Court orders compensation for design infringement

GUANGZHOU -- A court in South China's Guangdong province has ruled that Jiaduobao (China) Drink Co Ltd must compensate Guangzhou Pharmaceutical Holdings Limited for design infringement.

Jiaduobao must pay 150 million yuan ($24 million) for losses suffered by GPH -- best known for herbal tea Wong Lo Kat, sold in a famously red can -- and costs of more than 260,000 yuan, the Guangdong Higher People's Court said on Friday.

Hong Kong-based Jiaduobao had been using the Wong Lo Kat brand since 1995, when it leased it from GPH. However, the company was only authorized to use the brand until 2010, and had the lease contract extended only by bribing administrative staff of GPH.

The two companies then fell into a trademark dispute. The case went to arbitration in April 2011, with the China International Economics and Trade Arbitration Commission ruling in May 2012 that the brand rights rest with GPH. Jiaduobao has since then produced a similar red tin herbal tea branded with the "Jiaduobao" name.

In July 2012, GPH filed a lawsuit against Jiaduobao, claiming the latter infringed its right to the red can, and asked for 150 million yuan compensation.

The ruling said since the red Wong Lo Kat can was a well-known product, there was an innate connection between the fame of the trademark and the product's packaging and decoration.

The behavior of Jiaduobao has confused the public and is unfair competition, it said.

The court ordered Jiaduobao to stop using similar packaging and decoration to Wong Lo Kat, and suspend production and sales.

Jiaduobao must also make a public apology to GPH. Jiaduobao said it would appeal.