Castel trademark dispute not over in spite of court ruling

A second ruling from the Higher People's Court of Zhejiang province has not ended a prolonged trademark dispute between famous French vintner Castel Freres SAS and Panati Wine Co in Shanghai.

After losing the largest trademark suit in China's wine industry, Castel applied for a retrial to China's highest court, which accepted its appeal on Aug 8. Sometime within the next three months, it will decide if a retrial is needed, according to a report from the China Business Journal.

The prior verdict by the provincial court required Castel to pay compensation of nearly 34 million yuan ($5.6 million) to the plaintiff Panati Wine for infringement on its Chinese trademark "Kasite". But at a press conference at the end of last month, Yin Kai, president of Castel China, said the judgment has "deviated from the objective and fair stance".

He said his company has never used that name as a trademark. It was just the Chinese translation of its company name.

In 2001, Castel and its Chinese partner Changyu established the Chateau Changyu-Castel, and in 2006, they started importing wine from France to China, making "Kasite" a popular name, said Yin.

But on the other hand, "Kasite" as a trademark was granted in 2000 to Li Daozhi, founder of Panati Wine. Its corresponding English name is Cavesmaitre.

Although it was awarded the status of a well-known trademark last year, Yin claimed that Li's "Kasite" trademark is actually little known.

"Would anyone in the wine industry believe that Castel, a European industry leader founded in 1949, hopes consumers would mistake its products for products from a Chinese company or a Chinese merchant Li Daozhi?" Yin asked.

China Business Journal quoted Wang Dehui, general manager of domestic wine marketing company Zhide Co, as saying that most industry insiders and consumers started to know the name Kasite from the namesake chateau co-founded by Castel and Changyu.

"We have limited knowledge about Li," Wang said.

In response, Li said he "understands Castel has a dissenting view about the compensation, but its insistence on non-infringement does not make sense".

"It just won't admit it even though the court's ruling has come out," he said.

In order for the court to rule that a trademark has been infringed upon, consumers must be confused about the source of the product, an attorney for Castel told Agence France-Presse. Material evidence supporting the claim must also be presented, he said.

"The consumers of Castel did not have any reason to mistake the French company for the plaintiff, and the plaintiff did not present any material evidence of the infringement," said the attorney.

In addition, Yin said that Castel is a French company, and the plaintiff Li is a Spanish national, so the Zhejiang court was required to adopt the procedures for foreigners, but it did not.

'Trademark squatter'

According to the online trademark database of the State Administration for Industry and Commerce, Li and his Panati Wine have applied for many trademarks using the Chinese translation of international chateaus, such as Penfolds and Chateau Mouton Rothschild. There are also common names like Chateau Le Vin.

A report from Nanfang Daily earlier this month said that Yin called Li a "trademark squatter", which refers to someone that registers company names and trademarks in anticipation of selling them when said company decides to enter the market.

But Li disagreed. He told the newspaper that the involved companies can launch legal actions against him, "but no such things ever happened".