TRADEMARK WAR: WONG LO KAT BAI WANG（ I6081502） RAVI TEJA （ I6099735）

INTRODUCTION HISTORICAL BACKGROUND FACTS OF THE CASE ISSUE ARGUMENTS OF BOTH PARTIES

  INTRODUCTION

The case Wong Lo Kat is a famous Chinese herbal tea brand originally since 1828 during Qing dynasty and it is one of the most popular tea drinks in China today. It is sold in many forms and different types of containers by two different entities. The t rademark is c la imed by both Guangzhou Pharmaceutical (the Licensor) and JDB (the Licensee).

CASE FACTS

Wong Lo Kat’s trademark right is owned by Guangzhou Wanglaoji Pharmaceutical Co., Ltd., a subsidiary of the state-owned Guangzhou Pharmaceutical Holdings Limited. licensed the right to use the “Wong Lo Kat" trade mark to Hong Kong’s Hung To Group Co., Ltd. In 1997, Hung To Group and Guangzhou Pharmaceutical signed a trademark license agreement by which Hung To Group had legally obtained the right to use “Wong Lo Kat“. Its subsidiary, JDB Beverage Co., Ltd produced the red can version of Wong Lo Kat in mainland China, with the traditional English name Wong Lo Kat in mainland China, which means “Wong lo Kat" in Cantonese spelling.   The trademark license was renewed in 2000 to make it valid until 2 May 2010 owing to its increased popularity and sales. In 2002 and 2003, two additional extensions were signed, extending the validity to use the trademark up to 2013 and 2020 respectively.

ISSUES

Invalidity and the Trademark Infringement.

The Guangzhou Pharmaceutical Holdings' general manager Li was found guilty of fraud in 2005. It was alleged that as part of the agreements to extend the license, he has received payments from Hung To Group as a bribe. In April 2011, Guangzhou Pharmaceutical started the arbitration in China International Economic and Trade and Trade Arbitration Commission and in May 2012, it has invalidated both the license extension agreements. In April 2013, this case went to proceeding before Guangzhou High Court. In 19 Dec 2014, for the first instance, Guangzhou High Court decided that JDB has infringed the trademark and so was ordered to pay the compensation of 1.5 billion Yuan to Guangzhou Pharmaceutical.

JDB started the litigation in Beijing Intermediate Court against Guangzhou Pharmaceutical alleging infringement of the Red Can package and decoration right of JDB. At the same day, Guangzhou Intermediate Court also accepted the claim raised by Guangzhou Pharmaceutical for the same right infringed by JDB. In Jan 2013, Guangzhou Intermediate Court issued the verdict of injunction in the litigation, requiring the JDB to stop using “Wong Lo Kat renamed as JDB” or “the top popular tea is renamed as JDB” or similar expression for the purpose of advertising.

ARGUMENTS

The validity of the extension licensee agreement

Even though the Guangzhou Pharmaceutical Holdings' general manager Li was found guilty of fraud, the Hung To Group states that it was engaged in the business trade in good faith. From this perspective, the agreement should be valid.

The right of the package and decoration

JDB insisted that even though the trademark has been owned by Guangzhou Pharmaceutical, the red can which is the main feature of the package should still be used by JDB. JDB argues that it has made huge efforts to invest in its design and popularity for many years. The most significant feature of the red can is recognized by the public because of these efforts and so, the red can, its package and decoration can only be used by them.

OPINIONS

1.VALIDITY OF THE LICENSE AGREEMENT

  China International Economic and Trade Arbitration Commission: Invalid May 2012

  Reason：Commercial Bribery

  JDB：violation of arbitration procedure

  In 2011 ：JDB started to withdraw the “Wong Lo Kat” sign.

GP established the “Wong Lo Kat ” group limited.

Progress “Wong Lo Kat”

back to GP

May 2012 War of “Wong Lo Kat” War of “Red Can”

Dec 2014 1995

JDB GP JDB 1995-2011

JDB 2011-May 2012

2.THE RIGHT OF PACKAGE AND DECORATION

Guangzhou People’s Higher Court：   “Wong Lo Kat” is a well-known

trademark and a time-honored brand .   Using “Wong Lo Kat” on a red can

means a huge potential commercial value which is given by the mark itself.

  The red can could not be able to exist independently.

Guangzhou People’s Higher Court：

  Products produced by the JDB would make confusion to the public.

  constitute unfair competition.

3.UNFAIR COMPETITION

IMPLICATIONS

•  National assets in China

•  Stress the Company name

•  License fee

•  Develop own marks

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