Wausau, WI, US --
The largest U.S. maker of ginseng tea must recall some of its ginseng products nationwide under a trademark infringement settlement reached Tuesday with the Wausau-based Ginseng Board of Wisconsin, an official said.
By June 30, San Francisco-based Prince of Peace Enterprises must remove from store shelves any ginseng tea, capsules and raw roots bearing the board's Wisconsin-grown seal, said Ron Rambadt, executive director of the Ginseng Board, a research and marketing organization.
More than 500 retail outlets potentially could. be involved nationally, Rambadt said, though none in Wausau.
This is the first time in the United States we have taken anybody to court," Rambadt said. "I want this to send a message that the ginseng industry will not sit around and take
a lot of abuse."
The settlement stems from a lawsuit filed in a San Francisco federal court in January, alleging the company had used the board's seal without approval between July 1992 and July 1993.
The seal program, active in 10 countries, allows ginseng companies to use the board's trademark in exchange for permitting inspections to verify the use of Wisconsin-grown
roots.
Under the settlement, the company did not admit trademark infringement.
Prince of Peace president Kenneth Yeung, in a telephone interview from San Francisco, called the agreement a product exchange, not a recall.
"A recall means to consumers that there is something wrong with the product and that is not the case," Yeung said.
The company will collect Prince of Peace products carrying the board's seal, and merchants can choose to receive credit or new products without the seal, Yeung said. He said the
quantity of products involved would be "minimal" because the company stopped using the seal nearly two years ago.
In addition to the product removal, the company has agreed to pay a cash settlement that will serve to cover the board's legal and investigative expenses, said RRambaddt, who was bound by the agreement not to disclose the sum involved.
Another ginseng official said the settlement would have a ripple effect.
"I think there are any number of honest and dishonest companies watching this," said Larry Berens, board president and a town of Maine ginseng grower.
The Ginseng Board is in the process of waning three other companies, on the East and West coasts of the United States and in Canada, about their alleged trademark infringement,
Rambadt said.
Berens said the Prince of Peace recall could increase demand for Wisconsin ginseng because unscrupulous companies, allegedly mixing Wisconsin ginseng with a lower-value Chinese
variety and selling it as pure Wisconsin roots, will fear being sued.
"I think this will change the thinking of dishonest sellers and those who felt they were being pushed by competition into being dishonest," Berens said.
About 75 local ginseng growers marched in the streets of Chicago's Chinatown in August 1994 to protest supposed fraudulent mixing, which they claimed had cost them up to $40 million in sales since 1991.
Marathon County growers raised about 1.7 million pounds of ginseng in 1994, roughly 90 percent of the nation's top. The mot has been selling for an estimated $20 to $35 per pound.
Rumors of a pending recall already have lessened the alleged mixing problem in some major cities, said local ginseng grower and manufacturer Paul Hsu.
"Just the word in the market that the board had something going on with Prince of Peace had some effect," said Hsu, quoting information from his salesman throughout the country.
Hsu estimated the alleged mixing has decreased by two-thirds since fall 1994 because of Prince of Peace negotiations and the Chicago protest.
"The Ginseng Board should be supported in order to clean up this kind of abuse in the United States."
- BY : Kelly C Thayer
- SOURCE : Wausau Daily Herald1995.05.24
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