On December 27, 2025, nanjids (002127.SZ) confirmed in an announcement that its partner Shanghai Xinhezhao had raised its claim from 95.25 million yuan to 565 million yuan, and requested the termination of the 2018-signed Trademark License Agreement.
The news sent stock message boards abuzz: "Tag-licensing leads to a 600-million-yuan lawsuit," "Asset-light model hits a snag"...
This is not just a contract dispute—it has thrust nanjids’ core "brand licensing" business model into the spotlight. After 18 years of rapid growth fueled by high profit margins, zero inventory, and no factories, the company is finally confronting the weight of "joint and several liability."
Chapter 1 Timeline: From Cooperation to Cross-Suits
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March 22, 2018
nanjids signed an agreement with Shanghai Xinhezhao, licensing the latter to use the "Cartelo Crocodile" series trademarks for a term ending December 31, 2027.
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2023
nanjids discovered that Shanghai Xinhezhao had arbitrarily sub-licensed the trademarks to over 200 downstream distributors and tampered with the crocodile logo, making it highly similar to LACOSTE’s trademark.
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January 2024
The Shanghai Intellectual Property Court ruled in LACOSTE’s trademark infringement lawsuit, ordering nanjids (as the licensor) to bear joint and several liability for 1.2 million yuan in compensation.
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January 2025
Shanghai Xinhezhao filed the first lawsuit, demanding a reduction in licensing fees and claiming 95.25 million yuan in damages.
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June 2025
nanjids countersued for 81.69 million yuan, citing unpaid licensing fees, unauthorized sub-licensing, and losses from joint liability for trademark infringement.
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September 2025
A ruling was issued in a BURBERRY trademark infringement case, leading to consumption restriction measures against nanjids and its chairman Zhang Yuxiang.
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December 2025
Shanghai Xinhezhao amended its litigation claims, increasing the amount to 565 million yuan and requesting contract termination.
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January 22 / March 3, 2026
Two cross-suits (with each party acting as plaintiff and defendant) will be heard at the People’s Court of Qingpu District, Shanghai. The total disputed amount reaches 647 million yuan, equivalent to 15.6% of nanjids’ net assets at the end of 2024.
Chapter 2 The Model: Cost of 92% Gross Profit Margin
nanjids’ 2025 H1 financial report shows:
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Brand licensing accounts for less than 8% of total revenue but boasts a gross profit margin of 92.04%;
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Self-operated retail revenue reached 52.53 million yuan with a 36.7% gross profit margin, while sales expenses surged to 138 million yuan.
Behind the high profit margins, legal risks have long been overlooked:
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Article 43 of the Trademark Law: Licensors must supervise product quality; violators shall bear joint and several liability for damages;
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Article 1168 of the Civil Code: Joint tortfeasors shall bear joint and several liability.
Zhao Liangshan from Shaanxi Hengda Law Firm noted: "As the trademark registrant, nanjids has a legal obligation to supervise the licensee’s product quality and trademark use. If it 'knows or should know' of infringement but turns a blind eye, it must share liability for compensation."
Chapter 3 Infringement: When "Crocodile" Becomes "LACOSTE Clone"
Shanghai Xinhezhao’s alleged "tampering" includes:
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Reversing the crocodile’s direction from "left-facing" to "right-facing" and adjusting the mouth angle to 52°, differing from LACOSTE’s logo by less than 5%;
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Adding a background color identical to BURBERRY’s "classic check" on polo shirt tags.
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January 2024: nanjids paid 1.2 million yuan in joint compensation in the LACOSTE case;
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September 2025: nanjids and its chairman faced "consumption restrictions" following the BURBERRY case ruling.
Chapter 4 Transformation: Can Self-Operated Business Save the Day?
Since 2023, nanjids has launched a "three-pronged strategy":
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Streamlining licensees from 10,000 to 3,000;
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Deepening co-branding with functional fabric suppliers such as SORONA and 3M;
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Developing self-operated retail, focusing on 99~399-yuan sun-protective clothing and down jackets.
2025 H1 results:
