---
title: "The Nine-Year Legal Battle Between JDB and Guangzhou Pharmaceutical"
description: "On July 1, the Supreme People's Court issued a ruling in the trademark infringement case between JDB and Guangzhou Pharmaceutical Group over the 'Wong Lo Kat' brand, which could be a turning point for JDB. The court found major defects in the evidence accepted in the first-instance judgment, revoked the Guangdong High Court's decision, and remanded the case for retrial."
author: "许悦  牙韩翔等"
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published: "2019-07-03"
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# The Nine-Year Legal Battle Between JDB and Guangzhou Pharmaceutical

> On July 1, the Supreme People's Court issued a ruling in the trademark infringement case between JDB and Guangzhou Pharmaceutical Group over the 'Wong Lo Kat' brand, which could be a turning point for JDB. The court found major defects in the evidence accepted in the first-instance judgment, revoked the Guangdong High Court's decision, and remanded the case for retrial.

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**On July 1, the Supreme People's Court issued a ruling in the trademark infringement dispute between JDB and Guangzhou Pharmaceutical Group over 'Wong Lo Kat', which could be a silver lining for JDB.**
The ruling posted on JDB's official website shows that the Supreme People's Court found major defects in the content and form of the evidence accepted in the first-instance judgment, which could not serve as the basis for determining the facts of the case. It ruled to revoke the civil judgment of the Guangdong High People's Court (2014) Yue Gao Fa Min San Chu Zi No. 1 and remanded the case to the Guangdong High People's Court for retrial.
Image from VCG
On the evening of July 1, Guangzhou Pharmaceutical responded to Jiemian News, stating: According to the ruling, the case will be remanded to the Guangdong High People's Court for retrial. A remand for retrial does not mean a final judgment. We will make every effort to handle the retrial. For specific details, please refer to the announcement by Guangzhou Baiyunshan Pharmaceutical Co., Ltd. tomorrow (July 2).
**The legal battle between the two companies has lasted nine years. It all started with the trademark dispute and later involved packaging and advertising slogans, which is rare in China's beverage market history.** Due to the long duration of the litigation, Jiemian News has sorted out the history of lawsuits between the two companies to reveal the grievances and恩怨 over these nine years.
**2010**
During the 2008 Beijing Olympics, JDB successfully used advertising blitz to spread the slogan '怕上火喝王老吉' (Drink Wong Lo Kat to prevent getting heaty) far and wide. This herbal tea, originally a regional drink from Guangdong, swept across the country, popularizing the red-can JDB Wong Lo Kat.
At the same time, Guangzhou Pharmaceutical also had its own Wong Lo Kat, but in green paper packaging.
In fact, JDB's Wong Lo Kat brand was leased from Guangzhou Pharmaceutical:
In 1995, Guangzhou Pharmaceutical leased the Wong Lo Kat brand to Hong Kong JDB for a 20-year term;
In 1997, Guangzhou Pharmaceutical signed a trademark license agreement with Hong Kong Hung To Group, JDB's investor;
In 2000, the two parties signed contracts stipulating that Hung To Group's lease of the 'Wong Lo Kat' trademark would last until 2010;
Between 2002 and 2003, Hung To Group signed supplementary agreements with Guangzhou Pharmaceutical to extend the lease to 2020.
The problem lay in these last two supplementary agreements.
In 2004, Chen Hongdao, chairman of Hung To Group, JDB's investor, was exposed for bribing Li Yimin, deputy chairman of Guangzhou Pharmaceutical Group, three times totaling HK$3 million. In 2005, Li Yimin was sentenced to life imprisonment. Chen Hongdao fled after being arrested and released on bail.
In 2010, Guangzhou Pharmaceutical sent a lawyer's letter to Hung To Group, claiming that the two supplementary agreements were obtained through illegal bribery and thus invalid, and requested that the agreements signed by Li Yimin be declared void.
**2011**
In 2011, JDB Wong Lo Kat's sales were between 16.5 billion and 20 billion yuan, making it one of the best-selling beverages in China at the time, ubiquitous in hotpot restaurants, BBQ joints, and small eateries.
In April of that year, Guangzhou Pharmaceutical filed for arbitration with the China International Economic and Trade Arbitration Commission. In May 2011, the Wong Lo Kat trademark case was filed, with a hearing scheduled for September. However, because Hung To Group did not respond, the case was postponed to December. No arbitration result was reached that day.
**2012**
After a year of wrangling, both parties supplemented their materials and confirmed February 10 for arbitration. Considering that the Wong Lo Kat brand was already worth over 100 billion yuan, the arbitration commission suggested mediation and postponed the arbitration by three months to May 10. However, the mediation failed—Hung To Group's conditions were based on the validity of the supplementary agreements, which Guangzhou Pharmaceutical could not accept.
