A court has ruled that disclaimers presented in small font at the bottom of promotional materials do not absolve a company of responsibility when the main promotional text uses large, prominent fonts. This principle was applied in a recent case where a beverage chain was found to have engaged in unfair competition.
The Beijing Chaoyang District People's Court issued a first-instance judgment in the unfair competition dispute case filed by Pop Mart International Group Limited against NAYUKI's operating entity, Shenzhen Pindao Catering Management Co., Ltd.
The court determined that NAYUKI's use of identifiers such as "LABUBU," "Mi Bu Bu," and "Bu Bu" in its promotional activities was likely to cause consumers to mistakenly believe there was a specific commercial connection, such as a joint venture, licensing agreement, or sponsorship, between the NAYUKI brand and the "LABUBU" trendy toy brand. This was deemed to constitute unfair competition by causing consumer confusion.
The court ordered NAYUKI to compensate Pop Mart for economic losses amounting to 300,000 yuan and for reasonable legal expenses of 20,000 yuan, totaling 320,000 yuan. Neither party has appealed, making the first-instance judgment effective.
Background of the Dispute
The case originated from a marketing campaign launched by NAYUKI in September 2025. The campaign, promoted in its stores, on its official WeChat account, and mini-program, named several beverages "Mi Bu Bu." The promotional graphics utilized the "LABUBU" artistic image and featured slogans like "Drink Mi Bu Bu, Win LABUBU" and "Bu Bu Gather! Drink Bu Bu for Free, Win LABUBU!"
Pop Mart claimed ownership of the copyright for the "LABUBU" series of artistic works. It argued that "LABUBU," through long-term operation, had achieved high recognition and significant market fame, constituting a product name with a certain level of influence.
Pop Mart alleged that NAYUKI, without authorization, used identifiers identical or similar to the "LABUBU" product name for commercial operations and promotion across its platforms. This was said to easily mislead the public into believing a commercial cooperation existed between the two parties, thus constituting unfair competition.
NAYUKI defended itself by stating it had included a disclaimer in the promotional articles noting that "activity prizes are purchased independently by Nayuki and are not part of an official cooperation with Pop Mart," fulfilling its duty of reasonable notice and eliminating the possibility of confusion. It also stated that the LABUBU blind box gifts used in the activity were all purchased through legitimate channels, denying any unauthorized use or counterfeit practices.
The Court's Reasoning
The court noted that disclaimers such as "no official cooperation with Pop Mart" were placed at the bottom of the promotional graphics in a relatively small font size. In contrast, promotional phrases like "Drink Mi Bu Bu, Win LABUBU" were placed centrally in the graphics using much larger fonts.
Therefore, the court found that NAYUKI's practice of "large-font promotion, small-font disclaimer" failed to reasonably alert consumers that its promotional activities were unrelated to Pop Mart. Consumers based on the prominent promotional graphics could easily mistakenly believe a specific connection, such as a licensing cooperation, existed between the NAYUKI brand and the "LABUBU" brand. Consequently, the court ruled that "the defendant's defense of fair use lacks basis and is not supported."
Other Legal Challenges for Nayuki
The operating entity of NAYUKI is involved in several other legal disputes, including cases related to housing lease contracts and sales contracts.
For instance, in May of this year, the Guangzhou Yuexiu District People's Court announced a case where the plaintiff, Guangzhou Jieli Real Estate Development Co., Ltd., sued the defendants Shenzhen Pindao Catering Management Co., Ltd. and Guangzhou Nayuki Catering Management Co., Ltd. over a lease contract dispute. As the court could not serve the legal documents to the defendants, it had to proceed with service by public announcement according to regulations.
Earlier, in January, the Shanghai Xuhui District People's Court also had to serve a civil judgment by public announcement because Shenzhen Pindao Catering Management Co., Ltd. could not be located. That case also involved a housing lease contract dispute, with the plaintiff being Shanghai Longhua Aviation Development and Construction Co., Ltd.
The judgment content stated that the "Shop Lease Contract" and other documents between Shanghai Longhua Aviation and Shanghai Nayuki Catering Management Co., Ltd. were terminated on September 30, 2024. It permitted Shanghai Longhua Aviation to retain the lease security deposit of approximately 102,500 yuan, property management fee security deposit of 33,696 yuan, and utility security deposit of 6,240 yuan paid by Shanghai Nayuki. Shenzhen Pindao Catering Management Co., Ltd. was held jointly and severally liable for these monetary debts.
Reflecting on Current Performance
These cases reflect, to some extent, the current development situation of NAYUKI. Five years ago, the company debuted on the Hong Kong Stock Exchange with the光环 of being the "first share of new-style tea drinks," enjoying immense风光. Currently, however, its performance has declined significantly, its store network has contracted, and its stock price has fallen to HK$0.7 per share, resulting in a substantial decrease in market capitalization.
For the 2025 fiscal year, NAYUKI reported total revenue of 4.331 billion yuan, a year-on-year decrease of 12%. Its net loss attributable to owners narrowed to 239 million yuan, a reduction of 73.9% compared to the previous year.
The narrowing of losses is attributed to the contraction of its store network. As of the end of 2025, NAYUKI operated a total of 1,646 stores. It net closed 165 directly operated stores last year, reducing the total number of directly operated stores from 1,453 to 1,288.
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