Chinese chain restaurant operator Shanghai XNG Holdings Ltd unit Shanghai Maichilin (“米芝莲” in Cantonese) was hit with a 10 million yuan verdict for trademark infringement of French tyre manufacturing company Michelin (“米其林” in Chinese), the Hubei Higher People's Court ruled last Saturday.

The Hubei Higher People's Court upheld the lower court’s decision that Shanghai  Maichilin should immediately stop the infringement of the exclusive right of Michelin 's trademarks and compensate Michelin 10 million yuan.

Michelin is a French multinational tyre manufacturing company. Since the 1980s, Michelin has successively registered in China the trademarks of "MICHELIN" and "米其林"，which were used for wheels, tires, inner tires, as well as for providing goods and services such as hotel and restaurant address information.

The trademarks have then been recognized as well-known trademarks by China's trademark authorities.) Since "MICHELIN" sounds like "Maichilin" in Cantonese, Michelin successively registered several trademarks of "MICHELIN" and "米芝莲" in China’s Hong Kong Special Administrative Region in 1990 and 2009.

Shanghai Maichilin, founded in 2013, used the unauthorized "米芝莲" trademark as its enterprise name and shop signboard and offered franchise services. According to the latest statistics released on its official website, Shanghai Maichilin has opened 500 chain stores in 150 Chinese cities. 

Michelin believed that Shanghai Maichilin had violated its exclusive right to use the "米芝莲" trademark and the unauthorized use of the trademark as its brand name constituted unfair competition.

Michelin filed a lawsuit with the Wuhan Intermediate People's Court to stop the infringement and seek compensation for its losses.

Wuhan Intermediate People's Court ruled in the first instance:

Shanghai Maichilin shall immediately stop using the logo of "米芝莲" and "米芝蓮" in its business activities and stop using "米芝莲" as its enterprise name; its changed enterprise name shall contain no same or similar character to "米芝莲", "米其林" or "MICHELIN"; Shanghai Maichilin shall compensate Michelin for economic loss of 10 million yuan and publish a statement in China Intellectual Property News to eliminate the repercussions.

Shanghai Maichilin then appealed the first instance decision to the Hubei Higher People's Court.

Last Thursday, the Hubei Higher People's Court ruled in favor of Michelin by upholding the first instance judgment.