TWE Wins Supreme Court Retrial

Hongfang’s support brings Treasury Wine Estates Ltd (TWE) to a Win in the Supreme Court’s Retrial

【Case Summary】

After helping Treasury Wine Estates Ltd (TWE) to get its trademarks “奔富” and “Penfolds” recognized as well-known trademarks in China, our firm, Shanghai Hongfu Law Firm, once again represented Treasury Wine Estates Ltd (TWE)’s affiliate, Southcorp Brands Pty Limited (the trademark holder of “奔富” and “Penfolds”), to win a favorable judgment in the “奔富酒园” trademark invalidation retrial ruled by the Supreme People’s Court. Starting from filing an application for trademark invalidation against the Disputed Trademark “奔富酒园” to the Supreme People’s Court issuing a retrial judgment, the case went through twists and turns and lasted seven years. The case eventually ended with the Supreme People’s Court “giving the final word”, supporting our grounds, revoking the second-instance judgment, upholding the first-instance judgment, and declaring the Disputed Trademark No. 11157214 “奔富酒园” invalid.

【Case Background】

In March 2016, Southcorp Brands Pty Limited filed an application for invalidation against the Disputed Trademark “奔富酒园” with the former Trademark Review and Adjudication Board of the National Administration for Industry and Commerce (hereinafter referred to as the “Trademark Review and Adjudication Board”). On September 30, 2016, the Trademark Review and Adjudication Board made a ruling that the Disputed Trademark shall be declared invalid, on the grounds that the registration of the Disputed Trademark constitutes “acquiring registration by other illicit means” in Article 44.1 of the Trademark Law. Dongfang Mingri Company was dissatisfied, filed an administrative lawsuit, and requested to revoke the ruling and order the Trademark Review and Adjudication Board to make a new ruling.

The Court of First Instance held that Dongfang Mingri Company and its affiliated companies had obvious subjective intentions to copy and plagiarize other people’s well-known trademarks, and hoarded a large number of trademarks, which obviously exceeded the normal needs of the company business. Such behaviors not only disrupted the normal order of trademark registration management, but also illicitly occupied public resources, damaged the interests of an unspecified majority of trademark applicants, damaged the market order of fair competition, violated the principle of public order and good morals, and damaged public interests. Therefore, the registration of the Disputed Trademark constitutes the situation as referred to in Article 44.1 of the Trademark Law. Therefore, Dongfang Mingri Company’s lawsuit request was dismissed.

Dongfang Mingri Company was dissatisfied and appealed to the Beijing Higher People’s Court (the Court of Second Instance). The Court of Second Instance pointed out that Dongfang Mingri Company and its affiliates provided evidence that they had used and advertised “奔富酒园” on wine products in China. Based on the protection of reliance interests after trademark authorization, it is not appropriate to arbitrarily dispose of trademark private rights on the grounds of harming public interests. Therefore, it is not suitable to apply Article 44.1 of the 2014 Trademark Law to regulate and determine that Dongfang Mingri Company “acquired registration by other illicit means”. Accordingly, the Beijing Higher People’s Court revoked the first-instance judgment and the ruling of the former Trademark Review and Adjudication Board.

After the second-instance judgment, Hongfu Law Firm, and Zhonglun Law Firm worked together. With the team’s detailed evidence collection, an extensive market research by market research companies, and rigorous argumentation by well-known intellectual property law experts, Treasury Wine Estates Ltd (TWE) decided to apply for a retrial with the Supreme People’s Court. On March 30, 2021, the Supreme People’s Court made a ruling to retrial the case and made the retrial judgment in July 2022.

【Judgment Perspective】

The Supreme People’s Court concluded that the pivoted issue of the retrial was whether the registration of the Disputed Trademark constituted “acquiring registration by other illicit means” in Article 44.1 of the Trademark Law.

The Supreme Court holds that in the Disputed Trademark “奔富酒园”, the use of the Chinese characters “酒园” on the above-mentioned goods is not very distinctive, and the distinctive identifying part of the Disputed Trademark is the Chinese characters “奔富”. The relevant evidence submitted by Southcorp Brands Pty Limited shows that it has used the “奔富” logo since 1995, and the “奔富” logo points to Southcorp Brands Pty Limited. Meanwhile, based on the substantial evidence in the case, it can be determined that, when Dongfang Mingri Company applied for the registration of the Disputed Trademark “奔富酒园”, to the relevant public, on wine and other goods, the Chinese characters “奔富” pointed to “Penfolds”, which persisted for a long time. Before this case, Southcorp Brands Pty Limited and Dongfang Mingri Company had civil disputes over trademark infringement and unfair competition. The civil judgments of the relevant cases determined that Dongfang Mingri Company and its affiliated companies, in the process of operating the “奔富酒园” wine, used a large number of words used by the media in the industry to introduce the “Penfolds” wine, which was an unfair competition by false advertising and infringement of exclusive rights to registered trademarks such as “PENFOLDS”, etc. Therefore, it can be determined that the registration of the Disputed Trademark “奔富酒园” by Dongfang Mingri Company has the intention of clinging to the reputation of the “Penfolds” wine producer in order to seek illegitimate benefits. At the same time, according to the facts ascertained in the original examination, Dongfang Mingri Company and its affiliated companies have registered more than 250 trademarks including the Disputed Trademark in this case and the trademark “宾利” in several classes of goods or services such as Class 33 and Class 35, etc. It is difficult to say that it is necessary for normal business activities. Based on the wrong application of the law in the second-instance judgment, the Supreme People’s Court also specifically pointed out that, since “acquiring registration by fraud or other illicit means” mainly refers to the means of registration, rather than the illegitimate purpose of the registration, the evidence of its use after the registration of the trademark “奔富酒园” submitted by Dongfang Mingri Company is insufficient to prove the legitimacy of its registration means and is not a legitimate reason to maintain the trademark registration of “奔富酒园”. So far, the “market pattern theory” on which the trademark “奔富酒园” relied, upon in the second-instance judgment collapsed.

【Attorneys in charge of this case】
Eric SU, Bob ZHANG, Cathy HE.