According to a number of Thai media reports, on the morning of December 19, the Thai Royal 50R group (50R group) formally submitted a lawsuit to the court, asking the court to order China Luckin Coffee to compensate 10 billion baht for economic losses, which the court has accepted.
In a filing with the court, Royal Thai 50R Group stated that it had legally registered the Luckin trademark with the Ministry of Commerce of Thailand in 2020, and that everything was handled in accordance with the rules and procedures of Thai law, and that it was allowed to use the trademark to operate a coffee shop business that sells beverages such as tea and coffee. However, China Luckin Coffee later filed a lawsuit against the Central Intellectual Property and International Trade Court, accusing 50R Group of maliciously registering its trademark, for which the lower court ruled against the defendant. The 50R Group argued that the verdict was unfair, submitted a rebuttal to the court, and won the case on December 1 this year.
The complaint of the Royal Thai 50R Group also stated that in the early days, before the court made a final judgment, China Luckin had repeatedly forced the plaintiff to stop using the trademark, and repeatedly forcibly seized the property of the other party, causing it to suffer serious economic losses. 50R Group also spent a lot of money to fight the lawsuit, and asked the court to award a total of 10 billion baht (about 2 billion yuan) in compensation to China Luckin Coffee.
Luckin lost the lawsuit, and netizens called it "outrageous"
It is reported that the Royal Thai 50R Group is a Thai local enterprise engaged in retail, new energy, tourism, real estate, catering and other diversified management enterprises, with the background of the Thai royal family and military government. Its subsidiary, Thailand Luckin Coffee Co., Ltd., owns the Luckin brand trademark legally registered with the Department of Commerce of Thailand, and has now developed and operated more than a dozen Luckin coffee shops in Thailand.
Thai cottage "Luckin" (source: Internet)
As early as the beginning of 2022, some netizens said that they drank Luckin in Thailand, except that the copywriting is in Thai, and the other visual designs are almost replicas of Luckin. If you don't look closely, you won't notice that it's just the antlers flipping direction.
In August 2022, Luckin Coffee issued a statement saying: Thailand is fake! Luckin Coffee has not opened a store in Thailand. The Luckin store in Thailand is a counterfeit store.
Regarding Luckin Coffee's appearance to fight fakes, netizens' comments were very lively, saying "Tai is too much", "Tai is hateful", "Tai is outrageous", "Tai is angry".
According to a person familiar with the matter, although many people know that Thailand Luckin is the so-called "cottage store", because it preemptively applied for a trademark in Thailand, it is in line with the local laws of Thailand, so it can open a store normally, which may be the main reason for Luckin Coffee's defeat this time.
Previously, some netizens predicted that Luckin's overseas trip should focus on Southeast Asia, most likely Thailand. However, in the end, Luckin chose Singapore as its first stop on the sea. On March 31, 2023, Luckin launched its first overseas store in Singapore.
Domestic trademarks are frequently preemptively registered overseas
In recent years, Chinese enterprises have encountered more and more disputes over bad faith trademark squatting in the process of going overseas.
There are many similar examples, "Wang Zhihe" is a time-honored brand in China, and it is famous for condiments, bean curd and other goods. As early as the 1980s, Wang Zhihe Group applied for the registration of the "Wang Zhihe" graphic trademark in China, and made extensive deployment in overseas markets, and submitted trademark applications in the United States, Canada and other places. However, when preparing to enter the German market in 2006, it was discovered that the "Wang Zhihe" graphic trademark had been preemptively registered by a German company called OKAI Import Export GmbH (hereinafter referred to as "OKAI"), which was the distributor of Wang Zhihe's products in Germany.
In addition, EuroKera also maliciously registered a number of well-known Chinese trademarks such as Goubuli, Shaolin Temple, Lao Gan Ma, and Qiaqia. In the following seven years, after a series of lawsuits and negotiations, the local court finally made a judgment to revoke the trademark in question preemptively registered by EuroKera.
Tea brand Chayan Yuese has also encountered similar overseas trademark squatting incidents. According to China Youth Daily and other media reports, in 2018, a student from Changsha who went to South Korea preemptively registered the trademark of Chayan Yuese in South Korea and opened a store. Cha Yan Yue Se was very helpless about this, saying that she had known about it, but the other party's behavior was legal and she had no right to interfere.
(Image source: Chayan Yuese official Weibo)
In addition to the above-mentioned brands, according to incomplete statistics from Blue Whale Finance, in recent years, a number of well-known domestic brand trademarks have been preemptively registered overseas, such as in 2003, a Korean natural person applied for the trademark "WULIANGYE", Wuliangye Group suffered a preemptive registration in South Korea, "Zhuye Qingjiu" was also preemptively registered in South Korea, and "Tsingtao Beer" was preemptively registered in the United States.
According to Times Finance and Economics, in 2019, Nan Cunhui, member of the Standing Committee of the National Committee of the Chinese People's Political Consultative Conference, vice chairman of the All-China Federation of Industry and Commerce, and chairman of Chint Group, said in a proposal submitted on preventing malicious registration of trademarks overseas that more than 80 trademarks in mainland China were preemptively registered in Indonesia, nearly 100 trademarks were preemptively registered in Japan, and nearly 200 trademarks were preemptively registered in Australia. There are three main reasons for the above-mentioned situation: first, enterprises have a weak awareness of intellectual property protection, second, enterprises have limited access to information about overseas squatting, and even if they do, it is only after the preemptively registered trademark has been approved for registration, and third, overseas rights protection is costly, complicated and time-consuming.
