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Tianfu v Pepsi: a lawsuit caused by a formula

Times Weekly on September 1, 21 at 23:41

Tianfu Coke is full of confidence in winning the lawsuit.

With the end of the marriage between Tianfu and Pepsi, the two sides have become enemies since then. This "marriage" brought bad luck to Tianfu Coke, which changed it from a large national enterprise to a municipal poor enterprise in Chongqing.

In desperation, Tianfu decided to go to court with PepsiCo, and broke down the whole claim for recovering rights and interests into a series of lawsuits, which were intended to be broken one by one.

Our reporter Deng Quanlun is from Chongqing.

After p>12 years of marriage, it has been broken, but after 16 years of resentment, it is difficult.

On August 31st, China Tianfu Coke Group (hereinafter referred to as "Tianfu") sued Pepsi (China) Investment Co., Ltd. (hereinafter referred to as "Pepsi") and Chongqing Pepsi Tianfu Beverage Co., Ltd. (hereinafter referred to as "Chongqing Pepsi") for infringement of trade secrets, which was heard in the Fifth Intermediate People's Court of Chongqing in private.

This is the second hearing of the case after April 22nd this year. Tianfu accused Pepsi of long-term illegal possession of all its own "Tianfu Coke" formula and production technology technical files. The trial begins at 9: on the same day and ends at 17: 2. The trial result will be pronounced on a date after the collegiate bench.

"I am very satisfied with today's trial and have a good chance of winning. But this is only the first battle of our lawsuit war against Pepsi. " Qian Huang, general manager of Tianfu, who walked out of court, revealed to Time Weekly that Tianfu will fight Pepsi through at least six lawsuits and recover many rights and interests infringed in the process of joint venture with the latter. The total amount of claims is expected to be as high as 4 million yuan.

the beginning and end of bad relations

the lawsuit between Tianfu and Pepsi originated from a marriage.

in January, 1994, PepsiCo and Tianfu jointly established Chongqing PepsiCo Tianfu, in which PepsiCo invested USD 1.7 million in cash and Tianfu discounted USD 7.3 million in land, factory buildings and production equipment, with the investment ratio of 3∶2.

Li Peiquan, one of the founders of Tianfu Coke and the general manager of Tianfu for 16 years, attended the trial as a witness on August 31st. During the trial, he said in an interview with Time Weekly that the purpose of cooperation between Pepsi and Tianfu was very clear. Pepsi came to help Tianfu develop and expand the production of Tianfu Coke, so that both sides could achieve satisfactory benefits.

before the joint venture, Tianfu was the largest coke giant in the domestic market, with 18 factories in China, accounting for 75% of the market at that time.

But this "marriage" brought bad luck, and the joint venture company lost money every year within 12 years after its establishment. In 26, due to debt, Tianfu sold all its shares in PepsiCo Tianfu to PepsiCo for 13 million yuan.

Since then, the marriage between Tianfu and Pepsi has come to an end, and the two sides have since become enemies. The Chinese side believes that the foreign party transferred its profits to Pepsi by buying syrup stock solution from Pepsi and "by substantially raising the price of concentrated solution", which made the plaintiff become a municipal-level poverty-stricken enterprise in Chongqing from a large national enterprise.

What still rankles Li Peiquan is that after the joint venture, PepsiCo made every effort to promote the Pepsi brand, step by step, and eventually the Tianfu brand was strangled.

according to the contract between PepsiCo and Tianfu at that time, the "Tianfu" coke produced by Chongqing Pepsi should not be less than 5% of the total beverage output. However, the reality is that the sales volume of Tianfu series drinks has dropped sharply year by year. The sales volume of joint venture accounts for 74% in the first year, 51% in the second year and 21% in the third year, and only accounts for .5% in 27. Tianfu brand has almost disappeared from the market.

