On August 16, 2017, the Supreme People's Court ruled in final instance: both Guangzhou Pharmaceutical Group and JDB Company made significant contributions to the formation of the packaging design rights for the "red-can Wanglaoji herbal tea" in question. Both parties may jointly enjoy the packaging design rights, provided they do not harm the legitimate interests of others. JDB finally won the lawsuit over the packaging design rights of red-can Wanglaoji herbal tea, meaning that in the future, JDB can also use the traditional red-can packaging for sales. So, has the seven-year war over Chinese herbal tea come to an end? From 2010 to 2017, JDB, though repeatedly defeated in lawsuits against Guangzhou Pharmaceutical's Wanglaoji, won the sympathy of consumers. Its various popular advertising campaigns and legal battles became models for the Chinese advertising industry. Ultimately, this sympathy influenced the final court ruling. First, let's review the seven years of war between them. First Battle 2010-2012: The Trademark Separation War Who is called Wanglaoji? In 2010, the "Wanglaoji" trademark was valued at 108 billion yuan. In the same year, Guangzhou Pharmaceutical Group stated that it would no longer cooperate with JDB and would produce "Wanglaoji" itself, sending a lawyer's letter to JDB demanding the return of the "Wanglaoji" trademark. On May 11, 2012, Guangzhou Pharmaceutical Group received an arbitration award dated May 9, 2012, from the China International Economic and Trade Arbitration Commission (CIETAC), which ruled that the "Wanglaoji" Trademark License Supplementary Agreement and the Supplementary Agreement on the "Wanglaoji" Trademark License Contract signed between Guangzhou Pharmaceutical Group and JDB's parent company, Hongdao (Group) Co., Ltd., were invalid; Hongdao (Group) Co., Ltd. was to cease using the "Wanglaoji" trademark. JDB expressed dissatisfaction! However, it was to no avail. On July 16 of the same year, the Beijing First Intermediate People's Court ruled in final instance, rejecting JDB's application to revoke the arbitration award. First battle: Guangzhou Pharmaceutical Wanglaoji wins! Second Battle 2013: The Advertising Slogan War Guangzhou Pharmaceutical Wanglaoji believed that JDB's advertising slogan "The red-can herbal tea with the nation's leading sales has changed its name to JDB" was false advertising, misleading buyers into thinking the two were the same product or that Wanglaoji had changed its name to JDB. Subsequently, JDB launched another advertisement: "In China, for every 10 cans of herbal tea sold, 7 are JDB. The authentic formula means more people drink it. Drink JDB to prevent getting heaty." Wanglaoji also considered this to involve false advertising. On December 20, 2013, Guangzhou Pharmaceutical Group sued JDB. After the first instance, JDB lost the case and could no longer use the advertisements. Although it appealed in court, the final ruling two years later upheld the original judgment, rejecting the appeal. In this battle, JDB lost again and had to pay 3 million yuan in compensation... Third Battle 2013-2015: The Exclusive Formula War Starting in 2013, JDB began launching advertisements about its "exclusive formula," explicitly stating that "the ancestral secret formula has never been granted to any enterprise other than JDB." Such direct expression naturally provoked Wanglaoji. On December 23, 2013, Guangzhou Pharmaceutical Group and its subsidiary, Da Jian Kang Company, filed a lawsuit with the Guangzhou Intermediate People's Court, accusing JDB of false advertising and commercial defamation. They requested the court to order JDB to immediately cease the infringing acts, publish a statement in the media for one consecutive month to eliminate adverse effects and apologize, and compensate for losses of 10 million yuan. On December 23, 2015, the Guangzhou Intermediate People's Court made a first-instance judgment: JDB was to immediately cease the false advertising and commercial defamation, and compensate Wanglaoji for economic losses and reasonable rights protection costs of 5 million yuan. Additionally, JDB was required to publish a statement and publicly apologize in the Guangzhou Daily and on the homepage of JDB Group's official website. Subsequently, JDB appealed to the Guangdong High Court, but the appeal was ultimately rejected, and the original judgment was upheld. By then, Wanglaoji had won nearly 20 lawsuits... Fourth Battle 2014-2017: The Red-Can War On December 19, 2014, the Guangdong High Court ruled in the first instance: the ownership of the red-can herbal tea packaging design belonged to Wanglaoji, and JDB's outer packaging constituted infringement on Wanglaoji, requiring JDB to compensate Wanglaoji 150 million yuan in economic losses and over 260,000 yuan in reasonable rights protection costs. Helpless, in April 2015, JDB had to launch gold-can JDB. However, this did not mean JDB's complete failure. Naturally, JDB began the cycle of appealing again... Finally, JDB's