The Intermediate People's Court of Suzhou, Jiangsu Province, issued a first-instance civil judgment in the trademark infringement and unfair competition lawsuit brought by Louis Vuitton Malletier (LV) against the Chinese tea beverage brand "Molly Tea" (茉莉奶白) and its local franchisee.

(Image Source: The Beijing News)

The court ordered Molly Tea to pay LV RMB 10 million in economic losses and RMB 300,000 in reasonable legal expenses, totaling RMB 10.3 million. This marks one of the highest damages awards in recent intellectual property disputes within the Asian beverage and consumer goods sector. Although Molly Tea has announced its intention to appeal, the case provides vital strategic guidance regarding international trademark cross-class protection, commercial copyright limits, and corporate Freedom to Operate (FTO) compliance.

I. Case Background & Litigation Timeline

• Core Dispute: In 2021, Molly Tea built its initial identity around traditional Chinese aesthetic elements. During a subsequent visual rebrand, the company introduced a main logo featuring a four-petaled geometric flower and widely deployed a repeating quadrupled pattern on cups, paper bags, and store fascias. The pattern led consumers on social media to highlight striking visual similarities with LV’s famous Monogram design.
• Prior Application History: Public records reveal that starting in 2022, Molly Tea submitted multiple applications to register four-petal geometric device marks with the China National Intellectual Property Administration (CNIPA). These applications were repeatedly rejected or placed under refusal review due to conflicts with prior registered marks held by LV. Despite these administrative refusals, the brand fully deployed the disputed pattern across its commercial operations.
• Court Jurisdiction Strategy: LV initiated the suit in Suzhou by naming a local Suzhou franchisee alongside Molly Tea's Shenzhen headquarters as co-defendants. Under Article 29 of the Civil Procedure Law of the PRC, jurisdiction lies with the court at the place of the tortious act or the defendant's domicile. This strategy successfully anchored jurisdiction with the Suzhou Intermediate People's Court, home to the specialized Suzhou IP Court.
• Current Status: Filed in May 2025, the case resulted in a first-instance ruling on June 29, 2026. Molly Tea has updated its digital applet icons and announced a formal appeal.

(Image Source: Molly Tea Mini-Program)

II. Judicial Reasoning & Legal Analysis

1. Why Copyright Registration Fails as a Defense

Molly Tea argued that it held valid copyright registration certificates for the artwork, claiming independent creation. The court rejected this defense:

• Functional Distinction: Copyright protects original artistic expression, whereas trademark law governs commercial identifiers that indicate product origin.
• Commercial Conversion: Once the geometric pattern was affixed to packaging, store signage, and marketing collaterals, its function converted into trademark-style use (商标性使用).
• Prior Right Priority: Under Article 32 of the PRC Trademark Law, subsequent copyright registrations cannot infringe upon an entity's prior registered trademark rights.

(Image Source: China Trademark Office)

2. Secondary Meaning of Geometric Patterns

While basic four-petal designs exist in the historical public domain, LV's extensive global commercial use and marketing have established significant acquired distinctiveness (后天显著性). Intensive commercial use of highly similar visual symbols by a competitor in consumer-facing markets constitutes bad-faith goodwill freeloading (攀附商誉) and likelihood of confusion.

3. Cross-Class Protection for Well-Known Marks

LV operates primarily under Class 18 (leather goods) and Class 25 (apparel), while Molly Tea operates under Class 30 (beverages) and Class 43 (catering services).

• Under Article 13(3) of the PRC Trademark Law, protection for registered well-known trademarks (驰名商标) extends across non-similar product and service categories.
• The court found that using an almost identical pattern on beverage products misleads the public into inferring an authorized commercial relationship or collaboration, diluting the distinctive character and goodwill of LV's well-known mark.

(Image Source: Huibiao.com)

4. Basis for the RMB 10.3 Million Award

The RMB 10.3 million award exceeds the statutory compensation ceiling of RMB 5 million outlined in Article 63(3) of the PRC Trademark Law. The court applied discretionary damages (裁量性赔偿) based on:

1. Scale of Infringement: Molly Tea operates a vast nationwide store network where the infringing visual assets were deployed systematically.
2. Subjective Bad Faith: Proceeding with commercial deployment after repeated trademark application rejections by the CNIPA demonstrated intentional infringement (明知故犯).

