Summary: In July 2026, the first-instance verdict of the trademark infringement case filed by Louis Vuitton (LV) against Moli Naibai, with a compensation amount of 10.3 million yuan, has drawn widespread attention from all sectors of society. The main points of contention in this case can be summarized into three key issues: the determination of trademark similarity, the cross-class protection of well-known trademarks, and the calculation of damages. The court held that the four-leaf flower used by Moli Naibai was similar to LV's well-known four-leaf flower trademark, and that the defendant had used the mark on a large scale despite knowing that its trademark registration application had been rejected, demonstrating clear subjective malice and constituting trademark infringement. This article posits that while this ruling clarifies the boundaries of cross-class protection for well-known trademarks in modern commercial operations and serves as a warning for emerging brands regarding intellectual property compliance, it also exposes the tension between traditional public cultural resources and the exclusive rights of registered trademarks.

trademark infringement; well-known trademark; cross-class protection; subjective malice; damages

I. Problem Statement

In July 2026, the Suzhou Intermediate People's Court of Jiangsu Province issued a first-instance judgment in the trademark infringement dispute between Louis Vuitton Malletier (hereinafter referred to as "LV") and Shenzhen Jasmine Naicha Catering Management Co., Ltd. (hereinafter referred to as "Jasmine Naicha"), finding that Jasmine Naicha had committed trademark infringement. The court ordered it to cease the infringement and pay LV 10.3 million yuan in economic damages and reasonable expenses. The combination of such a high amount of compensation and the fact that the defendant, Jasmine Naicha, is one of the leading enterprises in the new tea beverage market quickly sparked extensive discussions within the intellectual property academic and business communities.

The core issue in this case is whether the four-leaf flower graphic design used by Moli Naibai is similar to the four-leaf flower trademark registered by LV, and whether it infringes LV’s exclusive right to use its registered trademark. If infringement is established, does the claimed damages amount of 10.3 million yuan have sufficient factual and legal basis? Furthermore, the defendant argues that its graphic design originates from traditional Chinese cultural elements such as the baoxiang flower and persimmon calyx pattern, which are part of the public domain and should not be monopolized by trademark exclusive rights. Is this defense reasonable under the framework of trademark law? To clarify the above issues, it is necessary to understand relevant theories such as cross-class protection of well-known trademarks.

II. Case Facts and Summary of Judgment

LV is a globally renowned luxury brand, and its registered Monogram series four-leaf floral graphic trademark enjoys extremely high recognition among Chinese consumers, having been recognized as a well-known trademark multiple times. Since 2024, Molly's Milk White has widely used a four-leaf floral graphic as its brand logo and product packaging in its business operations, and has applied to the National Intellectual Property Administration for registration of this graphic trademark on several occasions, all of which were rejected due to similarity to LV's seven prior registered four-leaf floral graphic trademarks. Despite being aware of this restriction on its rights, Molly's Milk White has continued to open numerous stores nationwide and extensively use the rejected logo.

From 2025 to 2026

The court found after trial that: First, the infringing mark and LV's trademark in question are substantially similar in terms of composition elements, line curvature, and overall visual effect. Their coexistence in the market is likely to cause confusion among relevant consumers or lead them to mistakenly believe there is a specific association between the two. Second, LV's trademark in question constitutes a well-known trademark and is entitled to cross-class protection under the law, with its scope of protection extending to the catering services engaged in by the defendant. Third, despite knowing that its trademark registration applications had been repeatedly rejected due to similarity, the defendant continued to use the mark on a large scale. This demonstrates subjective intent to free-ride on LV's goodwill, and objectively, the defendant also obtained improper commercial benefits through such free-riding conduct, constituting trademark infringement. Accordingly, the court ordered the defendant (Molly's White) to cease the infringement and, after comprehensively considering factors such as the profits gained from the infringement, the degree of subjective malice, and the reasonable expenses incurred in enforcing rights, determined the amount of compensation to be 10.3 million yuan.

III. Analysis of the Key Legal Issues in Dispute in This Case

(1) Determination of trademark similarity: based on the likelihood of confusion among the relevant public.

Pursuant to Article 57(2) of the Trademark Law, using a trademark that is similar to a registered trademark on the same goods, or using a trademark that is identical or similar to a registered trademark on similar goods, without the authorization of the trademark registrant, where such use is likely to cause confusion, constitutes trademark infringement. In this case, upon repeated comparison between the LV trademark in question and the accused infringing mark, the court found that the core compositional elements of both are four-leaf floral designs, which are highly similar in terms of petal curvature, arrangement, and visual focal point, making the overall impressions difficult to distinguish. Under normal circumstances, consumers are highly likely to confuse the four-leaf flower mark of Jasmine Milk Tea with LV's four-leaf floral trademark. Although one is a luxury brand and the other is a tea beverage, given the global renowned status of the LV trademark, the relevant public may still mistakenly believe that there is a brand licensing or other affiliation between the two upon seeing the defendant’s mark, thereby creating a false impression of confusion.

