Japanese retail company MUJI has been ordered to pay about US$89,000 to a Chinese company and to make make a public apology, after losing an appeal against a court ruling on perceived trademark infringement.
At a hearing last month, China’s Supreme People’s Court in Beijing upheld a 2017 ruling in favour of Natural Mill, whose parent company Beijing Cottonfield Textile Corp owns a trademarked name used by MUJI.
When the company entered China in 2005, MUJI had registered its name in Roman alphabet block letters. At that time, MUJI had also taken out trademarks for its name in Chinese characters (Wuyinliangpin). However, though that trademark covered most of the goods the brand sold, it did not cover them all.
According to South China Morning Post, Chinese company Hainan Nanhua had registered the Wuyinliangpin trademark in 2001. The company later transferred the name rights to Beijing Cottonfield Textile Corp. In 2015, these two companies sued MUJI for breach of the trademark. Two years later, the appeal court for intellectual property disputes. located in Beijing, ruled in their favour.
MUJI had once previously acknowledged that the rights to the Wuyinliangpin trademark were held by the Chinese firm. But the Japanese company had appealed against the ruling by pointing out that it had legally registered almost all its products under the name.
With the loss of its appeal, MUJI has been ordered to provide financial compensation to Beijing Cottonfield Textile Corp while it also apologising for trademark infringement on its online shop and in its retail stores.
However, this ruling has drawn raised eyebrows from some, who question if it is a case of the state abusing a technicality to rule in favour of a Chinese company over a foreign one. Several copyright and trademark cases in China have had dubious outcomes due to what many see as bias by its legal system towards local companies above all else. Natural Mill has drawn fire for its massive similarities to the older MUJI, amd been labelled a “copycat brand” on a regular basis. Yet despite that common opinion, MUJI will likely have to abide by the ruling in full in order to continue functioning on the mainland.