China’s Beijing Intellectual Property Court has recently ruled in favor of the Comité Interprofessionnel du Vin de Champagne (CIVC), a trade body, in a lawsuit lodged by it against Chinese perfumer maker Guangzhou Xuelei Cosmetics Co., Ltd. (广州市雪蕾化妆品有限公司) and perfume distributor Beijing Yali Shadi Cosmetics Co., Ltd. (北京雅丽莎迪化妆品有限公司).

Established in 1941, the CIVC is one of the first regional wine committees created in France. It was established by statute to manage the common interests of growers and champagne houses. The CIVC sets strict norms, by which a sparkling wine originated and produced in the Champagne wine region of France has the right to be called “champagne.” It demands specific vineyard practices, sourcing of grapes exclusively from designated places within it, specific grape-pressing methods and secondary fermentation of the wine in the bottle to cause carbonation.

Guangzhou city, Guangdong province-based Xuelei, founded in 1996, is China’s largest perfume and fragrance producer, developing its own brands as well as offering services as an original equipment manufacturer (OEM) to established perfume brands.

The CIVC in 2012 filed applications with the Trademark Office of the China National Intellectual Property Administration for registration of “champagne” and “香槟 (champagne’s Chinese transliteration)” as geographical indication collective trademarks with goods in Class 33, both of which were granted in 2013.

The CIVC sued Xuelei and Yali Shadi in the Beijing Intellectual Property Court in 2020. It said that the “Champagne Life” mark and its Chinese counterpart that the perfume products manufactured and distributed by the two companies bore infringed its trademarks. The body required dilution protection for its famous trademarks, claiming the two defendants’ infringing use had the potential for confusion since consumers might assume affiliation with the owner of the mark regardless of the product or service.

Xuelei argued that the allegedly infringed trademarks were non-famous in China and that its “Champagne Life” trademarks were registered with the goods in a class other than Class 33, which the goods the allegedly infringed trademarks were registered with were in.

The court held that before the CIVC’s registration in China in 2013, champagne enjoys strong protection as a Protected Geographical Indication (PGI) under the Paris Convention for the Protection of Industrial Property, to which China became a contracting party in 1985. Champagne’s PGI status has fully validated its repute. Upon registration by the CIVC, the two disputed trademarks are instead protected as collective trademarks.

The Trademark Law of the People’s Republic of China and the Implementing Regulations of the Trademark Law were amended to allow geographical indication designations to be registered as collective and/or certification trademarks in China in 2001.

Back in 2012, in another trademark infringement complaint brought by the CIVC, the court didn’t agree with the defendant’s arguments that “champagne” and “香槟 (champagne’s Chinese transliteration)” had not been registered in China yet and ruled against the accused infringer soft drink maker Beijing Shengyan Meiyi Trading Co., Ltd. (北京圣焱意美商贸有限公司). The court applied the geographical indication protection regime.

The Beijing Intellectual Property Court ordered Xuelei to pay 210,000 yuan ($33,000) in damages and reasonable expenses and Yali Shadi to pay 10,000 yuan ($1,580) in reasonable expenses to the CIVC.

The case docket no. is （2020）京73民初371号, whose English transliteration is 371, first instance (初), civil case (民), (2020) Beijing Intellectual Property Court (（2020）京73).