(Yicai Global) Aug. 13 -- Well-known Chinese hot pot chain operator Haidilao International Holding recently sued a restaurant in Central China operating under a similar name for infringing its exclusive rights to its trademark, but a court dismissed its lawsuit.

Haidilao hauled the local restaurant named ‘Hedilao’ into a court in Changsha, the capital of Hunan province, asserting its name and logo were similar to Haidilao's registered trademark and hijacked its exclusive rights to it, Legal Weekly reported yesterday. The report did not state whether Haidilao claimed compensation or sought other relief.

The tribunal found overall differences in the name and logo of the two restaurants prevent ordinary consumers from mistakenly supposing a connection exists between the two, noting also that Haidilao features fiery Sichuan-style hot pot as its signature offering, while Hedilao's main fare consists of Hunanese river fish dishes, which are notably different. It accordingly dismissed Haidilao's action. The Beijing-based hot pot chain has thus far not appealed.

Haidilao’s shares [HK:6862] rebounded this morning after plunging 3.7 percent yesterday, closing 6.08 percent up at HKD43.95 (USD5.67) at lunch to give it an about HKD232.94 billion (USD 31 billion) market cap, even as the overall Hang Seng Index fell 0.15 percent.

Peng Dingyun, president of the Intellectual Property Tribunal of Changsha court, who presided over the case, noted IP trials must protect rights protection, but not do so overly broadly so as to stifle social innovation. Some businesses abuse their rights and use them to lord it over certain sectors in a way inimical to the aims of IPR protection, Peng stated.

Founded in 1994 in southwestern Sichuan province, Haidilao operated 768 outlets in China and overseas as of the end of last year. The company landed on the Hong Kong Stock Exchange in 2018. The Covid-19 pandemic lopped percent off its operating income in the first half from the same period last year, according to its latest performance forecast, and its projected net loss was between CNY900 million (USD130 million) CNY1 billion (USD144 million).

‘Haidilao’ means ‘scooping from the bottom of the sea.’ ‘Hedilao’ simply substitutes the word for river (he) for ‘sea.’

Editor: Ben Armour