III. Corporate IP Compliance Roadmap

• Conduct Freedom to Operate (FTO) Audits: Conduct comprehensive trademark clearance and cross-class risk evaluations prior to finalizing brand rebrand designs or expanding into international franchise markets.
• Avoid Commercializing Unapproved Trademarks: Rolling out visual identities that have been formally rejected by IP authorities exposes companies to high claims of intentional bad faith, elevating potential damages into punitive or discretionary tiers.
• Differentiate Copyright from Trademark Use: A copyright registration certificate does not grant an automatic legal shield to use an artistic graphic as a commercial identifier if it conflicts with prior registered trademarks.

(Image Source: Tianyancha)

About the Author

Yu Yuting
Partner | NEO-ARK Law Firm

Lawyer Yu focuses on foreign-related litigation, cross-border disputes, commercial matters, and legal services for overseas individuals and businesses in China.

Email: [email protected]

In recent years, defense teams at Neo-Ark law firms have frequently been consulted by family members of individuals detained upon returning from overseas "scam compounds" (诈骗园区). Families are often baffled by detention notices: If the suspect made no money, generated zero verified fraud sales, or was trafficked or coerced, why do public security authorities charge them with fraud under "other serious circumstances"?

This article examines the tension between traditional property crime requirements (where monetary loss dictates guilt) and new statutory presumptions under China's specialized judicial interpretations. It analyzes key precedents, statutory frameworks, and practical defense pathways centered on timeline calculations and legitimate cause exceptions.

（source：baidu）

I. The Conflict Between Traditional Guilt Principles and Judicial Presumptions

Under Article 266 of the Criminal Law of the People's Republic of China, traditional fraud requires establishing unlawful possession intent, specific victims, and quantifiable monetary loss. In contrast, cross-border telecom fraud operates under specialized judicial guidelines:

1. Key Judicial Precedents

• Case 1: State v. Zheng (Tongzhou District Court, Nantong, Jiangsu) The defendant operated at a Cambodian scam hub between July and September 2019, earning RMB 25,000. While individual victim losses could not be individually verified, the court confirmed his active presence exceeded 30 days. Applying Article 3 of the Opinions on Several Issues Concerning the Application of Law in Handling Telecom and Online Fraud Criminal Cases (II) ("Opinions II"), the court ruled this constituted "other serious circumstances," sentencing him to three years' imprisonment (suspended for four years) and a fine of RMB 30,000.
• Case 2: State v. Luo, Li, & Liu (Qianshan District Court, Anhui) The defendants crossed the border into Wa State, Myanmar, to join a "Pig Butchering" (杀猪盘) fraud syndicate. Although individual fraud amounts were untraceable, their stays at the compound spanned two to four months (all exceeding 30 days). The court invoked the 30-day presumption, convicting them of fraud alongside illegal border crossing (偷越国（边）境罪).

（source：baidu）

II. The Normative Logic of the "30-Day Rule"

Under Article 3 of Opinions II and Article 7 of the Opinions on Handling Cross-Border Telecom Network Fraud, individuals joining an overseas fraud group targeting Chinese domestic residents are held criminally liable for fraud under "other serious circumstances" if:

1. Specific fraud amounts cannot be established due to cross-border evidentiary barriers, AND
2. The suspect stayed at an overseas scam hub for 30 days or more cumulative within a single year (or crossed the border multiple times).

Why Was This Presumption Established?

Scam syndicates systematically erase server logs, change communication channels, use obfuscated ledgers, and operate outside Chinese jurisdiction. If traditional monetary proof were strictly required, low-level operators would evade criminal liability entirely. To preserve deterrence across the entire illicit supply chain, Chinese legal policy constructs a statutory presumption connecting duration of presence to degree of participation and public harm.

