Penfolds wins trademark battle over 'squatter' in China

Penfolds owner Treasury Wine Estates has won a high court battle against a trademark squatter claiming ownership to a widely understood Chinese translation of the Australian wine brand's name - but the dispute doesn't end there. Extra reporting by DecanterChina editor Sylvia Wu.

Beijing’s High People’s Court stripped a Spanish-Chinese individual called Li Chen of the right to use the ‘Ben Fu’ trademark, a translation of the Penfolds name.

The ruling is the latest twist in a dispute that has lasted for several years.

It concerns a practice known as ‘trademark squatting’, which has also affected French wine producers in China, most notably Castel but also some Bordeaux Châteaux.

But, the Penfolds saga in China has not ended.

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An associate of Li Chen obtained the Ben Fu name in 2009 and Treasury Wine Estates first applied to have that registration cancelled in 2012.

Beijing’s People’s court upheld Treasury’s wish, stating that Li Chen could not prove that she had ‘used the trademark commercially’.

The court ruling in favour of Treasury Wine Estates merely means that the ‘Ben Fu’ trademark is again open to registration.

The Australian wine giant must re-apply for the sole right to use the Ben Fu name, and the Beijing court said that Treasury was not guaranteed success.

China has become a significant growth driver for Treasury Wine Estates, and for Australian wine exports in general.

A free trade deal signed between Australia and China is gradually reducing tariffs on Australian wine entering the Chinese mainland.

Asia generates good returns for Treasury, accounting for 7% of the company’s wine sales by volume but 13% of its global net sales and 27% of its global operating profit in the company’s last financial year.