On December 7, 2010, Tianfu Cola and its attorney informed the media that the case of Tianfu Cola suing PepsiCo for infringement of trade secrets (which was reported by this newspaper), which has attracted much attention from all walks of life, is now available. Latest developments. The city’s No. 5 Intermediate People’s Court ruled in the first instance that Pepsi-Cola should stop using Tianfu Cola’s technology and return technical secrets and related materials within a time limit. But it did not support Tianfu Coke’s claim of 1 million yuan.

This lawsuit was initiated by "Tianfu" to pursue the core technology. China Tianfu Cola Group Company (Chongqing) (hereinafter referred to as Tianfu Cola) stated in the indictment: In 1994, Tianfu Cola and PepsiCo entered into a joint venture. It holds 40% of the shares, but the investment does not include the technical files of the "Tianfu Cola" formula and production process. After the joint venture relationship is terminated, the joint venture company will still use these technical secrets for a long time. Tianfu requested the court to order that the defendant immediately stop using and return the technical files of the "Tianfu Cola" formula and production process owned by the plaintiff, and pay compensation of 1 million yuan for economic losses.

According to lawyer Xu Laiqing of Chongqing Weizhen Law Firm, Tianfu Coke’s agent, according to the contract at that time, Tianfu Coke enjoyed the trade secrets of the formula and production process of Tianfu products. After entering into a joint venture with PepsiCo that year, Tianfu Cola fulfilled its obligation to contribute land, factory buildings and equipment in price, and also handed over technical secrets and technical files such as Tianfu Cola's product formula and production process that were not covered by the contract.

Qian Huang, the current CEO of Tianfu Coke, said that the core of the dispute in this lawsuit is the technical secrets of the ingredients, formula and production process of Tianfu Coke B concentrate. Handing over the formula and technical secrets to the joint venture was based on the good expectation that "foreign capital can help us become bigger and stronger" at that time. However, after the joint venture, the joint venture company controlled by the foreign party reduced Tianfu Coke's market share year by year, until it eventually stopped producing even one bottle.

Qian Huang said that the formula and technical secrets are the core secrets of Tianfu Coke, and they are also the core and soul of Tianfu Coke’s early development and growth. Now, the Tianfu Cola brand has been hidden. That's why they pursued it at all costs, and that's why this lawsuit came about. The reason why Tianfu Cola wants to sue PepsiCo China Investment Co., Ltd. (hereinafter referred to as PepsiCo China) is because they believe that PepsiCo China is behind the scenes. Because the case involves trade secrets, both court sessions were closed to the media and the public. As the defendants, Chongqing Pepsi Tianfu Beverage Co., Ltd. (hereinafter referred to as Chongqing Pepsi) and Pepsi China have also refused to respond to the media. It was not until yesterday that reporters learned about their attitudes and views from the verdict.

Chongqing PepsiCo argued that the trade secret dispute involved in this case was a joint venture contract dispute and should be arbitrated by the China International Economic and Trade Arbitration Commission as stipulated in the contract. Before the establishment of the company, the foreign shareholders of the joint venture had clearly requested that all manufacturing technologies related to Tianfu Cola concentrate be transferred to Chongqing Pepsi. Tianfu Cola also accepted it. Now, the technical secrets and production process are owned by Chongqing PepsiCo, and Tianfu Coke has no right to own the technical secrets. Therefore, there is no infringement on their part.

In addition to agreeing with Chongqing Pepsi’s relevant views, PepsiCo China also stated that Tianfu Cola has no evidence to prove that PepsiCo China manipulated Chongqing PepsiCo to infringe technical secrets. Before Tianfu Cola withdrew from Chongqing Pepsi, Chongqing Pepsi had been producing a full range of Tianfu Cola products in accordance with the joint venture's charter. Xu Laiqing said they received the verdict last Friday. Lawyer Xu and Tianfu Cola are both satisfied with the verdict.

