(Yicai Global) Dec. 11 -- Japanese household furnishings and personal use items retailer Ryohin Keikaku's Muji brand has lost a trademark infringement case in China and been ordered to pay more than CNY600,000 (USD85,336) in damages, China Youth Daily reported today.
The Beijing Municipal High People's Court, which upheld a 2015 ruling in a final adjudication recently published online, held that Tokyo-based Ryohin Keikaku and its Muji Shanghai subsidiary infringed the exclusive right to use the trademark of Beijing Miantian Textile Products and its Beijing Wuyinliangpin Investment unit by using the symbols, '無印良品,' 'Muji無印良品' and '无印良品Muji,' in similar products, packaging and promotions.
A Hainan province-based Chinese company registered the '无印良品' trademark in China in April 2001, and transferred it to Beijing-based Miantian Textile Products in 2004. The Beijing firm established Beijing Wuyinliangpin in 2011 to exclusively use the trademarks involved. Ryohin Keikaku, which introduced the 'Muji無印良品' brand in 1989, started to promote the trademark after it set up Muji Shanghai in 2005.
The court ordered Muji Shanghai to issue statements via its official flagship store on Alibaba Group Holding's Tmall online emporium and in its physical outlets in mainland China to eliminate the ill effects and compensate the plaintiffs in the amount of CNY500,000 for economic losses and pay over CNY126,000 in reasonable costs.
Miantian filed a lawsuit in 2015, charging that Tokyo-based Ryohin Keikaku and Muji Shanghai infringed its trademark rights. A Beijing court made the first instance judgement in 2015, which the Japanese firm appealed.
The court dismissed the appeal and upheld the first instance judgement in a final ruling, arguing that Ryohin Keikaku must assume liability for infringement as the registered trademark is regional, and the products accused of infringement had already violated the exclusive right of the trademarks involved after they began circulating in China.
With 256 stores in various Chinese cities, Muji has been expanding rapidly since it entered the domestic market. In addition to selling personal use items and furnishings, the Japanese firm also runs hotels in the country and will introduce household decoration services in the Chinese market, from which it has wrung hefty profits. Ryohin Keikaku's operating revenues were up 8 percent from last fiscal year at JPY409.7 billion (USD3.8 billion) between March 2018 to February this year, which mostly benefited from revenue growth in overseas businesses centered on China.
The Japanese firm has registered its third straight year of revenue growth in China since fiscal year 2016, grabbing JPY75.1 billion in fiscal year 2018, an annual increase of 11.8 percent from fiscal year 2017. The revenue from China, 61.4 percent of the total from the company's East Asia division last fiscal year, is the highest among Muji's overseas markets.
Editor: Ben Armour