"Tianfu has been eaten by Pepsi in disguise! We must safeguard the rights and interests of Tianfu! " Qian Huang said that in 28, Tianfu began to recover the Tianfu brand from Pepsi. "At the end of this year, we wrote to Pepsi seven times, but all of them failed to reply."

In desperation, Tianfu decided to go to court with PepsiCo, and broke down the whole claim for recovering rights and interests into a series of lawsuits, which were intended to be broken one by one. On October 26, 29, Tianfu submitted an indictment to the Fifth Intermediate People's Court of Chongqing, claiming that "Pepsi was suspected of illegally possessing technical secrets for a long time".

Tianfu thinks: "The plaintiff enjoys the technical secrets of the formula and production process of Tianfu Coke, and the technical files are also owned by the plaintiff, which completely belongs to the state-owned assets of China."

On April 22nd this year, this case of infringement of trade secrets was opened for the first time, but the trial only entered the stage of giving evidence, and it was announced that a retrial would be held on another day.

at the first hearing, both the plaintiff and the defendant submitted a large amount of evidence to the court. "The paper evidence we have collected will fill a luggage case," said Qian Huang, general manager of Tianfu. The evidence includes the recipe and production process of Tianfu Coke, and various technical identifications of Tianfu Coke.

PepsiCo also provided seven sets of evidence to the court. Interestingly, many of the evidences presented by both sides overlap. "Although the evidence submitted by both sides is the same, our understanding is not consistent." Qian Huang said.

For example, in view of the same evidence-Joint Venture Contract signed on January 18th, 1994, Tianfu believes that Pepsi has not obtained the right to use the plaintiff's "Tianfu Coke" formula and production technology. Pepsi said that Chongqing Pepsi legally and justly owns and uses all kinds of assets of Tianfu Coke, including related formulas and production processes.

who owns the formula?

The reopening of the court session on August 31st attracted many old Tianfu employees to the court to help lawyers. Among them, Li Peiquan, a 73-year-old founder of Tianfu Coke, participated in the trial as a witness together with Tianfu's former chief engineer, file section chief, technical section chief and security section chief.

PepsiCo has sent a strong team of lawyers, four of whom are from well-known law firms in Beijing, Shanghai and Chongqing.

The plaintiff and the defendant fought hand-to-hand in court.

According to Xu Laiqing, the attorney of Tianfu and director of Chongqing Weizhen Law Firm, the ownership of trade secrets such as the formula and production technology of Tianfu Coke has become the focus of heated debate in court. Both parties believe that the trade secrets such as formula and production technology are their own.

PepsiCo first submitted the Joint Venture Contract as evidence, claiming that one of the production purposes of Chongqing PepsiCo agreed with Tianfu at that time was to "produce Tianfu cola beverage products and concentrated solution".

"if we don't get the formula, we can't produce it at all." The defendant's lawyer said that the production purpose stipulated in the Joint Venture Contract actually proved that Tianfu agreed to transfer the formula and production process of Tianfu Coke to Chongqing Pepsi. In addition, Chongqing Pepsi also submitted a number of evidences, trying to prove that it properly obtained the technical secrets of Tianfu Coke.

PepsiCo further believes that the plaintiff Tianfu, as a joint venture party, has been appointing the legal representative, chairman and management personnel to the enterprise, not only knowing about the ownership and use of various assets including the formula and production technology of the joint venture company, but also playing a leading, encouraging and supporting role.

Regarding the right to use the formula after 26, PepsiCo said that when Tianfu withdrew from the joint venture, PepsiCo had paid a "high price" and the company had the right to continue to own and use various assets of Tianfu Coke, including the formula and production technology.

Tianfu Coke, on the other hand, proves from four aspects that all the rights and interests of the trade secrets such as the formula and production technology of Tianfu Coke belong to itself. First, Tianfu has led the development of Tianfu Coke since 1981. Secondly, "Tianfu Coke" passed the safety test, and the Ministry of Health approved Tianfu to formally produce "Tianfu Coke" in April 1988.