After the trial, the No. 5 Intermediate People’s Court held that according to the three elements of trade secrets, the core technology in dispute between the two parties was a technology not known to the public, and Tianfu Coke had adopted strict confidentiality measures for this technical information. , and at the same time, the core technology has actual or potential commercial value and is practical. Relevant evidence shows that only Tianfu Cola is the owner of this core technology. The joint venture contract of that year did not stipulate that core technology would be invested in Chongqing PepsiCo as registered capital. From the beginning of the joint venture, Tianfu Coke knew that Chongqing Pepsi was using Tianfu's core technology, and it should be considered a legitimate use of the technology. Over the years, Tianfu Coke has never claimed royalties for technology secrets. This case is a lawsuit for infringement of trade secrets, and Tianfu Coke has the right to file it in court.

The court ruled that Tianfu Cola is the right holder of the trade secrets of the ingredients, formula and production process of the concentrate B involved in the case. Chongqing Pepsi will stop using Tianfu Cola’s relevant trade secrets on the effective date of this judgment. , and return the technical secrets and related materials within 10 days from the date of entry into force of the judgment.

Claims of 1 million yuan will not be supported. As for Tianfu Cola naming PepsiCo as a defendant, it did not submit relevant evidence and did not support it. Qian Huang said that as of this year, Tianfu Cola has been wearing the label of a particularly poor enterprise in Chongqing for 10 consecutive years. Currently, the company has nearly 200 registered employees, with an average age of nearly 50 years old. The company has completely stopped production. The only production line was mothballed five years ago. There is currently no source of income. The only asset is an old 4-story building with an area of ??less than 2,000 square meters. The rest of the land, equipment, factories and other assets were invested in the joint venture.

Except for the 17 people who stayed behind, all the nearly 200 employees currently registered in the company have been laid off. They receive an average monthly living allowance of about 350 yuan. These living expenses are all allocated by the superior enterprise Textile Holding Group. During holidays, the Municipal State-owned Assets Supervision and Administration Commission and the Municipal Federation of Trade Unions must allocate a certain amount of hardship condolences to employees.

The main job of their left-behind staff is to manage current and retired employees, pay social security, medical insurance, etc., and litigate lawsuits. Qian Huang said that this lawsuit was only the first victory. Next, they will also initiate trademark litigation for "Tianfu". There are three main aspects of trademark litigation: the invalid transfer of the "Tianfu" trademark itself, trademark usage fees, and trademark impairment losses. Total losses are estimated at more than 200 million yuan.

Qian Huang said that in addition to producing cola, Tianfu Cola originally produced 57 products in 12 categories, including fruity sodas, juices, beverage alcoholic drinks, functional drinks, cans, and liquor. Their ultimate goal in filing this lawsuit is to restore the production of Tianfu Cola and reshape the national brand. According to Qian Huang, "As long as the core technology is brought back, Tianfu Cola is expected to return to the market in a year."

Qian Huang said that although the company is struggling now, their "Tianfu" brand is deeply rooted in the hearts of the people. , they are considering financing, cooperation with consortia and other methods to restart production. With the support of consumers and technical strength, all their employees are optimistic about the prospects. In fact, the feud between Tianfu Cola and Pepsi lasted for 16 years.

In 1981, Tianfu Cola was born in Chongqing. However, although Tianfu Cola once held 75% of China's cola market share, it still had no competitive advantage in the face of the international beverage giants that entered the market in a big way. As a result, on January 18, 1994, Tianfu Cola and PepsiCo officially signed a joint venture contract to establish Chongqing Pepsi Tianfu Beverage Co., Ltd., with the foreign party accounting for 60% of the shares.

However, this seemingly beautiful cross-border marriage has plunged Tianfu Cola into a long nightmare.

In the joint venture contract, the two parties clearly stated that the purpose of establishing the joint venture was to develop the "Tianfu" brand series of beverages. At the same time, it can also produce some Pepsi brand beverages, but Tianfu Cola's share will not be less than 50%. However, after the joint venture between the two parties, the joint venture company made every effort to promote Pepsi brand beverages from advertising to sales. Li Peiquan, the former CEO of Tianfu Cola, said that Tianfu Cola's beverage sales dropped sharply. In the first year of the joint venture, it still accounted for 74%, and by the second year it was 51%. In the third year, it dropped to 21%, and by 2007 it only accounted for 0.5%. In stark contrast, soon after the joint venture, Pepsi-Cola's market share in Chongqing reached over 80%.

