The $10.3 Million Paper Cup: When Louis Vuitton Took a Milk-Tea Chain to Court

It was early on July 28, Paris time. LVMH's first-half 2026 earnings call had moved into the analyst Q&A session. She had been in the CFO seat for less than a year. An ID from an Asian investment bank popped up, the question in one line of English: Has the lack of improvement in China's performance had anything to do with the lawsuit against Moli Naibai?

She paused for about two seconds. Then she spoke. Her first sentence mentioned neither performance nor China, nor did it even answer the "is there a connection" part.

"I believe you would agree that intellectual property is our absolute core asset."

That sentence was heard by more than just the analyst who asked. A month earlier, a judgment from the Suzhou Intermediate People's Court had been delivered to Moli Naibai's registered address: 10.3 million yuan in damages.

Moli Naibai, with an average ticket of 28 yuan per customer, and an LV Speedy handbag priced at 26,000 yuan, had shared the outline of the same flower in court. Four petals, rotationally symmetrical, with rounded edges. That flower appeared on Moli Naibai's paper cups, tote bags, and store signage — and also on LV's luggage leather, Monogram canvas, and window displays. The Suzhou court found that the former had infringed seven of the latter's registered trademarks.

The day after the judgment circulated online, "LV Sues Moli Naibai" hit No. 13 on Weibo's trending list. One comment received more than 3,000 likes: "When big brands have bad sales, they take it out on small brands."

Cabanis followed with a second sentence. This one pushed the courtroom in Suzhou, Jiangsu, onto a much larger map.

"Not just in China — our teams regularly and consistently handle trademark infringements in multiple countries around the world."

She didn't give examples. But a look through LVMH's global litigation records of the past five years would find independent designers in Europe, resale platforms in the US, counterfeit workshops in the Middle East — more than forty countries. The frequency wasn't "occasional" but "regular," on a quarterly rolling basis.

For her final sentence, she pulled back: "This case is currently still in the judicial process, so I am not in a position to comment further."

What she didn't say: the first-instance judgment had been issued on June 29 and served on July 1. The 30-day appeal period had not yet expired. Moli — that cup of milk tea — still had a chance to overturn it on appeal. During this window, any public comment on the merits of the case could be cited by opposing counsel as evidence of "media interference."

Three sentences. None directly answered the analyst's question. All the information had been delivered.

Three months earlier, when Paris headquarters first saw Moli Naibai's materials, a paper cup sat on the legal department's desk. It had been bought from a store near Shanghai's Jing'an Temple and stuffed into a suitcase for a twelve-hour journey back to Europe. The four-petal flower on the cup was photographed, enlarged, and placed side by side on screen with LV's trademark files.

The legal department's conclusion was one sentence: Start at the registration end.

On July 16, the Beijing Intellectual Property Court, Courtroom No. 19. In the plaintiff's seat sat counsel for Louis Vuitton Malletier. In the defendant's seat sat the China National Intellectual Property Administration — the government agency that approves all trademark registrations in the country. The third party was a natural person named Huang Minyao, who held a trademark that LV wanted invalidated. This was the sixth time LV had sued CNIPA. Of the previous five first-instance cases, LV had won three and lost two.

The public gallery was sparsely occupied. The judge asked one question: "On what basis does the plaintiff claim cross-class protection for its well-known trademark?"

That question went straight to the heart of the Moli Naibai dispute.

LV's trademarks are registered in Class 18 (leather goods and bags) and Class 25 (clothing); Moli Naibai is registered in Class 43 (food and beverage services). According to the Classification of Similar Goods and Services, these categories have nothing to do with each other. A bag seller suing a milk-tea seller had no basis in traditional trademark law. But Article 13 of the Trademark Law leaves a door open: if a trademark is "well known to the relevant public," it may receive cross-class protection.

LV didn't need to prove that Moli Naibai sold the same goods. It only needed to prove that consumers seeing that flower would think of LV.

The Suzhou court accepted this argument. The judgment contained this sentence: "The four-petal floral design used by the defendant is similar in constituent elements and overall visual effect to the plaintiff's claimed well-known trademarks, sufficient to cause the relevant public to believe there is an association with the plaintiff."

How was 10.3 million calculated? The court applied the statutory damages cap plus punitive damages. Moli Naibai has more than 200 stores nationwide, each with that flower on its signage, cups, and bags. Multiply that by sales volume, multiply by the duration of infringement. When the number came out, many IP lawyers posted one sentence on their WeChat Moments: "Cross-class protection is no longer just a theory."

The analyst's question hid another assumption, more subtle than law: was this lawsuit the straw that scared away Chinese consumers?

Numbers don't speak that way.

LVMH's total revenue for the first half of 2026 was €38.644 billion, with organic growth of 2%. The second quarter accelerated to 3%, beating Wall Street expectations. Spread the map out: the US grew 6% in Q2, Japan 14%, Europe steady — while Asia excluding Japan grew only 4%. Within that "Asia," China was the lion's share.

