Chalk Up One More For Wahaha

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It’s like a train wreck. I want to look away but can’t. More silly litigation between Wahaha and Danone:

Groupe Danone SA has lost another round in a trademark battle with its estranged Chinese partner, a key ruling that may further diminish the French company’s position in the year-long legal fight.

Shan Qining, spokesman for Hangzhou Wahaha Group Co Ltd, said yesterday that the Hangzhou Intermediate People’s Court has agreed with an earlier arbitration ruling and rejected Danone’s claim to the Wahaha brand name. The ruling held that Wahaha, a famous trademark for bottled water and drinks, will be retained by China’s biggest producer of food and beverages.

Danone responded that the Hangzhou Court rendered its ruling based on a procedural review only and said it will appeal to higher judicial authorities.

The ownership of the Wahaha brand has been a key issue in a string of legal battles that began in June last year between Paris-based Danone and its Chinese partner.

Danone sued Wahaha and its chairman, Zong Qinghou, for allegedly using the Wahaha brand and selling competitive drinks outside the two firms’ 39 joint ventures that were formed since a partnership began in 1996. The French company said these actions caused it to lose US$25 million a month.

But Wahaha said it still owns the brand after a trademark transfer was halted by the state trademark office. Danone said that decision ran counter to the cooperation contract it had with Wahaha.

Granted, I do not know the exact legal theory at play in this particular litigation. However, you just don’t ask to be awarded a trademark like this. There are ways to do so at the Trademark Office, but obviously that won’t work in this case because it is obvious that Wahaha was the rightful (original) owner. No, Danone is saying that because of an agreement between the parties, they should be awarded the trademark.

Uh uh. Doesn’t work that way. Chinese courts do not award what we legal types call "specific performance," which is just a cute way of saying "not money". Courts in China are all about money, and sometimes public apologies. If Danone had a good argument, they could ask the court for compensation because the trademark was never transferred to them. But asking for the mark itself? Ridiculous.

Moreover, the original decision was from an arbitration body, which are even more reluctant to award specific performance. Even if the arbitrator gave you what you wanted, good luck taking that award to the Trademark Office and demanding a trademark assignment. Not gonna happen.

If you want more lurid details of this long dispute, go bother Dan at CLB or use the Google.