To Chinese consumers, 'Lafite' is nearly synonymous with top-tier wine, yet before 2017 the two Chinese characters '拉菲' had not been registered as a trademark. Judgment (2015) Hu Zhi Min Chu Zi No. 518 of the Shanghai Intellectual Property Court recognized 'Lafite' as a well-known unregistered trademark and, by analogy to the Trademark Law's provisions on malicious use, ordered the malicious free-rider to pay RMB 2 million in damages—the first case in Shanghai in which a well-known unregistered trademark was recognized.
Case Overview
Chateau Lafite Rothschild is a world-famous wine producer. In October 1997, its 'LAFITE' trademark was registered in China (No. 1122916, covering wines). The Chinese transliteration '拉菲' (Lafite), blocked by a prior squatted '拉菲庄园' (Lafite Manor) trademark, went through refusal review and opposition procedures and was only registered in 2017.
In May 2015, the Chateau found that the defendant Shanghai Baochun Industrial Development Co., Ltd. ('Baochun'), while importing and selling the Chateau's own wines, had continuously imported and sold wines bearing the signs 'CHATEAU MORON LAFITTE' and '拉菲特庄园' (Lafite Manor) since 2011, with Baozheng (Shanghai) Supply Chain Management Co., Ltd. ('Baozheng') handling logistics and warehousing. The Chateau sued, requesting recognition of 'Lafite' as a well-known unregistered trademark, an order for the two defendants to stop the infringement and eliminate the impact, and joint damages of RMB 5 million including reasonable expenses.
Issues in Dispute
- Since 'Lafite' had not been registered when the accused conduct occurred, whether it was necessary to recognize it as a well-known unregistered trademark;
- Whether 'MORON LAFITTE' was similar to 'LAFITE', and whether '拉菲特' was similar to '拉菲';
- Whether damages could be awarded for infringement of a well-known unregistered trademark.
Judgments and Case Numbers
Shanghai Intellectual Property Court, civil judgment (2015) Hu Zhi Min Chu Zi No. 518 (December 27, 2017), held: the accused conduct occurred before the Chateau obtained the exclusive right to the 'Lafite' trademark (which, per Article 36(2) of the Trademark Law, was April 28, 2014), so it was necessary to determine whether 'Lafite' was a well-known unregistered trademark at the time of the accused conduct. The Chinese relevant public commonly uses 'Lafite' to refer to the 'LAFITE' trademark, a stable correspondence had formed between the two, and before the accused conduct 'Lafite' was already widely known to the relevant public in China—it could be recognized as a well-known unregistered trademark.
The prominent use of 'MORON LAFITTE' on the front label of the accused wines differed from 'LAFITE' by only one letter and was similar, infringing the exclusive right to the 'LAFITE' registered trademark; the use of '拉菲特' on the back label was similar to the well-known unregistered trademark '拉菲' and likewise constituted infringement. Baochun's import and sale of the infringing wines showed evident subjective malice, and Baozheng knowingly provided logistics and warehousing facilitation, constituting contributory infringement.
The court ordered the two defendants to stop the infringement, publish statements in China Industry and Commerce News to eliminate the impact, and jointly compensate the Chateau RMB 2 million in economic losses including reasonable expenses. No party appealed, and the judgment took effect.
The case was selected into the 50 Typical IP Cases of Chinese Courts 2017 and the Top 10 Typical Cases of Shanghai Courts 2018 (sources: official website of the Shanghai Intellectual Property Court; Shanghai Higher People's Court website).
Key Takeaways
- Well-known unregistered trademarks are likewise protected, but the finding has a premise: at the time of the accused conduct, the unregistered mark must already have reached fame among the relevant public;
- The damages basis was applied by analogy: the Trademark Law and related judicial interpretations do not directly provide damages for infringement of a well-known unregistered trademark, so the court applied by analogy Article 36(2) on 'malicious use shall be compensated', ordering the malicious user to bear liability;
- Liability along the import chain is long: importers, sellers, and providers of logistics and warehousing facilitation may all constitute infringement or contributory infringement.
Lessons for Businesses
The Chinese name of an imported product is not 'whatever you choose to call it'. When choosing a Chinese product name or designing a wine label, importers should proactively search whether the Chinese transliteration has been registered by others or is already well-known in the market, to avoid similarity. For well-known foreign brands, even an unregistered Chinese transliteration can obtain protection through recognition as a well-known unregistered trademark—but the premise is the ability to produce long-term, extensive evidence of promotional use.
If you need these procedures handled for you, you may book the trademark monitoring service of a filed trademark agent on MyTMBee, with full assistance from material preparation through filing and follow-up.