'Red Bull' is a leading brand in China's energy drink market. Over the ownership of the 'Red Bull' series trademarks and the license relationship, Thai T.P. Pharma Healthcare Co., Ltd. and Red Bull Vitamin Drink Co., Ltd. (actually controlled by Reignwood Group) fought a series of lawsuits lasting several years. The Supreme People's Court judgment (2020) Zui Gao Fa Min Zhong No. 394 clarified a key rule: the exclusive right to a registered trademark belongs to the registrant, and a licensee's long-term use and heavy promotion of the mark does not, in itself, constitute a factual basis for acquiring trademark rights.
Case Overview
Thai T.P. Pharma signed a joint venture contract with a counterparty agreeing to establish a joint venture, Red Bull Vitamin Drink Co., Ltd., with Thai T.P. Pharma providing the product formula, process technology, trademarks, and subsequent improvement technology. All 17 'Red Bull' series trademarks were registered in the name of Thai T.P. Pharma. The parties later signed multiple trademark license contracts covering the 'Red Bull' series; Red Bull Company paid license fees and invested heavily in marketing and advertising for 'Red Bull' products.
Red Bull Company later sued before the Beijing Higher People's Court, requesting a declaration that it owned the 'Red Bull' trademarks and an order for Thai T.P. Pharma to pay RMB 3.753 billion in advertising and promotion expenses.
Issues in Dispute
- Whether the trademark rights were originally acquired or acquired by succession, and whether the joint venture could obtain ownership of the 'Red Bull' series trademarks under the contract;
- Whether the goodwill formed by the licensee's long-term use and promotion of the trademarks could serve as a basis for acquiring trademark rights;
- Whether the performance term of the joint venture contract had expired.
Judgments and Case Numbers
First instance: the Beijing Higher People's Court issued civil judgment (2018) Jing Min Chu No. 166 on November 25, 2019, dismissing all of Red Bull Company's claims; Red Bull appealed.
Second instance: the Supreme People's Court, in civil judgment (2020) Zui Gao Fa Min Zhong No. 394 (December 21, 2020), held that original acquisition and acquisition by succession are the two ways of obtaining the exclusive right to a registered trademark; whether acquisition by succession exists should be examined by reference to whether the parties made clear agreements on the change of ownership, duration and nature of use, and should be determined comprehensively by the parties' true intent and actual performance. In a licensing relationship, the licensee's use and promotion of the trademark, or its acts to safeguard the reputation of the licensed trademark, cannot in themselves become the factual basis for obtaining trademark rights. The Supreme People's Court dismissed the appeal and affirmed—ownership of the 'Red Bull' series trademarks remained with Thai T.P. Pharma.
The case was selected into the Top 10 IP Cases 2020 released by the Supreme People's Court (source: annual cases officially released by the Supreme People's Court, reposted by China Court Network and China Changan Network).
In addition, Supreme People's Court judgment (2019) Zui Gao Fa Shang Chu No. 7 found that the joint venture's term expired on September 29, 2018. According to public reports, courts in Zhejiang, Guangdong, and elsewhere subsequently ordered Reignwood-affiliated production and sales companies to stop producing and selling infringing 'Red Bull' drinks and to pay damages (e.g., Zhejiang Higher People's Court (2020) Zhe Min Chu No. 42; Tianhe District People's Court of Guangzhou (2016) Yue 0106 Min Chu No. 15728).
Key Takeaways
- Trademark ownership turns on registration and assignment records, not on who actually uses the mark: the exclusive right arises from approved registration, and assignment requires approval and announcement; long-term use and advertising investment cannot in themselves infer a transfer of ownership;
- 'License' and 'capital contribution' are different things: a license contract should state the license type (exclusive, sole, or ordinary), territory, term, fees, and termination conditions;
- Exit provisions are crucial: where stipulations are unclear, the ownership of inventory, packaging, and channel investment goodwill all become dispute points after termination;
- The dispute is a 'series war': beyond trademark ownership, it drags in connected issues such as the joint venture term, corporate existence, and distributor liability.
Lessons for Businesses
When a brand owner licenses another to use its trademark, the contract must state that 'ownership does not transfer; only a usage license is granted', with a clear exit mechanism; a licensee planning long-term operation should seek a long license term and renewal mechanism, avoiding binding all packaging, channel, and advertising investment to a trademark it cannot control. Where a trademark is contributed as capital, the change of registration must be completed—otherwise the capital contribution has not legally landed.
If you need these procedures handled for you, you may book the license recordal service of a filed trademark agent on MyTMBee, with full assistance from material preparation through filing and follow-up.