Recently, there have been several instances of “trademark squatting” in China. “Trademark squatting” refers to the act of registering a trademark in hopes of selling it at a premium to its rightful owner. China has a “first to file” trademark system, under which an unrelated third party may file trademark application for a brand name without showing use in commerce.
Some companies and individuals who are familiar with the Chinese system have begun researching valuable foreign wine brands and registering their names, making the winery vulnerable to an infringement lawsuit if it sells its products in China. Many wineries, including the French Castel brand, have fallen victim to this practice.