A Beijing court has delivered a sharp rebuke to tea giant Nayuki’s Tea, ruling that the company’s unauthorized use of Pop Mart’s iconic 'LABUBU' intellectual property constitutes unfair competition. The Chaoyang District People's Court ordered Nayuki to pay 320,000 RMB (approximately $44,000) in damages after finding that the brand used deceptive design tactics to imply a commercial partnership that did not exist. The ruling has now taken effect as neither party filed an appeal.
The dispute originated from a 2025 marketing campaign where Nayuki introduced 'Mibubu' themed drinks, featuring promotional artwork that heavily utilized the visual signatures of Pop Mart’s sharp-toothed 'LABUBU' character. While Nayuki attempted to shield itself with a microscopic disclaimer stating that prizes were self-purchased and had no official cooperation with Pop Mart, the court ruled that 'large-font promotion with small-font disclaimers' is insufficient to prevent consumer confusion. The judge emphasized that the distinctive features of LABUBU have achieved a level of public recognition that demands protection under anti-unfair competition laws.
This legal setback highlights the intensifying pressure within China’s 'new tea' sector, where brands are increasingly desperate for viral marketing hits to offset declining consumer spend. Nayuki’s financial health has been under significant strain, with its 2025 annual report showing a revenue drop of nearly 12% to 4.33 billion RMB and a net loss of 239 million RMB. The company has also been forced to shrink its footprint, recording a net closure of 152 directly operated stores as the market reaches a saturation point.
In an environment where official IP collaborations with top-tier characters can cost millions in licensing fees, Nayuki's attempt to 'ride the coattails' of Pop Mart's popularity reflects a high-stakes gamble to drive traffic on the cheap. However, the finality of this judgment signals that Chinese courts are no longer tolerating 'border-crossing' tactics that exploit the fame of established creative properties. For the industry, this case serves as a definitive warning that the space for 'creative' copyright infringement is rapidly closing.