**On May 11, 2012, the arbitration commission ruled that the two supplementary agreements signed between Guangzhou Pharmaceutical and Hung To Group were invalid, and Hung To (Group) Co., Ltd. must stop using the Wong Lo Kat trademark.**
Mutual litigation began from there. JDB refused to accept the ruling. On May 27, JDB applied to the court to revoke the ruling and the case was filed. On May 28, Guangzhou Pharmaceutical claimed JDB's illegal profits reached 7.5 billion yuan and would seek compensation according to law.
In June of that year, two versions of red-can Wong Lo Kat appeared on the market—Guangzhou Pharmaceutical officially launched its own red-can Wong Lo Kat—leaving consumers confused.
**2013**
**That year, the 'trademark war' expanded to a 'packaging war.'** Since both parties claimed rights to the unique packaging and decoration of the well-known red-can Wong Lo Kat herbal tea, on May 15, 2013, the Guangdong High Court held the first-instance hearing for the 'red-can dispute' between Guangzhou Pharmaceutical and JDB. JDB provided 49 pieces of evidence to prove that the authentic red-can herbal tea (packaging) belonged to JDB; Guangzhou Pharmaceutical provided 20 pieces of evidence, including original contract documents.
**At the same time, the 'slogan war' also began.** In November 2012, Guangzhou Pharmaceutical sued JDB in the Guangzhou Intermediate People's Court, claiming that slogans like 'The red-can herbal tea with the nation's leading sales has changed its name to JDB' constituted false advertising and unfair competition.
**In December 2013, the Guangzhou Intermediate People's Court ruled in the first instance that slogans like 'The red-can herbal tea with the nation's leading sales has changed its name to JDB' were false advertisements.**
**2014**
**In December 2014, JDB ultimately lost the first instance of the 'red-can case.'**
The Guangdong High People's Court ruled on December 19 of that year, rejecting all of JDB's claims and ordering JDB to compensate Guangzhou Baiyunshan Pharmaceutical Group Co., Ltd. 150 million yuan in economic losses and over 260,000 yuan in reasonable rights protection costs.
Despite immediately appealing, JDB paid a price. From April 2015, JDB officially launched a new gold-can packaging and spent heavily on marketing.
In 2014, Guangzhou Pharmaceutical also filed a lawsuit with the Guangdong High Court, demanding that six JDB companies, including Guangdong JDB Beverage and Food Co., Ltd., compensate 1 billion yuan for infringing on Guangzhou Pharmaceutical's 'Wong Lo Kat' registered trademark, later increasing the claim to 2.9 billion yuan. Subsequently, the six JDB companies filed a counterclaim, requesting the Guangdong High Court to order Guangzhou Pharmaceutical to compensate them 1 billion yuan in economic losses and bear the counterclaim litigation costs.
In addition to the 'red-can case,' the disputes between JDB and Wong Lo Kat during these two years also involved advertising slogans and trademarks.
For example, the two sides also argued over whether the slogan should be '怕上火,喝王老吉' (Drink Wong Lo Kat to prevent getting heaty) or '喝加多宝' (Drink JDB). In March 2014, Wong Lo Kat sued JDB over the slogan '怕上火喝加多宝' (Drink JDB to prevent getting heaty), alleging unfair competition. The case was heard in the Guangzhou Intermediate Court, with Wong Lo Kat seeking 5 million yuan in compensation from JDB and its distributors. On December 3, 2015, **the Guangzhou Intermediate People's Court ruled in the first instance that the slogan '怕上火' (prevent getting heaty) exclusively belonged to the Wong Lo Kat brand, and JDB must immediately stop using it and compensate Wong Lo Kat 5 million yuan in economic losses.**
**2015**
In the year the gold can was launched, on June 16, 2015, the second instance of the 'red-can case' was heard at the Supreme People's Court, but the litigants were only JDB's parent company Hung To Group and Guangdong JDB Beverage and Food Co., Ltd.
A few days later, Wong Lo Kat added five more JDB companies as co-defendants. Wong Lo Kat argued that Guangdong JDB was only one of six independently operated JDB companies, and most of the 20 million JDB red-can infringing products on the market were produced by the other five companies. Suing only one company would not restrict the infringing activities of the other JDB companies.
In 2015, the 'recipe case' also had a first-instance result. On December 23, 2015, the Guangzhou Intermediate People's Court ruled in the first instance: JDB must immediately stop the false advertising and commercial defamation, and compensate Wong Lo Kat 5 million yuan in economic losses and reasonable rights protection costs.
Additionally, JDB was required to publish a statement and publicly apologize on the front page of Guangzhou Daily and the official website of JDB Group. This was the first time commercial defamation was recognized in the series of lawsuits between Wong Lo Kat and JDB.
