TCM brands with similar recipe in legal dispute

Xiamen Traditional Chinese Medicine's parent company Shanghai Pharmaceuticals Holding Co reported that it had not received any notice from the court.

But a representative told China Business News that it has paid great attention to the lawsuit and asked the Xiamen subsidiary to handle the case "with a proper and serious attitude".

Lin Junfeng, secretary to the chairman of the Xiamen company, said the company "is extremely shocked by the sudden lawsuit, because the two companies have coexisted in peace for years".

He also said the company, as one of the traditional Chinese medicine practitioners, would continue to "carry on the traditional techniques and respect the business rules to flourish the industry together with its peers".

But an industrial insider told National Business Daily that increasingly fierce market competition was very likely the factor behind the conflict.

Although they claim similar medical effects, the annual sales income of Babao Dan in 2013 was around 70 million yuan, while the sales of Pien Tze Huang reached about 800 million yuan in the same year, according to statistics from Shanghai Pharmaceuticals Holding.

So the Shanghai company decided last year to invest more in the promotion of Babao Dan to strive for a greater market share.

You Yunting, a partner at DeBund Law Offices based in Shanghai, said the verdict will be influenced by two important factors - whether the two medicines have indivisible historical origins and whether the Xiamen company has exaggerated its product in the ads or may cause any confusion for customers to the two medicines.