The Court Ultimately Supported Guangzhou Pharmaceutical Holding Company’s Application for an Injunction

201302011-周一(BY Albert Chen  ) Guangzhou Pharmaceutical Holding Company (“GPHC”) is the holder of the王老吉 (the “Wang Lao Ji”) trademark in mainland China. In 2000, it licensed Hongdao Group, a Hong Kong admitted company, to use the trademark. After Hongdao Group used the trademark and caused it to develop a definite business reputation, however, a dispute broke out between the two parties over the right to use the Wang Lao Ji trademark.

In the first round of the fighting between the parties, GPHC used arbitration with CIETAC to cancel the supplementary agreements signed between two parties in 2002 and 2003 based upon the fact that the agreements were executed under commercial bribery. This website has discussed the implementation problems arising in that case. After that, the subsidiary of Hongdao Group that had sold Wang Lao Ji, Jia Duo Bao (“JDB”) began to sell its herbal tea under the brand name 加多宝(the “JDB”) Additionally, JDB used disputed slogans, such as “Wang Lao Ji now calls itself JDB,” “China’s top selling red can herbal tea now call itself JDB.” Claiming that such slogans constituted false advertising or unfair competition GPHC filed for an injunction with the Guangzhou Intermediate People’s Court and demanded an immediate halt to such advertisements.

According to reports, the court recently made a decision and issued the injunction. It made the order mainly on the ground that JDB herbal tea was only recently produced and put on the market by JDB and there is no factual basis for it having changed from another name. Additionally, the red canned herbal tea beverage, Wang Lao Ji, had already sold well throughout the world for years and had taken the leading position in the herbal tea market. Therefore, the public would think of Wang Lao Ji when encountering a slogan like “China’s top selling red can herbal tea.” Objectively, JDB’s adoption of these slogans would mislead the public and make them believe JDB is the new name of the original Wang Lao Ji.

The court held that, in order to prevent this false advertising from causing irrevocable damages to the holder of the Wang Lao Ji trademark, it is necessary to prohibit JDB from placing such slogans in public places to conduct false advertising. The court therefore ordered the injunction.

We have introduced China’s system for injunctions in a previous post, and you may click here to read it if it interests you.

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