07 August 2018

King & Wood Mallesons represents Guangzhou Pharmaceutical in winning a trademark infringement lawsuit in the first instance, obtaining the highest-ever damages award in China’s IP litigation history

In July, 2018,Guangzhou Pharmaceutical Holdings Limited (“GPHL”), represented by King & Wood Mallesons (“KWM”), was awarded a favorable first-instance judgment against Guangdong Jiaduobao Drink & Food Co., Ltd. , Zhejiang Jiaduobao Beverage Co., Ltd., Jiaduobao (China) Beverage Co., Ltd., Fujian Jiaduobao Beverage Co., Ltd., Hangzhou Jiaduobao Beverage Co., Ltd. and Wuhan Jiaduobao Beverage Co., Ltd. (collectively referred to as “JDB”) in relation to JDB’s trademark infringement acts. In the first instance judgment, Guangdong High People’s Court found that JDB’s use of the trademark “Wanglaoji” from 2 May 2010 to 12 May 2012 constituted trademark infringement. The defendants were ordered to jointly pay GPHL RMB 1.44 billion in compensatory damages and reasonable legal costs and fees. This case involved very complex legal issues, the first instance of trial lasted for over four years and the damages awarded is the highest ever in China’s IP litigation history.

This case marks another important dispute between GPHLand JDB after their battle over the red can packaging and decoration. On 2 May 2000, GPHL, the proprietor of the registered trademark “Wanglaoji”, signed a trademark license agreement with Hung To Group, allowing Hung To Group to use the trademark “Wanglaoji” in the PRC for 10 years until 2 May 2010. In 2002 and 2003, the two parties entered into two supplementary agreements, extending the license to 20 years. On 9 May 2012, the CIETAC (China International Economic and Trade Arbitration Commission) found these two supplementary agreements were invalid. After the expiration of the trademark license agreement however, JDB (controlled by Hung To Group) continued to manufacture and sell a red can herbal tea under the trademark “Wanglaoji”. Having not received any positive response after sending demand letters, GPHL initiated a lawsuit before the Guangdong High People’s Court in April 2014.

Representing GPHL, KWM’s IP litigation team studied this case thoroughly and developed a systematic and targeted litigation strategy. With arguments and opinions largely upheld and adopted by the Court, KWM obtained a victory for the client in the first instance of trial. KWM’s expertise and teamwork were highly recognized by the client.

This case was led by partners Shi Yusheng and Liu Jun.

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