(II) Cross-Class Protection of Well-Known Trademarks: Reasonable Delineation of Cross-Class Boundaries

LV's four-leaf flower trademark has been recognized as a well-known trademark by multiple judicial rulings and administrative decisions. According to Article 13, Paragraph 3 of the Trademark Law, if a trademark applied for registration on goods that are not identical or similar to those of a well-known trademark already registered in China is a reproduction, imitation, or translation of that well-known trademark, and it misleads the public, potentially harming the interests of the well-known trademark registrant, registration shall be refused and its use prohibited. In this case, the court appropriately extended the conditions for cross-class protection: cross-class protection of well-known trademarks does not require identical goods categories; as long as the alleged act is sufficient to mislead the public, causing relevant consumers to associate with the well-known trademark holder and potentially harming their interests, it constitutes infringement. LV has long expanded its commercial territory through brand extension and collaboration, and its brand influence is no longer limited to traditional product categories. Against this backdrop, the court determined that the defendant's use of similar signs could weaken the global commercial value of LV's trademark and should therefore be prohibited.

(3) Determination of subjective bad faith: continuing to use despite knowing it was rejected.

In this case, Moli Nai Bai repeatedly applied to register the disputed four-leaf clover graphic trademark, but all applications were rejected by the Intellectual Property Office on the grounds of similarity to LV's prior registered trademark. This fact constitutes important evidence for establishing subjective bad faith. The court held that the defendant, after repeatedly receiving rejection notices and being fully aware of the defects in the trademark it intended to register, not only failed to cease its use but instead大规模 opened stores and expanded its market nationwide, clearly demonstrating a subjective intent to ride on the brand reputation of LV. This "knowing yet deliberate" conduct not only exacerbates the severity of the infringement but also serves as a significant consideration for the court in applying punitive factors when determining the amount of damages.

IV. Reasonableness and Dispute over the Amount of Compensation

The judgment amount of 10.3 million yuan still appears excessively high, even with the application of punitive damages. Based on the court's calculation logic, this amount primarily consists of two components: one is the infringement profit, and the other is the reasonable expenses incurred for rights protection. According to publicly disclosed financial information, Moli Naibai's total revenue for 2025 is approximately 4 billion yuan, with products using the allegedly infringing trademark accounting for about 35% of total revenue. Based on this, the estimated infringement profit is around 10 million yuan. The second component is the reasonable expenses incurred by LV for rights protection, such as legal fees and investigation costs, totaling approximately 300,000 yuan. Taking the above factors into comprehensive consideration, the court also treated the defendant's subjective malice, the duration of the infringement, and the scale of the infringement as discretionary aggravating factors.

From the perspective of judicial practice, although the awarded compensation is high, it is not without basis. On one hand, the court did not simply use the amount of illegal profits as the sole benchmark, but fully considered punitive factors on this basis. On the other hand, the defendant failed to provide sufficient evidence during the litigation to prove that its actual profits were lower than the estimated amount, nor did it offer an effective defense of legal source. Therefore, the awarded compensation is reasonably justified within the existing evidentiary framework and legal system.

5. Analysis of the Effectiveness of the Defendant's Defense: Can Traditional Public Cultural Elements Prevail over the Exclusive Right to a Registered Trademark?

Jasmine Naicha argued in litigation that its four-leaf flower design originates from traditional Chinese public cultural elements such as Baoxiang flower and persimmon calyx patterns, which are symbols of traditional culture in the public domain and should not be registered as a trademark by LV for exclusive protection. This defense involves an important but long-standing institutional flaw in trademark law: how should the conflict between public cultural resources and the exclusive right to a registered trademark be reconciled?

From the perspective of the current Trademark Law, this defense is unlikely to gain legal support. First, trademark rights, being rights that undergo statutory examination, announcement, and registration, possess legal public trust and certainty. LV's trademark in question is legally registered and renewed, remaining valid under the law, and its right to protection is not diminished by the cultural origin of the pattern. Second, once traditional cultural elements enter the public domain, any entity may freely draw upon and use them. However, if such elements are combined and arranged in a distinctive manner through original creation to form a registrable trademark, that trademark is granted independent protection apart from its source elements. Third, even if the original elements of the design derive from traditional Chinese patterns, the commercial mark used by the defendant, after being designed, closely resembles LV's trademark visually, giving rise to a specific commercial expression. This expression has exceeded the scope of legitimate reference and entered into the realm of trademark infringement by free-riding on goodwill.

However, this case also reveals a structural dilemma in China's intellectual property system: the conflict between traditional elements and trademark exclusive rights is not merely a simple legal issue of "whether registration is allowed" or "scope of exclusivity," but rather lies in the current trademark examination system's lack of a mechanism for identifying and blocking public cultural resources. Such issues deserve deep consideration by lawmakers.

VI. Conclusions and Implications

The first-instance judgment in the trademark infringement case of LV v. Moli Nai Bai holds significant legal implications on multiple levels.

First, at the substantive law level, the judgment systematically outlines the criteria for cross-class protection of well-known trademarks, clarifies the method for comparing similar graphic trademarks, and defines the weight of subjective intent in infringement determinations, thereby providing a referenceable adjudicative logic for similar cases. Second, at the damages level, the judgment demonstrates the court's judicial orientation of imposing strong deterrence against malicious infringement through high compensation awards, offering a vivid practical standard for the policy of "strict protection" of intellectual property. Third, at the business compliance level, a key insight for new consumer brands from this case is that "brand before market, trademark first" is by no means just a slogan.

Of course, this case also reminds us to pay attention to the balance between intellectual property protection and the inheritance of traditional culture. While strengthening trademark protection, how to reserve reasonable space for creation and use of public cultural resources and avoid excessive privatization is a long-term issue that legislative, judicial, and administrative authorities need to address together.

For this case, Moli Naibai has clearly stated that it will appeal, and the outcome of the second-instance trial is worth continuous attention. Regardless of the final judgment, this case has provided a benchmark sample for the intellectual property compliance governance of China's new consumer brands.