Herbal tea war hits boiling point

Guangdong High People's Court Wednesday opened a hearing on a packaging dispute between herbal tea maker JDB Group and its competitor Guangzhou Pharmaceutical Holdings, after the two companies accused each other of rights infringement in the form of highly similar red-can packaging.

Guangzhou Pharmaceutical, the current owner of the herbal tea brand Wong Lo Kat, is arguing that the recognizable red can is a part of and a prominent feature of the Wong Lo Kat brand, so JDB is not authorized to use the same packaging.

But Hong Kong-based JDB holds that it was granted the red-can design patent back in 1997 when the company was still authorized to use the Wong Lo Kat brand, so JDB should be the sole owner of the red-can packaging.

"Personally I think packaging is an inseparable part of a brand, so the brand owner Guangzhou Pharmaceutical should be solely authorized to use the red-can package," Wang Xiaomin, a patent lawyer at Guangdong Qianhai Law Firm, told the Global Times Wednesday.

However, Zheng Shengli, a professor at Peking University, told the Chinese Radio Network Wednesday that the party that makes the contribution should reap the rewards, so the right to use the red can belongs to JDB because it designed and used the red can first.

Zhao Hu, a partner with Beijing-based EastBright Law Firm, told news portal sina.com Wednesday that a red can is not special packaging, so it is a public resource that can be used by any company and does not belong to either JDB or Guangzhou Pharmaceutical.

Legal disputes between the two companies have been going non-stop since an arbitration commission ruled in May 2012 that the Wong Lo Kat brand belonged to Guangzhou Pharmaceutical and that JDB, which had been granted permission to produce Wong Lo Kat tea for over 10 years, was no longer authorized to use the brand.

There were serious verbal confrontations in the court on Wednesday and the judge had to warn the two companies several times to stop attacking each other, media reports said. There was also a violent incident on Saturday involving over 20 employees from the two companies.

Wang said that it usually takes about a month for the court to make a ruling, but this decision could take longer due to the complicated nature of the case.

"There is no precedent for the packaging and the brand of a famous product belonging to different parties," said Wang, noting that even patent lawyers are divided concerning the case.

Both companies are presenting themselves as victims. In court, Guangzhou Pharmaceutical is demanding 150 million yuan ($24.4 million) in compensation from JDB, while JDB is demanding 30.96 million yuan in compensation from Guangzhou Pharmaceutical.

Both companies cannot be reached for comment Wednesday.

"JDB still leads the market with over 70 percent of the herbal tea market … But red-can Wong Lo Kat produced by Guangzhou Pharmaceutical is also gaining ground among consumers through the high exposure of the continuous lawsuits," Liu Hui, an industry analyst at Capital Securities, told the Global Times Wednesday.

JDB currently sells herbal tea under the name Jiaduobao, but it was ordered to stop using the slogan "red-can herbal tea has changed its name to Jiaduobao" in January.