China’s Guangzhou Intellectual Property Court on December 26 upheld a lower court’s decision ordering Guangzhou Taiyun Tech Co., Ltd. (广州泰运电子科技有限公司) to pay 100,000 yuan ($16,000) in damages in a legal battle with Guangzhou Coates Signco Trading Co., Ltd. (广州高思贸易有限公司).

Guangzhou Coates in 2019 filed a lawsuit against Guangzhou Taiyun with the Nansha District People’s Court of Guangzhou city alleging claims for false advertising and unfair competition based on the allegation that Guangzhou Taiyun advertised it as a McDonald's licensed supplier of self-ordering kiosks (SOKs) and digital menu boards (DMBs) for its restaurants in Germany and around the globe when it was actually an SOK and DMB maunfacturer commissioned by Guangzhou Coates.

Guangzhou Coates on July 21, 2015 signed a contract with McDonald's to design and manufacture SOKs and DMBs for its restaurants. Guangzhou Coates on November 15 signed a contract with Guangzhou Taiyun as an Original Equipment Manufacturer (OEM) to manufacture, test, deliver, and provide support for SOKs and DMBs with the patented designs provided by Guangzhou Coates. Guangzhou Taiyun began to advertise itself as a “global licensed supplier of McDonald's and KFC” on its official website and some other e-commerce websites like Alibaba.com in March 2019.

The trial court agreed with Guangzhou Coates’s arguments that Guangzhou Taiyun’s free-riding on the well known “McDonald's” brand infringed Guangzhou Coates’s right of honor as its licensed manufacturer and caused it economic losses, ordering Guangzhou Tianyuan to pay Guangzhou Coates 100,000 yuan ($16,000) in damages.

Defendant Guangzhou Taiyun appealed the trial court’s decision to the Guangzhou Intellectual Property Court and the appeals court backed it.

The case docket no. is 258, second instance (终), civil case (民), (2021) Guangzhou Intellectual Property Court (粤73).