Kweichou Moutai Co, a famous liquor firm in China, has never given up in its desire to gain the trademark of "national liquor".

After failing eight times since 2001 in applying for the trademark, its latest attempt has achieved some preliminary success as its recent application passed the first review of the Trademark Office of the State Administration for Industry and Commerce (SAIC) on July 20.

If the application receives no objections before October 20 or the objections are proved to be invalid, Moutai will get the trademark.

However, it is not likely to be easy for the firm, which is based in Southwest China's Guizhou Province, as its rivals have already begun to express their opposition.

Furious debate

Shanxi-based Fenjiu Group expressed its opposition to the Trademark Office on August 6, saying that Moutai's products are not good enough to "represent or symbolize the whole nation", despite its high reputation.

Fenjiu said the preliminary approval for the trademark goes against the regulation issued by the SAIC on July 2010, which said that applications for trademarks containing "national + commodity name" should be rejected, due to exaggeration and fraud in advertising and other adverse effects.

Fenjiu even expressed its doubts about the Trademark Office, as it is confusing to see the application rejected several times only to get a pass this time according to the same law, said Liu Jigong, director of the firm's legal department.

Henan-based Dukang Distillers Holdings Ltd also sent an opposition letter to the Trademark Office and posted an open letter to the public on its website on August 7.

Dukang offered 10 reasons for its opposition, including Moutai's relatively short history and unaffordable prices. It also said there are no precedents for such a trademark and that it would represent unfair competition for other liquor firms.

Shaanxi Xifeng Liquor Group Co has already authorized a trademark agency in Beijing to prepare documents showing that "Xifeng has a longer history than Moutai" and that "Xifeng was honored as one of China's four famous alcohol brands together with Moutai in 1952," Southern Metropolis Daily reported on August 7, citing insiders familiar with the matter.

"The whole nation opposes it," Sichuan-based Wuliangye Yibin Co told the Beijing Morning Post last Wednesday.

It's not only liquor firms that are dubious about the trademark. Beijing-based Century Law Firm, which has no connections either with Moutai or its rivals, submitted its opposition at the end of July.

Liu Guizeng, a partner with Beijing-based Hanhow Intellectual Property Partners, also told the Global Times that the case violates the Trademark Law, the Advertising Law and the Law Against Unfair Competition.

Support needed

Anhui Gujing Distillery Co appears to be one of Moutai's few supporters in the case so far.

"I quite agree with Moutai's application, because China's trademarks should protect domestic enterprises," Liang Jinhui, general manager of the company, said on the sidelines of the Sixth China Brand Festival held in Beijing on June 8.

"Moutai is the leader of the liquor industry, and it represents not only itself, but also the whole sector. Liquor firms should support each other on the basis of national interests and development of China's liquor industry," Liang noted.

Amid the debate, Moutai and the Trademark Office have remained silent. Calls to the publicity department of the Trademark Office went unanswered and it has made no comment on the issue so far.

Meng Qiliang, vice governor of Guizhou Province, said Thursday during the Second Guizhou International Liquor Fair that it is not easy for poverty-stricken Guizhou to have big profitable firms like Moutai, and Guizhou needs national brands, which requires support from society.

Guizhou will make every effort to protect Moutai's reputation, as well as strengthening and improving Moutai's position as a national liquor, according to a press release from the liquor fair, the Beijing News reported Friday.

Meng also said that there is a precedent for a company having a "national" trademark, in the form of "National Cellar 1573".

However, "liquor is a type of commodity, while cellar is not," said liquor expert Tie Li, noting that a cellar is merely the place of storage as opposed to the product itself.

Competing interests

Chinese liquor firms often promote their products as liquors that are served at State banquets, a symbol of their long history and nationwide recognition, Yang Qingshan, a liquor expert with the China Brand Strategy Association, told the Global Times.

Therefore, they have a preference to use the word "national" in their product names, such as Luzhou Laojiao Liquor's "National Cellar".

Application for the trademark is a competition strategy by Moutai, Yang said, noting that other liquor producers will not be able to use the word "national" for publicity of their products if Moutai succeeds in obtaining the trademark.

"Moutai may deserve the title of 'national liquor' as it is widely recognized by both the government agencies and consumers for its quality and scarcity," Yang said. "But the trademark cannot be exclusively owned by one liquor firm, as it would be unfair to other firms."

Successful application for the "national liquor" trademark would certainly benefit Moutai's sales, Shi Jiangang, a researcher at Orient Securities, said in a research note on August 1.

It would also enhance Moutai's leading position in the liquor industry as well as its product value, because brand value and enterprise image are vital for Moutai's marketing and sales, Shi said.

Moutai reported net profits of 7 billion yuan for the first half of 2012, an increase of 42.56 percent year-on-year, the firm said Thursday.

However, the firm's need for the trademark has grown more urgent, as it has suffered a blow from a recent regulation restricting government spending.

The State Council passed a regulation on June 13, prohibiting government agencies from purchasing luxury goods, a move to cut government expenditure.

The price of Feitian Moutai has decreased to as low as 1,519 yuan per bottle, from a high of 2,600 yuan last December.

Liu from Hanhow predicted that the Trademark Office would leave the dispute to the review process by the Trademark Review and Adjudication Board and possibly further litigation after that.

Whatever the result, it represents good marketing, Yang said, as both Moutai and its rivals have been and will continue to be in the spotlight.