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We all know about fake Gucci handbags and Ralph Lauren polo shirts, but what about fake wine?
Counterfeiting occurs when a premium brand name is applied to unauthorised and inferior product and sold to unsuspecting distributors and consumers.
It is an increasing problem for wine producers in Australia and globally, who see their revenue and market share eroded and their valuable reputation for quality jeopardised. Annual losses are estimated to be in the hundreds of millions of dollars in Australia alone.
Technology can help. Wine Australia maintains a label directory to help identify counterfeit wine overseas,[1] but it is of limited assistance if the fake labels and bottles are high-quality and realistic. Pioneering blockchain technologies are closing the gap, allowing the authenticity of each bottle to be verified instantly by scanning a microchip embedded in new digital screwcaps.[2]
Detecting counterfeits is only the first step, though. Brand owners will need to enforce their intellectual property rights to eliminate infringements and recover damages. Trade mark and copyright are typically relied on in that context.
Brand owners should register trade marks in key export markets to facilitate enforcement there – a trade mark registration in Australia has no effect overseas. As brands evolve, corresponding new trade marks should be registered.
Copyright protects artistic elements of wine labels, which are often not encompassed by registered trade marks. In most countries, copyright arises automatically and does not require registration or other formalities (the U.S. is a notable exception). Brand owners should ensure they own the copyright in their labels, which may require obtaining an assignment of rights from the creator.
Treasury Wine Estates and other producers have succeeded with enforcement actions in recent years, both in Australia and in vital overseas markets such as China. Enforcement costs may be substantial but the cost of doing nothing is higher, especially where brand integrity and goodwill are threatened.
Brand owners concerned about counterfeit products being imported into Australia should lodge a notice of objection with Australian Border Force.[3] The notice empowers ABF to seize suspected counterfeit goods, giving the brand owner the opportunity to prevent them ever reaching the market. Each notice is valid for 3 years and may be renewed indefinitely, as long as a corresponding Australian trade mark is registered.
Support may also be available from overseas customs and law enforcement authorities, including in China.[4] Raids on counterfeit operations have become more common in China, spurred in part by the growing profile of domestic wine production there.
In summary:
- Although counterfeit wine is a big problem, technology is making it easier to detect.
- Enforcing intellectual property rights against counterfeiters is essential for maintaining the valuable reputation of a brand.
- Wine producers must implement a trade mark strategy and remain vigilant about threats.
If you need advice about protecting your brand in Australia or overseas, please contact David Jackson (djackson@slflawyers.com.au; 03 9600 2450).
[1] https://www.wineaustralia.com/selling/eliss.
[3] https://www.abf.gov.au/help-and-support-subsite/Pages/notices/intellectual-property.aspx.
