The Wahaha Group plans to file a €5 billion counterclaim against
its French partner Danone SA, explaining the Trademark Office of
the State Administration for Industry and Commerce (SAIC) has
confirmed it did not approve the trademark transfer from Wahaha to
Danone.
Wahaha spokesman Shan Qining said that Wahaha decided to "demand
justice by legal procedures" after Danone filed for arbitration and
lawsuits against the company.
The Wahaha Group has also applied for arbitration to resolve the
trademark transfer dispute with Danone at the Hangzhou Arbitration
Committee, asking the committee to terminate a trademark transfer
contract signed between Hangzhou Wahaha Group and the joint venture
of Wahaha and Danone in 1996 as well as a written reply from the
Trademark Office of SAIC on this issue.
On June 7, the Trademark Office said it had not approved the
application from the Wahaha group to transfer more than 200
registered trademarks to its joint venture with Danone in 1996 and
1997. In August 1997, the state trademark authority approved the
application from Wahaha to put the trademark-licensing contract on
record.
According to the office, this means the transfer was invalid and
the contract should be terminated.
On May 9, Danone SA first proposed eight arbitration
applications to the Arbitration Institute of the Stockholm Chamber
of Commerce. On June 4, Danone filed a lawsuit in a Los
Angeles-based Superior Court against Ever Maple Trading Ltd.,
Hangzhou Hongsheng Beverage Co. Ltd, and two individuals related to
the companies.
Ever Maple Trading Ltd. is the controlling shareholder of
Hangzhou Hongsheng Beverage, which is the parent company of
Hangzhou Wahaha Food and Beverage Sales Co., Danone's joint venture
partner in China.
Referring to the US$100 million award requested in the US
lawsuit, Wahaha said Danone had not paid Wahaha for the trademark
transfer fee, so the trademark-licensing contract is invalid and it
is Wahaha who has the right to ask for compensation.
Turning to Danone's accusation of illegally setting up companies
outside their joint ventures and selling Wahaha-branded products
identical to those marketed by their joint ventures, Wahaha said in
a statement that the four companies sued by Danone are investment
companies which have no product lines and production
activities.
Wahaha said Danone has not found proof of illegal operations on
the part of Wahaha, but it has conclusive evidence that Danone has
broken the law. It will file a counterclaim of €2-5 billion against
Danone in addition to its active responses to lawsuits in the US
and Sweden.
However, Danone rebuked Wahaha for the publication of
confidential content discussed at the joint ventures'board
meetings, only several hours after they ended on June 21. It also
pointed out that this action deliberately set obstacles to a
peaceful solution, which will affect the negotiations and harm the
interests of all shareholders and staff workers.
The feud surfaced as Zong Qinghou, founder of Wahaha, rejected
Danone's bid to buy out some of Wahaha's assets, while Danone,
which owns 51 percent of the joint ventures, has responded by
accusing Wahaha of violating the 1996 agreement by illegally
setting up companies outside their joint ventures and selling
identical Wahaha-branded products through these companies.
On June 6, Zong Qinghou resigned from his post as chairman of
its 39 joint ventures with Danone, and Emmanuel Faber has been
named interim chairman.
(International Finance News, translated by Li Shen June
27, 2007)