III. Statutory Exceptions & Defense Pathways

While the 30-day threshold appears rigid, Article 7 and Article 8 of the Cross-Border Fraud Opinions establish explicit defense avenues:

1. Proof of Legitimate Activity (正当活动)

The statutory presumption is defeated if the defense provides verifiable evidence that the individual went abroad for legitimate employment (e.g., working strictly as a cook or cleaner without participating in core fraud operations) or did not actually join the fraud syndicate.

2. Strict Calculation of the 30-Day Timeline

Under Article 8, the 30-day clock only begins when the suspect officially joins the scam hub. Defense counsel must audit the timeline to deduct:

• Reasonable transit time from the border to the destination.
• Periods of forced confinement or transit prior to entering the compound.
• Time spent detained or waiting for repatriation after rescue by local authorities.

3. Mitigating Circumstances for Deceived or Coerced Individuals

Under Chinese criminal justice policy (宽严相济), individuals who were lured, tricked, or coerced into participating—and who fled or were rescued before executing active fraud schemes—may qualify for non-prosecution (不起诉) or substantial sentence mitigation.

（153 Cross-Border Sextortion Suspects Repatriated from Indonesia to China. source：baidu）

IV. Actionable Recommendations for Families & Defense Teams

1. Reconstruct the Objective Timeline: Gather entry/exit logs, flight bookings, transit receipts, location tags, and chat records to establish exact dates of entry, transit, and actual arrival at the compound.
2. Document Forced Confinement & Rescue: Secure witness testimony, police release documents, or family communication records demonstrating coercion, ransom requests, or human trafficking context.
3. Engage Specialized Criminal Defense Counsel Early: Counsel should intervene during the initial police investigation (侦查阶段) to file formal legal opinions (法律意见书) detailing statutory exclusions and demanding line-item deductions from the 30-day timeline.

Conclusion

The 30-day rule provides Chinese law enforcement with an effective tool against cross-border fraud, but it is not an absolute rule of strict liability. By methodically proving legitimate intent, reconstructing transit timelines, and establishing coercion or lack of active participation, defense teams can prevent clients from being unjustifiably swept up in statutory presumptions.

About the Author

Yu Yuting
Partner | NEO-ARK Law Firm

Lawyer Yu focuses on foreign-related litigation, cross-border disputes, commercial matters, and legal services for overseas individuals and businesses in China.

Email: [email protected]

With the expansion of global short-video ecosystems, cross-border content scraping—specifically downloading original videos from overseas platforms like TikTok, removing watermarks, and re-uploading them to domestic Chinese platforms such as Douyin for commercial monetization—has emerged as a systemic legal challenge for global content creators and multi-channel networks (MCNs).

This dual-language compliance guide analyzes civil and criminal jurisprudence within Chinese courts to map statutory violations, digital evidence preservation protocols, platform takedown mechanisms, and litigation strategies tailored for foreign right-holders.

(Official homepage of TikTok platform displaying global user-generated content creation. Source: tiktok.com)

I. Key Judicial Precedents: Chinese Court Enforcement Against Cross-Border Content Theft

1. Civil Jurisprudence: Zhang v. Liang (Beijing Internet Court)

• Factual Background: The plaintiff, a TikTok creator with over 1 million followers, published 100 original product recommendation videos. The defendant downloaded all 100 videos, removed original attribution watermarks, and posted them on Douyin, gaining 350,000 followers and generating commercial sales revenue.
• Legal Holding: Under the Berne Convention for the Protection of Literary and Artistic Works, lawful works first published in member states enjoy national treatment under China’s Copyright Law. The court held that deleting creator credits and unauthorized distribution infringed upon both the plaintiff’s Right of Authorship and Right of Communication through Information Networks. The defendant was ordered to pay RMB 50,000 in economic damages and RMB 22,500 in reasonable legal/notarization fees.

