Danone drops lawsuit versus trademark body

BEIJING, Nov. 7 -- Groupe Danone SA said it has withdrawn a lawsuit against the state trademark office amid a bitter dispute with its Chinese partner.

"During the legal process, we believe the facts around the written reply from the state trademark office have been clarified," an official from Ogilvy & Mather, a public relations firm which represents Danone in China, told Shanghai Daily by telephone yesterday.

But the spokesman declined to elaborate further. Earlier media reports said Danone was forced to drop the case after the firm failed to meet the expiry deadline to file the suit.

The world's biggest yogurt maker has been vying for ownership of the Wahaha brand for a long time because it was provided under the partnership deal with Wahaha Group, China's largest beverage maker since 1996.

Danone sued the central trademark authority in August because the French firm claimed the written reply from the body turning down the transfer of Wahaha brand to its joint ventures was not done according to legal procedures. It also accused Wahaha Group, along with its Chairman Zong Qinghou, of failing to complete a trademark transfer process.

"The withdrawal does not mean Danone has given up," said Xu Zhengguo, director of Shanghai Jinhu Trademark Service. "It could still fight for the brand through other methods."

The ownership of Wahaha, the nation's prominent beverage brand, is vital in the dispute between Wahaha and Danone, which went public since April.

Danone sued Wahaha for using the brand without permission by making same-brand products outside the joint ventures, thus violating the contract.

But Wahaha claimed it still owns the brand and demanded arbitration in Hangzhou, Zhejiang Province, to halt the brand transfer to the joint ventures.

Danone, which said the spat has hurt its sales in Asia, hopes for an amicable solution with Wahaha and to settle the case out of court.