Recently, Changsha Intermediate People’s Court of Hunan concluded a trademark infringement lawsuit raised by the French wine manufacturer Societe Civile De Chateau Lafite Rothschild (Lafite) against Shenzhen Jinhongde Trade Co., Ltd. (Jinhongde) and Health Industry Development Co., Ltd. (HID) under Hunan Biological & Pharmaceutical Group. The court ruled that Jinhongde, for proven trademark infringement and unfair competition, is to compensate the plaintiff 300,000 Yuan. The ruling marks Lafite’s first victory over an IP lawsuit in China.

 

 

According to an Internet live broadcast, the plaintiff introduced its trademark to the court of first instance with the following evidence: (A) On October 10, 1996, the plaintiff applied at the Trademark Office for “Lafite” trademark for Commodity Category 33 of “alcoholic beverage (except beer)”. On October 28, 1997, the trademark registration was approved with the registration number of 1122916. On October 28, 2007, the trademark was renewed for another ten years. (B) On October 10, 1996, the plaintiff applied to the Trademark Office for the “Chateau Lafite Rothschild” trademark for the above same Commodity Category. On October 28, 1997, the trademark was registered with the number 1122917, and then on October 28, 2007, renewed to October 27, 2017. (C) On July 23, 2001, the plaintiff applied, with France as the initial application and registration country, to use the “five-arrow graph” in “wine named after origin” of Category 33. Lafite applied for international registration to the International Bureau of World Intellectual Property Organization in accordance with the Madrid Agreement on International Registration of Marks and designated China for territorial extension of protection. The application was approved by the China Trademark Office with the trademark registration number of G764270. The trademark is valid until July 23, 2011.

 

The plaintiff claimed that the “Lafite Family” trademark used by the defendants was composed by “Lafite” and the common English word “FAMILY”, which contained the plaintiff’s registered trademark “Lafite” entirely. The “Lafite Family” trademark and “lafitefamily.com” domain name used by the defendants were very likely to cause confusion to the public, which violated the exclusive rights of the famous registered trademark “Lafite” owned by the plaintiff. In addition, the Lafite Family trademark used by the defendants infringed the specific name of the Lafite wine produced by the plaintiff and constituted unfair competition.

 

In court, the plaintiff explained the defendants’ violation acts in detail:

 

1.       “Lafite Family” used by the defendants infringed the prior registered, famous trademark “Lafite” owned by the plaintiff.

 

The defendant used the Lafite Family trademark which consists of two parts: the first part is composed of “L”, “A”, “F”, “I”, “T”, “E” and the second part is the common English word “FAMILY”. It is obvious that the first part “Lafite” in the defendants’ mark is exactly the same with the plaintiff’s “Lafite” trademark. The defendants’ mark fully includes the plaintiff’s registered trademark, which is likely to cause confusion or misunderstanding to the public. The defendants’ acts violated Article 52 of the Trademark Law and constituted trademark infringement.

 

2.       The “Five-arrow graph” used by the defendants infringed the prior registered and famous “Five-arrow graph” trademark owned by the plaintiff.

 

The plaintiff’s mark had “five arrows” and the letters of “Lafite” while the defendant’s mark was made up by “five arrows” and the words “Lafite Family.” Comparing the two marks, one can easily find out that in the plaintiff’s trademark, letter “R” and “Lafite” are at the center, the five arrows are arranged radially and the letters “DOMAINES”, “BARONES DE ROTHSCHILD” are surrounding them; the defendants’ trademark also has Lafite Family at the center and arranges the five arrows radially. The two trademarks are confusingly similar, so that the defendants’ mark violated Article 52 of the Trademark Law and constituted trademark infringement.

 

3. The defendants’ use of “Lafite Family” infringed the well-known name of Lafite products of the plaintiff The Chinese transliteration of the Plaintiff’s “Lafite” trademark has gained a very high reputation after longterm use and wide publicity. “Lafite” and its Chinese transliteration have already formed a specific and sole corresponding legal connection with the plaintiff. The trademark Lafite Family used by the defendants is mainly identified by the word “Lafite,” which is likely to cause confusion and misunderstanding to the public. Therefore, the defendants’ act violated Article 5.2 of the Law of Unfair Competition and constituted unfair competition.

 

3.       The domain name “lafitefamily.com” used by the defendants infringed the plaintiff's prior and wellknown registered trademark “Lafite.”

 

The words “lafitefamily” in the defendants’ domain name is confusingly similar to the plaintiff ’s “Lafite” trademark, which will mislead the public to believe that the products provided by the defendants come from the plaintiff, or that the infringing goods provided by the defendants have been authorized by the plaintiff.

