The legal wrangle between Danone and Wahaha has spread beyond
the two companies to the nation's trademark authority.
Hangzhou Wahaha Foods Co, one of five joint ventures set up by
the two firms, has sued the Beijing-based State Trademark Bureau
over what it claims was "improper administrative behavior" in 1996
and 1997.
Hangzhou Wahaha Foods is 51 percent-owned by French food giant
Danone Groupe SA, with the rest controlled by China's largest
drinks producer Wahaha Group.
The Beijing No 1 Intermediate People's Court told China
Daily on Friday that Wahaha Foods has demanded the trademark
bureau rescind its rejection of applications to transfer the Wahaha
brand from the Chinese company to the joint ventures because it did
not issue a written notice or give a reason for its decisions at
the time. The court has accepted the case.
A spokesman with the trademark bureau said on Friday that it has
yet to be notified of the legal action by the court. Danone
declined to comment on the matter.
Danone, the world's largest yogurt maker, signed an agreement
with Wahaha in 1996 that required the transfer of the Wahaha brand
from the Chinese company to the joint ventures.
Under the contract, the Chinese company was barred from making
products that compete with those produced by the joint ventures, or
from using the Wahaha brand without Danone's consent.
But the two parties are divided on the validity of the agreement
after Wahaha Group opposed an acquisition proposal from Danone to
take 51 percent of non-joint ventures set up by the Chinese
side.
Zong Qinghou, founder of Wahaha Group, claims the transfer was
not properly approved by the authorities, citing a reply from the
State Trademark Bureau, which twice rejected applications for the
transfer of the Wahaha brand in 1996 and 1997.
Wahaha claims Danone was aware of the situation and that the two
sides had joined forces to get around the rules.
Danone initially said Wahaha had not applied properly for the
transfer of the brand, for which Danone paid Wahaha Group 100
million yuan.
(China Daily September 1, 2007)
