The Red Bull Battle in China: A Commercial and IP War That Spanned Eight Years by Ray Zhao
- Hetanshi Gohil
- May 9
- 2 min read
In The Global IP Matrix Issue 21, Ray Zhao, Partner at Unitalen Attorneys at Law, China, explores the high-profile legal saga between the Thai Tencel Group and the Reignwood Group over the rights to the Red Bull brand in China. With disputes spanning trademark infringement and shareholder equity, this eight-year battle underscores the complex relationship between intellectual property law and commercial interests in China’s booming beverage market.
The Equity Dispute: Supreme People’s Court Ruling
At the core of the conflict lies the ownership of 88% equity in Red Bull Vitamin Beverage Co., Ltd., the joint venture between the two groups. Reignwood claimed it was the true owner of the stake, alleging that the shares were held in trust by Red Bull Thailand.
However, the Supreme People’s Court of China dismissed the claim, ruling that Reignwood failed to prove beneficial ownership. The court rejected the so-called “equity holding agreement” and affirmed the legal shareholding of Red Bull Thailand, highlighting the importance of formal governance structures in joint ventures.
Trademark Dispute: Changsha Intermediate Court Ruling
In a separate ruling from July 2023, the Changsha Intermediate Court dismissed a trademark infringement lawsuit filed by Tencel Group against a local China Red Bull distributor, Huaxia Sugar Wine Company.
The court stated that Tencel failed to provide sufficient evidence that the distributor violated trademark rights. This ruling was a victory for China Red Bull and demonstrated the judiciary’s commitment to evidentiary standards and procedural fairness in IP litigation.
Key Implications Across Business and Law
For IP Protection: The Changsha ruling reaffirmed China’s growing judicial maturity in handling complex IP disputes, placing importance on solid evidence over reputation alone.
For Business Strategy: With China Red Bull generating over ¥145.3 billion in cumulative sales, these decisions are pivotal for ongoing operations and commercial planning within the energy drink market.
For Legal Precedent: The judgments underscore the legal principle that corporate formalities and clarity in agreements are vital when navigating joint ventures in foreign jurisdictions like China.
Conclusion
The Red Bull case represents one of the longest-running and most complex commercial-IP battles in China. From boardroom fallout to courtroom confrontation, this legal saga offers valuable lessons for companies operating in joint ventures, particularly in high-growth consumer sectors.
To learn more, read the full article by Ray Zhao in The Global IP Matrix Issue 21.
This crackdown should serve as a wake-up call to the IP community—reminding all stakeholders that transparency, diligence, and ethics are non-negotiable pillars of a fair and functioning IP system.
For more insights from Ray Zhao, read the full article in the latest issue of The Global IP Matrix.
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