A recent trade mark dispute in China serves as an important reminder that investing in a brand without carrying out proper trade mark clearance can have significant legal and commercial consequences.
A court in Jiangsu Province ruled that Shenzhen-based beverage chain Molly Tea had infringed the registered trade mark rights of Louis Vuitton, ordering the company to pay damages of 10.3 million yuan (approximately £1.1 million / $1.5 million).
Molly Tea argued that its four-petal logo was inspired by the traditional jasmine flower, a traditional symbol used in China for hundreds of years. Furthermore, they argued that there would be no confusion or unfair advantage given that the respective parties operated in entirely different markets. Nonetheless, the court concluded that Molly Tea had infringed Louis Vuitton's registered trade mark rights in China and diluted the distinctiveness of its well-known brand.
Although this decision was made under Chinese trade mark law, the issues it raises are relevant to businesses worldwide. Courts in many jurisdictions, including the UK, assess trade mark infringement considering factors such as the similarity of the respective marks, the similarity of the goods/services and the reputation of earlier marks, before arriving at the conclusion as to whether there would be a likelihood of consumer confusion or unfair advantage.
For businesses of all sizes, the case highlights an important point: trade mark clearance should be an essential part of the branding process, not an afterthought.
Expert Insight
Commenting on the decision, Secerna's UK Chartered Trade Mark Attorney, Sam Turton, said:
This dispute is a stark reminder that trade mark risk is not confined to businesses operating in the same market sector. Many companies assume that selling tea or coffee would insulate them from claims by a luxury fashion house, but well-known brands can enjoy broad protection against dilution and unfair advantage, even across very different industries.
One significant aspect of this case is that Molly Tea reportedly continued using its logo after repeated objections during the trade mark registration process. The company is understood to have made several applications to register versions of its four-petal motif, which were refused by the Chinese Trade Mark Office because of the overlap with Louis Vuitton's earlier rights. Continuing to build a national brand around a logo that had already attracted official objections appears to have been a significant factor in the court's assessment of the case.
The case demonstrates why professional trade mark clearance searches should take place before a brand or logo is launched. Identifying potential conflicts early allows businesses to make informed decisions before investing in packaging, signage, marketing and expansion. Trade mark clearance is not simply an administrative exercise – it is an essential part of managing and minimising legal risk.
Nonetheless, the case has sparked significant outcry amongst the Chinese public, with Molly Tea indicating that they will appeal the decision. This is unlikely to be the last we hear of this case.”
Key Legal and Commercial Takeaways
The case provides several important lessons for businesses developing and protecting their brands:
- Inspiration does not prevent infringement: A logo inspired by nature, history or traditional designs can still infringe an earlier registered trade mark if it is too similar to those earlier trade mark rights.
- Trade mark clearance should come before launch: Carrying out comprehensive trade mark clearance searches before investing in branding helps identify potential conflicts before they become expensive legal disputes.
- The cost of rebranding often exceeds the cost of registration: Court-awarded damages may be only part of the financial impact. Businesses may also need to replace packaging, signage, websites, marketing materials and other brand assets, while rebuilding customer recognition.
- Trade mark rights are territorial: As businesses expand into new markets, they should ensure their brands are cleared and protected in every country or region in which they intend to trade.
The power of the reputed brand: Brands that carry an enhanced level of reputation and distinctiveness generally attract a greater scope of protection.
Why Early Trade Mark Clearance Matter
Many businesses invest considerable time and money creating a new brand identity before checking whether similar trade marks already exist. If conflicts are discovered after launch, changing a business name or logo can be disruptive, costly and damaging to customer recognition.
Professional trade mark clearance searches help identify potential issues before significant commercial investment has been made. They enable businesses to assess legal risks, refine branding where necessary and proceed with greater confidence that their brand can be protected and enforced.
It is equally important to understand that registering a company with Companies House or securing a domain name does not automatically give a business the legal right to use a name or logo. Only registered trade mark rights provide monopoly rights for the goods and services they cover, and businesses can still infringe earlier trade mark rights despite owning the company name or website domain.
How a Chartered Trade Mark Attorney Can Help
Chartered Trade Mark Attorneys help businesses protect one of their most valuable commercial assets: their brand.
This includes carrying out comprehensive trade mark clearance searches, advising on the registrability and distinctiveness of proposed names and logos, securing UK and international trade mark registrations, and helping businesses enforce their rights where infringement occurs.
For organisations planning to expand internationally, trade mark attorneys can also develop filing strategies covering overseas markets, including via the European Union and International trade mark regimes, helping to minimise legal risk as businesses grow.
Protect Your Brand Before Complications Arise
The Louis Vuitton v Molly Tea dispute demonstrates that trade mark protection is far more than an administrative process – it is an essential element of business risk management.
Whether you are launching a new brand, entering new markets or reviewing an existing trade mark portfolio, carrying out professional trade mark clearance searches at the earliest opportunity can help avoid costly disputes, unnecessary delays and expensive rebranding exercises.
If you would like advice on trade mark clearance, trade mark registration or protecting your brand in the UK or internationally, contact our attorneys at Secerna.