2. Criminal Jurisprudence: State v. Zhu & Wang (Nanhu District Court, Zhejiang)

• Factual Background: The defendants systematically scraped, edited, and distributed copyrighted short video resources across digital networks to evade automated platform audits, generating over RMB 390,000 in illegal gains.
• Legal Holding: Applying Article 217 of the Criminal Law of the People's Republic of China (Copyright Infringement Crime), the court sentenced both defendants to two years' imprisonment (suspended with two years and six months' probation) and imposed total criminal fines of RMB 380,000.

(Overview diagram illustrating judicial enforcement procedures and copyright rules in China. Source: Baidu Baike)

II. Statutory Breakdown of Infringing Acts Under Chinese Law

1. Right of Communication through Information Networks (Information Network Transmission Right): Uploading protected works to open online platforms without consent, enabling public access at selected times and locations, violates Article 10 of China's Copyright Law.
2. Right of Authorship (Attribution Right): Stripping original watermarks, creator logos, or closing credits directly violates moral rights of attribution.
3. Right of Adaptation (Derivative Works): Unauthorized re-editing, dubbing, or slicing video content infringes upon derivative transformation rights.
4. Unfair Competition (Anti-Unfair Competition Law): Where scraping constitutes a core commercial model that free-rides on established brand equity to siphon traffic, courts apply Article 2 of the Anti-Unfair Competition Law.
5. Criminal Liability: Profit-driven copyright infringement with illegal revenue exceeding RMB 50,000 or illegal gains exceeding RMB 30,000 triggers criminal prosecution under Article 217 of the Criminal Law.

(Official portal interface of Douyin platform for content management and creator services. Source: douyin.com)

III. Four-Step Enforcement Protocol: From Evidence Preservation to Litigation

Step 1: Secure Digital Evidence (Critical Baseline)

• Capture complete screen recordings of the infringing account, videos, fan count, likes, comments, and direct e-commerce conversion links.
• Utilize verified electronic evidence platforms (e.g., Quanli Weishi, Cunnar) for blockchain timestamping, or engage a Chinese notary public for formal web page preservation (Highest Evidentiary Weight).

Step 2: Platform Administrative Takedown

• Submit IP takedown complaints through Douyin’s Intellectual Property Protection Portal. Requires proof of prior original publication, raw creation logs, infringing URLs, and comparative claim charts.

Step 3: Formal Legal Demand Letter

• Retain Chinese legal counsel to issue a formal Cease-and-Desist (C&D) letter to the infringing individual or operating entity, setting firm deadlines for video deletion, public apology, and financial settlement.

Step 4: Litigation via Specialized Internet Courts

• If settlement negotiations stall, file a lawsuit in the competent People's Court. The three specialized Internet Courts (Beijing, Hangzhou, Guangzhou) exercise jurisdiction over internet-related disputes, supporting fully digitalized cross-border filing, electronic service of process, and remote trial proceedings.

IV. Practical Requirements for Foreign Creators & MCNs

• Cross-Border Power of Attorney (POA) & Authentication: Procedural documents executed overseas (such as POAs and corporate registration certificates) must fulfill cross-border verification requirements. For signatory nations to the Hague Apostille Convention, documents require an Apostille Certificate. For non-signatory jurisdictions, consular legalization via the Chinese Embassy remains mandatory.REFER：https://www.neoarklawyers.com/navigating-legal-representation-how-foreign-parties-appoint-chinese-lawyers-in-the-apostille-convention-era/
• Statute of Limitations: The statutory limitation period for copyright infringement in China is three years, running from the date the right-holder knew or reasonably should have known of the infringing activity.
• Enforcement Mechanisms: Upon issuance of a binding court judgment, non-compliant defendants face judicial enforcement measures, including bank account freezing, asset seizure, and inclusion on credit blacklists.

Conclusion

China’s modern judicial framework offers robust, equal protection to international creators under the Berne Convention. Overseas creators and legal teams should act promptly upon discovering unauthorized reposting by securing admissible electronic evidence and executing systematic administrative or judicial remedies to safeguard their intellectual property.

About the Author

Yu Yuting
Partner | NEO-ARK Law Firm

Lawyer Yu focuses on foreign-related litigation, cross-border disputes, commercial matters, and legal services for overseas individuals and businesses in China.

Email: [email protected]