Coca-Cola Plays It Smart In Its IP Fight With Nongfu Spring

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Two companies. Two “Vitamin Water” products being sold in China. Two bottles that look suspiciously similar. Well, actually, the bottles appear identical to me, and the design is rather distinctive. So is there an obvious intellectual property infringement here?1

Maybe, but don’t expect a lawsuit anytime soon.

The players are Coca-Cola and Nongfu Spring, competitors in the China beverage market (Disclosure: I’m a regular drinker of both Diet Coke and Nongfu Spring water. One of my cats refuses to drink any other bottled water but Nongfu, and she has excellent taste.)

The products are Coca-Cola’s “Glacéau Vitamin Water” and Nongfu’s “Victory Vitamin Water.” This is not a trademark dispute, so the branding of these products is beside the point. However, for what it’s worth, I have no freakin’ idea what “Glacéau” means, if anything. I suspect it’s just a made-up word that sounds vaguely like “Glacier,” has a Frenchy feel to it, and is relatively easy to trademark.

If you’re wondering just what “vitamin water” is, it is water laced with various vitamins that most of us already get in our food and/or daily vitamin supplements. The product is also referred to as “smart water” and “enhanced water,” the latter sounding suspiciously similar to “enhanced interrogation.” (I wonder what kind of liquid was used by the U.S. military when it water-boarded suspected terrorists?)

But I digress. According to press accounts, Coca-Cola started marketing their enhanced interrogation water in China before Nongfu Spring. However, Nongfu was able to secure a design patent, presumably on the bottle.

In China, there are two ways to protect a design like this bottle: 3D trademark and design patent. Of the two, the design patent, also referred to as an industrial design, is by far the more likely, for various reasons. Although the Trademark Law allows for 3D trademarks, this has never really caught on much in this country, and such trademarks are comparatively rare.

On the other hand, design patents are extremely common, probably because they are cheap and are usually granted within six months from filing. You can’t swing a dead cat in the general vicinity of a big Chinese company these days without making contact with at least one or two design patents.

Coca-Cola was first in the market, but Nongfu patented the design. Hey, wait a second (you ask), aren’t patents only granted for new designs? Yes indeed. For existing designs, patent protection is not available.

This design is sufficiently distinct that it defies logic to suggest that these bottles were developed separately. Therefore one company copied the other’s design. Since Coca-Cola entered the market first, I’m going to assume that Nongfu is the culprit and that they filed for the patent after seeing the Coke design.

So will Coca-Cola go after Nongfu? Thus far, Coke has publicly criticized Nongfu and asked them to use different packaging, to no avail. Nongfu has said, in its defense, that the label it uses is quite dissimilar to that of the Coke product. This is absolutely true, but that issue is separate from the matter of the bottle design.

According to a company spokesman, Coca-Cola is not planning to take this issue to court. Why not? Obviously the Nongfu design is a copy, and the patent lacks novelty (i.e. it wasn’t a new design). So wouldn’t Coca-Cola win an infringement suit?

Not necessarily. Coca-Cola would no doubt succeed in invalidating the Nongfu design patent. However, since Coke doesn’t have a patent of its own, it cannot sue Nongfu for patent infringement. Other legal theories, such as unfair competition, seem rather weak to me.

Coke is therefore playing it smart here. Unless Nongfu makes a stupid move like suing Coke for patent infringement (theoretically it could do this, but ultimately it would lose the overall case), it doesn’t make any sense for Coke to escalate this fight.

Could Coca-Cola have avoided this situation? Yes, it could have filed for a design patent of its own prior to using the bottle. Many companies don’t bother obtaining such rights, though, and it’s quite possible that this current dispute with Nongfu is not seen internally as a big deal when compared to other IP infringement problems Coke has in China.

Sometimes it just isn’t worth it to escalate these IP battles. My only piece of advice here goes out to Nongfu, whose petulance has been amusing. First, they might wish to muzzle their spokesman, whose nationalistic nonsense is embarrassing:

[Spokesman] Zhou added that the vitamin water of the Coca-Cola company is overvalued; and the intention of launching “Victory Vitamin Water” is to protect Chinese consumers’ rights.

Somehow I don’t think this old-school blather would do much to influence an IP judge, if it ever comes to that. The last time I checked, issues related to pricing are not a valid defense against IP infringement.

Second, they have demanded an apology from Coca-Cola, claiming that Coke is engaging in dirty tricks because the Nongfu product has proved to be a strong competitor. There might be some truth to this, but it’s probably not a great idea to turn up the aggressive rhetoric when the design you’re using is obviously identical to that of the competition and you were second to market.

