Molly Tea Global, a China-based multinational franchise of tea shops, has demanded that several of its American franchisees stop using their name, due to contract violations and the unauthorized use of their brand name. As a result of these disputes, Molly Tea has filed a lawsuit against MHL NY LLC (MHL) in federal court, alleging damages of more than $5 million, to counter MHL’s New York State Supreme Court case, filed and pending in Queens Supreme Court ..
MHL is being represented by a talented team of attorneys, including our very own, Peter Sverd, Esq. They contend that their parent company attempted to exert undue control over them by cutting off access to supplies, closing operating systems, and removing stores from delivery platforms, making it substantially harder for them to run their businesses.
Molly Tea Sues MHL for More Than $5m
The lawsuit against MHL originated in 2023, when Molly Tea sought to open American franchises in New York. They signed an agreement with MHL to open four branches using the Molly Tea brand, but the relationship began to deteriorate soon thereafter. There were growing disputes over a variety of different issues, including store ownership, lease arrangements, and operational control, with there apparently being a discussion about restructuring the business relationship between MHL and Molly Tea.
In the end, these issues were not able to be reconciled privately, and filed a lawsuit in the U.S. District Court for the Southern District of New York, alleging breach of contract, trademark infringement, and other claims, with damages totaling more than $5 million.
MHL Changes Name of Shops to “?” Tea
As part of this lawsuit, Molly Tea successfully sought an injunction against MHL to prevent them from continuing to use the “Molly Tea” branding. In response, MHL changed the signage over their stores to “?” Tea, complying with the order while putting the legal dispute in full public view. This unusual branding is likely to remain until the ongoing legal dispute is sorted out.
Additional IP Issues for Molly Tea
Unfortunately, Molly Tea is not a stranger to intellectual property issues, though in the previous case, it was the defendant rather than the plaintiff. It was forced to pay $1.5 million in damages to Louis Vuitton by a Chinese court after it was determined to have stolen its four-petal flower design from the handbag manufacturer. Whether its ongoing dispute with MHL will go any better remains to be seen.
The Status of the Case
Right now, the lawsuit against MHL is an ongoing matter, with the court currently monitoring both storefronts and social media accounts to ensure they remain compliant with the injunction. MHL continues to contend that it has engaged in no wrongdoing, and that it was Molly Tea that overstepped the terms of their agreement.
What You Should Do If You Are in an Intellectual Property Dispute
If you are a business owner seeking to protect your intellectual property rights, or you have been accused of illegally using someone else’s IP, you should speak to a lawyer with experience handling business law matters. The Law Offices of Peter Sverd have extensive experience with complex business litigation, and they are ready to represent you in your case. The sooner you call, the sooner they can get to work for you.