The Perfect Pairing: Protecting U.S. Geographical Indications with a Sinoamerican Wine Registry

Article excerpt

Abstract: Chinese counterfeiters have infiltrated the wine world, falsely labeling products and using fraudulent geographical indications (GIs). GIs, which function as a type of brand, are internationally protected designations of a product's origin and characteristics. Recently, United States GIs, such as Napa or Walla Walla, have appeared on bottles of wine composed of Chinese grapes. By misappropriating U.S. brands, Chinese counterfeiters deceive and confuse consumers, disadvantage legitimate businesses, and causes health concerns. Unlike other brands, GIs protect regions, rather than individual producers. This creates a particular void: no single winery can register a GI and no single winery is harmed by fraudulent use, making counterfeits difficult to prevent, detect, and address. This Comment argues that Chinese law currently provides insufficient protection for U.S. wine GIs. As a solution, it proposes a Sino-American wine registry to effectively preserve GIs and protect the affected wines, producers, consumers, and countries.

INTRODUCTION

Splashy headlines around the world decry the rise of Chinese wine counterfeits. A London Telegraph headline reads, "Red Alert Over Bordeaux Wine Fraud,"1 while a CNN.com headline laments the "Counterfeits in the Grape Wall of China."2 Meanwhile, the Australian Broadcasting Company's article, titled "Winemakers See Red Over Bogus Bottles," describes counterfeiters who "rebadged" Chinese wines as Australian.3

With growing Chinese demand for foreign wines comes a corresponding increase in fraudulent products.4 For example, counterfeiters pay thousands of dollars for empty French Bordeaux bottles, only to fill them with cheap Chinese wine and sell them at inflated prices.5 Penfolds, an Australian wine that is popular and wellrecognized in China, spurred a string of knockoffs marked "Benfolds" in the same typeface as the original.6 Fake products bottled and packaged as "Canadian ice wine" are available on Chinese shelves, with frauds potentially comprising eighty percent of the ice wine in China.7

Counterfeit wines create a number of concerns. For example, their labels falsely convey a reputation, which can deceive or confuse consumers.8 Unfortunately, fraudulent wines are often of much lower quality and sometimes even laced with chemicals.9 This can lead to dilution of legitimate brands, harming their producers.10 Meanwhile, counterfeiters receive an unfair advantage, benefitting from the reputation they are weakening.11

United States wines have not escaped the counterfeit plague. Recently, a Chinese winery attempted to register itself domestically as "Napa Valley."12 Though it didn't obtain that particular brand, it ultimately assumed the name "Valley Napa"-despite the fact that its wine consisted entirely of Chinese-grown grapes-and marketed its wine to domestic consumers.13 In late 2012, the Chinese government finally granted protected status to the term "Napa."14 However, this protection took fourteen years of work for the Napa Valley Vintners Association,15 including a 2011 trade mission to China to promote and preserve the Napa name.16

The Napa Valley struggle illustrates the problem with protecting geographical indications (GIs). GIs are label designations that indicate a wine's origin and often denote certain qualities associated with that origin.17 A form of intellectual property (IP), GIs function as brands, preserving reputation and truth in labeling.18

While brand protection benefits any product, the protection that GIs offer is especially crucial for wine. Consumers select wines based on reputation-not merely those of the wine's producer or its ingredients, but also the reputation of the wine's geographic region.19 Strong regional reputations often result in economic profit, as was the case in Walla Walla, Washington. Once a dying agricultural town, the region is now booming thanks to its wine industry.20 "Walla Walla has created a brand for itself," says Richard Kinssies, a Seattle wine expert. …

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