Lessons to be learned from 'JIE BAI NA' trademark saga

After eight years of legal twists and turns, it seems that the Changyu Winery Group has managed to retain its rights to the 'JIE BAI NA' trademark – a word which was alleged to be the Chinese version of the Cabernet grape variety. There are lessons to be learned from the saga.

In June 2010, the Beijing High People's Court issued a decision in favour of the Changyu Winery Group, owner of the Chinese trademark 'JIE BAI NA', dismissing a revocation action in which it was claimed the mark was a generic descriptor for the Cabernet grape. The case has received much attention because of the many changes in opinion and the uncertainty and complexity that has been involved in retaining the rights to one trademark registration. In the course of both administrative and judicial processes, the 'JIE BAI NA' trademark has been registered, revoked and re-instated.

The founder of Changyu Wine Group applied for the 'JIE BAI NA' trademark in China as far back as 1931 as a transliteration of 'Cabernet', and re-applied for the mark in 2001 under China's current Trademark Law (1991). Although 'JIE BAI NA' was a transliteration of 'Cabernet', there are however other very different translations of 'Cabernet' in use in Chinese.

Following the mark's registration, a group of well-known Chinese wine companies – Great Wall Winery Company, Dynasty Winery Group and Weilong Winery Company – filed jointly to have the registration cancelled. This was on the grounds that 'JIE BAI NA' had become the generic name for the 'Cabernet' variety, in use by many other wine producers, and that Changyu Winery Group itself had not used 'JIE BAI NA' to function as a trademark. Indeed, while Changyu Winery Group had an extensive history and reputation in the mark, it had not applied the symbol ™, and had used the 'JIE BAI NA' trademark as a descriptive noun on its label. It had also been very slow to act against competitors using the same mark descriptively.

Changyu's case prevailed in part due to opinion from authorities, such as the Chinese Society for Viticulture, noting that 'JIE BAI NA' was not listed as one of the official Chinese transliterations of the Cabernet variety.

The case illustrates that registration should be seen as a beginning, not an end. The trademark owner must continue its effort to strengthen the association between its goods/services and the trademark, and it must be vigilant both in relation to its own use of the mark and any use by others. Failure to act against infringers will not only encourage further infringement; it may be deemed to amount to implied consent, relegating the mark to the status of a generic descriptor.

Trademark owners should take active steps to ensure that their rights are not being eroded and their trademarks diluted.

Careful use of the marks. A trademark owner's use of its own marks can be crucial. The appropriate symbols ® or ™ should be used to indicate words or devices that are trademarks. These should be followed by a generic term or a descriptor that makes it clear that the trademark is not a product name.

Registering defensive marks to protect a major trademark. Whereas a major trademark is used in a stylized font in order to make it more distinctive, trademark owners should consider registering the mark in plain font as a defensive mark.

Collection of evidence to prove use and reputation. Trademark owners should retain records of promotions, advertisements, daily sales figures, advertising costs and market share reports. Business and market information of this sort can play a crucial role in establishing evidence of a mark's reputation and popularity. During a dispute, establishing a reputation through such supporting evidence will make it easier to argue a likelihood of confusion.

Proactive enforcement of your rights. Regardless of the registration or use, competitors, the public and the media can misuse trademarks in a way that dilutes their distinctive character and threatens to make them descriptive of a class of goods. Trademark owners should take appropriate action – in many cases a warning letter may be sufficient. How the trademark owner deals with infringement will be a key factor in the trademark's ongoing success.