[Patent Talk] The Name “Yantai Gaoliang Liquor” Can No Longer Be Used Freely

<Registered Trademark No. 40-1657026 of Shandong Yantai>

A court has ruled that the trademark right to the name "연태고량주 (Yeontae Goryangju, i.e., Yantai Gaoliang Liquor)" is valid. On the 15th of this month, the Patent Court ruled against the plaintiff in a suit seeking invalidation of a trademark registration brought by A, a Korean liquor distributor, against the Chinese baijiu maker Shandong Yantai Winery Co., Ltd. ("Shandong").

Under the Trademark Act, a mark containing a place name cannot be registered if the place name indicates the place of origin of the goods or is a conspicuous geographical name. As an exception, however, registration is allowed where the mark has acquired distinctiveness through long use.

Shandong is based in Yantai, Shandong Province, China, and since 2003 has sold Yantai Gaoliang Liquor in Korea under an exclusive agreement with Company B, a Korean trading company. As sales grew and awareness of Yantai Gaoliang Liquor increased, Shandong filed a trademark application for the name "연태고량 (Yeontae Goryang)" in May 2018 and entered into an exclusive license agreement for the trademark with Company B.

As Yantai Gaoliang Liquor became more popular, however, many trading companies, including Company A, began importing baijiu from other Chinese manufacturers and selling it in Korea under the name "Yantai Gaoliang Liquor," and similar trademarks were filed. Company A also filed a trademark application in September 2018, four months after Shandong, for the name "Yantai Gaoliang Liquor" with the Chinese characters for "Gaoliang" written slightly differently.

<Shandong Yantai's Yantai Gaoliang Liquor product>

Shandong's trademark application was initially rejected for lack of distinctiveness because it contained a "geographical name," but in the appeal against the final rejection, its argument of distinctiveness acquired through use was accepted, and the mark was registered in October 2020. Company A then filed an invalidation trial with the Intellectual Property Trial and Appeal Board (IPTAB) in April 2021, which was dismissed in October 2021. Company A appealed again by filing an action to cancel the trial decision with the Patent Court in November 2021, and on June 16 this month the court ruled against the plaintiff.

An invalidation trial filed by Shandong against Company A's registered trademark is currently pending. In light of the results so far, Company A's trademark is likely to be invalidated. Company A and other trading companies will now no longer be able to use the name "Yantai Gaoliang Liquor" for Chinese baijiu and will have to sell their products under separate trademarks.

This is not the first dispute involving Yantai Gaoliang Liquor. Company B ...