Beijing Tongrentang Sued Tianjin Tongrentang For Infringing IPO, And Tianjin Tongrentang Claimed That Its Predecessor Could Be Traced Back To The Qing Dynasty

Can there be two Tongrentang in A-share market? Without waiting for the answer, Beijing Tongrentang has launched a decisive attack.

Recently, Tianjin Tongrentang Group Co., Ltd. (hereinafter referred to as "Tianjin Tongrentang") has been sued by Beijing Tongrentang (Group) Co., Ltd. (hereinafter referred to as "Beijing Tongrentang") for infringement. Both sides have made their respective voices on the issues of brand and trademark, and the dispute of Tongrentang brand has once again become the focus of public opinion.

However, Tianjin Tongrentang is in the process of IPO, which means that the final outcome of the trademark infringement dispute will have a significant impact on its listing.

Brand competition between two time honored brands

On August 13, Beijing Tongrentang announced that it had filed a lawsuit against Tianjin Tongrentang, accusing it of infringing on its exclusive right to use its registered trademark and constituting unfair competition. The statement was harsh and explosive.

"Tongrentang Group is the only legal successor of the" Tongrentang "brand name and the only legal holder of the" Tongrentang "trademark. Any unauthorized use, counterfeiting and confusion of Tongrentang's trademark will constitute infringement and unfair competition. "

Moreover, "Tianjin Tongrentang Group Co., Ltd. has no homologous relationship with Tongrentang Group, is not a subsidiary or branch of Tongrentang Group, nor has any related relationship. Tianjin Tongrentang, without permission, uses the infringement logo which is highly similar to Tongrentang Group's "Tongrentang" words and "Tongrentang" registered trademark, and causes confusion through prominent use of enterprise name words and false publicity, which infringes on the rights of Tongrentang Group such as the exclusive right of registered trademark, and constitutes unfair competition, Tongrentang Group has the right to investigate its responsibility and safeguard its own rights and interests through legal channels. At present, Tongrentang Group has brought a lawsuit to the court. " Beijing Tongrentang said.

Tianjin Tongrentang also issued a tough statement against Beijing Tongrentang's "complaint". On August 24, Tianjin Tongrentang issued a statement in response: the company's predecessor can be traced back to the Qing Dynasty. In history, it used the names of jingtongrentang zhangjialao pharmacy, jingtongrentang Heji and Tianjin Tongrentang pharmaceutical factory to carry out drug business activities.

Tianjin Tongrentang said, "the enterprise name, brand name and trademark of Tianjin Tongrentang are legally obtained, which has a long history and is beyond doubt. Intellectual property rights are the core interests of Tianjin Tongrentang. For any act that conceals or separates historical facts, confuses the public and infringes upon the rights and interests of Tianjin Tongrentang, Tianjin Tongrentang will take all legal measures to resolutely defend its legitimate rights and interests! "

IPO again aims at Gem

Tongrentang is a well-known traditional Chinese medicine brand. In fact, there are many Tongrentang in the market. Besides the orthodox Beijing Tongrentang, there are Tianjin Tongrentang, Nanjing Tongrentang and Chengdu Tongrentang.

The predecessor of Tianjin Tongrentang originated from Zhangjia old pharmacy during the Qing Dynasty. In history, it used the names of jingtongrentang old pharmacy in Kyoto, Tianjin jingtongrentang Heji, Tianjin Tongrentang pharmaceutical factory, Tianjin Xianfeng traditional Chinese medicine factory, Tianjin No.4 traditional Chinese medicine factory, and Tianjin Tongrentang pharmaceutical factory.

From the official evaluation of the title, Tianjin Tongrentang is also recognized as a time-honored brand. In 2006, the Ministry of Commerce recognized Tianjin Tongrentang Co., Ltd. (registered trademark: Sun) as the first batch of "China time honored brands". In 2019, the Ministry of industry and information technology of the people's Republic of China rated Tianjin Tongrentang Group Co., Ltd. as the first batch of specialized and special new "little giant" enterprises. The "sun" trademark registered and used by Tianjin Tongrentang was recognized as "China famous trademark" by the Trademark Office of the State Administration for Industry and Commerce in 2012.

Although the brand names are close and the main businesses are similar (including "R & D, production and sales of Chinese patent medicines"), the two companies are already quite different in terms of enterprise nature, capital operation and revenue scale.

Beijing Tongrentang (Group) Co., Ltd. is a state-owned enterprise fully controlled by Beijing SASAC. It has several subsidiaries, including Beijing Tongrentang Co., Ltd. (600085. SH) is A-share listed company, Beijing Tongrentang Technology Development Co., Ltd. (01666. HK) and Beijing Tongrentang traditional Chinese Medicine Co., Ltd. (08138. HK) are listed in Hong Kong stock market.