 

5. The defendants’ product brochure, website and other items of publicity of Château Lafite constituted unfair competition. In order to mislead the public, the defendants fabricated the historical background of Château Lafite, which constituted unfair competition.

 

6. The defendants’ acts of trademark infringement and unfair competition obviously had subjective bad faith.

 

The plaintiff’s “Lafite” and “Five-arrow graph” trademark have a very high reputation and its products have earned a high reputation with the public. In order to seek illegal profits, the defendants made use of the “lafitefamily.com” site and publicized the confusingly similar mark of Lafite Family and in its brochures and the packages of wine products so as to mislead the public, which showed that the defendants intentions were malicious.

 

In summary, the defendants’ acts infringed the registered trademark “Lafite” and “Five-arrow graph” owned by the plaintiff and constituted unfair competition.

 

The defendants believed that there were significant differences between the mark Lafite Family used on their products and the plaintiff’s “Lafite.” Since the Chinese name of “Lafite” is not registered, defendants’ use “Lafite Family” and “Lafei Shizu” does not constitute infringement.

 

After the hearing, the court held that the Lafite Family logo on the defendants’ products contained a major part of the plaintiff’s registered trademark Lafite and formed approximation, which was sufficient to cause confusion on the source of the products.

 

On February 28, 2011, Changsha Intermediate People’s Court made the first instance decision. The defendants were ordered to immediately stop using the infringing trademarks on their wine products, the site of http://www.lafitefamily.com and promotional materials. Based on Article 5.2 of the Law of Unfair Competition, the Chinese transliteration of Lafite was identified as the unique name for the famous trademark and thus the defendants’ use of Lafite Family constituted unfair competition. The false publicity on the http://www. lafitefamily.com website and promotional materials also constituted the same. The defendants were ordered to publish a statement to eliminate the misleading influence, cancel the “lafitefamily.com” domain name which infringed the exclusive right of the original trademark Lafite, and compensate the plaintiff 300,000 Yuan. In addition, the court ordered the defendant of HID under the Hunan Biological & Pharmaceutical Group to stop selling the infringing products and using false promotional materials.

 

 

The plaintiff’s legal representative and lawyer of Beijing Unitalen Law Office Li Yongbo said that it is particularly noteworthy that the court decided that “Lafite” is the unique name for the famous wine and the defendants’ use of “Lafite Family” aimed to take advantage of the plaintiff’s market dominance and well-known brand. The defendants had bad intent and their acts constituted unfair competition.

 

During the trial, the plaintiff explained to the court on its claim that the Chinese transliteration of Lafite was a unique name for the well-known products. The specific reasons were as follows. After a long-term use and wide publicity, the transliteration of the plaintiff ’s trademark “Lafite” has become a peculiar name for its famous products. This has a legal basis in Article 5 of the Law of Unfair Competition: An operator may not adopt the following unfair means to carry to transactions in the market and cause damage to competitor. (2) using, without authorization, the name, packaging or decoration peculiar to well-known goods or using a name, packaging or decoration similar to that of well-known goods, so that his goods are confused with the well-known goods of another person, causing buyers to mistake them for the latter.

 

Article 1 of the Interpretation of the Supreme People’s Court on the Application of Law to the Trial of Civil Disputes over Unfair Competition provides that goods with market reputation and related public knowledge in China should be identified as “well-known goods” as described in Article 5 of the Law of Unfair Competition. To identify well-known goods, the people’s court should consider the time, region, volume and target of the sale of goods, duration, extent and geographical scope of promotion and other factors and then make a comprehensive judgment. The plaintiff should bear the burden of proof for the market reputation of its commodities. According to Article 5 of the Law of Unfair Competition and Article 1 of the above Judicial Interpretation, the plaintiff provided 17 news reports on “Lafite” from mainstream Internet media dated from May 24, 2004. The reports proved that the Chinese transliteration was a specific name for the plaintiff ’s well-known products.

 

The plaintiff also made a detailed description of the infringement of the unique name of the well-known Lafite products. The following conclusions can be made by comparing the “Lafite Family” mark the defendants used on wine bottles, paper packaging boxes, distributed brochures and its official website, and the Lafite products of the plaintiff. Firstly, “Lafite Family” was made up by the two words “Lafite” and “Family” with “Lafite” as the major part, which was exactly the same with the plaintiffs mark. Secondly, the pronunciation emphasis on “Lafite Family” was still laid on “Lafite” and thus the major part was similar to the plaintiff ’s well-known product name. Finally, the name “Lafite Family” gave consumers the impression that it was one of a series brands of the plaintiff and hence its mark was directed to the plaintiff ’s trademark. In conclusion, “Lafite Family” was confusingly similar to Lafite and the above acts of the defendants infringed the exclusive rights of the plaintiff, violated Article 5 of the Law of Unfair Competition and constituted unfair competition.