**2016**
**JDB still failed to win.**
Three years earlier, Guangzhou Pharmaceutical sued JDB and two retailers over slogans like 'Out of every 10 cans of herbal tea sold in China, 7 are JDB,' alleging false advertising and unfair competition, and requested a preliminary injunction. Subsequently, the Guangzhou Intermediate Court issued a judgment, ruling in the first instance that three JDB advertisements, including 'Out of every 10 cans of herbal tea sold in China, 7 are JDB; more people drink JDB to prevent getting heaty; with the authentic recipe, more people drink it,' were false advertisements. JDB was ordered to withdraw the advertisements, pay 5 million yuan in compensation to Wong Lo Kat, and make public statements in multiple media outlets.
JDB appealed again, and on March 8, 2016, the Guangdong High Court made a second-instance judgment, rejecting the appeal and upholding the original judgment.
That year, the 'recipe case' also came to an end.
On July 19, 2016, Guangzhou Baiyunshan Pharmaceutical Co., Ltd. (600332) announced that Guangzhou Pharmaceutical Group and Guangzhou Wong Lo Kat Big Health Industry Co., Ltd. (hereinafter referred to as Wong Lo Kat Big Health) had received the judgment from the Guangdong High People's Court. The Guangdong High Court made a final judgment on the 'recipe case' between Wong Lo Kat and JDB, rejecting JDB's appeal and upholding the original judgment.
Although JDB expressed dissatisfaction and intended to appeal, China implements a system of second instance being final, and an appeal does not affect the execution of the judgment.
**2017**
In August 2017, the Supreme People's Court ruled in the second instance that both Guangzhou Pharmaceutical Group and its predecessors, as well as JDB and its affiliated companies, had made significant contributions to the formation and development of the packaging and decoration rights of the 'red-can Wong Lo Kat herbal tea.' It would be unfair to award the rights entirely to one party and might harm the public interest. Both parties could jointly enjoy the packaging and decoration rights of the 'red-can Wong Lo Kat herbal tea' without harming the legitimate interests of others.
Guangzhou Pharmaceutical Group and its predecessors, as well as JDB and its affiliated companies, all played active roles in the formation, development, and goodwill building of the packaging and decoration rights. Awarding the rights entirely to one party would lead to obvious unfairness and might harm the public interest.
JDB was naturally pleased, but Guangzhou Pharmaceutical Group disagreed with the above judgment and filed for retrial, arguing that the unique packaging and decoration rights of 'Wong Lo Kat herbal tea' belonged to Guangzhou Pharmaceutical Group, and JDB's use of packaging and decoration similar to the well-known product 'Wong Lo Kat herbal tea' on identical products constituted unfair competition. **The Supreme People's Court's second-instance judgment not only failed to resolve the dispute but also set a bad example, seriously undermining China's trademark licensing system,** and therefore requested the revocation of the second-instance judgment and the maintenance of the first-instance judgment.
After reviewing the key issues based on Guangzhou Pharmaceutical Group's retrial application, the Supreme People's Court stated that the retrial application did not meet the retrial conditions stipulated in the relevant provisions of the Civil Procedure Law, and thus rejected the retrial application.
**The rejection of the application brought an end to the packaging dispute that had lasted for several years. JDB managed to win a round.**
**2018**
On July 27, 2018, after more than seven years, the first-instance judgment in the Wong Lo Kat trademark infringement case was issued.
The Guangdong High Court ordered the six JDB companies to compensate Guangzhou Pharmaceutical Group a total of 1.441 billion yuan in economic losses and reasonable rights protection costs within ten days from the effective date of the judgment.
According to the 'First-Instance Judgment' of the Guangdong High Court, six companies, including Guangdong JDB Beverage and Food Co., Ltd., Zhejiang JDB Beverage Co., Ltd., JDB (China) Beverage Co., Ltd., Fujian JDB Beverage Co., Ltd., Hangzhou JDB Beverage Co., Ltd., and Wuhan JDB Beverage Co., Ltd., were ordered to pay a total of 1.44 billion yuan in economic losses and reasonable rights protection costs to Guangzhou Pharmaceutical Group. The case acceptance fee of 14.693 million yuan was to be borne equally by the plaintiff and the defendants.
However, on the same day the judgment was issued, JDB Group's official website issued a statement saying that after receiving the first-instance judgment from the Guangdong High Court on July 25, JDB disagreed with the judgment and immediately appealed to the Supreme People's Court.
In JDB's view, from May 2, 2010, to May 19, 2012, Guangzhou Pharmaceutical and JDB were in a cooperative relationship, fulfilling obligations and enjoying rights according to the agreement, and there was no infringement.
**2019**
**After another long year, JDB finally got the news it had been longing for.**
On July 1, 2019, JDB published on its official website the 'JDB Announcement on the Supreme People's Court's Ruling on the 'Wong Lo Kat' Trademark Infringement Dispute,' stating that it had received the Supreme People's Court's ruling on the trademark infringement dispute between JDB and Guangzhou Pharmaceutical Group over 'Wong Lo Kat.'
Source: Jiemian News


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