Brand, channel and product are the three key factors for the development of consumer goods enterprises, among which brand is particularly critical. The president of the Coca-Cola Company once said: "Even if the torch of the Coca-Cola company is burned to the ground, the company can rebuild the factory and invest in new development in a few months only with the well-known trademark" Coca-Cola "." Consumer goods industry is different from the technology industry, also different from the Internet industry, the importance of brand is far greater than technology, traffic and so on. Wang Lao Ji, Jordan, Hyundai Motor, Didi taxi, Jiang Xiaobai, Doctor Li and other brand incidents to China's consumer goods operators sounded the alarm, we must pay attention to brand management. Cosmetics industry belongs to the category of consumer goods industry. Cosmetics operators must pay attention to brand management and keep their own brand. Jiao Hanwei, lawyer of Shanghai Guohillhouse Law Firm, will discuss brand management issues from two perspectives of law and operation for reference of cosmetics operators.

Brand and brand management

Brand and trademark are two different categories of concepts, the former is a commercial term, the latter is a legal term. Brand is a kind of comprehensive perception formed by consumers in the face of comprehensive components of services or products. A trademark is a specific mark used to distinguish goods and services, and consumers can distinguish different goods or services through this mark. The trademark is an important part of the brand, but it is not equal to the brand. In addition to trademarks, trade names, product names, product series names, unique ICONS, unique bottle shapes, unique flower boxes, unique packaging and decoration, and goodwill are all important components and carriers of the brand. In daily work, many people mix and generalize these two terms, and even mistakenly think that the brand is a trademark, which is obviously a cognitive misunderstanding. Therefore, when it comes to cosmetics enterprise brands and cosmetics brand management, it must not be simply equivalent to trademark management. The brand management of cosmetics enterprises is the comprehensive management of a series of brand elements of enterprises, including but not limited to the systematic application, registration, rights protection and licensing of brand elements such as trademarks, trade names, product names, product series names, unique ICONS, unique bottle shapes of products, unique flower boxes of products, unique packaging and decoration of products, domain names, goodwill, etc.

Wanglaoji trademark dispute

According to public information, Wanglaoji brand herbal tea has a history of 100 years and was originally founded by Wang Zebang in Guangzhou in 1828. In 1956, it was reorganized as Wanglaoji Joint Pharmaceutical Factory during the public-private partnership, and in 1992, it was transformed into Guangzhou Yangcheng Pharmaceutical Co., LTD. (hereinafter referred to as "Guangzhou Yangcheng Company"). No. 626155 "Wang Lao Ji" trademark is a registered trademark of Guangzhou Yangcheng Company. Before March 1995, "Wanglaoji" brand refreshing tea beverage was produced and sold by Guangzhou Yangcheng Company. In March 1995, Guangzhou Yangcheng Company and Hong Kong Hongdao Group (hereinafter referred to as "Hongdao Group") signed a trademark license contract, allowing Hongdao Group to exclusively use the registered trademark No. 626155 "Wanglaoji", limited to red paper packaging cool tea beverage, Hongdao Group can entrust other factories to process and manufacture the above products and send to Yangcheng Pharmaceutical for the record; The term of validity of the above trademarks used by Hongdao Group shall be from March 28, 1995 to January 2003; The trademark license fee shall be RMB 600,000 in the first year and shall increase by 20% each year from the second year. After the signing of the contract, Hongdao Group operates Wanglaoji brand herbal tea business through its wholly owned subsidiary Guangzhou JDB Beverage and Food Co., LTD. (wholly owned by Taiwan, Hong Kong and Macao legal persons, hereinafter referred to as "JDB Company").

