China: Win-Win Or No-Win: JDB And Wang Laoji Share The Usage Of Red Can Packaging
Last Updated: 16 January 2018

The battle for scrambling for the red can packaging between the plaintiff, appellant, Guangdong JDB Beverage and Food Co., Ltd. and the defendants, appellees, Guangzhou Wang Laoji Health Industry Co., Ltd. and Guangzhou Pharmaceutical Holdings Ltd. (collectively referred to as GPH) came to an end on August 17, 2017. The Supreme People's Court issued its judgement, holding that whereas both GPH and JDB have made great contribution to the packaging of the red can of Wong Lo Kat Herbal Tea, the two companies can share the interests on the packaging of the red can of Wong Lo Kat Herbal Tea.

On July 6, 2012, GPH and JDB filed a lawsuit respectively, claiming for the rights and interests to the famous product-specific packaging and decoration of red can Wong Lo Kat Herbal Tea and accusing the other party for illegally producing and selling the herbal tea product with red can packaging and decoration.

Guangdong High People's Court held in the first instance that GPH has the rights and interests to the red can Wong Lo Kat Herbal Tea's specific packaging and decoration and the producing and selling of red can Herbal Tea by Wang Laoji Health Industry under the authorization of GPH doesn't infringe; JDB producing and selling red can Herbal Tea with the packaging printed on one side Chinese characters for "Wang Laoji" and the other side Chinese characters for "jiaduobao or printed on both sides Chinese characters "jiaduobao" infringes the rights of GPH. JDB was ordered to stop the infringing behavior and to pay GPH 150 million RMB plus 260 thousand RMB lawyers' fees.

JDB appealed to the Supreme People's Court. The Court found the "famous product" of the law in the present case is the "red can Wong Lo Kat Herbal Tea", the yellow Chinese characters for 'wang laoji", the red background and their combination as a whole constitute the specific packaging and decoration of red can Wong Lo Kat Herbal Tea. Being the right holder of the registered trademark "wang laoji", GPH alleged that since the trademark is an integral part of the packaging and decoration and functions as an identifier of the product source, customers would take it for granted that the red can Wong Lo Kat Herbal Tea belongs to the right holder of the trademark "wang laoji", while the recipe and taste of the tea would not affect customers' recognition and judgement of the product. Once being licensee of the trademark "wang laoji" and the practical operator of red can Wong Lo Kat Herbal Tea, JDB argued that the rights and interests to the packaging and decoration and the belonging of the trademark right are two issues and shall be treated separately. What consumers like is the red can Wong Lo Kat Herbal Tea produced by JDB with special recipe, the packaging and decoration at issue was used by JDB and was closely connected with JDB's product. Therefore, the relative rights and interests of the packaging and decoration belong to JDB.

The Supreme People's Court held that taking the historical development process of the red can Wong Lo Kat Herbal Tea, the cooperation of the two parties, the consumer cognition and the equity into consideration, both GPH and JDB had made great contribution to the creation, development and the reputation of the packaging and decoration at issue. Assigning the ownership of the packaging and decoration to either party will cause unconscionability and probably harm the interests of the public. Therefore, the rights and interests of the packaging and decoration of the red can Herbal Tea shall be mutually possessed by GPH and the JDB on the premise of respecting the consumer cognition, abiding by the bona fide doctrine and without harming the legal interests of others.

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