The Trademark Review and Adjudication Board and the Beijing Intellectual Property Court invalidated a copycat of an unregistered French GI in China by invoking the Article 10.2 (foreign geographical name known to the public is prohibiting from being registered as a trademark) and Article 10.1.8 (unhealthy influence) of the 2001 Trademark Law.

Case Brief

The INSTITUT NATIONAL DE L'ORIGINE ET DE LA QUALITE (previously known as Institut National des Appellations d'Origine - INAO) is the French government bureau regulating agricultural products with Protected Designations of Origin (PDOs). INAO forms part of the French Ministry of Agriculture.

Margaux is a wine growing region and appellation d'origine contrôlée (controlled designation of origin) within Haut-Médoc in Bordeaux, the world's wine capital. Margaux is the name of the village situated in the middle of this production area, and its leading "château" is also called "Chateau Margaux".

On April 26, 2012, a local winery in China called Yantai Médoc Châteaux Wine Ltd. (烟台梅多克庄园葡萄酒有限公司) applied for the registration of “玛歌·鹰贵” trademark (Margaux Yinggui in Chinese) in class 33, covering goods of aperitif, wine, liqueur, alcoholic beverage (excluding beer), sparkling wine, brandy, etcetera. The mark was registered on July 28, 2013.

On December 30, 2014, INAO brought before the Trademark Review and Adjudication Board (TRAB) an invalidation action against such trademark, on the ground that Margaux is a French geographic indication (Article 16) and a foreign geographical name known to the public (Article 10.2) that the registration of the disputed mark has "other unhealthy influence" (Article 10.1.8).

The TRAB partially dismissed INAO’s arguments by finding that Margaux was not registered as a geographic indication in China and that INAO failed to adduce sufficient evidence to prove that Margaux fulfilled the substantial requirements of a GI as outlined in Article 16.2 of the 2001 Trademark Law (since the disputed trademark had been registered in 2013, before the entry into effect of the third revision of the law).  However, the TRAB held INAO’s remaining ground (unhealthy influence and foreign geographical name) was tenable and ruled to invalidate the disputed mark on November 19, 2015.

The TRAB invalidation decision was upheld by the Beijing Intellectual Property Court on July 27, 2016.

The court echoed the TRAB reasoning that:

  1. “Margaux” is a well-known wine-producing region in France and a foreign geographical name known to the public;
  2. the first part “玛歌” of the litigious mark is the Chinese transliteration of “Margaux”;
  3. the litigious mark contains the Chinese transliteration of Margaux and has not attained a distinctive meaning other than the meaning of its geographical name component;
  4. the use of the litigious mark in respect of wine is likely to mislead the relevant public to misconstrue that the wine comes from the French place called “Margaux” which is likely to cause "unhealthy influence".

The court invoked Article 10.2 (foreign geographical name known to the public is prohibiting from being registered as a trademark) and Article 10.1.8 (unhealthy influence) of the 2001 Trademark Law to invalidate the mark.

Comments:

The case is interesting because the court gave some explanation in its judgment:

1. Article 10.1.8 of the 2001 Trademark Law is customarily used as a fall back provision if there is no other absolute ground for brand owners to rely on. The 2001 Trademark Law also contains an Article 10.1.7 about trademarks that are deceptive because they "have the nature of exaggeration and fraud in the advertising of the goods".  But for trademark considered as deceptive but without the "exaggerated advertising" situation, Article 10.1.8 was indeed the convenient fall back. This legislative gap has been filled in the third amendment of the Law with deletion, in Article 10.1.7, the exaggerative prerequisite and only refers to "deceptive" trademarks.

2. With respect to 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 states that such clause was firstly introduced in the 1993 Trademark Law which means that it was only applicable to those geographical name trademarks that had been registered before the implementation of the 1993 Trademark Law. Therefore, this exception could not apply to the disputed trademark which had been registered in 2013.

The case is included as one of the exemplary cases released by the Beijing IP Court at the press conference for its two-year anniversary.

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