Business Intelligence on Retailing, Franchising, and Consumerism in China

China Coffee Franchiser In Hot Water Over Cafe Logos

The exterior signboards at about 800 UBC coffee outlets across the Chinese mainland may be pulled down as a result of a new ruling that the cafe operator must stop using the disputed logo.

Shanghai Daily reports that the Trademark Examination Commission under the State Administration for Industry and Commerce said yesterday that Shanghai UBC Coffee Co should stop using the UBC trademark on its signs as they violate a copyright held by Zhejiang Liang'an Food Co Ltd.

A lawyer surnamed Wang with Shanghai UBC said the company will file a court appeal, arguing that the trademark commission is not the determining legal body in the case.

A similar appeal to the Beijing Higher People's Court in July failed, however. At that time, the court ordered Shanghai UBC to stop using the logo on small commodities such as coffee and tea packaging, cups and napkins, upholding a trademark commission ruling last year.

The companies are linked to two Taiwanese–You Changsheng and Chen Wenmin–who previously worked together. Their aim was to bring UBC, a popular cafe chain in Taiwan, to the mainland market in the late 1990s.

Chen Wenmin, designer of the UBC logo, co-founded a firm with seven other partners, including You, in 1997 but left at the end of 2000.

Chen then authorized Zhejiang Liang'an to use the UBC trademark in 2003 and promised no third party would be allowed to employ the brand name.

You Changsheng established the Shanghai UBC Co in 2001 to franchise a cafe chain under the same brand. It has developed a network of around 800 cafes throughout the mainland.

Shanghai UBC said it bought the trademark from Hainan UBC Co, the former joint venture set up by the eight partners in 1999. Chen Wenmin was the general manager of the firm then.

Chen Wenmin and Zhejiang Liang'an Food Co Ltd jointly appealed to the trademark commission in 2003 to annul the Hainan UBC trademark registration.

They claimed that Hainan UBC's registration violated the copyright of the trademark's designer, who said he was unaware of the registration. The trademark commission ruled last year that the brand was improperly registered and should be annulled.

Industry analysts said the case is one of many such examples facing China mainland's fledgling franchising industry, which didn't have intellectual property regulations until earlier this year.

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