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France tackles China over Danone, Schneider legal spats

Sun Nov 25, 2007 1:16pm EST

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BEIJING, Nov 25 (Reuters) - French President Nicolas Sarkozy intervened with China on Sunday on behalf of French companies Danone (DANO.PA) and Schneider (SCHN.PA), which are bogged down in local legal disputes, French officials said.

Food group Danone is suing its Chinese partner Wahaha for alleged breach of contract and Schneider Electric must pay damages for infringing a patent on technology the French company says it owns. Both claims are disputed by their respective partners. Sarkozy raised the fate of the two companies over dinner with Chinese President Hu Jintao at the start of a three-day state visit on Sunday.

"President Hu took note," a French official said. The discussion was "not conclusive but not negative either."

France says intellectual property rights and legal protection form part of its concerns over fair trade.

Danone and Wahaha have been exchanging accusations and lawsuits for months, with the French company accusing its Chinese partner of setting up illegal operations outside their ventures that sell identical products.

Wahaha has in turn accused Danone of violating non-competition agreements.

In September, Schneider Electric lost a patent infringement lawsuit and was ordered to pay $44 million in damages.

The suit was brought in the eastern city of Wenzhou by Chint Group, China's biggest maker of low-voltage electrical products. It accused the French electrical engineering group of selling products based on Chint's technology.

Schneider says it is entitled to use the technology and disputes the validity of Chint's Chinese patent.

(Reporting by Emmanuel Jarry, Tim Hepher; Editing by Maureen Bavdek)

((tim.hepher@reuters.com)) Keywords: CHINA FRANCE/COMPLAINTS

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