Invalidation action against a copycat of French geographic indication

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

The Institut National de l’Origine et de la Qualité (INAO, previously known as Institut National des Appellations d’Origine) is the French government bureau regulating agricultural products with protected designations of origin (PDOs). The INAO forms part of the French Ministry of Agriculture.

Margaux is a vine 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 “Château Margaux”.

On 26 April 2012, a local winery in China called Yantai Médoc Châteaux Wine 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, etc. The mark was registered on 28 July 2013.

On 30 December 2014, the INAO brought before the TRAB an invalidation action against such trademark, on the ground that Margaux is a French geographic indication (Article 16, 2001 Trademark Law) and a foreign geographical name known to the public (Article 10.2), so the registration of the disputed mark has “other unhealthy influence” (Article 10.1.8).

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

The TRAB invalidation decision was upheld by the Beijing Intellectual Property Court on 27 July 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 prohibited from being registered as a trademark) and Article 10.1.8 (unhealthy influence) of the 2001 Trademark Law to invalidate the mark.

Case analysis

The case is interesting because the court gave some explanation in its judgment. First, 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 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 trademarks 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 by deleting the exaggerative prerequisite in Article 10.1.7, only referring to “deceptive” trademarks.

Second, with respect to Yantai Médoc’s counterargument citing the exception clause at the end of Article 10.2 – e.g., “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 of 2016 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. Wanhuida Peksung represented the INAO in the above procedure.

Author: Huang Mei is a senior trademark counsel at Wanhuida Peksung