Red Bull energy drink logo
(Author’s note: I do not drink Red Bull; I have yet to drink a bottle or can of Red Bull. I am not an employee of Red Bull or connected to Red Bull in any capacity. I am not connected to any of the parties mentioned in this post. I am not a lawyer; I do not believe however that law is the monopoly of lawyers. Non-lawyers can and should weigh in and wade into legal issues. Legal issues are not legal issues alone but they have ethical, philosophical, political, economic, and psychological dimensions. What initially motivated me to write this post is the name Yoovidhya, a name that figured prominently in my post yesterday.)
Does a former distributor of an energy drink have intellectual property rights over the product? Though not a lawyer, I think that a FORMER or even an EXISTING distributor does not have intellectual property rights over a good because it did not have any role in conceptualizing, in imagining, in producing the product.
I am thus perplexed that the Department of Justice recently recommended the indictment and the courts issued orders to arrest some parties for violating the country’s intellectual property code.
Thai Red Bull (original version)
While writing yesterday’s blog post about Voyaruth Yoovidhya (https://bongmendoza.wordpress.com/2012/09/04/whats-it-with-ferrari/), grandson of Chaleo Yoovidhya, I learned that Chaleo was the inventor of the drink (then known as Krating Daeng) and founder of the Red Bull empire.
In partnership with the Austrian Dietrich Mateschitz, a new company Red Bull GmbH was organized to make the drink suit Western taste. Red Bull soon became the most popular energy drink in the world and Chaleo’s family became the fourth richest family in Thailand with assets estimated at $5 billion.
Philippine version of Red Bull energy drink
Who are parties involved? The complaint was filed by the former Red Bull distributor in the Philippines–Energy Food and Drinks Inc. (EFDI).
The complaint is lodged against T.C. Pharmaceutical Industries Co., Ltd. (TCP)–the manufacturer of the drink–and its current distributor, Maryland Distributors, Inc. (MDI).
Ordered arrested on the TCP side are Supreeya Yoovidhya, Pavana Langthara, Visuit Chiemkitchavarote, Suthirat Yoovidhya, and Nucharee Yoovidhya.
Three of those ordered arrested are Yoovidhyas, apparently relatives of the inventor of the drink and founder of the Red Bull company.
How can they, by any stretch of imagination be guilty of violation of intellectual property rights?
TCP terminated its distribution agreement with EFDI in October 2008 and the latter ceased operations by the end of 2009.
What’s the substance of TFDI’s complaint against TCP and MDI, its current distributor?
It supposedly found out that Red Bull products being sold in the country had “MDI” labels superimposed on the portion of the label which use to identify EFDI as the product’s exclusive local distributor.
If you are no longer a product’s distributor, why should the product label still contain your name?
On with the story.
The complaint against TCP was dismissed earlier by the city prosecutor of Legaspi City supposedly because there was a dispute over a product distribution agreement.
However, Justice Undersecretary Jose Vicente Salazar reversed the city prosecutor’s decision. Salazar ruled that a food product “shall be deemed misbranded if its labeling is false or misleading in any particular manner. Since complainant EFDI was the exclusive distributor, its name must be indicated in the label of Red Bull products. In the instant case, however, the bottles of Red Bull bore tampered stickers/labels.” (from Marion Ramos, “Cops vow to arrest Red Bull execs,” Philippine Daily Inquirer, 4, September 2012, p. A3)
EFDI was, I repeat, WAS, the exclusive distributor of Red Bull products.
Why then should its name be indicated on the product label?
Wouldn’t that be a case of misbranding or mis-labeling since MDI is now the current distributor?
Did the alleged misbranding happen when EFDI was still the exclusive distributor of Red Bull products?
If so, then it has a strong case?
The contract to distribute Red Bull products on an exclusive basis in the Philippines was signed by TCP and EFDI in 2003. It is most likely on the strength of this contract that EFDI was able to obtain a certificate of product registration for Red Bull energy drink products from the Bureau of Food and Drugs valid until 31 March 2013.
Does a certificate of product registration from the BFD confer intellectual property rights on the bearer?
It is my opinion as a non-lawyer that it is not.
Red Bull claims that it energizes tired bodies and thus falls under the BFD’s jurisdiction even if the former is careful to say it does not have therapeutic effects.
A certificate of registration, to my mind, allow the bearer to sell and distribute the product but it falls short of granting intellectual property rights to EFDI.
It is not clear if the exclusive distribution contract between TCP and EFDI is up to the end of 2013.
It is not likewise clear what contractual provisions govern the termination of the relationship.
What we know is that the TCP-EFDI partnership ended in 2008. If we assume the contract was ended unilaterally, without proper notice, and with malice or bad faith, among others–then the case should be better seen as breach of contract rather than a violation of intellectual property rights.
My non-lawyer two-cents’ worth.
Justice Undersecretary Jose Vicente Salazar talks to a domestic helper (Philstar)
Red Bull inventor and founder Chaleo Yoovidhya
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