Danone v. Wahaha: Wahaha 2/Danone 0

The lynching continues:

A Hangzhou court ruled Friday that Chinese beverage company Wahaha is the sole owner of the drinks brand created with its French joint venture partner Danone, the South China Morning Post reported. Danone had filed two applications in the mid-1990s to gain control of the Wahaha brand, but was rejected. Friday's court decision upheld those decisions and also ruled that since the French company had not taken legal action within two years of the earlier rejection notices, it had lost the right to sue. Danone, which owns a 51% stake in the joint venture, has claimed that it loses US$25 million per month as Wahaha uses the jointly developed brand to sell products outside the partnership, and may appeal the court's decision.

Explain to me how this could possibly be legal?

Danone can appeal all it wants, but the decision isn't going to suddenly become favorable. Wahaha is a former state-owned company operated by a multi-millionaire with lots of clout with the Chinese government.

Obviously the French government wasn't able to do anything proving that appeasement doesn't work with anyone (it also helps to have something more than a bottle of Bordeaux and some goat cheese to negotiate with).

This case illustrates China's institutionalized corruption at its worst. It also demonstrates the need to be on your game when you come to China to invest. You better have eyes in the back of your head.