Court therefore overruled the judgment of the court at first instance and Decision No. 55856.

 

Chateau Lafite was dissatisfied and appealed to the Supreme People’s Court. An article entitled “AQSIQ announces six kinds of imported ‘Lafite’ wines that do not conform to quality standard”, published on China Economic Net, reported that:/// Chinese consumers have always been enticed by “Lafite” Wines, however, recently, the Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) announced six kinds of imported Lafite wines that did not conform to the quality standard, which left admirers of Lafite shocked. According to China Economic Net, the six kinds of wine products that did not conform to the quality standard are: Chateau 拉菲 (Lafei) 2012 dry red wine …

 

On August 1, 2016, Sohu Finance published an article, with text and photos, in which it reported “Chateau 拉菲 (Lafei)” making a grand appearance at China Food and Drinks Fair and consumers unaware of it being a knockoff”///. The Supreme People’s Court ruled that the case should be reviewed.

 

Held: The Supreme People’s Court delivered its administrative judgment on December 23, 2016, overruling the judgment of the court of second instance and affirming the judgment of the firstinstance court and Decision No. 55856.

 

Reasoning: The Supreme People’s Court held that the decision on whether trademarks are similar requires consideration of the elements of the trademarks and their overall similarity, as well as of the distinctiveness and reputation of the relevant trademarks, and the correlation between the goods for which the trademarks are used. Whether it is easy for the trademarks to be confusing shall be used as the standard of judgment.

 

In this case, the disputed trademark consisted of Chinese characters 拉菲庄园（“Chateau Lafei”). 庄园 (“Chateau”) has a weak distinctiveness with respect to the wine category and hence 拉菲 (“Lafei”) is the core element of the disputed trademark. The key to whether the disputed trademark is similar to the cited trademark is whether 拉菲 (“Lafei”) is similar to “LAFITE” or whether the two are regularly connected.

 

Before the application date of the disputed trademark, according to the facts ascertained by the Court, “LAFITE” had been transliterated as Chinese characters 拉菲 in various media and news reports published in the News Express, Yangtze Evening Post and Beijing Daily – newspapers that are easily accessible and which have a large readership. Various media articles highly commended “LAFITE” wine and hence the cited trademark has a high reputation. In addition, as a result of many years of commercial operations, Chateau Lafite has established a stable objective connection between “拉菲” and “LAFITE”, and the relevant public in China often refers to “拉菲” as “Lafite”, so the disputed trademark is similar to the cited trademark.

 

In addition, where a trademark has been registered and used for a period of time, whether that use has resulted in a high market reputation and a relevant consumer community is assessed not on the basis of the period of use, but on whether the relevant public can objectively distinguish the trademark from other trademarks in practice. As per the facts ascertained by the Court, the relevant substandard products reported on by various news outlets could all be identified as products under the disputed trademark. It could also be seen from those news reports that the relevant public had indeed confused the disputed trademark with the cited trademark. The evidence that Gold Hope Company submitted therefore failed to prove that a distinct relevant public for its product had been formed as a result of its use of the disputed trademark. The second instance court’s conclusion that the disputed trademark had established its own stable market position had no basis in fact and the Supreme People’s Court overturned that judgment.