In a decision dated September 21, 2023 and only just released, China’s Supreme People’s Court (SPC) ruled for Château Lafite Rothschild upholding a judgement of 79.17 million RMB. The plaintiff in the first instance, Château Lafite Rothschild, believed that Golden Hope Company (南京金色希望酒业有限公司), Chateau Lafite Company (南京拉菲庄园酒业有限公司), Huaxia Company (南京华夏葡萄酿酒有限公司), Junteng Company (深圳市骏腾酒业有限公司), Perun Company (杭州佩伦贸易有限公司), Zui Niu Company (北京醉牛酒业有限公司), and Jiu Sheng Company (上海久圣酒类有限公司) used “LAFEI MANOR” and “拉菲庄园” to infringe on its trademark rights and damage the reputation of its well-known trademarks. The plaintiff also argued that the defendants forged their geographic origin, which is unfair competition.
The SPC held that according to the evidence submitted by Golden Hope Company in related cases, there are a total of 757 dealers and agents of “Château Lafite” wine across the country, and “Château Lafite” wine has been sold in nearly 2,000 supermarkets. The cost ranges from 4 to 5 RMB to more than 10 RMB , but the sales price ranges from more than 60 RMB to thousands of yuan, and therefore the illegal profits are as high as ten times or more. This shows that the illegal profits obtained by the seven defendants including Golden Hope Company as a result of the infringement far exceeded 100 million RMB .
The SPC calculated the profit margins as (single bottle sales price – single bottle cost price)/single bottle sales price. According to the recalculated sales price and cost price data, the profit margin of Château Lafite Company is 67%, the profit margin of Huaxia Company is 68%, and the profit margin of Junteng Company and Perun Company is both 31%.
The SPC ruled that Château Lafite Rothschild should receive damages and reasonable expenses paid to stop the infringement totaling 79.17 million RMB. Specifically, Chateau Lafite Company should compensate Château Lafite Rothschild for economic losses and reasonable expenses to stop the infringement of 51 million RMB, and Huaxia Company should compensate Château Lafite Rothschild for economic losses and reasonable expenses to stop the infringement of 25.2 million RMB. Junteng Company should compensate Château Lafite Rothschild 2.69 million RMB.
The case number is (2022)最高法民终313号 and the full text of the decision is available courtesy of 知产财经 here (Chinese only).