Huiyuan made a fool of itself due to trademark fraud

Huiyuan Drinking Water, knowing that it is not the trademark registrant and has no right to sign a trademark license contract, still signs a contract with others and should be held responsible Legal liability for invalid contracts.

Zhu Qiang and Kawagbo Company rashly bought equipment and promoted it without fulfilling their audit obligations. It was difficult to obtain legal support for loss claims, so they had to pay the bill themselves.

This trademark licensing dispute arises from the cooperation agreement signed in July 2011 between Huiyuan Drinking Water and Yunnan Shangri-La Kawagebo Drinking Water Co., Ltd.

It is reported that Zhu Qiang, chairman of Kawagerbo, met Zhu Shengbiao, general manager of Huiyuan Group (now in charge of Huiyuan Drinking Water Company), through the introduction of Wang Shuping, apple cider vinegar project manager of Huiyuan Group. Zhu Shengbiao authorized the Huiyuan trademark to be used by Kawagbo Company. According to the agreement, Zhu Qiang remitted 2 million yuan to Zhu Shengbiao’s personal account, and at the same time remitted 1 million yuan to the middleman Wang Shuping personally. Huiyuan Drinking Water Company issued a receipt of 2 million yuan to Kawagbo Company.

From the signing of the cooperation agreement to March 2012, Kawagbo has invested 2 million yuan in special molds, equipment, materials, and advertising expenses for the production of "Huiyuan Six-Molecular Water". Just when Kawagerbo started mass-producing Huiyuan brand series of drinking water, Huiyuan claimed that Kawagerbo was not allowed to produce and sell "Huiyuan" brand water.

He did not taste the benefits but suffered losses. Feeling cheated, Zhu Qiang angrily accused Huiyuan of "fraud". He also revealed that Zhu Shengbiao had begun similar "authorization behavior" for other companies before signing a contract with him. Last year, 28 companies signed contracts with Huiyuan Drinking Water Company, including 5 bottled water companies. Kawagbo Company is the company with the largest loss, about 11.2 million yuan.

Huiyuan refused to compensate and countersued for breach of contract

Huiyuan Group issued an announcement on August 1 to clarify the dispute with Kawagbo Company and refute the other party's accusations. The announcement stated that although the cooperation agreement stipulates that both parties will jointly develop the drinking water business of Huiyuan brand, the company has not reached an agreement on the franchise rights of any Huiyuan trademark.

At the same time, Kawagbo has not fulfilled certain payment obligations according to the cooperation agreement. Therefore, Huiyuan Drinking Water has the right to terminate the agreement without making any compensation to Yunnan Kawagbo. According to the opinions of the company's legal counsel, Huiyuan Drinking Water filed a lawsuit with the People's Court due to Kawagbo's breach of contract, requesting the termination of the cooperation agreement.

Although the announcement stated that it would not affect its financial and operating conditions, Hong Kong-listed Huiyuan Juice’s stock price plummeted due to the impact of trademark fraud.