Lawyers divided over Wahaha deal
Updated: 2007-07-19 15:12
To cope with the scrutiny of the authorities, the two companies signed a simplified contract stipulating that Wahaha Group authorized the joint ventures to use the Wahaha brand, without changing its ownership, Zong said. This simplified agreement was put on file at the State Trademark Bureau.
Danone lawyers said Wahaha never applied for the transfer properly and that their client repeatedly insisted on it. "Danone is just doing what should have been done 11 years ago to file the application to complete the transfer of the Wahaha trademark," said Tao Wuping, a lawyer representing Danone in China, adding the two contracts are not contradictory.
The two parties entered into a trademark license contract in which it was specifically mentioned that the transfer was pending the approval by the Chinese authorities and that Wahaha Group granted an exclusive right and license to use the trademark before changing its ownership, he said.
"The two parties never completed the proper transfer procedure as required by the authorities. Besides, they had never announced the deal," said Liu Chunquan, an independent lawyer with Guangsheng & Partners law firm.
He said the private contract should be viewed null and void, adding the partnership model was not uncommon in China 10 years ago when most local enterprises were inexperienced in selecting overseas partners.
But most lawyers attending a forum, organized by Shanghai Lawyers Association recently to discuss the dispute, hold the brand transfer contract should be respected as long as it is an authentic reflection of both sides' intent at the time.
"Based on the current information, my judgment is that the likelihood for Wahaha to lose the arbitration in Stockholm and lawsuit in US is about 80 to 90 percent," said Liu Xiaohai, an independent lawyer with Grandall Legal Group, one of the largest law firms in China.
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