Data map taken by China News Service reporter Wu Junjie
Text/Chen Haoxing
The protracted "Red Bull dispute" has ushered in a new reversal, and unlike in the past, China Red Bull is on the favorable side this time.
The Beijing High People's Court recently issued a judgment to revoke the first-instance ruling made by the Beijing No. 4 Intermediate People's Court in June 2023 on the contract dispute between Red Bull Vitamin Beverage Co., Ltd. ("China Red Bull") and Tencel Pharmaceutical and Healthcare Co., Ltd. ("Thailand Tencel Group") and Beijing Huairou District Township Enterprise Corporation, and ordered the Beijing No. 4 Intermediate People's Court to hear the case.
The Beijing High People's Court revoked the first-instance ruling, will the "Red Bull dispute" come to an end, or will it set off a new round of long-term tug-of-war?
The "Red Bull Battle" has been pulling on offense and defense for seven years
To understand the ins and outs of the "Red Bull controversy", we have to start with the origin of Red Bull.
In 1956, Xu Shubiao, a Thai-Chinese, founded the Thai Tencel Group. In 1975, Xu Shubiao successfully developed the "Kratingdaeng" drink, which was called "Red Bull" by Thai consumers because the product logo was two red cows colliding.
Red Bull was widely loved by Thai consumers from the moment it was launched, and with its unique formulation, marketing strategy and global promotion, it has become one of the most well-known and best-selling energy drinks in the world.
With Red Bull's international success, Xu Shubiao decided to bring Red Bull to China to return home. In 1993, Xu Shubiao established Hainan Red Bull Beverage Co., Ltd. in his ancestral hometown of Hainan, but the investment ended in failure because the product formula did not meet the requirements of domestic food safety supervision.
At this time, Yan Bin, chairman of Reignwood Group, took over Red Bull's domestic business. In November 1995, China Red Bull was officially born, and Yan Bin signed an agreement (also known as the "50-year agreement") with China National Food Industry Corporation, Shenzhen Zhonghao (Group) Co., Ltd. and Thailand Tencel. So far, Yan Bin has obtained the permission to produce, operate, and sell Red Bull series beverages, and also has the right to operate the Red Bull trademark in China.
Screenshot of the official website of China Red Bull
What seemed like a successful collaboration then began to take an unusual turn.
The original agreement between China Red Bull and Thailand's Tencel was mysteriously lost after it was signed. China Red Bull said it had a 50-year operating term in the agreement. Thailand's Tencel Group said that the Shenzhen industrial and commercial department approved China Red Bull's business term is only 20 years.
The dispute is complicated by the lack of original agreement documents. On October 6, 2016, Thailand Tencel filed a lawsuit on the grounds of trademark infringement by China Red Bull, and the core of the dispute was the term of authorization: Thailand Tencel believed that the 20-year authorization period had expired, while China Red Bull insisted that the authorization period was still 30 years.
During the trial, Thai Tencel produced a lot of evidence about the 20-year authorization period, including verifiable documents, filing contracts, etc. Chinese Red Bull has almost no cards in its hands that can be played, only an electronic version of the agreement. However, because the so-called "50-year agreement" did not have the original and the relevant copies did not have an official seal, the court considered the authenticity to be "doubtful".
On December 31, 2020, the Supreme People's Court made a final judgment on the dispute over the ownership of the "Red Bull series of trademarks", in which Tencel Group won the case and China Red Bull lost the case.
People thought that the "Red Bull dispute" would be settled, but China Red Bull still did not "give up", and in 2021, it sued Thailand's Tencel and others to the Beijing Fourth Intermediate People's Court, requesting that Article 7 of the above-mentioned "50-year agreement" be confirmed to be valid.
The twists and turns of the plot then make waves again. On February 23, 2022, China Red Bull issued a statement on its official website, WeChat and other platforms, saying that it had obtained the original "50-year agreement" and had officially submitted the original agreement to the Supreme People's Court as an important basis for the retrial of relevant cases.
The 50-year agreement was circulated online
In June this year, the Beijing No. 4 Intermediate People's Court issued a first-instance ruling on the case, rejecting the lawsuit filed by China Red Bull. In the first instance, it was held that the "50-year agreement" was not a composite contract and did not have the basis for the claim for split-up, so the plaintiff's claim did not have a basic basis in litigation law. In addition, the establishment of China Red Bull is one of the contents of the "50-year agreement", and China Red Bull should be the object of the contract rather than the subject of the contract, and it does not enjoy contractual rights and does not have the obligation to perform, so it is not a qualified plaintiff in this case.
