A Chinese court has sided with the Hangzhou Wahaha Group against France's Groupe Danone SA in a legal battle over ownership of the "Wahaha" trademark, China's best-known soft-drink brand. The dispute between the two firms emerged in April 2007, when Danone publicly accused Wahaha of setting up parallel businesses outside their joint ventures that illegally sell competing Wahaha-branded products.

"Danone will continue to pursue all legal options to protect its contractual rights and financial interests," said a Danone spokesperson. The two companies have been waging legal battles in China, the United States, Sweden and the British Virgin Islands.

Wahaha said the ruling affirmed its rights to the trademark, but Danone charged that the court had failed to conduct a substantive review of the case and vowed to take the matter to the relevant superior judicial authorities in China. Danone insists that regardless of decisions by the Chinese courts, the joint venture and trademark license agreements between Danone and Wahaha gave their ventures, 51 percent owned by Danone, exclusive and irrevocable rights to use all Wahaha trademarks.

Although most Chinese courts have so far issued rulings favourable to Wahaha, lawyers on both sides have said arbitration proceedings in Stockholm, which are expected to render a final decision early next year, will be the crucial legal battle to seal the joint ventures' fate.
(Source: Reuters)

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