Tianfu Group’s financial supervision over the joint venture is even more out of control. Qian Huang said that the joint venture company has been operating at a loss for many years, and Tianfu Group has not only failed to get any cents, but has also been saddled with debts of nearly 30 million yuan.

But PepsiCo has made huge profits from the joint venture. Li Peiquan said that PepsiCo's revenue from selling concentrates to the joint venture was estimated to be as high as 150 million yuan in the first 10 years of the joint venture.

In 2006, Tianfu Group, which was under tremendous economic pressure, sold its shares to PepsiCo for 130 million yuan. At this point, Tianfu Group has achieved zero liabilities on its books at the cost of the demise of its brand, the loss of its market, and the return of its assets to zero.

In order to regain its own brand, Tianfu Cola began to try to get back the formula and other core technologies from the joint venture company that it had been using for free. Qian Huang said that they began to seek explanation through official letters in October 2008, until they later went to court.

On October 28, 2009, Chongqing No. 5 Intermediate People’s Court officially accepted the case. Because Chongqing Pepsi raised jurisdiction objections, the case was postponed until the recent hearing, and the final verdict was reached.

Don’t let the Tianfu tragedy happen again. Tianfu Cola and Pepsi Cola won the first round of the brand battle. This is also the first victory in the battle between a Chinese national brand and a foreign brand in recent years.

In the 1990s, there was an upsurge of joint ventures between national brands and multinational companies. However, some domestic brands such as Beibingyang and Zhengguanghe were hidden, and 7 of China’s 8 largest beverage factories were missing. . Some multinational companies have obtained "licenses" to legally enter the Chinese market through joint ventures, thereby controlling market pricing power.

As for the large-scale penetration of foreign brands into all walks of life in China, the relevant departments have actually not introduced substantial measures to protect national brands. National brands are often not as conscious as foreign brands when it comes to issues such as protecting intellectual property rights, so they fall into certain traps. The super-national treatment that foreign capital has enjoyed for a long time has also, to a certain extent, occupied the market share that originally belonged to national brands.

Fortunately, Chinese people are gradually awakening. In recent years, Tianfu Cola and PepsiCo, Wahaha and Danone, etc. have been involved in brand disputes. The previous acquisition of Huiyuan by Coca-Cola also caused huge controversy.

In fact, Tianfu Cola’s journey from prosperity to decline and then to the difficult “reclaiming” is undoubtedly a vivid warning lesson for Chinese national brands. The recipe for Tianfu Cola is released. In 1985, Tianfu Cola was designated as a state banquet drink by the State Council and was hailed as a "famous drink of a generation."

Before the joint venture, Tianfu Cola had 108 branches across the country and accounted for 75% of the Chinese cola market in the first eight years of the joint venture.

Tianfu Pepsi announced the marriage and established "Chongqing Pepsi Tianfu Beverage Co., Ltd." Both parties made it clear that Tianfu's share of the company's total beverage output in the future will not be less than 50%.

Tianfu Cola’s sales account for 74% of the joint venture’s total beverage output. The joint venture lost more than 10 million yuan.

Tianfu Cola’s sales account for 51% of the joint venture’s total beverage output. The joint venture lost more than 15 million yuan.

Tianfu Cola’s sales account for 21% of the joint venture’s total beverage output. The joint venture company lost more than 30 million yuan.

The sales volume of Tianfu Cola accounts for less than 1% of the total beverage output of the joint venture company, and the joint venture company has accumulated losses of more than 70 million yuan.

Debt-ridden Tianfu sold all its shares in PepsiCo Tianfu to PepsiCo. Tianfu Coke is discontinued.

Tianfu sent letters to Pepsi six times hoping to return the "Tianfu Cola" trademark. But PepsiCo said it had not received any letters.

Pepsi proposed to Tianfu a prerequisite for negotiation: Tianfu must first issue a statement to apologize for previous remarks made to the media about cooperation with Pepsi in order to restore Pepsi's reputation.

Tianfu sued PepsiCo for allegedly illegally possessing technical secrets for a long time.

The No. 5 Intermediate People’s Court of the city decided the case in the first instance.