BUSINESS
Georgia Wins Khvanchkara Back
01 September, 2011

Khvanchkara became the first Georgian state trademark registered at the US market after successful settlement of its ownership dispute with Dozortsev & Sons Enterprise Limited. 

The National Intellectual Property Center of Georgia Sakpatenti and the American-based company Dozortsev & Sons Enterprise Limited concluded an agreement on August 18, 2011, according to which all rights for the trademark Khvanchkara, one of the 18 Georgian wine geographic appellations, registered in the US market on the Dozortsev & Sons since 2006, were transferred to

Georgia. From now on no other person or company shall be entitled to use the protected Georgian appellations of origin on the US market without due authorization of Georgian state agencies, Irakli Gvaladze, Head of Sakpatenti told Georgian Journal.

The dispute started past March when Sakpatenti, after submitting 18 geographical appellations of Georgian wines at the US market for registration, discovered that Khvanchkara and Kindzmarauli, two out of the questioned 18 appellations, have already been registered as trademarks of Dozortsev & Sons [distributing Georgian wines on the US market as of 1999] and Sakpatenti could not register them if the rights of Dozortsev & Sons were not annulled by the United States Patent and Trademark Office (USPTO) or the Company did not denounce its rights voluntarily. Eugene Dozortsev, President of Dozortsev & Sons, appeared reluctant to yield his rights over Georgian national intellectual property, claiming that registration of Georgian wine appellations as his trademarks was the single remedy to protect wines from the infesting counterfeit at the US market for which Georgian state did not care earlier, irrespective Dozortsevs’ repeated requests. He claimed that he had spent a lot of money and efforts to make Khvanchkara and Kindzmarauli famous in the US and asked in exchange for the handover of the brands either for fair compensations or for becoming the exclusive distributor of these brands at the US.

“I won 17 medals, and I deserve a medal for popularization of Georgian wines in fact,” he said when the dispute started in March. “Besides, why Georgian companies don’t export their wines to the US through Dosortsev & Sons exclusively?”

The other way for Georgia to get its brands back was to wait till the registrations would expire. Khvanchkara registration was to expire in 2016. Kidzmarauli registration expired in 2009 but Dozortsev asked for its prolongation; in March of 2011 Sakpatenti created problems in connection with its re-registration. But Georgia could not wait any longer as it supposed that Dozortsev would manage to register brands in question through unfair quasi-legal paper-work.

Unfortunately the legislative gap in Georgian legislation of intellectual property rights enabled Dozorstev & Sons to appropriate Georgian wine brands. However, Gvaladze did not rule out that to threaten to appeal to a court of justice to win Georgian national treasure back if Dozortsev did not agree on concession and yield voluntarily. Georgian legal experts assured that Dozortsev had no chance to win the case at the court as far as Georgian wine appellations are national treasure and the state did not hand them over to anyone and Dozortsev’s registration smelt foul.

But the case did not reach the court as Dozortsev came to senses. Sakpatenti filed a relevant appeal with the USPTO requesting the cancellation of the registration of Khvanchkara trademark; prior to the completion of the appeals proceedings, Dozortsev agreed to abandon all rights free of charge, on the basis of a settlement agreement.

“One of the main reasons of the voluntary assignment of the rights by the company was the solid argumentation reflected in the appeal filed by Sakpatenti requesting the cancellation of the mark,” Gavaladze said. “Khvanchkara and Kindzmarauli are our trademarks and the state will take care after protection of wines from the counterfeit at the US market henceforth. However as Dozortsev distributes really good wines produced in Georgia by reputable wine-producers he can go ahead with his activity and distribute these wines as any other distributor without any exclusive right.”

As a result of the successfully completed settlement agreement, Khvanchkara automatically became registered by the USPTO under the name of Georgia.  Kindzmarauli and 16 more appellations of origin of Georgian wines will be registered in the immediate future.

Along with this, Sakpatenti together with the Ministry of Agriculture of Georgia works actively in order to increase considerably the number of registered Georgian geographical indications and appellations of origin in the near future that is supposed to increase quality of Georgian production and export and protect them against counterfeiting.

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