(Decanter) - Cape Mentelle, the Margaret River winery owned by France's LVMH group, has bowed to pressure from local producers by dropping its threat of legal action against Flametree Wines over use of the Wallcliffe name on labels.

The move by Cape Mentelle comes after members of the Margaret River Wine Association voted overwhelmingly to challenge the LVMH-owned estate's claims to trademark rights on Wallcliffe as a standalone name.

As a result, the association said it would seek to legally protect Wallcliffe as a sub-region.

In a letter from Cape Mentelle to the Margaret River Wine Association, seen by Decanter.com, estate director Rob Mann wrote, 'Given the reactions voiced during the association meeting on March 27, Cape Mentelle has decided not to pursue wine companies who reference "Wallcliffe” on their labels for breach of trademark.

'Our recommendation to producers considering the adoption of the term on wine labels is to wait until such time as the sub –regions are further defined and legally adopted through formal registration with the AWBC (Australian Wine & Brandy Corporation) through existing protocols, a process in which we intend to actively take part.'

Cape Mentelle had registered the names Wallcliffe Vineyard, Wallcliffe Winery and Wallcliffe Estate on 11 October 1999. The winery was also trying to trademark ‘Wallcliffe’ as its sole patent with the Australian government.

The letter from Rob Mann does not specify whether that application has been withdrawn