---
title: "The Eight-Year Wang Laoji Trademark Dispute: Compensation Reduced from 20 Million to 1 Million, the 1.4 Billion Case Remains Unresolved"
description: "After eight years of legal battles over the Wang Laoji trademark, JDB has seen three false advertising cases resolved in its favor, with compensation reduced from 20 million yuan to 1 million yuan. However, the 1.4 billion yuan trademark infringement case remains pending, as the Supreme People's Court ordered a retrial."
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published: "2019-08-17"
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# The Eight-Year Wang Laoji Trademark Dispute: Compensation Reduced from 20 Million to 1 Million, the 1.4 Billion Case Remains Unresolved

> After eight years of legal battles over the Wang Laoji trademark, JDB has seen three false advertising cases resolved in its favor, with compensation reduced from 20 million yuan to 1 million yuan. However, the 1.4 billion yuan trademark infringement case remains pending, as the Supreme People's Court ordered a retrial.

Click to read the original article for details.
This article is republished with permission from Finance World Weekly (ID: cjtxzk); Author: Caitian Author
**Eight years ago, disputes over the Wang Laoji trademark led Wang Laoji to file a flurry of lawsuits against JDB, bringing it to court repeatedly. Since then, JDB and Wang Laoji have engaged in rounds of legal battles.**
While the 1.4 billion yuan compensation case has seen no new developments, three other lawsuits between JDB and Wang Laoji have been concluded, and the results have all turned in JDB's favor.
On the evening of August 16, Baiyunshan announced that the Supreme People's Court had issued rulings in three false advertising dispute cases between JDB and Wang Laoji after retrial. In one case, which had lasted five years and gone through first instance, second instance, and Supreme Court retrial, the compensation JDB was required to pay was reduced from 9.02 million yuan to 1 million yuan. In the other two cases, the original judgments requiring JDB to pay a total of 11.21 million yuan in compensation were also overturned during the Supreme Court's retrial.
Eight years ago, disputes over the Wang Laoji trademark led Wang Laoji to file a flurry of lawsuits against JDB, bringing it to court repeatedly. Since then, JDB and Wang Laoji have engaged in rounds of legal battles.
**JDB's "Nationwide Sales Leader" Advertising Ordered to Stop**
Public information shows that these three cases stemmed from the chain reaction following the "trademark dispute" between JDB and Wang Laoji in 2012.
As the trademark dispute intensified in 2012, after the lease agreement was ruled invalid, JDB quickly initiated a rebranding, but this move was met with resistance from Guangzhou Pharmaceutical and Wang Laoji.
According to Baiyunshan's announcement, in 2013, Guangzhou Pharmaceutical Group and Wang Laoji Great Health Company sued Wuhan JDB, Hunan Fengcai Haorunjia Trading Co., Ltd., and Xiaoxiang Morning Post together, on the grounds that Wuhan JDB, Fengcai Company, and Xiaoxiang Morning Post used advertising slogans such as "The nationally leading red-can herbal tea has changed its name to JDB" or other "name change" slogans in their advertising or product packaging, which seriously damaged the plaintiff's Wang Laoji trademark and goodwill, constituting unfair competition.
The defendants Wuhan JDB, Fengcai Company, and Xiaoxiang Morning Post used advertising slogans on their advertising or product packaging such as "The nationally leading red-can herbal tea - JDB", "For every 10 cans of herbal tea sold in China, 7 are JDB. Not afraid of getting heaty? More people drink JDB. With authentic formula, more people drink it", or "JDB herbal tea has been approved as a representative of national intangible cultural heritage". These statements were inconsistent with objective facts and violated national prohibitive legal provisions, also constituting false advertising and directly disparaging and damaging the plaintiff's trademark and goodwill, thus constituting unfair competition.
In September 2015, Baiyunshan announced the judgment of the Changsha Intermediate People's Court. The Changsha Intermediate Court confirmed that Wuhan JDB's advertising containing "The nationally leading red-can herbal tea has changed its name to JDB", "The nationally leading red-can herbal tea - JDB", and "For every 10 cans of herbal tea sold in China, 7 are JDB" constituted unfair competition through false advertising. It ordered Wuhan JDB and related parties to stop publishing such content, stop selling JDB products with such advertising slogans, and pay Guangzhou Pharmaceutical Group and Wang Laoji Great Health Company economic losses totaling 9.023 million yuan.
