Molly Tea sells jasmine milk tea in paper cups. Its logo is a small flower with four rounded petals. Millions of people in China say that flower comes from their own history, not from a Paris trunk maker. A Chinese court saw it differently, and that is where Louis Vuitton’s trouble began.
Start with the flower itself. Louis Vuitton has printed its monogram, a pattern of the letters LV mixed with four-petal flowers, since 1896. On the other side, supporters of the tea chain point to baoxiang, a stylized flower pattern found in Tang dynasty art more than a thousand years ago. Both sides are looking at roughly the same shape. They just disagree about who owns it.
The court only had to answer a narrow question: are the two flowers too similar? On June 29, the Suzhou Intermediate People’s Court said yes. It found that the tea chain had infringed seven registered Louis Vuitton flower trademarks, and ordered it to stop using the design and pay 10.3 million yuan, about $1.5 million, including legal costs, The Standard reported. The company said it would appeal. Its own attempts to register four-petal flower marks had mostly been rejected or declared invalid.
Shoppers answered a different question: is it fair for the world’s biggest luxury group to take a homegrown tea brand to court over a flower? Online, many said no. Research firm JL Warren Capital estimated that Louis Vuitton’s sales in China fell about 30% in July and 20% to 25% in August, according to Bloomberg. Those are estimates, not company data. The firm sends people to watch boutiques in about 15 malls instead of seeing real receipts. In late August, Louis Vuitton also closed its only store in Guiyang, shrinking its southwestern China footprint to three stores.
Then the bill reached the official numbers. On October 12, LVMH said organic sales in its fashion and leather goods division, home to Louis Vuitton and Dior, fell 5% in the third quarter. “Organic” means the company strips out currency swings and acquisitions, so it shows real demand. Analysts had expected a 1.8% drop, CNBC reported. Asia, where China is the biggest market, fell 5% while the US grew 5%. LVMH’s US-listed shares dropped almost 3% after the update.
The company’s main explanation was the Chinese economy. CFO Cecile Cabanis described a sharp, macro-led fall in consumer confidence, and a new tax crackdown on wealthy Chinese is not helping either. But on the call she also confirmed that the Molly Tea dispute hurt Vuitton’s China sales early in the quarter, while saying the exact damage is hard to measure. That is a careful sentence, but it is still an admission.
So why sue at all? Because a trademark only stays strong if the owner keeps defending it. If a brand lets look-alikes spread, a court may later decide the design is just a common decoration that anyone can use. In the worst case, a brand name becomes an everyday word. “Escalator” and, in the US, “aspirin” both started as protected brand names and ended up as ordinary words. For a luxury house, the pattern on the bag is a large part of what the customer pays for. I wrote earlier about how much a recognizable image can earn on its own in the Care Bears licensing story. Louis Vuitton’s lawyers were doing their job.
The problem is that the job is measured in one place and the cost shows up in another. The legal team counts a win in yuan. The stores count lost visits from young buyers who now see the brand as the bully in a story about their own culture. And those young buyers are the customers Louis Vuitton needs for the next twenty years, not just the next quarter.
The appeal is still open, so this case is not finished. But the third-quarter report already shows what a court victory can look like on the other side of the business.
My take: $1.5 million collected in court. Far more paid at the counter.