The legal wrangle over packaging between two leading Chinese herbal tea makers, Hong Kong-based JDB Group and Guangzhou Pharmaceutical Holdings, has come to a halt, temporarily, with 150 million yuan ($24 million) in compensation granted to the Guangzhou company.

Some two-and-a-half years after the two companies filed lawsuits against each other, the Guangdong Higher People's Court ruled on Dec 19 that JDB (China) Drink Co, a subsidiary of the JDB Group, must compensate Guangzhou Pharmaceutical 150 million yuan for its losses and 260,000 yuan in legal costs.

The court also ordered JDB to stop using similar packaging and decoration - a well-known red can - to Wong Lo Kat, the herbal tea brand of Guangzhou Pharmaceutical.

The two companies use similarly-designed packaging, which led to a legal dispute in court. Geng Guoqing / For China Daily

"JDB will definitely appeal to the Supreme People's Court and the judgment from the Guangdong court thus won't have any legal effect," Pang Zhenguo, a manager at JDB told Beijing Youth Daily.

Disputes between the two herbal tea makers date back to 1995 when Guangzhou Pharmaceutical leased the Wong Lo Kat trademark to JDB.

JDB was first authorized to use the trademark till 2010. It then secured rights in 2003 for an extension to 2020 from a former vice-chairman of Guangzhou Pharmaceutical, Li Yimin, who was later convicted of taking bribes from JDB.

The mainland company filed a complaint with the China International Economic and Trade Arbitration Commission to get back rights to the trademark.

The commission ruled in May 2012 that the lease to 2020 was invalid, and it ordered JDB to stop using the trademark.

Since then, JDB began to make herbal tea in a similar red can, renaming the "Wong Lo Kat" brand as "Jiaduobao". Guangzhou Pharmaceutical used red cans with "Wong Lo Kat" on its packaging.

In July 2012, JDB filed a complaint against Guangzhou Pharmaceutical about "the red can" whereas several days later the latter filed a lawsuit against the former for the same reason, according to Beijing Times.

The Guangdong Higher People's Court combined the two lawsuits and heard the case in May 2013 for the first time.

Guangzhou Wanglaoji Health Co, a subsidiary of Guangzhou Pharmaceutical, announced on Dec 25 it would donate the 150 million yuan compensation to a fund devoted to promoting old Chinese brands among young people, which was co-founded by the company and China's Time-honored Brands Committee on the same day.

JDB will employ lawyers globally to prepare for the hearing at the Supreme People's Court, said Feng Zhimin, office director at JDB.

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