In addition to this case, Guangzhou Pharmaceutical also filed related lawsuits against JDB in Guangdong Province and Chongqing. The courts in these two locations respectively ordered Guangdong JDB to pay Guangzhou Pharmaceutical Group 10.8132 million yuan and JDB China to pay Wang Laoji Great Health 400,000 yuan.
Thus, in the three cases, JDB was required to pay a total of 20.24 million yuan in compensation. Subsequently, JDB appealed each case, but the second instance upheld the original judgments. Still dissatisfied, JDB applied to the Supreme People's Court for retrial.
The Supreme People's Court's retrial results showed that in the Wuhan JDB case, the Supreme Court ruled that Wuhan JDB should pay Guangzhou Pharmaceutical Group Co., Ltd. and Guangzhou Wang Laoji Great Health Industry Co., Ltd. a total of 1 million yuan in economic losses and reasonable expenses. At the same time, the previous confirmation by the Changsha Intermediate Court that the advertising slogans "The nationally leading red-can herbal tea has changed its name to JDB", "The nationally leading red-can herbal tea - JDB", and "For every 10 cans of herbal tea sold in China, 7 are JDB" constituted unfair competition through false advertising was also overturned.
In the other two cases, Guangzhou Pharmaceutical's compensation claims were dismissed.
That evening, JDB China's official website also issued a statement saying that the Supreme Court's judgment recognized that after the trademark license contract terminated, JDB, in order to retain the rights it had earned from its contributions to enhancing the goodwill of the red-can herbal tea during the license period, informed consumers of the basic fact that the red-can herbal tea had been renamed "JDB", which was not obviously inappropriate subjectively. Objectively, JDB's use of the slogans "The nationally leading red-can herbal tea has changed its name to JDB" and "The original red-can Wang Laoji has changed its name to JDB herbal tea" did not create misleading effects, did not harm fair competition in the market order or the legitimate rights and interests of consumers, and did not constitute false advertising.
**Trademark Grievances**
The grievances between JDB and Wang Laoji have lasted for nearly eight years. During these eight years, Guangdong JDB and Guangzhou Pharmaceutical Group, the parent of Wang Laoji, have engaged in battles on at least three fronts: the red-can dispute, the trademark dispute, and the advertising dispute. Among these, the trademark dispute stands out in terms of both duration and the amount of money involved.
In 1997, Guangzhou Pharmaceutical Group signed a trademark license agreement with Hong Kong Hongdao Group, authorizing Hongdao's subsidiary JDB Group to sell red-can Wang Laoji in China. In 2000, a new contract was signed, extending the agreement until May 2, 2010.
Subsequently, from 2001 to 2003, Li Yimin, then deputy chairman of Guangzhou Pharmaceutical Group, accepted bribes totaling HK$3 million from Chen Hongdao, chairman of Hong Kong Hongdao Group, on three occasions. After that, supplementary agreements were signed, extending the lease of the Wang Laoji trademark to 2020 at a low price.
Soon after, in 2004, the bribery case was exposed, and Li Yimin and Chen Hongdao were arrested one after another. However, Chen Hongdao fled abroad after being released on bail pending trial in 2005.
The more significant issue arising from this bribery case was the controversy over the low rent for the Wang Laoji trademark. Due to the excessively low price in the supplementary agreements, after the original agreement ended in 2010, Guangzhou Pharmaceutical Group began applying through various channels to have the supplementary agreements ruled invalid.
In May 2012, the China International Economic and Trade Arbitration Commission ruled that the supplementary agreements were invalid, and JDB's use of the Wang Laoji trademark after 2010 was deemed infringement.
In 2014, Guangzhou Pharmaceutical Group filed a civil lawsuit in the Guangdong High People's Court, demanding that JDB compensate for economic losses caused by infringement of the Wang Laoji trademark from May 2010 to May 2012, totaling 1 billion yuan, which was later increased to 2.9 billion yuan. According to the first-instance judgment, JDB was required to pay a total of 1.44 billion yuan in economic losses and reasonable legal fees to Guangzhou Pharmaceutical Group.
In July this year, JDB announced that according to the Supreme People's Court's ruling, the civil judgment of the Guangdong High People's Court (2014) Yue Gao Fa Min San Chu Zi No. 1 was overturned, and the case was remanded to the Guangdong High People's Court for retrial.