To prevent the trademark from being preemptively registered, it should be laid out in advance
"Therefore, when Chinese companies start their internationalization strategy, this type of case and dispute will further increase. It also provides some cases, experiences and lessons for Chinese enterprises to deploy overseas, and sounds the alarm bell. Zhu Danpeng, an analyst of China's food industry, said, "This may be a good thing, which can allow more domestic companies to make intellectual property protection stronger, more refined and more thorough." ”
In this regard, Lei Yongjun, chairman of Beijing Putian Shengdao Strategic Consulting Agency, told the Blue Whale financial reporter that trademark layout is the most basic one in brand management, and once the trademark is preemptively registered, it will not only need to pay the cost of money, but also cause harm to consumers. "In the local area, buying a trademark in someone else's hand does not rule out that some people will ask for a sky-high price. But the most important thing is that the imitator also runs a coffee chain in other countries, also called Luckin Coffee, so it is sometimes difficult to distinguish between the real and the fake, which will not only cause harm to the company itself, but also to consumers. Lei Yongjun said.
"One of the characteristics of trademark rights is that the cost of applying for registration is low, but the cost of subsequent cancellation, opposition, and rights protection litigation is very large, so it is recommended to lay it out in the early stage and spend the cost in advance. Lu Mengjia, director of the Commercial Arbitration Commission of Jingshi Law Firm (National) and a foreign-related lawyer of the "Belt and Road" of the Zhejiang Provincial Department of Justice, told the Blue Whale Financial Reporter that in international trade, if there is a brand plan to go overseas, it is recommended to register and maintain the trademark right in advance to avoid the inability to protect the rights of the well-known trademark due to the protection of the interests of the country where the infringement is located, resulting in huge commercial losses.
At present, it is the general trend for brands to go overseas, how should enterprises carry out trademark layout, and what are the ways to apply for trademarks overseas?
Lawyer Lu Mengjia said that in the early stage of establishing a business model, enterprises should determine the overall plan for trademark maintenance and layout in combination with the products used in the specific trademark and the marketing plan. Specifically: "You can first apply for or register a trademark in the country where the goods are sold, and then consider Madrid international trademark registration, so that you can obtain trademark rights protection in most countries, and then apply for a separate trademark application if there is a need to protect trademark rights outside the members of the Union." ”
(Image source: Luckin Coffee's official Weibo)
Legal expert: China Luckin still has a chance to turn around
Dr. Xiao Zhiyuan, deputy dean of the Law School of Zhongnan University of Economics and Law, recently had an exchange with lawyers who serve large Chinese enterprises in Thailand. On December 22, Xiao Zhiyuan said in an exclusive interview with Jimu News that the trademark laws of most countries, including Thailand, implement the first-to-file principle. Article 46 of Thailand's Trademark Act stipulates that no person has the right to institute legal proceedings to prevent infringement of unregistered trademarks or to recover losses. China Luckin's trademark application in Thailand has not yet been approved, so it is extremely difficult to obtain trademark protection in Thailand.
Xiao Zhiyuan said that the provisions of the international trademark treaty on well-known trademarks can provide relief for this case, but there is a prerequisite for application, that is, China Luckin is recognized as a well-known trademark by the State Intellectual Property Office or the court. According to the official website of the World Intellectual Property Organization, Thailand joined the Paris Convention for the Protection of Industrial Property in 1883 and the World Intellectual Property Organization in 1989. The above-mentioned Convention provides for a special international regime for the protection of well-known marks, i.e., the States of the Union shall, ex officio, refuse or cancel the registration of another mark and prohibit its use if the competent authority of the country in which the mark is registered or in the country where the mark is used in the opinion of a person entitled to the benefit of this Convention, and another mark constitutes a reproduction, imitation or translation of the well-known mark for use on identical or similar goods, which is likely to cause confusion. A request for cancellation of such a mark shall be allowed for at least five years from the date of registration. The period during which a prohibition may be instituted by the Member States of the Union, and there shall be no time limit for a request for cancellation or prohibition of the use of a trademark that has been obtained by dishonest means.
In the absence of the registration of the trademark of Luckin in China, the deer head design is protected by the copyright law of the People's Republic of China, and when the work is completed, it is automatically protected by the laws of all member states of the Berne Convention for the Protection of Literary and Artistic Works, that is, it is protected by the copyright law of Thailand. In view of the information that Thailand Luckin has registered the trademarks of many foreign companies, including but not limited to the well-known trademarks of Chinese and American enterprises, it can be considered that the Thai Luckin deer head pattern infringes the copyright of China's Luckin deer head pattern, and the pattern that infringes the copyright of others is applied for and actually used as a trademark, which infringes the legitimate prior rights of China Luckin and there is obvious bad faith, and the request to apply for revocation of Thailand's Luckin trademark can be exempted from the five-year time limit of the Thai Trademark Law.
In addition, the principle of good faith is an imperial clause of civil law, and Thailand is no exception, according to Article 5 of the Royal Thai Civil and Commercial Code, every natural person must have good faith in exercising his rights and performing his obligations. Article 6 further provides that every act being carried out by a natural person is deemed to be in good faith. Article 70 stipulates that legal persons enjoy the same rights and obligations as natural persons, with the exception of rights and obligations which can only be assumed by natural persons by their very nature. Therefore, if China Luckin adjusts its litigation strategy, there is still legal space to knock down the disputed trademark of Thailand Luckin. (Jimu News)