 

Li Yongbo said the case handled by the Changsha Court was the first lawsuit raised by Lafite in China. Since Lafite was identified as a unique name for wellknown goods, the case laid a sound legal basis for Lafite to safeguard its civil rights in accordance with the Law of Unfair Competition.

 

 

It is learnt that the plaintiff Lafite is a world-famous wine maker. For over one hundred years, Lafite have been popular as the top wine brand and the company has been well-known as a wine maker. It is said that Lafite wine has the world’s top quality because of its soil, climate conditions and harvesting and processing techniques. Lafite wine is prominent for its floral fruity flavor and mellow soft taste, and is regarded as the “Queen” in the wine kingdom. The Bordeaux region of France has a long history of wine production and trade. In the 17th century, merchants from Netherlands and the UK listed wineries with superb technologies as “First Growth,” and Château Lafite was one of them. At the World Expo 1855 held in Paris, the French Emperor Napoleon III called for a formal wine classification system (i.e.: grading table) in order to better introduce wine of Bordeaux to the world. This work was then undertaken by the “Wine Broker Association” under the Bordeaux Exchange. On April 18, 1855, the wine classification table was announced, reflecting the prevailing market conditions and the changes of the previous century. Lafite was ranked as a First Growth. Since then, the label of Grand CruClasseen 1855 became a sign of recognition for top wine, and it is still respected by the world wine industry now. At the Christie’s auction in London in 1985, a bottle of Lafite signed by Thomas Jefferson (the third president of the United States) was purchased by Malcolm Forbes, boss of Forbes magazine, at one hundred and five thousand British pounds, setting a world record that remains to date.

 

However, when the “Queen Wine” and “LV Wine” entered China, it was found that many fake Lafite wines had been popular in the market. On March 27, 2011, China Central Television exposed on its Focus Program that counterfeit Lafite wines were available at the China Sugar and Wine Fair held in Chengdu.

 

It is also learnt that, for various reasons, the Chinese transliteration of Lafite has not been registered in China, so fake copies such as Lafite Family, Lafite Empire, Lafite Field, Lafite Legend, etc. float abroad one after another. Lafite could do nothing but take legal means and start a campaign to crackdown on the stream of counterfeit goods. The first step was set for Changsha.

 

On the defendants’ unauthorized use of the same or similar Chinese transliteration, trademark and domain name of “Lafite” on their wines, Lafite sued Jinhongde and HID under Hunan Biological & Pharmaceutical Group at Changsha Intermediate People’s Court on September 15, 2010, requesting an immediate injunction to stop of infringing acts and compensation to its losses in the amount of 500 thousand Yuan. On November 30, 2010, Changsha Intermediate People’s Court held a hearing on the case.

 

It is worth mentioning that the China Court Network provided netizens with an online live video broadcast for the trial. In recent years, the Internet has pulled law closer to the general public. As a means of opening the courts, online live video broadcasts publicized the court hearing with simultaneous records and pictures and the general public could attend the hearing on line. In this case, the live broadcast aroused extensive attention from a large number of netizens. They communicated with the guest judges with messages and questions. The barrier-free and interactive Q&A broadcast not only helped supervise the conduct of court, but also protected the legitimate rights and interests of related parties. It was a practical step for a transparent trial. Li Yongbo introduced, the court selected to broadcast on line the case because it was not only a typical one for trademark infringement and unfair competition, but also the plaintiff, as an internationally famous brand, aroused wide attention for its IP protection in China.

 

 

According to Zhang Yazhou, another lawyer of the plaintiff, currently several producers have been sued for infringing the intellectual property of Lafite, including Lafite Race, Lafite Empire and Zhuhai Lafite. Makers of Lafite Nobles were captured by Shenzhen and Wuhan police for suspected crime of counterfeiting registered trademark. Lafite has launched a full intellectual property protection campaign in China.

 

The copycatting of famous brands has existed for a long time. The plaintiff ’s attorneys in this case has handled several cases of this kind, such as the Montagut trademark infringement and unfair competition case by Li Yongbo, the BMW vs. Century BMW case by Zhang Yazhou, and the Aupu trademark infringement case. Copycatting brands has even led to the emergence of a gray industrial chain which brings high profits to unscrupulous companies but heavy losses to the victims.

 

To this end, Zhang Yazhou proposed that Chinese enterprises should actively cultivate their own brands and create their own trademarks as a long-term development path for themselves.

 

(Translated by Li Yu)