In August 1996, Guangzhou Pharmaceutical Group Co., Ltd. was established as a limited liability company (state-owned assets, hereinafter referred to as "Guangzhou Pharmaceutical Group"). After the reorganization of state-owned assets, intangible assets such as Wanglaoji trademark held by Guangzhou Yangcheng Company were transferred to Guangzhou Pharmaceutical Group. In May 2000, Guangzhou Pharmaceutical Group and Hongdao Group signed the Trademark License Agreement, which stipulated: Gpo Group licenses Hongdao Group the exclusive use of trademark No. 626155 of "Wanglaoji" for the production and sale of red canned and red bottled Wanglaoji herbal tea within the territory of China, excluding Hong Kong, Macao and Taiwan, for the period from May 2, 2000 to May 2, 2010. After the trademark license agreement was signed, GFC and Hongdao Group signed a supplementary agreement in November 2002 to extend the license agreement until May 1, 2020. In May 2003, the two sides signed a second supplementary agreement, agreeing that: Hongdao Group shall renew the registration before the expiration date of the term of validity of the "Wong Lao Kat" trademark No. 626155 (January 19, 2013), and thereafter file the license formalities for the "Wong Lao Kat" trademark, so that Hongdao Group can legally use the "Wong Lao Kat" trademark during the license term in accordance with the 2000 license Agreement and the two supplementary agreements.

Since 2003, Hongdao Group has invested hundreds of millions of yuan to bid for the right to broadcast three prime-time "king" advertisements on CCTV, and launched the brand advertising slogan of "afraid of getting angry and drinking Wang Lao Ji". After nearly ten years, JDB company continued to carry out uninterrupted advertising in the media such as CCTV. Under the strong promotion, Wang Lao Ji red pot herbal tea produced by JDB Group has won many market honors. Since 2006, it has long occupied the first place in the national canned beverage market sales. "Wong Lao Ji" brand has become a well-known brand of herbal tea, and its red can packaging has also become a very iconic product packaging.

In April 2011, GFA Group filed an arbitration application with China International Economic and Trade Arbitration Commission, requesting that the Supplementary Agreement signed between GFA Group and Hongdao Group on November 27, 2002 and the Supplementary Agreement signed on June 10, 2003 be invalid; Hongdao Group stopped using the "Wong Lao Ji" trademark. On May 9, 2012, the China International Economic and Trade Arbitration Commission made a ruling that the Supplementary Agreement on the License of the "WangLaoji" Trademark and the Supplementary Agreement on the License Contract of the "WangLaoji" Trademark were invalid; Hongdao Group stopped using the "Wong Lao Ji" trademark. The main reasons for the decision are as follows: On July 1, 2005, Guangzhou Intermediate People's Court made (2005) Suizhong Law Punishment No. 87 criminal judgment of first instance: From 2000 to 2003, the defendant Li Yimin, while serving as the vice chairman and general manager of Guangzhou Pharmaceutical Group, took advantage of his position to accept a total of 3 million Hong Kong dollars from Chen Hongdao, chairman of Hong Pharmaceutical Group, three times in the process of signing the "Wong Lao Ji" trademark license agreement between Guangzhou Pharmaceutical Group and Hongdao Group, constituting the crime of taking bribes. On this basis, the Tribunal finds that: "The fact that Li Yimin, former vice chairman and general manager of Guangzhou Pharmaceutical Group, and Chen Hongdao, chairman of Hongdao Group, took bribes and bribes totaling 3 million Hong Kong dollars on three occasions has been determined by the court judgment that the time of the bribes and bribes coincided with the time of the conclusion of the supplementary agreement, and the purpose of Chen Hongdao's bribe of 3 million Hong Kong dollars to Li Yimin was to conclude the supplementary agreement. Li Yimin took advantage of his position to seek benefits for Hongdao Group, where Chen Hongdao served as chairman, and the benefits Li Yimin sought for Hongdao Group were the conclusion of a supplementary agreement, which not only harmed the interests of GFA Group, where Li Yimin served as vice chairman and general manager, but also harmed the interests of the state. Therefore, the conclusion of the two supplementary agreements falls under the circumstances of 'malicious collusion to harm the interests of the State, a collective or a third party' as stipulated in the Contract Law of the People's Republic of China, and the supplementary agreements shall be deemed invalid." On this basis, GCM Group withdrew the right to use Wong Lao Kat's trademark.

