Castel, a France-based wine merchant, has lost a legal battle for using Kasite trademark in China.

According to the Zhejiang Provincial High Court judgement, the French wine producer had to stop using the trademark in China and pay a fine of CNY33.73m ($5.4m) to Shanghai firm Panati Wine and its Spanish-Chinese owner Li Daozhi.

Panati Wine is a wine distribution firm that distributes Spanish wines to the Chinese markets.

The company first applied for the registration of trademark Kasite in 1998 and was granted to use the trademark in 2000.

Castel first began bottling wine in China in 1999 with the brand name Kasite, which is supposed to be a Chinese transliteration for Castel.

As the trademark was not used for three years, Castel’s request to cancel the trademark was accepted.

Daozhi appealed the verdict and won the case back, however, Castel continued to use the trademark.

In 2008, Daozhi established a new firm Cavesmaitre Wine with its Chinese name as Kasite.

Following the continued usage of Kasite trademark by Castel, Daozhi again filed a trademark infringement lawsuit in 2009 asking Castel for a compensation of CNY40m for wrongly using the trademark.

After the Zhejiang Provincial High Court judgement, Castel applied for new registered Chinese trademark – Kasidaile.