Although the compensation in the three false advertising disputes was reduced from 20 million to 1 million yuan, the 1.44 billion yuan compensation hanging over JDB remains unresolved.
In addition to the trademark dispute, the "red-can dispute" had a greater social impact. In 2012, Guangzhou Pharmaceutical Group and Guangdong JDB Beverage and Food Co., Ltd. separately filed lawsuits, each claiming rights to the packaging and decoration of "Red-can Wang Laoji" and accusing the other of infringement.
At that time, both sides spared no effort in the red-can dispute. Besides presenting numerous patent certificates, advertising vouchers, and contracts as evidence, legal experts from all walks of life also split into two camps, supporting Wang Laoji and JDB respectively.
After five years, on August 16, 2017, the Supreme People's Court's final judgment held that both Guangzhou Pharmaceutical Group and JDB Company had made significant contributions to the formation of the packaging and decoration rights of the "Red-can Wang Laoji Herbal Tea". Both parties could jointly enjoy the packaging and decoration rights of the "Red-can Wang Laoji Herbal Tea" without harming the legitimate interests of others.
**Production Suspension Turmoil**
JDB, frequently entangled in lawsuits, subsequently went downhill.
Zhonghong Co., Ltd., a delisted "penny stock", disclosed JDB's financial reports in August 2018. For three consecutive years from 2015 to 2017, JDB's net profits were -189 million yuan, 1.48 billion yuan, and -583 million yuan respectively. In terms of operating revenue, JDB's main business revenue in 2015 was 10.04 billion yuan, and in 2016 it was only 10.63 billion yuan, with a growth rate of only 5.8%. Additionally, by 2017, JDB's net assets had reached -345 million yuan, indicating insolvency. However, JDB subsequently stated that these figures were seriously inconsistent with the facts.
Despite denying these figures, JDB had already made a leadership change in March 2018, with Li Chunlin succeeding Wang Qiang as president of JDB, and later publicly responded to some of the difficulties JDB faced.
Economic Observer quoted Li Chunlin as saying that among the many difficulties, the most impactful was the production suspension controversy caused by COFCO's "supply cut". COFCO Packaging was JDB's supplier, providing 90% of JDB's packaging cans. Li Chunlin described it as JDB's "lifeblood". The cooperation between the two parties had lasted for about 20 years, but in the second quarter of 2018, COFCO Packaging decided to stop supplying cans. Given COFCO's position in JDB's industrial chain, once the supply of cans stopped, JDB's production could not proceed normally. This led to the suspension of some JDB factories and a halt in cash flow.
This may have been a response to the events reported by multiple media outlets in August 2018, which exposed JDB's production suspensions and unpaid worker wages.
However, on January 7, 2019, JDB's official website issued an announcement showing that COFCO Packaging and JDB had signed the "COFCO Packaging - JDB 2019 Can Supply Cooperation Agreement". According to this agreement, COFCO Packaging's total can supply in 2019 would account for 70% of JDB's annual production, meaning COFCO Packaging would continue to be JDB's most important packaging supplier.
Being embroiled in the restructuring turmoil of Zhonghong Co., Ltd. was the second difficulty JDB faced. At that time, because Zhonghong was on the verge of delisting from the A-share market, the sudden news that JDB might participate in the restructuring raised JDB's market profile again. At the same time, the not-so-rosy financial reports disclosed earlier also raised many external doubts about JDB.
Li Chunlin once publicly told Economic Observer, "After Zhonghong's announcement, banks put a lot of pressure on us. All banks put us on their high-attention lists, and a large number of loans required early repayment. Dealers were even more worried and dared not make payments."
After taking over, starting from September 2018, Li Chunlin gradually eased this tense situation through multiple visits.
After the announcement on July 1 this year that the 1.44 billion yuan trademark case was remanded for retrial, on July 24, JDB once again changed its senior management, appointing Jin Jichuan and Xu Wei as Chief Financial Officer and Chief Operating Officer of JDB Group, respectively. Public information shows that Jin Jichuan came from COFCO and previously served as a supervisor at Beijing JDB Beverage Co., Ltd.; Xu Wei previously served as JDB's Chief Marketing Growth Officer.


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