Wanglaoji red can packaging decoration dispute

Based on the trademark dispute with Guangzhou Pharmaceutical Group, JDB began to produce and sell herbal tea products in red cans labeled with "Wong Lo Kat" on one side and "JDB" on the other side in December 2011. After the ruling of the trademark dispute, JDB started to produce and sell herbal tea products with "JDB" red can packaging and decoration on both sides from May 10, 2012. In June 2012, Guangzhou Pharmaceutical Group authorized its subsidiary Guangzhou Wanglaoji Great Health Industry Co., LTD. (hereinafter referred to as "Guangzhou Great Health") to start the production and sales of "red cans" Wanglaoji herbal tea. In July 2012, regarding the use of red cans packaging and decoration, JDB Company sued Guangzhou Great Health Industry Co., Ltd. to stop unfair competition, and claimed 30.96 million yuan. Then, Guangzhou Pharmaceutical Group took Hongdao (Group) Co., Ltd. and JDB to court (and later withdrew the prosecution against Hongdao Group), asked to stop unfair competition, and claimed 150 million yuan, which triggered the dispute over the ownership of red canned packaging. The Guangdong High Court of first instance ruled that JDB lost the lawsuit, stopped using the red packaging, and compensated Guangzhou Pharmaceutical Group for a loss of 150 million yuan. On July 27, 2017, the Supreme People's Court made a final judgment: the special packaging and decoration rights of well-known products involved in the case can be shared by GPC and JDB under the premise of following the principle of good faith and respecting consumer cognition without harming the legitimate rights and interests of others; Guangzhou Pharmaceutical Group's claim that JDB Company infringes on the rights and interests of the unique packaging and decoration of its well-known products cannot be established, and the civil judgment of Guangdong High Court Minsanchu Zi No. 2 (2013) is revoked, and all litigation claims of Guangzhou Pharmaceutical Group are rejected.

Wanglaoji trademark infringement compensation dispute

On May 7, 2014, GFC sued JDB and six other companies for trademark infringement, claiming that JDB and six other companies should stop the infringement, and jointly compensate GFC for the economic loss of 2,930,155,500 yuan caused by the infringement of the registered trademark of "Wong Lao Kat" from May 2, 2010 to May 19, 2012. On July 6, 2018, the Guangdong High Court made a judgment of first instance: It found that the use of Wanglao Kit trademark by JDB and other six companies from May 2, 2010 to May 10, 2012 constituted infringement, and ruled that JDB and other six companies jointly compensated GFC for economic losses of about 1.44 billion yuan. The amount of compensation in this case is the largest amount of trademark infringement compensation in the past years.

In July 2019, the Supreme People's Court ruled that the evidence accepted in the above first-instance judgment had major defects in content and form, and could not be used as the basis for determining the facts of the case, and ruled to revoke the first-instance judgment of the Guangdong Higher People's Court and remanded it to the Guangdong Higher People's Court for retrial. The case is still pending.

The final trend of the case is not discussed, from the Wanglaoji brand before and after 8 years of litigation disputes can be seen, trademarks, product packaging and decoration are important elements of the brand, which has great commercial value for enterprises. On the other hand, it is undeniable that JDB's contribution to Wanglaoji brand is irreplaceable. It has invested a lot in product construction and brand promotion, and has also achieved remarkable market achievements. However, due to the lack of good brand management, JDB not only cannot enjoy the value of the brand, but also brings huge troubles and losses to itself, which eventually leads to the product changing its name. Lost the canned beverage market dominance. Wanglaoji brand dispute case is worth every consumer goods operator to reflect. Consumer goods industry must pay attention to and do a good job of enterprise brand management; Brand management is a very important thing.

Jiao Hanwei

Chief partner and lawyer of Shanghai Guohillhouse Law Firm

Have more than 10 years of legal service experience and more than 5 years of operating experience in the cosmetics industry, familiar with law and business, He is good at providing enterprises with cosmetics business legal services, legal counsel, equity structure, equity incentive, equity financing, equity acquisition, brand management, brand rights protection, brand acquisition, business negotiation, litigation and arbitration and other solutions for the whole stage of enterprise development from the perspective of law and operation.