Wines & Vines

COVER STORY "It's on our agenda," says Tim Wen, president of the American Wine Importers Association, based in Guangzhou, China. "We are thinking about how to protect our members." names without breaching the attorney-client privilege, but I can tell you that I am personally aware of American wines that have been copied." Legal approaches Misleading labels Counterfeit labels and refilled bottles are not the only threats. Abuses of IP include the use of design, with several sources citing the "leaf" motif of Kendall-Jackson being lifted, and new brands created with names suspiciously familiar to famous ones. It may only be a matter of time before we see Opus Won and Screaming Beagle. Time will tell if Highlights • nyone exporting wine to China should educate A themselves about the intellectual property risks. • hile few examples of outright counterfeiting of W U.S. wines exist, their growing visibility could bring abuses like those seen by French, Australian and Chinese producers. • ine trade members and officials in China recomW mend that wineries take the initiative for their own protection in the market. REUTERS/STRINGER competitors, and market share slumped to a mere 5% by volume. "The current status of California wines in the China market—relatively peripheral and under-performing in my opinion—is part of the reason there is still not much of a market for faked California plonk," says Dan Christensen, director of California vintner and exporter Thirvin. "Once we start to see a bit more categorical significance, hold on to your hat, as I imagine there will be a slew of fakes and copycats to deal with." Given China's seemingly unstoppable economy, and the growing disposable income of its citizens, some might see that slew as just around the corner. there is a U.S. equivalent of the French perfect storm of fakery: a bottle that includes the "five arrows" logo of Chateau LafiteRothschild and the name Romanée-Conti on a white wine label. There is also the recent recognition by China's government—via the Administration for Quality Supervision Inspection and Quarantine—of Napa Valley as a geographical indication. This should offer more protection to Napa but might bring unexpected results. "People throw the name Napa around like it's Bordeaux," says Christensen. "We find ourselves in an uphill battle trying to explain why our legitimate premium Napa gear costs 200% more" than wines from Lodi, Paso Robles or Temecula, which some merchants call "Napa," too. "This is happening more and more. As awareness of California and its most prestigious AVA increases, so too will misrepresentation of the names," he says. "All brands are at risk. Counterfeiters do not discriminate," says attorney Dan Harris of Seattle, Wash.-based law firm Harris & Moure. "They will copy whatever it is they think is profitable. I cannot reveal brand So, how to protect a brand? Step one is a no-brainer. "The one preemptive measure we have taken, and advise all of our partner wineries to do, is register the trademark for the Chinese names and logos of the wines in China," says Christensen. He says wineries that neglect this step can find their names registered by others and end up being "held hostage" or forced to come up with another name. Brand ownership means options for action. The next no-brainer is taking action. "We need importers and distributors to help police the market for us," says Jorge Sanchez, director of the U.S. consulate's Agricultural Trade Office in Guangzhou, China, noting the complexity and diversity of China. "When you see smuggling from Hong Kong or someone refilling your bottles, some law firms can conduct surveys (to check the market)," he says, though he notes it can be costly. "Then you can find a way to squeeze these pilferers out of the market." Perhaps more daunting than the cost is the perception that courts and authorities in China are ineffective. Nick Bartman, an independent legal investigator from England who has toured China in search of fake wines, says many brand owners give up before they have even tried. A shrug and resignation is the common reaction to fake wines in China, says Bartman. "Such a misguided reaction comes from those who have no proper knowledge of enforcement in China. In fact, stopping fakes in China is often the easy bit. Getting brand owners to realize this and work together against fakes is the far greater challenge," says Bartman. Attorney Harris agrees, saying, "China's courts are generally not that bad at enforcing trademark rights," though he cautions there is a significant gap between winning a case and stopping long-term counterfeiting. "The problem typically stems from taking a court order and using it against a counterfeiter that simply cannot be found," he says. "And even if you can succeed against one counterfeiter, others pop up and it can become like Whac-A-Mole." When such outcomes are likely, Bartman recommends the speed of criminal over civil prosecution. Win es & Vines AU GU ST 20 13 31

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