Final Judgment of Hangzhou Intermediate Court: Rejects the Application From Danone

HANGZHOU, China - Ownership of “Wahaha” Trademark Belongs to Wahaha Group After Danone Suffers 38th Defeat

May 21st, 2009, Hangzhou Intermediate People’s Court of Zhejiang Province made the Final judgment to reject the application from Danone on the revocation of No. 207 ruling of Hangzhou Arbitration Commission (2007). At this point, the dispute over ownership of trademark “Wahaha” between Danone and Wahaha is finally settled, adding a new defeat to Danone’s history.

Dispute over “Trademark Transfer Agreement” and Danone’s first application was rejected.

After the Danone-Wahaha disputes occurred, the ownership of trademark “Wahaha” was a focus of the contention between the two sides. Danone considered that the “Trademark Transfer Agreement” signed between the two sides in 1996 was still valid, and requested Wahaha to perform the agreement and transfer the trademark to the joint venture company. However, Wahaha thought that the National Trademark Office did not approve the transfer and the two sides had terminated the “transfer agreement” through signing the “trademark use license contract”. Thus, Wahaha was not obliged to transfer the trademark. To clear this point, shortly after the dispute, Wahaha submitted an application to Hangzhou Arbitration Commission for arbitration, requesting to confirm that the “Trademark Transfer Agreement” had been terminated. On December 2007, Hangzhou Arbitration Commission made a ruling that the “Trademark Transfer Agreement” was terminated on December 6, 1999. Danone defied the decision and applied to Hangzhou Intermediate Court for revocation. On July 30th, 2008, Hangzhou Intermediate Court ruled that the grounds of the application made by Danone were false and that the original decision was valid.

Sophistry “home” and “abroad”, Danone took the initiative to apply for arbitration

Shortly after Wahaha filed the above-mentioned case for arbitration, Danone claimed as follows: Even if, as said by Wahaha, the National Trademark Office did not approve the transfer, which caused termination of the “transfer agreement”, the “transfer agreement” not only stipulated that Wahaha should transfer the trademark “Wahaha” registered in China to the joint venture, but also stipulated that Wahaha is obliged to transfer the trademark “Wahaha” registered overseas, while transfer outside China did not require approval of the National Trademark Office, so Wahaha is obliged to transfer the trademark registered abroad. Hereby Danone took the initiative to bring the arbitration up to Hangzhou Arbitration Commission, requesting Wahaha to transfer the trademarks registered abroad. This formed the strange situation of “one contract, two cases”.

Regarding the case Danone filed for arbitration, Hangzhou Arbitration Commission made a ruling in September 2008, which rejected the request of Danone. The arbitral tribunal indicated in the verdict that the rights and obligations on the transfer of trademark involved in the “Trademark Transfer Agreement” were stipulated in the same contract, and the arbitral tribunal confirmed on December 6th, 2007 that the agreement had been terminated from December 6th, 1999. Therefore all the rights and obligations in the “Trademark Transfer Agreement” have been terminated. Thus, the basis of the legal relationship requested by Danone has been lost.

Refused to accept the arbitral decision, Danone re-applied to cancel the ruling

Danone was dissatisfied with the arbitral decision, and applied to Hangzhou Intermediate Court for revocation of the ruling. Hangzhou Intermediate Court accepted and registered the case on April 7th, 2009. After inspection, Hangzhou Intermediate Court believed that the application of Wahaha Food Company (i.e. the joint venture under control of Danone, and the litigation representative was Fan Yimou) for revocation of the arbitral decision is based on the provisions of Article 58.1.6 of the “Arbitration Law of People’s Republic of China”: “the arbitrator accepted bribes or done malpractice for personal benefits or perverted the law in the arbitration of the case”, but Danone simply provided no facts on the perverting of law on ruling. Hangzhou Arbitration Court affirmed the legitimacy and impartiality of the arbitration and maintained the original ruling.

Legal Adviser of Wahaha Group, lawyer Yang, said that the ruling was a final judgment of the ownership of trademark “Wahaha”. Whether the trademark “Wahaha” is registered in China or abroad, it belongs to Hangzhou Wahaha Group. At this point, the disputes over the “Trademark Transfer Agreement” between the two sides are settled.

Source: Wahaha Group

Baoxiu Ye at +86-10-8886-5353 x8832 or bx.ye at insightpr.com.cn