However, Tianjin Tongrentang has gone through a process from state-owned enterprises to private enterprises. As of the signing date of the offering, Zhang Yansen's family actually controlled 60% of the equity of Tianjin Tongrentang. In addition, Lizhu group owns 40% equity, which is the second largest shareholder of the company. It is worth noting that Zhang Yansen family is also the actual controller of Goubuli steamed stuffed bun, another time-honored brand in Tianjin.

Tianjin Tongrentang has long considered landing in the capital market. In 2016, Tianjin Tongrentang planned to be listed on the main board of Shanghai Stock Exchange, and formally submitted its prospectus in April 2018. However, on January 26, 2021, Tianjin Tongrentang withdrew its prospectus. This IPO Tianjin Tongrentang chose gem. On June 28, the gem officially accepted the listing application of Tianjin Tongrentang Group Co., Ltd. (hereinafter referred to as "Tianjin Tongren").

According to the prospectus, from 2018 to 2020, the operating revenue of Tianjin Tongrentang will be 666 million yuan, 744 million yuan and 818 million yuan respectively, with an annual compound growth rate of 10.87%; The net profit attributable to the parent company was 143 million yuan, 151 million yuan and 161 million yuan respectively, with an annual compound growth rate of 6.15%.

As of the disclosure date of the prospectus, Tianjin Tongrentang had 114 drug approval numbers, 32 drugs were listed in the national medical insurance list, and 11 drugs were listed in the national essential drug list. At present, there are still some problems in the company, such as high concentration of product sales, slow update of drugs and low R & D investment.

At present, the company's operating income mainly comes from nephritis rehabilitation tablets, Xuefu Zhuyu capsules and fengguanfukang tablets, and the total income of the three products accounts for more than 80% of the total revenue, and the trend of annual growth in the reporting period. Among them, Shenyan Kangfu tablets (1999-2013) and fengguanfukang tablets (2004-2018) were once rated as the second-class protection varieties of traditional Chinese medicine, but they have expired now.

During the reporting period, Tianjin Tongrentang's investment in drug R & D accounted for about 3% of its revenue. The overall R & D cost rate was low, the R & D investment was insufficient, and the drug iteration was slow. Tianjin Tongrentang is actively focusing on evidence-based medicine and the secondary development of traditional Chinese Medicine. However, the situation that the revenue is highly dependent on a few products is unlikely to change in the short term.

Involved in litigation or affected its IPO

However, for Tianjin Tongrentang, it was sued by Beijing Tongrentang in the IPO stage, and the result of this lawsuit will obviously have a significant impact on its IPO process.

"At least, Tianjin Tongrentang needs to settle the lawsuit before it can continue to IPO." A large securities firm investment bank said.

According to the prospectus, Tianjin Tongrentang has a total of 122 registered trademarks. Although its enterprise name also includes "Tongrentang", none of its registered trademarks takes "Tongrentang" as its name, and only part of its trademark is "jintongren". Moreover, this part of trademark has certain similarities with the trademark registered by Tongrentang group as "Tongrentang".

In accordance with the spirit of the trademark law, Tongrentang Group enjoys exclusive and exclusive rights to its registered trademarks, and the exclusive owner of trademarks has the right to prohibit others from registering the same or similar trademarks on the same or similar goods. Item 2 of Article 57 of the Trademark Law of the people's Republic of China stipulates that "without the permission of the trademark registrant, the use of a trademark similar to the registered trademark on the same kind of goods, or the use of a trademark identical or similar to the registered trademark on similar goods, may easily lead to confusion", which is an act of infringement of the exclusive right to use a registered trademark.

Some people in the legal profession said that the two main businesses include Chinese patent medicine. Once the court finds that the two brands are similar, and these similar trademarks will cause confusion among consumers, Tianjin Tongrentang may constitute infringement.

According to the provisions of question 15 of "answers to several questions about initial business" (II) issued by the CSRC in 2019, "there are major disputes or lawsuits over important assets or technologies such as trademarks, patents, know-how and franchise rights that have a significant impact on the business operation or revenue realization of the issuer, and have or will have a significant impact on the financial status or operating results of the issuer", It belongs to the situation that has a significant adverse impact on the sustainable operation ability of the issuer.

Although the "Tongrentang" brand debate has not yet been concluded, in any case, falling into this dispute will certainly have a significant impact on the listing of Tianjin Tongrentang.

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