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Danone says Wahaha trademark ruling illegal
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French dairy giant Groupe Danone SA, which lost ownership to the iconic Chinese trademark Wahaha in an arbitration case, said the verdict was illegal and wrong and planned to petition the court to revoke it.


Danone's attorney, who was identified as Tao, said the company is going to appeal at Hangzhou Intermediate People's Court to revoke the arbitration verdict ruling that Hangzhou Wahaha Group, China's biggest beverage maker, owns the Wahaha brand.


The verdict is illegal and wrong, Tao said.


Danone said the verdict was made by distorting the facts on five major points, including the effectiveness of the trademark transfer agreement and its approval and transfer procedure.


An arbitrator designated by Danone didn't sign the verdict, Tao said.


A Hangzhou arbitration bureau ruled that a trademark transfer contract can no longer be executed because the time for Danone's action has expired.


Wahaha filed an arbitration claim on June 14 to end the trademark transfer agreement set out in a joint-venture agreement in 1996, claiming it owns the brand on the basis of a reply from the State Trademark Office, saying it "did not consent to the transfer."


Danone filed a counter claim in July.


The trademark dispute is a crucial step in a bitter legal battle that began in April between the two companies. At one time the firms worked together as the most successful Sino-French joint venture.


Paris-based Danone alleged that Zong Qinghou, chairman of Wahaha, set up separate companies that produce competitive products and used the Wahaha brand without permission, breaching the joint-venture contract.


It also filed a lawsuit in Los Angeles seeking more than US$100 million for alleged illegal sales in addition to arbitration in Stockholm for compensation of 800 million euros (US$1.1 billion) in May.


Wahaha also said yesterday it won a lawsuit against a Danone executive for unlawful competition in China.


A statement from Wahaha said the Guilin Intermediate People's Court found Francois Caquelin, who was appointed by Danone to the board of the joint venture with Wahaha, engaged in unfair competition because he took similar positions in rival companies.


The claim would also be considered against Danone Asia President Emmanuel Faber and Danone China President Qin Peng, Wahaha said.


Danone said it will appeal the Guilin decision.


The dispute with Wahaha has caused huge financial losses for Danone.


Last year, Danone made a profit of more than 10 billion yuan globally with the Asia-Pacific region contributing 20 percent.


(Shanghai Daily December 11, 2007)

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