Business Intelligence on Retailing, Franchising, and Consumerism in China

Starbucks Leaves Qingdao Market

With the closure of Qingdao Starbucks Coffee store which is located at the east building of Hai Tian Hotel, Starbucks has now formally left the Qingdao market after a two year lawsuit in which it was being accused of trademark infringement.

Qingdao Starbucks was accused by Starbucks Corporation for trademark infringement in 2004. Starbucks registered the trademark of Starbucks and its Chinese name in China in 1996, while Qingdao Starbucks used the same trademark and symbols for Starbucks in its name, advertisements, napkins and ice beverages. Therefore, Qingdao Starbucks was accused of violating Starbucks' trademark.

A Qingdao court made a trial judgment at the beginning of 2006, sentencing Qingdao Starbucks to stop violating the trademark of Starbucks and compensate the latter RMB500,000. Both parties were not content with the trial judgment, and they both lodged appeals at the Supreme People's Court in Shandong province.

Though the final judgment hasn't been made by the Supreme People's Court in Shandong province, Hai Tian Hotel in which Qingdao Starbucks is located, has ended the cooperation with Qingdao Starbucks for fear of a bad negative on its reputation caused by this lawsuit.

Though Qingdao Starbucks has withdrawn from Hai Tian Hotel, it hasn't gone through any procedure for the cancellation of its company license.

Qingdao Starbucks was founded in October 2003, and used to have two coffee shops in Qingdao, one of which was located in Hai Tian Hotel, one of the earliest five-star hotels in Shandong Province.

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