  1. The two possible causes of action are patent infringement and unfair competition. China Daily, which incorrectly (in this case) translated “抄袭” as “plagiarism” needs some serious editorial support. []

12 responses on “Coca-Cola Plays It Smart In Its IP Fight With Nongfu Spring

  1. dale

    The good folks in Atlanta should just turn table and steal the brew (formula?) and packaging for Nongfu’s latest premium iced tea ( That stuff is really pretty good, better than any of the stuff CC sells in the states. Be a fun fight to watch as well.

  2. Steve M

    Other legal theories, such as unfair competition, seem rather weak to me.

    I’m not terribly familiar with the Anti-Unfair Competition Law (much less how it is interpreted in practice), but doesn’t it provide for trade dress protection? As you point out, the Vitamin Water bottle design and packaging are rather distinctive.

    1. Stan Post author

      True, but for a strong unfair competition case, you need more. An anchor form of IP like a trademark could be sufficient, or strong evidence that consumers are being misled would help. Despite the bottle design, I just think this case would be very difficult.

  3. S.K. Cheung

    I am not sure if there is any company that doesn’t want more market share than it currently enjoys. Or if there is any company that enjoys losing market share to a competitor. So if CC doesn’t want to escalate this fight, it must figure this is a fight it can’t win, or it’s a fight that is not worth winning. As you say, since it doesn’t own a patent for bottle design, there is no infringement. CC would first have to sue to disallow Nongfu’s patent. Then presumably it will have to apply for its own patent, to prevent a repeat of history. But since Nongfu already has market share (even if ill-gotten), the cat’s out of the bag. Nongfu could probably maintain its share even if it was forced to change it’s bottle shape at this point. And with Nongfu there with a patent now, at least CC is ensured there won’t be another copy-cat. So my guess is that it’s a fight that’s not worth winning for CC. Probably chalk it up as lesson learned. But i’ll bet they’ll be applying for a bottle-design patent the next time they move into a new product space.

  4. pug_ster

    Stan, I would disagree with you on Nongfu Muzzling its spokesman. Considering that many US companies are complaining many Chinese complaining infringing its IP, this company should take a stand. If Nongfu said nothing, many Western commentators will start running rumor mills saying that Nongfu did in fact infringed on its IP. Now since the Nongfu made their ‘nationalistic nonsense,’ they deflected the argument to that CC complained about it, but doesn’t intend to sue and dismiss this as a PR stunt. Nongfu spokesperson should protect its brand, as I think more Chinese consumers are confident about the brand. If he said nothing, I am willing to think that many Chinese consumers would think Nongfu as a second rate product and its sales would drop.

  5. D

    Stan: I’m glad you discussed this, because I have been following this since Glaceau made their first major retail push into China last year. I have many thoughts, but I will leave you with 2 things:

    1) When Glaceau first launched last year, they priced their beverage at around RMB14.5-15/bottle. That is amazingly high compared to Gatorade (around RMB4-5) and other enhanced water products in the RMB3-5 range. I first saw palettes of Glaceau at Wal-mart and then saw it in 7-11 and other retail outlets in China. They were always selling very slowly. Likewise, slowly, the price dropped down to RMB10, and now I see a bottle priced between RMB9.5 and RMB11, depending on the location. At a movie theater, I saw it for about RMB20-25, by the way. Anyway, my point is that their price points were ***extremely*** high, and remain so.

    2) About 3 months ago, my colleague in Beijing came back from the convenience store downstairs and he showed me Nongfu’s bottle that he just purchased and drank. I had previously remarked to him that I thought Glaceau’s pricing was ridiculous and off-the-charts, and he was pleased to show me the Nongfu bottle and proclaim that he bought it for RMB3. You see, he thought the bottle in his hand WAS Glaceau and we was remarking how low they had dropped their prices… it was not until I pointed out that this was a similar bottle from a Chinese competitor that he took a closer look and realized that was why the price was drastically lower. In his hand was not Glaceau, but rather Nongfu’s “Victory Water”. Their bottles and branding are confusingly similar.

  6. Stuart

    “Could Coca-Cola have avoided this situation? Yes, it could have filed for a design patent of its own prior to using the bottle.”

    I’ll bow to your better judgement, but really? My impression is that Nongfu would have proceeded with their rip-off bottle regardless. love to be wrong about this.

      1. Stuart

        Yes, but my thing is, exactly where would that have got them? Nongfu would have obfuscated, dragged feet, counter-accused, and still used the bottle. Unless you’re telling me that a clear patent infringement case holds water in China these days.

        1. S.K. Cheung

          That’s true. Worrying about whether CC had a patent on the bottle design assumes that the patent is worth more than the paper it is written on. In China, that is a risky assumption.