4% is positive growth, just slow. It wasn't slow because LV sued a milk-tea chain. It was slow because the yuan weakened in Q2, making LV in Japan 15% cheaper than in Shanghai; foot traffic in luxury malls in China's first-tier cities fell year-on-year; and the consumer confidence index hovered around the boom-bust line.

No one in LV's China stores put down a handbag because "the brand sued a milk-tea shop." Plenty of people closed their wallets because "the same bag is 3,000 yuan cheaper in Tokyo."

Cabanis made no excuse for the performance, nor did she apologize for the lawsuit. She separated the two, placing them in entirely different drawers. One labeled "Operations," the other "Enforcement." She closed both and moved to the next slide.

If you look only at the Moli Naibai case, you'll miss what's really happening.

Over the past five years, LV has filed 1,691 trademark infringement lawsuits in China — an average of one every two and a half days. In the first half of 2026, it added another 56. This isn't "occasional enforcement." It's an assembly line.

Civil litigation is only the part above the waterline. Below the surface are the trademark oppositions and invalidation requests filed with CNIPA — proceedings that never make the news because they're too technical, too quiet. For every trademark, from application to publication to registration, LV's legal team files an opposition at every window. If the opposition is rejected, they go to the Beijing IP Court to sue CNIPA — just as they did on July 16.

The system is dual-track. The administrative track works at the front end, preventing similar trademarks from ever receiving registration certificates. The civil track works at the back end, claiming damages against stores already using similar marks. Two tracks in parallel, no gap between them.

This isn't unique to LV. Legal departments of international brands all do similar things. But at the density of 1,691 lawsuits and six suits against CNIPA, no other brand has matched it in the Chinese market.

That's also why LVMH's legal budget rises every year. It's not a cost — it's a variant of another brand division, whose output isn't handbags but injunctions and judgments. The return isn't low: the damages from the Moli Naibai case roughly equal the gross profit from selling 300 LV handbags in China.

On earnings calls for the Perfumes & Cosmetics division, analysts rarely ask legal questions. This time was an exception. The Moli Naibai case touched not a routine legal issue but the most sensitive string in trademark law: cross-class protection for well-known marks.

Supporting lawyers said: This is exactly the legislative intent. Article 13 of the Trademark Law states clearly that well-known trademarks are not limited to their registered classes.

Opposing lawyers said: This could become "trademark bullying." A bag seller can sue milk-tea sellers, coffee sellers, stationery sellers — as long as it's willing to spend time proving "consumers would associate it with me." And proving that isn't hard for LV.

Both arguments hold water. But in the business world, there's a long distance between "holds water" and "ought to be."

The first-instance judgment in the Moli Naibai case merely planted the first signpost on that road. It tells every new Chinese consumer brand: your trademark, even if not in the same category as a luxury brand's, can still be dragged into court. And if you lose, damages are counted in millions.

The final appeal outcome is still pending. Whether the appellate court upholds or reverses, this case has already rewritten the cost structure of Chinese trademark litigation. For LV, what it gained isn't just 10.3 million yuan, but a precedent that can be cited. In every similar case going forward, lawyers can pull out this judgment and say, "Look, the Suzhou court once ruled this way."

When Cabanis said on the earnings call that "intellectual property is our absolute core asset," she didn't explain what that meant. Spread out LV's five-year litigation record in China, and you'll find another translation of that sentence.

It's not a slogan. It's an operations manual.

Brand protection doesn't rely on press releases. It relies on filing documents on time in every opposition period, completing notarized evidence collection at every infringing storefront, and locking down the chain of evidence in every courtroom. None of these things is a "strategic declaration" — they are concrete, mundane, repeatable actions. It took 1,691 repetitions over five years to move the phrase "core assets" from the annual report to the front page of court judgments.

For Chinese brands, LV's playbook is a preview. When China's new consumer brands — those now opening stores in Southeast Asia, the Middle East, and Europe — one day face the same counterfeiting headaches, their lawyers will pull out similar litigation data. When that day comes, the path LV is paving in China today will be the standard template.

The news of the Moli Naibai case will eventually fade. The trending list will refresh, the comment threads will turn over. But the clerk in Courtroom No. 19 of the Beijing IP Court will keep typing. The examiners at CNIPA will keep reviewing the next batch of trademark applications. LV's legal team will keep watching every issue of the publication gazette.

The outline of that four-petal flower won't disappear from LV's archives. It will lie quietly as an attachment to the next opposition filing, waiting to be printed, bound, and handed into court again.

The Suzhou court's judgment now rests in the legal department's folder at Moli Naibai. The appeal-period countdown is still turning. After the earnings call ended in the early hours of July 28, Cabanis turned off her screen.

It was still dark in Paris.