Danone to appeal after losing trademark dispute against Wahaha

SHANGHAI, Dec. 11 (Xinhua) -- French food group Danone Tuesday voiced displeasure and vowed to appeal after losing its battle with Chinese beverage giant Wahaha Group in a trademark dispute.

Danone said in east China's Shanghai City that it was "shocked" by the verdict handed down by the Hangzhou Arbitration Commission the previous day and would appeal according to the legal procedures.

The panel ruled that the popular Wahaha trademark belonged to Wahaha Group, Danone's Chinese joint venture partner.

Danone has contended that the Wahaha trademark belonged to the joint venture. But the panel ruled that a Trademark Transfer Agreement, jointly signed by the two groups in 1996, which indicated that the trademark should be transferred to the joint venture, had expired in 1999.

The move was the latest in the dispute between the Chinese drink group and the French giant that emerged in April and has become highly public.

Danone was dealt a setback in another venue Monday, when the Guilin Intermediate People's Court agreed with a complaint by Wahaha and ruled that Francois Caquelin, a Danone executive, had breached the company law and "caused turmoil and chaos" in production and sales.

Danone expressed regret at the court's ruling.

Danone, which owns a 51-percent stake in the 39 Danone-Wahaha joint ventures, has accused Wahaha of setting up independent companies and selling products identical to those sold by the joint ventures. Danone had demanded a 51-percent stake in the non-joint venture companies, which Wahaha rejected.

Since mid-year, the two companies have filed numerous complaints and lawsuits against each other in various Chinese and foreign jurisdictions.

Danone filed its first lawsuit against Wahaha on May 9 in Stockholm, and on June 4, Danone filed another lawsuit, in Los Angeles, against two Wahaha-related companies and two individuals.

Also in June, Wahaha filed a request with the arbitration commission in the eastern Chinese city of Hangzhou over the disputed trademark transfer.

It also lodged suits in Shenyang and Jilin against Danone executives Emmanuel Faber, who replaced Zong Qinghou as chief of Danone and Wahaha's 39 joint ventures, Qin Peng, China director for Danone Asia and Francois Caquelin, a financial director, claiming they had breached company law or damaged the interests of the Danone-Wahaha joint venture.

ln July, Danone filed a counterclaim against Wahaha, alleging that Wahaha had failed to transfer trademarks to their joint venture under an agreement reached in 1996 when their cooperation started.