A win for the Real Penfolds against Fake Penfolds
07 Aug '19

Encouraging news for Australian brand owners in China.

Much has been written about Trade Mark strategies for Australian businesses protecting their brands in China and combatting infringement in that country. This case represents an interesting spin on the enforcement of Australian brands against would-be exporters of counterfeited goods to China. Quite frankly, it’s cause for celebration.

A few key takeaways:

  1. In addition to registering your trade marks in China, including Chinese characters and transliteration marks, register the Chinese character marks and transliteration marks here in Australia.
  2. Our Trade Marks Act includes a provision that deems an infringement to occur where an Australian registered trade mark is applied in Australia to goods or services that are bound for export. This can be a very powerful way to stop counterfeit products entering the Chinese market and/or otherwise to recover damages or profits from the infringing exporter.
  3. Generally, when it comes to branding strategy for China it is critical to take legal advice early. China, unlike Australia (and most jurisdictions for that matter), is a ‘first to file’ jurisdiction. This essentially means it’s easy to be gazumped by an unscrupulous operator if you don’t register early in China.

Facts

Southcorp Brands Pty Ltd (Southcorp) owns trade marks for the iconic Australian wine brand, ‘Penfolds’. Penfolds is sold globally, including to China. In Mandarin and Cantonese, the phonetic approximation of ‘Penfolds’ is ‘Ben Fu’ and the characters ‘奔富’ are pronounced and transliterate to ‘Ben Fu’. As a result, each of the marks ‘Penfolds’, ‘Ben Fu’ and ‘奔富’ effectively carry the same meaning to Mandarin and Cantonese speakers.

Introducing Australian Rush Rich Winery Pty Ltd (Rush Rich). Rush Rich exported, from Australia to China, a range of inferior wines bearing the ‘奔富’ brand, and other versions of  that brand which, when translated to English mean ‘Ben Fu Winery’ and ‘Australian Ben Fu Winery’. Rush Rich’s intentions were there for all to see, rush to richness through trade mark infringement.

The decision

In a slam dunk win for Southcorp, the Court awarded summary judgment against Rush Rich for the infringement of Southcorp’s Australian registered trade marks for Penfolds, Ben Fu and ‘奔富’. In further proof of the value of trade mark registration, Southcorp established that Rush Rich had no reasonable prospect of defending the infringement claims and were awarded an account of profits totalling more than $350,000 plus an award for interest and costs. If Southcorp had not registered its trade marks, the decision would not have been so definitive and positive.