10.3 Million Yuan Trademark Verdict in China: What the LV vs. Molly Tea Case Teaches Foreign Brands

July 3, 2026 - Reading time 6 min - By the Logo China Pro Editorial Team

1. The Timeline of the Dispute (What Happened, Exactly)

• 2024 H2 -- Molly Tea rolled out a new brand identity built around a black four-petal flower graphic, replacing its original Chinese-calligraphy logo. Consumer chatter on Xiaohongshu and Weibo immediately flagged a resemblance to LV's Monogram.
• March 2024 -- Molly Tea's affiliated company filed multiple trademark applications for the four-petal flower graphic in classes covering restaurants, advertising, and food products. The China National Intellectual Property Administration (CNIPA) rejected every application, finding registration obstacles due to prior rights.
• May 15, 2025 -- Louis Vuitton Malletier filed a trademark infringement lawsuit at the Suzhou Intermediate People's Court against Molly Tea's parent company (Shenzhen Molly Milk White Catering Management Co., Ltd.) and a franchisee in Wu Zhong District.
• June 29, 2026 -- First-instance judgment issued (publicly disclosed July 2, 2026). The court awarded LV 10 million yuan in economic damages plus 300,000 yuan in reasonable enforcement costs -- totaling 10.3 million yuan.
• July 2, 2026 -- Founder Zhang Bocheng confirmed Molly Tea will appeal. The same evening, the brand's WeChat Mini Program switched its black flower logo to a color version.

Source: Suzhou Intermediate People's Court first-instance judgment (June 29, 2026); International Financial News via CCTV Finance (July 3, 2026); Xinhua - Jiaohuidian (July 3, 2026); China Quality News (July 3, 2026); China Daily bilingual edition (July 3, 2026); Yangtse Evening News (July 3, 2026).

2. The Core Legal Issue: Cross-Class Protection of Well-Known Marks

Ordinary trademarks in China are protected only within their registered Nice class and closely related classes. But well-known (驰名) trademarks enjoy an expanded scope of protection that can stretch across unrelated industries -- this is the principle of "cross-class protection" under Article 13, paragraph 3 of China's Trademark Law.

The court reasoned as follows:

1. LV's seven four-petal flower graphics are well-known trademarks with global recognition and high distinctiveness.
2. Molly Tea's design was so close in composition, element layout, and line rendering that it would lead ordinary consumers to assume a brand association -- a co-branding, a licensing deal, or some other commercial connection.
3. Even though no consumer would mistake Molly Tea for LV itself, the psychological association between the two brands was enough to establish infringement under the well-known-mark doctrine.
4. Molly Tea's prior rejections by CNIPA demonstrated subjective bad faith: the brand knew the graphic was unregistrable, yet still deployed it at scale across 2,300+ stores.

This logic has direct implications for foreign brands entering China. The question is no longer "are we in the same industry?" -- it is "does our mark create a likelihood of association with an already well-known Chinese or foreign mark in China?"

3. Five Takeaways for Foreign Brands Planning to Enter China

Takeaway 1: "Different Industry" Is Not a Defense

The most dangerous misconception Logo China Pro often hears from international founders is: "We sell software / cosmetics / supplements, and the conflicting mark is in luxury goods or dairy -- we're fine." Under China's well-known mark doctrine, industry boundaries do not immunize you. If your mark triggers a consumer association with a recognized mark, you can lose -- even across industries.

Takeaway 2: A CNIPA Rejection Letter Is a Legal Warning, Not a Suggestion

Molly Tea's applications were rejected in 2023-2024. The brand proceeded to use the mark anyway. The court treated this as conclusive evidence of bad faith -- a factor that inflates damages and destroys any "innocent infringement" argument. If CNIPA rejects your mark, treat the rejection letter as the most important document in your file.

Takeaway 3: Pre-Filing Clearance Must Cover All 45 Nice Classes

A domestic trademark search limited to your own class is insufficient in China. You must clear your proposed mark across all classes where a well-known mark could plausibly claim an association. In practice, this means searching at least the top 10-15 classes relevant to your brand's visual identity and product adjacencies -- and cross-checking against the CNIPA well-known marks register.

Takeaway 4: Damages Are Scaled to Revenue, Not Just Royalty Rates

The 10 million yuan figure was not arbitrary. The court applied an "infringer's profit + reasonable costs" formula, multiplying Molly Tea's 2025 revenue (~4 billion yuan) by the share of revenue attributable to products bearing the infringing mark (~35%). For foreign brands with high projected revenue in China, this means the bigger you grow before fixing a trademark problem, the larger your exposure becomes.

Takeaway 5: Cultural Heritage Arguments Rarely Override Registration Rights

Some Chinese netizens argued that the four-petal flower motif derives from Tang Dynasty "Baoxiang" patterns, and therefore LV's mark is itself a form of cultural appropriation. The court did not entertain this argument. Under China's trademark system, registration is what creates enforceable rights -- not historical origin. If your design draws on traditional cultural elements, your defense cannot rely on "it was there first." You need a registered, defensible mark of your own.

4. What This Means for Your Brand -- A Practical Checklist

Whether you are launching a DTC brand, expanding into Tmall or JD.com, opening a flagship store in Shanghai, or sourcing through Chinese suppliers, the LV v. Molly Tea verdict is a signal that CNIPA enforcement is aggressive and courts are willing to award nine-figure damages.

Before committing to any brand name, logo, or packaging in the Chinese market, Logo China Pro recommends the following minimum due-diligence steps:

1. Run a multi-class CNIPA trademark search (not just your primary class) to identify conflicting marks -- including well-known marks in unrelated classes.
2. Audit your logo's visual similarity to any well-known marks in China, even if they operate in a different industry.
3. Document your pre-filing clearance process. If a dispute arises later, a documented clearance report is your strongest evidence of good faith.
4. File your trademark applications early -- China is a first-to-file jurisdiction. Waiting until you "get traction" can cost you the entire mark.
5. Do not use a mark after a CNIPA rejection. The Molly Tea verdict demonstrates this is the fastest path to a bad-faith finding and a nine-figure damages award.

5. How Logo China Pro Can Help

At Logo China Pro, the studio's specialist partners conduct comprehensive CNIPA trademark clearance searches before any brand expansion into China. The service includes a multi-class search across the 45 Nice categories, a well-known-mark cross-check, a visual similarity audit, and a written risk assessment -- the same framework that would have flagged Molly Tea's exposure long before the LV lawsuit was filed.

If you are a foreign brand preparing for launch in China, the best time to run a clearance search was before your last design meeting. The second-best time is today.

See the filing packages and pricing ->

Read answers to common questions from foreign founders ->

Disclaimer: This article is for general informational purposes only and does not constitute legal advice. Trademark law is jurisdiction-specific and fact-dependent. The analysis above reflects publicly available information from official court records and Chinese state media as of July 3, 2026. For advice on your specific situation, consult qualified trademark counsel licensed in the relevant jurisdiction. Logo China Pro facilitates introductions to independent specialist partners; the studio itself does not practice law.

*NOT legal advice. Logo China Pro is a filing-coordination service, not a law firm. Filing execution is coordinated with specialist partners. CNIPA examination outcomes depend on the official examiner's decision and applicable regulations.