Chinese shareholders of Wahaha joint venture company will face huge legal risks. At present, the game between Chinese and foreign shareholders of the joint venture company is expanding outward.

The dispute over trademark rights between Danone and Wahaha Group in France triggered a lawsuit in full swing.

This is not the result that Zong Houqing, chairman of Wahaha Group, wants. But it takes a long legal process to overturn the joint venture agreement that he thinks is "unfair".

Domestic legal experts are not optimistic about this.

Dong Ansheng, a professor at the Law School of Renmin University of China, told the Financial Times that although Danone was at fault in the whole incident, judging from the information available, Wahaha bears greater legal responsibility.

Dong Ansheng made the remarks to reporters after a Wahaha/Danone joint venture dispute forum hosted by the School of Commercial Law of Renmin University of China.

At that time, all the legal experts attending the meeting believed that the Chinese shareholders of Wahaha joint venture company would face great legal risks.

At present, the game between Chinese and foreign shareholders of this joint venture company is expanding outward.

Legal experts believe that continuing litigation will lead to a "lose-lose" result, and finding a good result for this dispute is testing the wisdom of many parties including the judicial department and some administrative departments.

The trademark right is still in China.

After clearing the fog of nationalism and joint venture, the focus of controversy now falls on the ownership of Wahaha registered trademark. Danone insists that Wahaha series trademarks have been injected into the joint venture established by the two companies.

What caused this round of disputes was the joint venture contract signed by both parties during the joint venture period of 1996, which stipulated that Wahaha Group, the trademark owner at that time, injected 50 million yuan of intangible assets into the joint venture company, that is, half of the value of Wahaha trademark. The other half will be purchased by the joint venture company.

At that time, this agreement was signed on the basis that France's Danone did not hold a controlling stake in the Wahaha joint venture company, and Wahaha Group held 49% of the shares respectively.

According to this joint venture contract, both parties signed a trademark transfer agreement at 1996, stipulating that Wahaha Group shall not use Wahaha trademark in its products or transfer it to a third party.

However, this trademark transfer agreement has never been approved by the State Trademark Office.

After that, the two parties signed a trademark use contract at 1999, and Wahaha Group agreed to provide the joint venture company with exclusive and irrevocable rights and trademark use license.

In Dong Ansheng's view, the third agreement, namely the trademark use contract, is actually a remedial measure after the performance of the trademark transfer agreement is blocked. "It can be seen that Wahaha Group had no regrets at that time." Dong Ansheng said.

However, the signing of the trademark use contract has actually admitted that the trademark ownership still belongs to Wahaha Group, so Wahaha Group is qualified to authorize the joint venture company to use the trademark.

Zhao Xudong, a professor at China University of Political Science and Law, believes that according to the available information, the Trademark Office has not approved the transfer of Wahaha series trademarks, which is an important condition for the establishment of trademark transfer. Wahaha series trademarks have not been transferred to the joint venture company as property rights.

On June 14, Hangzhou Arbitration Commission accepted the arbitration application filed by Wahaha Group and requested to confirm that the trademark transfer agreement had been terminated. Danone filed an application for anti-arbitration in early July.