Dissatisfied with the first-instance ruling, China Red Bull still appealed to the Beijing High People's Court with the original grounds of action.
This time, China's Red Bull finally ushered in the "dawn". The Beijing High People's Court re-evaluated the determination of the court of first instance.
The ruling of the court of second instance stated:
First of all, China Red Bull is one of the signatories of the "50-year agreement". According to the evidence on record, the "50-year agreement" shows that China Red Bull is the party that signed the agreement, and the corresponding rights and obligations are stipulated in the agreement, and China Red Bull, as the signatory of the agreement, shall bear the corresponding obligations and enjoy the rights agreed in the agreement. As the subject of the contract, China Red Bull has the right to file a lawsuit in accordance with the contract.
Second, China Red Bull has the right to file a separate lawsuit against some of the terms in the contract. The contract consists of individual clauses, and the invalidity of some clauses of the contract does not affect the validity of the other clauses of the contract. Based on the relative independence of the terms of the contract, China Red Bull filed separate lawsuits based on different terms of the "50-year agreement", which did not violate the law.
In summary, the Beijing High People's Court made a final ruling: to revoke the first-instance ruling, and to order the first-instance court to continue hearing the case.
"Red Bull Controversy": Finale or a new round of "tug-of-war"?
A number of legal industry insiders pointed out that with the recovery of the original agreement, the "Red Bull dispute" is about to open a new chapter, and the revocation of the first-instance ruling also indicates that a new round of tug-of-war will start again.
Meng Xu, an intellectual property lawyer at Beijing Zhongwen Law Firm, said in an interview with China News Service that firstly, according to the content of the agreement, it can be seen that the subject of the agreement involves a total of four parties: A, B, C, and D. China Red Bull, as the signing party C, is undoubtedly the subject of the contract and has the right to file a lawsuit.
In addition, according to Article 156 of the Civil Code, if a civil juristic act is partially invalid and does not affect the validity of the other parts, the other parts are still valid. At the same time, there are a number of different clauses involved in the agreement, and based on the principle that the contract terms are relatively independent, China Red Bull did not violate the law by filing separate lawsuits based on different clauses of the agreement. Whether this ruling will bring a real new reversal to the "Red Bull dispute" still needs to wait for the outcome of the trial of the case by the Beijing Fourth Intermediate People's Court.
With the current closer cooperation between various enterprises, Meng Xu suggested that the two parties should clearly agree in the contract on the ownership and scope of use of intellectual property rights, the licensing method, license period, license fee and other contents of intellectual property rights, and special agreements on technical secrets and trade secrets, so as to avoid disputes arising from the inability to protect their rights or the loss of competitive advantages due to unclear agreements.
Zhao Zhanzhan, a lawyer at Beijing Jiawei Law Firm, said in an interview with China News Service that the Beijing High People's Court's revocation of the first-instance ruling and only held that China Red Bull had the right to sue Tencel Group was a ruling on the procedural issues of the case itself, not on the substantive issues of the case. In the next step, the Beijing Fourth Intermediate People's Court will again conduct a trial on the substantive issues of the case.
Zhao Zhanzhan further pointed out that in the short term, the case will not have a so-called "finale", but the beginning of a new round of games between the two sides of the lawsuit. The recovery of the original agreement will only affect the lawsuit initiated by China Red Bull, and the final judgment of the dispute over the ownership of the "Red Bull series trademarks" in which Tencel Group is the subject of the lawsuit has been decided, and will not affect the previous final judgment.
Zhang Ming, a partner and lawyer at Beijing Jingshi Law Firm, said in an interview with China News Service that judging from media reports, the dispute will enter a long-term tug-of-war stage in the future and is unlikely to end in the short term.
"The Beijing High People's Court revoked the first-instance ruling and appointed the Fourth Intermediate People's Court to hear the case, an important reason for which it was based on the emergence of new evidence. Zhang Ming believes that with the recovery of the original agreement, the entire trend of the case may change dramatically. As for the role of the original agreement as new evidence in judging the rights and obligations of the entity, it is necessary to further examine and judge in future trials.
Source: The country is a through train
Editor: Qin Jing
Editor-in-charge: Wei Xi