The Treasury Wine Estates Ltd (ASX: TWE) share price is currently up around 0.9% after news the company has won a court case in China.

Treasury Wine Estates owns a number of prominent wine labels including Penfolds, Wolf Blass, Squealing Pig, Pepperjack, Blossom Hill, and Yellowglen.

The company sells its wine across the world. The Chinese market is a huge potential opportunity for the business. However, in recent years it has seen its Chinese earnings sink amid trade tariffs on Australian wine.

Yet, it seems there has been a positive development in China.

According to reporting by various media, including the Australian Financial Review, Treasury Wine has won a court case in the Supreme People’s Court of China. The court ruled in favour of TWE against Penfolds ‘copycat’ Rush Rich.

The Rush Rich registration of the Chinese character mark for Penfolds Winery was ruled invalid.

According to reporting by the newspaper, the judgement was made on grounds of “bad faith” by Rush Rich and its “illicit conduct in registering a large number of trademarks for a range of global luxury brands” which included Penfolds.

Rush Rich is reportedly a company based in South Australia, but it has entities in China.

According to the AFR, Penfolds managing director Tom King said: Penfolds has a long and proud heritage in China that’s been protected and nurtured since the first bottle of wine was exported from South Australia to Shanghai in 1893.

He also said that international legal protection gave consumers confidence in the brand. Treasury Wines is taking a “zero tolerance” approach to any infringements.

Treasury Wine Estates has noted that China will remain a priority market for the company, through its multi-country of origin portfolio that includes French, US, Chilean, and potentially Chinese-sourced wine.

Indeed, the company’s ambition to get back into China was revealed when it announced in May that it plans to get around the tariffs by producing a wine made in China.

According to reporting by the Australian Broadcasting Corporation, Penfolds will release a Chinese vintage in late 2022. TWE had found “promising characteristics” in grapes sourced from Ningxia, in China’s central-north, and Shangri-la in the south-western Yunnan province.

The ASX share has entered into a strategic cooperation agreement with the China Alcoholic Drinks Association, which is the country’s primary wine industry body. This would allow it to build China’s capabilities in wine.

The ABC quoted CEO Tim Ford: China is an emerging fine winemaking region and we’re confident we can produce a premium Chinese Penfolds that maintains the distinctive Penfolds house style and uncompromising quality.

As a leading global wine producer, we have a responsibility to help build the wine category and industry in our different markets.