In something of a TV drama, one of the most successful Sino-French joint ventures melted down into a heated court battle, in which the victor was crowned on its home field.
On June 14th, China's largest beverage manufacturer, Wahaha Group, filed a claim to end the trademark transfer agreement set out in the joint venture agreement back in 1996. Wahaha claims that its brand was not transferred to the French dairy maker, Groupe Danone SA, because the Chinese State Trademark Office said it "did not consent to the transfer."
When Danone filed a counter-claim in July, the fate of the Wahaha brand was unknown. Danone claimed that Wahaha Group's chairman, Zong Qinghou, was responsible for setting up more than 20 companies that used the Wahaha brand without permission, thus breaching the original agreement.
A rebuttal by Wahaha stated that a Danone apointee on Wahaha's board of directors, Francois Caquelin, took similar positions "on the board of rivals", hence suing Danone executives for unlawful competition in China.
Regardless, the matter is now more than half-settled, as a Hangzhou arbitration bureau ruled yesterday that the Wahaha brand still belongs to the Wahaha Group. The trademark transfer agreement can no longer be exercised. That's a dual advantage for China: 1. Chinese firms, for once, is battling for intellectual property rights instead of fostering production of pirated goods; and 2. Chinese firms are no longer the products of foreign direct investments, but have their own brand and identity. What do you think?
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