WineFuture HK: major sponsor - CavesMaître – the Chinese 'Castel' – 'a stolen tradename'

Robert Parker presenting 'The Magical 20' – CavesMaître, France is rather less magical

Anyone watching Robert Parker's very impressive presentation of the 20 Bordeaux wines from the 2009 vintage will have seen the name and logo of Caves Maître, France looming large behind him. CavesMaître was one of the major sponsors of WineFutureHK and Daniel Li of CavesMaître sat on the right of Parker for the Grand Tasting.

However, it would appear that the business practices of CavesMaître are much sharper than speakers like Robert Parker and Jancis Robinson MW might wish to be associated with. In western eyes CavesMaître has stolen the trademark of Groupe Castel, the Bordeaux giant, although their action is perfectly legal in China as under Chinese trademark law it is 'first come first served'.  Jancis Robinson MW has assured me she knew nothing of this history and I guess that Parker did not either.

Daniel Li of CavesMaître@WineFuture Hong Kong
Pancho Campo on far right

A search on Google reveals that CavesMaître used to be called Wenzhou Castel (based in Wenzhou) before changing their name to Caves Maître sometime this year. It will also show that this Chinese company trademarked the name Castel. Recently Wenzhou Castel brought a successful court case in China against French company Castel Frères, which is now a leading player in the Chinese market with case sales believed to be around one million. Although French Castel did register their trademark in China on 21st November 2007. Unfortunately they were too late as Wenzhou Castel had got in first with: (“Ka Si Te (卡斯特)”) – meaning Castel in Chinese.

  

From Frost Brown Todd website article here that gives details of the case:

 

November 10, 2011

French Wine “Castel” Mark – An Interesting Case to Decipher

A recent move by a local court in Wenzhou, China may well indicate that in the future a lawsuit against a foreign brand owner in China could cause the foreign defendant to lose its valuable trademarks if it loses the case.  Earlier this year a local Chinese merchant sued a famous French wine producer in the Wenzhou Intermediate People’s Court and successfully secured an “ex-parte” relief, by which, the defendant’s valuable trademark would be subject to freeze until the case is decided. Defendant in this case is Castel Group, which is the owner of the “Castel” trademark in China. However, the Chinese plaintiff had managed to register the Chinese “Ka Si Te (卡斯特)” mark first in China, a phonetic translation of the famous “Castel” mark. It sued Castel Group in the Wenzhou local court on three accounts of infringement and requested damages up to US$31 million. 

What makes this case unique is not the case itself, but the court’s decision to freeze the Castel Group’s valuable “Castel” trademark at the initial stage of the lawsuit until the case is decided.  Chinese civil procedures offer plaintiffs, in some situations, an ex-parte temporary relief, to prevent defendants from transferring property and money during the course of a case.  Normally such relief has been taken the form of freezing bank accounts or real property (by appointing a conservator).    In this case, what the court did directly touched on Castel Group’s  intangible assets, meaning that the “Castel” mark cannot be licensed or assigned to any third party while the case is pending. More importantly, the “Castel” mark may be subject to auction if the court decides in favor of the local Chinese trader and Castel Group otherwise does not comply with the court’s order requiring it to pay damages.

Our colleagues at ZY Partners in Beijing pointed out that this case could start another round of problems especially for companies that do not have significant assets in China. Such companies used to be less concerned about litigation risks in China.  However, even they very often have trademarks or other intangible assets in China.  Now they could face risks of losing their valuable intellectual property (trademarks or even patents) if they end up losing legal battles in China. The flipped side of the story is that foreign plaintiffs may find this new development helpful when they seek to recover damages against Chinese defendants. 

(“Ka Si Te (卡斯特)”)

CavesMaître's website is here. They have a page of legal notices which includes their right under Chinese law to use the name Castel – “Ka Si Te (卡斯特)”. Many of the wines sold by this company use 卡斯特 in the name. Whether CavesMaître's Chinese are aware that these wines are from the 'Chinese' Castel rather than the better known Castel Frères is an interesting question. 

One might also ask whether Pancho Campo MW was aware of the history behind CavesMaître. If he wasn't then surely he failed to do his due diligence properly. If he was aware of the trademark history, why did not he inform his speakers.

Jancis Robinson MW with Daniel Li of CavesMaître

Jancis Robinson MW told me that "While I was at WineFuture Hong Kong I had no clue about this. It was only on my return to the UK that I became aware. I did think though it was all a bit odd with the whole stage festooned with CavesMaître signs and logos as nobody seemed to know about this company. Pancho had made it out to be a big coup getting a Chinese company as a sponsor – insisting that the real future was dealing with Chinese companies rather than European ones." 

I suspect that Robert Parker was equally in the dark.
 
This episode surely shows how foolish it can be to rush into China without doing your due diligence and equally making sure that you register your trade mark in China.