A grape result – exporter of copycat Penfolds wines ordered to pay

Food & Beverage Industrials Intellectual Property Patents & Trade Marks

In brief 2 min read

Companies exporting wine labelled with the Chinese equivalent of Australia's famous Penfolds brand have been ordered to pay more than $350,000 in damages for trade mark infringement. Law Graduate Max Jones reports

The claim

Southcorp Brands Pty Ltd is the subsidiary of Treasury Wine Estates, the company that owns Penfolds wines. Southcorp owns registered trade marks for the words: PENFOLDS, BEN FU and 奔富.

The Chinese characters 奔富 are pronounced 'Bēn Fù', which is a phonetic approximation of 'Penfolds' in Mandarin and Cantonese. All three trade marks have been used since 1995 to sell wine to Mandarin and Cantonese speakers, who account for a large proportion of Penfolds' global sales.

The respondents exported to China wines that included the 奔富 characters on their labels. Southcorp claimed this infringed its trade marks and sought an account of profits and injunctive relief.

After the respondents' lawyers ceased acting for them and the respondents failed to appoint new lawyers or file further evidence or submissions, Southcorp sought both summary judgment and default judgment. This included dismissal of a cross-claim the respondents had filed to revoke registration of two of Southcorp's trade marks.

The result

Justice Beach granted summary judgment on the basis that the respondents' defence had no reasonable prospects of success. His Honour found the respondents' marks were substantially identical with, or deceptively similar to, each of Southcorp's trade marks. They infringed the 奔富 trade mark by displaying the same Chinese characters on their labels in a bold font so as to make them the 'dominant cognitive cue'. Although the respondents had combined 奔富 with other Chinese characters, these translated to 'winery', 'wine park' or 'Australia' and were found to be descriptive only.

The respondents also infringed the BEN FU and PENFOLDS trade marks, because those trade marks had both a close phonetic association with the Chinese characters and a longstanding brand association within the Chinese market.

Justice Beach found that the labels the respondents used were likely – and, in fact intended – to deceive and confuse Mandarin and Cantonese customers.

His Honour also dismissed the cross-claim by way of default judgment, due to the respondents' procedural failures.

The court granted Southcorp $351,916.75 (plus interest) in equitable relief, and made orders restraining the respondents from using the impugned marks or any similar marks.

Foreign language marks and translations

Justice Beach's decision demonstrates an English-language trade mark may be infringed by a foreign-language copy. When considering trade mark infringement by the use of Chinese characters, emphasis is to be placed on the meaning and pronunciation of the characters used.

Regulation of counterfeit wines

In response to a string of cases involving wine copycats in Australia, the Federal Government has announced the development of a Wine Label Intellectual Property Directory. All Australian wine exporters will be required to submit images of their labels before gaining export certification. The directory will be public and searchable to allow wineries to identify potential trade mark infringers. Watch this space.