appeal succeeded! On August 16, 2017, the Supreme People's Court ruled in final instance that Wanglaoji and JDB jointly enjoy the packaging design rights for the "red-can Wanglaoji herbal tea." At this point, apart from sharing the red-can packaging, Wanglaoji's three core assets—trademark, formula, and the "prevent heatiness" advertising slogan—have all been returned. Is this war truly over? Will JDB, having finally gained the initiative, quietly accept this victory? From the perspective of FMCG brand building, JDB Group has cultivated Chinese consumers' memory of the herbal tea taste, the red-can visual image, and the product's core value of preventing heatiness. Although JDB lost the trademark, formula, and advertising slogan lawsuits, after regaining the red can, JDB can basically be on par with Wanglaoji in terms of brand assets. Consumers' taste memory and red-can recognition remain unchanged. Whether the trademark is JDB or Wanglaoji no longer matters, as all consumers have already recognized JDB. Therefore, in the battle for brand assets, JDB has finally gained a slight edge over Wanglaoji. What actions will JDB, which is adept at counterattack marketing, take next? Speculation One JDB launches a red-can commemorative edition herbal tea to impact Wanglaoji's market and disrupt Wanglaoji's red-can herbal tea sales. However, Wanglaoji not only has a strong green-box foundation but has also launched several flank products, such as sugar-free and the newly launched black-can herbal tea, which can effectively resist JDB's red-can market impact. More importantly, Wanglaoji's sugar-free pricing and market have already surpassed JDB's price point. The 5-yuan price point has secured the future price space for herbal tea for Wanglaoji. If JDB launches a low-priced red-can herbal tea, it can attack Wanglaoji's red-can herbal tea competitively, but in terms of value competition, it will take time to catch up to the 5-yuan price advantage, which is necessary to maintain its competitive edge in the herbal tea market. In September, Wanglaoji launched its new black-can herbal tea, seemingly prepared to "play to the end," and it is well-prepared. Speculation Two JDB maintains the status quo and takes no action, turning swords into ploughshares, coexisting peacefully with Wanglaoji, sharing the development and growth of Chinese herbal tea. Like Coca-Cola and Pepsi, they could join hands to enter the international market, winning market resonance and goodwill through co-opetition, and also earning the respect of their opponents. However, this would mean JDB completely loses the brand assets of red-can herbal tea and forever loses its market share in red-can herbal tea. Speculation Three JDB promotes red cans overseas and gold cans domestically. This way, it can promote red-can herbal tea in overseas markets and then sell the overseas version of red-can herbal tea back to China, forming a pattern of JDB's overseas red can and domestic gold can, alongside Wanglaoji's red can, green box, and black can. This way, JDB can continue to occupy the moral high ground. If the international version is promoted smoothly, it can advance to the world or retreat to counterattack domestically. This requires JDB to have stronger international expansion capabilities, and its market risks will be greater. If overseas market development fails, JDB will be drawn into more battlefronts. Will the future war in the herbal tea market thus enter the era of JDB's counterattack? Let's wait and see. ○ ○ Zou Wenwu, Executive Director of the Brand Management Professional Committee of the China Marketing Association, founder of Shengxiong, partner of Guoguo Wine, and creator of Fenjiu's Chinese Liquor Soul. The 3rd (CFIC) China FMCG + Internet Conference will be held in Chongqing in November 2017. The conference will closely focus on the theme "New Forces, New Ecology," inviting 1000+ distributors, 500+ brand owners, founders of 200+ B2B platforms, and 100+ investment and financing institutions to explore a new chapter of cross-border integration! Core topics of this conference:
How can the FMCG industry leverage B2B to achieve new growth opportunities?
How should the new supply chain behind new retail be built?
How can intra-city logistics help B2B achieve leapfrog development?
Highlights of this conference:
The industry's first "2017 China FMCG B2B Industry Competitiveness White Paper"
Case sharing of excellent distributors in transformation and upgrading
Upgraded conference + exhibition, Hall 6 Internet Technology Exhibition strengthens docking
Leaders from Alibaba Retail Link, GL Capital, EASIA Supply Chain, Best Store Plus, Yijiupi, and Hisense will deliver speeches and share pioneering views.
Registration is now open. Long press the QR code below or click "Read Original" to register. Add friend with note "Conference Registration" Click the link below to review the highlights of the 1st and 2nd FMCG + Internet Conferences: 2016 "FMCG + Internet" Summit Forum -END-