In July 2026, the People's Court of Weiyang District, Xi'an concluded a trademark infringement case. A catering store, whose previous infringement had been confirmed by an effective judgment, changed its store name five times in succession, yet always kept a "one-character difference" from the well-known brand "Lanxiangzi". The court finally applied the new rules on punitive damages and ordered the defendant to bear three times punitive damages. This is the first case concluded by Weiyang District Court under the judicial interpretation on punitive damages, which came into force on May 1, 2026.

The Fast-rising Hunan Cuisine Brand "Lanxiangzi"

The plaintiff, Xi'an Zhenshan Lanxiangzi Catering Management Co., Ltd., is the exclusive licensee of the registered trademarks "Lanxiangzi" and "Lanxiangji".

Founded in Xi'an in 2019, the "Lanxiangzi" brand positions itself in the Hunan cuisine catering track. After years of operation, the brand has achieved rapid expansion: by the time of the case, it had opened more than 380 directly-operated stores in 75 cities across the country. In the Hunan cuisine sector, the "Lanxiangzi" trademark has accumulated high market awareness and reputation, becoming one of the catering brands with national influence.

It is precisely this brand influence that makes it a target of free-riding infringement. The plaintiff has shown strong awareness of intellectual property protection in rights enforcement: it has not only filed lawsuits for trademark infringement, but also brought copyright infringement actions against the defendant for misappropriating dish pictures and menu layouts, and won both at first and second instance.

The "One-character Difference" Operator Who Refuses to Mend Its Ways

The defendant is a catering company, with Gao Mou as its shareholder. According to public reports, the defendant is small in scale, a catering operator in the early stage of entrepreneurship with relatively weak legal awareness.

What makes the case special is that the defendant's infringement was not a one-time negligence, but showed obvious continuity and repetitiveness.

Stage 1: Using the trade name "Qinxiangji" In 2024, the plaintiff found that the defendant opened a store on the food delivery platform, operating under the name "Qinxiangji", while misappropriating the plaintiff's original dish pictures and menu layout. The plaintiff immediately filed a copyright infringement lawsuit. After two instances of final trial, the effective judgment confirmed that the defendant's infringement was established.

Stage 2: "Changing shells" to continue infringement after losing the previous case Surprisingly, the effective judgment did not stop the infringement. Since January 2025, the defendant has systematically "rebranded" and changed its online store name many times in succession:

• "Lanxiangji · Hunan Cuisine Stir-fry"
• "Xinxiangji · Hunan Cuisine Stir-fry"
• "Lanxianghui · Hunan Cuisine Stir-fry"
• "Lanxiangbo · Hunan Cuisine Stir-fry"

These names differ from the plaintiff's trademarks "Lanxiangzi" and "Lanxiangji" by only one character, and are highly similar in font shape, pronunciation and overall visual impression. Meanwhile, the defendant's store page continued to copy the plaintiff's border layout design and persistently used the plaintiff's copyrighted dish photography works.

Manifestation of Infringement Consequences

This "one-character difference" strategy directly leads to consumer confusion. According to reports, some consumers entered the defendant's store due to confusion, and after being dissatisfied with the dish quality, complained directly to the plaintiff's brand, causing actual damage to the plaintiff's brand reputation.

In addition, multiple food delivery stores opened by the defendant's shareholder Gao Mou have also been sued by the plaintiff for infringement for the same reason. This indicates that the infringement is not an isolated incident, but has a certain systematic nature.

Determination of "Willful" and "Serious Circumstances"

The case was heard by the summary judgment tribunal of the People's Court of Weiyang District, Xi'an.

1. Determination of trademark infringement

The court held that both the plaintiff and the defendant belong to the catering industry, and the plaintiff's involved trademark has certain market popularity. The store name used by the defendant is very similar to the plaintiff's trademark in text composition, visual perception and arrangement, with the intent of free-riding and attaching to the plaintiff's goodwill. Objectively, it has caused consumer confusion, constitutes trademark infringement, and shall bear corresponding civil liability according to law.

2. Application of punitive damages

The key dispute in this case is whether punitive damages apply. On May 1, 2026, the Interpretation on the Application of Punitive Damages in Civil Intellectual Property Infringement Cases (No.7 [2026] Judicial Interpretation) issued by the Supreme People's Court came into force, refining the criteria for determining "willful" and "serious circumstances".

The court comprehensively judged from four dimensions and found that the defendant's conduct met the applicable conditions for punitive damages:

1. The defendant should have known the popularity of the trademark. As operators in the same catering industry, it is impossible for the defendant to be unaware of the plaintiff's well-known trademark.
2. The defendant continued to infringe after the effective judgment of the previous case. In the previous litigation, the plaintiff had given effective notice of trademark infringement, and the effective judgment also confirmed the infringement fact. However, the defendant did not stop the infringement or make corrections, but instead intensified it.
3. Actual consumer confusion and repeated infringement by the defendant's shareholder across multiple stores. A considerable number of consumers have consumed due to confusion and misidentification, and multiple food delivery stores opened by the defendant's shareholder Gao Mou have been sued for infringement for the same reason, indicating that the infringement is systematic.
4. Considerable scale of infringing operation. The defendant's sales on one single platform exceeded RMB 200,000 in just half a year.

On this basis, the court found that the defendant's conduct falls under the "willful" and "serious circumstances" stipulated in the judicial interpretation, meeting the conditions for applying punitive damages.

Comprehensively considering the popularity of the plaintiff's registered trademark, the degree of the defendant's subjective fault, the severity of the infringement, the duration and the benefits obtained, the court ordered the defendant to bear three times punitive damages, with a total compensation of more than RMB 299,000.

The trial did not end with the judgment. After the verdict, the presiding judge learned that the two parties had another 4 related disputes under the jurisdiction of different courts, involving large amounts. If litigated one by one, both parties would be trapped in a long judicial tug-of-war.

The defendant's shareholder admitted after the judgment that he had weak legal awareness in the early stage of entrepreneurship, recognized the illegality of his conduct, and hoped to resolve the remaining related cases together and seek a chance to correct his mistakes.

The presiding judge then set up a post-judgment mediation platform. Through multiple rounds of face-to-face communication and back-to-back persuasion, the opposing emotions of the two parties were gradually resolved. The plaintiff also stated that the original intention of rights protection was to stop infringement and protect the brand, rather than simply pursuing compensation.

In the end, the two parties reached an agreement to settle all 5 related cases with RMB 300,000. The defendant's shareholder wrote a letter of apology, and the compensation has been paid in a lump sum.

Significance of the Case

This is the first case concluded by the People's Court of Weiyang District, Xi'an under the judicial interpretation on punitive damages, which came into force on May 1, 2026.

From the perspective of judicial logic, the court strictly 对照 Articles 6 and 7 of the new rules on the criteria for "willful" and "serious circumstances", and corresponded to the case facts one by one, providing a clear reference framework for the trial of similar cases. In particular, the circumstance of "committing the same or similar infringement again after the effective judgment of the previous case" is explicitly listed as one of the statutory circumstances for determining "serious circumstances" under the new rules, and the judgment of this case is a direct application of this rule.