Combating counterfeiting in China

International branded drinks are being targeted by counterfeiters, as foreign brands increase in popularity in China.

The whiskey industry in particular has come under attack from counterfeiters. Currently, Chivas Regal is the leading imported whiskey in China. The Chinese Trade Mark Office (¡°CMTO¡±) having recognised the importance of the brand protected both ¡®Chivas Regal¡¯ and ¡®Chivas¡¯ as well known trademarks, with the former protected in both English and Chinese, the latter protected in English, under the PRC¡¯s Trademark Law. The CMTO¡¯s approval of the Chivas brand as a well known trademark in China allows for cross class protection, and is not merely limited to alcoholic beverages under Class 33.

In addition to affording such protection to the Chivas brand, China is also working in close connection with the Scotch Whiskey Association (¡°SWA¡±) who¡¯s aim is to ¡°promote, protect and represent the interests of the whisky industry in Scotland and around the world.¡± The CMTO has protected ¡°Scottish Whiskey¡± as a collective trademark.

Article 16 of the PRC¡¯s Trademark Law states the following:
¡°Where a trademark contains a geographic indication of the goods in respect of which the trademark is used, the goods is not from the region indicated therein and it misleads the public, it shall be rejected for registration and prohibited from use; however, any trademark that has been registered in good faith shall remain valid.¡±

This provision therefore prohibits counterfeiters from passing off spirits as Scottish Whisky where they have not been produced in Scotland.

The importance of protecting a company¡¯s IP rights should be a number one priority even before taking steps to enter the Chinese market, since the PRC is a first-to-file jurisdiction. This means that the holder of a trademark for example in a foreign jurisdiction has no priority in PRC unless and until it has filed its marks. The sole exception is ¡°well-known¡± foreign trademarks. Additionally, foreign companies should look at adopting a Chinese name for their company and/or brand. This can be beneficial for numerous reasons, such as increasing potential client base, by appealing to more in the Chinese market, and also to stop your competition from legally registering the new Chinese name of your company. The most prominent example was the registration of the ¡°Starbucks¡± trademark by a Shanghai based caf¨¦.

At Lehman, Lee & Xu our professional and dedicated IP department deal with such issues on a daily basis. Our years of experience, allows us to make a full and practical assessment as to the best course of action to protect our client¡¯s business interests in China. Our prominence within the Chinese legal sector is evident in the numerous accreditations and awards received, with our IP practice being ranked as a Tier 1, and our lawyers recognised as leading lawyers within such fields. For further details related to our IP department, or if you have any legal queries please contact us at mail@lehmanlaw.com.



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