Big trouble for exporter of counterfeit Penfolds

Southcorp Brands Pty Ltd (Southcorp) owns the iconic Australian wine brand “Penfolds”.

“Penfolds” is exported globally, with a significant proportion of sales made to Cantonese and Mandarin speaking consumers.¹

In Mandarin and Cantonese, the “phonetic approximation of ‘Penfolds’ is ‘Ben Fu’ and the characters ‘奔富’ are pronounced… and transliterate to… ‘Bēn Fù’.”²

Consequently, “Penfolds”, “Ben Fu” and “奔富” all carry the same meaning to Mandarin and Cantonese speakers.

Australian Rush Rich Winery Pty Ltd (with others) (Rush Rich) exported a range of wines with the following Chinese characters on the label:

• “奔富”, meaning “Ben Fu”;
• “奔富酒庄”, meaning “Ben Fu winery”; and
• “澳大利亚奔富酒庄”, meaning “Australia Ben Fu winery”.

It appears that Rush Rich intended to misappropriate the “Penfolds” brand in order to boost sales in China.³

Southcorp commenced trade mark infringement proceedings against Rush Rich on the basis that Southcorp owned the following registered Australian trade marks:

• “PENFOLDS”;
• “BEN FU”; and
• “奔富”.

Southcorp applied for summary judgement.

To succeed, Southcorp had to show that Rush Rich had no reasonable prospect of successfully defending the claim.⁴

Summary judgment

The Court found that Rush Rich could not defend Southcorp’s claim.

A Mandarin or Cantonese speaking consumer (with an imperfect recollection) could mistake the counterfeit wine as the genuine article.⁵

Importantly, Rush Rich’s use of the brand “奔富” was found to infringe Southcorp’s “PENFOLDS” and “BEN FU” marks, given the aural similarities.⁶

Further, by exporting its products to China, Rush Rich had used its counterfeit brand in Australia as a trade mark.⁷

The Court ordered Rush Rich to pay Southcorp $351,916.75 as an account of profit, $23,385.59 in interest and the costs of the proceedings.

Lavan comment

Summary judgment can be a cost-effective way to resolve proceedings.

However, to succeed, the applicant must have a strong case, and the respondent no defence.

If Southcorp had not registered its trade marks, it would have faced an expensive and uncertain trial.

A business must protect its brand now, so that when the time comes, it is equipped to resolve disputes efficiently.

If you require advice in protecting your brand, or representation in a trade mark dispute, please contact Iain Freeman or Andrew Sutton.