Thirdly, on August 2th, 28, the Supervision Bureau of the Ministry of Health sent a letter to confirm that Tianfu Coke is a new domestic resource food that has been officially produced, and the manufacturer is Chongqing Beverage Factory (predecessor of Tianfu Group, whose rights and obligations have been inherited by Tianfu Group), which is enough to prove that Tianfu still enjoys the technical secret of Tianfu Coke and has not transferred it to Pepsi.

fourthly, Tianfu paid the technology transfer fee in full to Sichuan Institute of Traditional Chinese Medicine in July 1995, and only then did it fully acquire the technical secret of Tianfu Coke. "When it was a joint venture with Pepsi in 1994, Tianfu had not fully obtained this technical secret. How could it be used as a capital contribution or transferred to Chongqing Pepsi?" Xu Laiqing said.

"Pepsi obtained Tianfu's trade secrets through improper means." Tianfu accused in court that after the establishment of Chongqing Pepsi, Tianfu allocated the original office building to it, but during the file handover process, Chongqing Pepsi instructed the archivists to illegally occupy the technical secret file of "Tianfu Coke" and not to hand it over to Tianfu, and hired Tianfu's main production backbone to use the technical secret for production without authorization, which violated the principles of equality, fairness, honesty and credit and harmed Tianfu's legitimate rights and interests.

Tianfu requests that Pepsi immediately stop using and return all the technical secrets of Tianfu's "Tianfu Coke" formula and production process, and compensate Tianfu for the loss of 1 million yuan.

at least six complaints against Pepsi

"They illegally possessed our technical secrets such as formula, and we are confident to get back what belongs to us." After the trial, Qian Huang, general manager of Tianfu Coke, quickly walked out of the court and admitted that he "felt a little relaxed"-"I am very sure of winning the case".

This lawsuit is only the first battle for Tianfu Coke to recover its brand. Qian Huang said that according to the reservation plan, they will sue PepsiCo at least six times, in addition to trade secrets, they will also sue PepsiCo in trademark, contract fraud, management and other aspects. It is expected that the amount of claims in the whole lawsuit will reach 4 million yuan.

"I am very satisfied with today's trial, and now I want to start the second world war of litigation and claim compensation from Pepsi for the loss of Tianfu trademark value." Qian Huang said that according to the preliminary assessment of the financial department, the claim amount at this level is about 2 million yuan.

"The trademark of Tianfu Coke has never been sold to PepsiCo." Li Peiquan repeatedly told the Times Weekly reporter that it was only 3.5 million yuan that was given to the joint venture company for conditional use, and the other party did not own the trademark.

in p>1994, the joint venture term was 5 years, but when the two parties broke up in 26, Tianfu was in a state of inability to speak, and did not claim the trademark back in time, resulting in a slightly passive situation. In this regard, Li Peiquan stressed that even if the joint venture company has the right to use, the Chinese side originally held 4%, but the rights and interests in this respect were not clarified when the shares were sold.

"We have enough evidence for these accusations against Pepsi, and I am confident of the final result." Qian Huang told Times Weekly that Tianfu Coke has been a poverty-stricken enterprise for ten years, and it is very scarce in terms of manpower, financial resources and material resources. However, in this lawsuit, everyone saw hope and the development prospects of national brands.

Qian Huang's tone is sonorous: "As long as the seeds are there, they can germinate and take root; As long as the brand can be recovered, Tianfu Coke will have the hope of resurrection. After the brand is recovered, we will reproduce Tianfu Coke and reshape the brand. "

In the face of this lawsuit initiated by Tianfu, Pepsi is very low-key. PepsiCo's attorneys all remained silent when facing media reporters in Chongqing court, and refused to speak for interviews. PepsiCo has never publicly commented on this lawsuit. On August 31st, the reporter of Time Weekly called the public relations manager of PepsiCo (China) Investment Co., Ltd. for many times, but they all entered the voice message state directly.

