Drinks dispute ruling says iconic brand design now jointly owned

Two Chinese beverage brands were ruled to jointly own the iconic red packaging of a type of popular herbal tea, the Supreme People’s Court said Wednesday in its final verdict, putting an end to a high-profile trademark dispute that lasted more than five years.

The SPC said both companies, Jiaduobao (China) Drink Co and Guangzhou Pharmaceutical Holdings Ltd (GPH), made huge contributions to the famous red package of 100-year-old herbal tea brand Wong Lo Kat. As long as they don’t violate each others' legitimate interests, they can share the ownership of the red package.

Hong Kong-based Jiaduobao had been using the Wong Lo Kat brand since 1995, when it leased it from GPH. However, the company was only authorized to use the brand until 2010, and had the lease contract extended by bribing administrative staff at GPH.

Over the leasing period, the herbal tea in red cans achieved huge success in China’s drinks market.

The two companies got into a trademark dispute which went to arbitration in 2011, with a decision made in 2012 that the brand rights rest with GPH.

They later sued each other over the design of the cans used for their respective herbal tea products.

In December 2014, the Guangdong Higher People’s Court ruled in favor of GPH and ordered Jiaduobao to pay more than 150 million yuan (US$22.4 million) in compensation to GPH.

Jiaduobao appealed to the SPC.