Request for the return of Tianfu Coke formula

In October p>29, Tianfu Company filed a complaint with the Fifth Intermediate People's Court of the city on the grounds of infringement of technical secrets. Originally, the trial time has been confirmed, but the case was delayed until yesterday because PepsiCo raised jurisdiction objections twice before the trial. It is reported that during the trial, Tianfu Coke Group demanded that Chongqing Pepsi Tianfu Beverage Co., Ltd. and Pepsi (China) Investment Co., Ltd. immediately stop using Tianfu Coke and return its formula and production technology, and requested that both defendants be ordered to compensate the plaintiff for the loss caused by the use of technical secrets of RMB 1 million. In court, Tianfu Coke also produced evidence such as their formula, and PepsiCo also prepared a lot of evidence, and both sides gave evidence and cross-examined.

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Tianfu Coke sued Pepsi: Give me back the formula and compensate me 1 million yuan

September 1, 21 at 1:7:8 Source: Chongqing Business Daily

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The case was heard in the Fifth Intermediate People's Court yesterday, and Pepsi argued that the formula was properly owned

Reporter Tang Hao photo

Tianfu Coke, which has attracted much attention from the society, sued Pepsi for "long-term illegal possession of technical secrets and infringement of trade secrets". Yesterday, the case was officially opened in the Fifth Intermediate People's Court. Because of the commercial secrets involved, the court held a closed hearing. It is reported that during the trial, the two sides had a heated debate, and "Tianfu" filed a lawsuit against "Pepsi" to return the formula and compensate 1 million yuan.

Tianfu disappears after transnational marriage

Tianfu Coke formula, which was born in 1981, was successfully developed by Tianfu Coke Group and Sichuan Institute of Traditional Chinese Medicine. "We used to have 18 home improvement bottle factories in China. In the eight years before the joint venture, the accumulated tax profit reached 6 million yuan, accounting for 75% of the China cola market." Li Peiquan, founder of Tianfu Coke, said.

In January, 1994, Tianfu Coke and Pepsi Cola were married with a share ratio of 4∶6, and it was clear that the purpose of the joint venture was to develop Tianfu brand beverages.

but the result is not the case. PepsiCo uses its controlling right and management right to fully promote the Pepsi brand from advertising to sales. In 26, due to serious losses, Tianfu Coke transferred its shares to PepsiCo for 13 million RMB to pay off its debts, and the Tianfu Coke brand disappeared.

Request for the return of Tianfu Coke formula

In October p>29, Tianfu Company filed a complaint with the Fifth Intermediate People's Court of the city on the grounds of infringement of technical secrets. Originally, the trial time has been confirmed, but the case was delayed until yesterday because PepsiCo raised jurisdiction objections twice before the trial. It is reported that during the trial, Tianfu Coke Group demanded that Chongqing Pepsi Tianfu Beverage Co., Ltd. and Pepsi (China) Investment Co., Ltd. immediately stop using Tianfu Coke and return its formula and production technology, and requested that both defendants be ordered to compensate the plaintiff for the loss caused by the use of technical secrets of RMB 1 million. In court, Tianfu Coke also produced evidence such as their formula, and PepsiCo also prepared a lot of evidence, and both sides gave evidence and cross-examined.

Pepsi argues that the formula is properly owned

"Our formula is superior to Pepsi, but they have our technology. We are confident to get back what belongs to us. " After the trial, Qian Huang, general manager of China Tianfu Coke Group Company (Chongqing), said that the two sides mainly debated the ownership of the formula in court. "Pepsi" believed that after they established a joint venture with Tianfu Coke, Tianfu Coke's formula technology was naturally owned by them, so there was no illegal occupation or infringement of any trade secrets.

Qian Huang didn't agree with this. He said that this was not stipulated in the contract at that time, and "Pepsi" took over their formula and production technology step by step in the name of joint venture. This is God.