The long-drawn dispute over the brand hijack of MUJI, the pioneering retailer of Japan, with its rival mimic under Cottonfield Company in China, was prolonged into yet another epilogue, as Beijing Intellectual Property Court ruled in a recent hearing against MUJI Company to further compensate Cottonfield Company for economic losses and reasonable expenses to stop infringement, totaling 200,000 yuan, with the blame that MUJI Company had objectively fabricated and disseminated false information in statement, thereby sabotaging the goodwill of Cottonfield Company. 

MUJI began registration of trademarks on multiple classes of goods in 1999, but did not register on class 24 products including towels and quilts. In 2001, a company in Hainan applied for the trademark registration of "MUJI" under class 24 and was approved. In 2004, a company in Hainan approved the transfer of the trademark to Cottonfield Company. In 2019, Cottonfield Company sued MUJI Company to the court on the grounds of infringement because it believed that MUJI Company used the trademark "MUJI" on class 24 products, namely sheets and quilts. In November 2019, the Beijing Higher Court made the final judgment, alleging that MUJI Company constituted trademark infringement and needed to bear legal responsibilities such as stopping infringement, eliminating influence and compensating the losses. 

To fulfill the above effective judgment of Beijing High Court, as of November 10, 2019, MUJI Company issued statement on its Tmall online store and offline stores, saying that the "MUJI" trademark has been registered in almost all categories of goods and services, with the only exceptions on goods such as cloth, towels and bedspreads, which had hijacked by other companies through preemptive registration. 

Once again Cottonfield Company sued MUJI Company to the court, claiming that the expression "hijack" in its statement constitutes commercial slander. According to Cottonfield, the context of the statement involved in the case is misleading enough to cause the public to equate the above-mentioned "other companies" with Cottonfield Company, and to doubt that Cottonfield Company has hijacked the "MUJI" trademark of MUJI Company, and is an outlaw, instead of a real victim of civil infringement cases. 

The word "hijacking" is a simple statement of the illegal act of preempting others to apply for registered trademarks by illegal means such as unfair competition. MUJI Company fabricated and disseminated the false information implying that Cottonfield Company hijacked the "MUJI" trademark, which caused the relevant public to mistakenly recognize the towels, quilts and other commodities with "MUJI" mark of Cottonfield Company as counterfeit goods, resulting damages to Cottonfield Company. Cottonfield Company requested the court to judge MUJI Company to jointly compensate for the economic losses caused by commercial defamation of 3 million yuan and compensate for the reasonable expenses paid for stopping infringement of 100,000 yuan, plus a statement to eliminate the impact of infringement on Cottonfield Company. 

In November 2021, the court of first instance ruled MUJI Company to compensate Cottonfield Company for economic losses of 300,000 yuan and reasonable expenses of 100,000 yuan. 

MUJI Company appealed to revoke the first-instance judgment and reject all the claims of Cottonfield Company in the original trial. MUJI believes that the court of first instance had made fact-finding error by mistakenly determining that MUJI had fabricated and disseminated false information. The abbreviation "hijacking" mentioned in the public statement of MUJI Company is a comprehensive, objective and true statement of facts, which is not misleading and does not fabricate or disseminate false information. The court of first instance found that the statement involved damaged the goodwill of Cottonfield Company, which was a fact-finding error. The word "hijacking" is an abbreviation of "preemptive registration", which does not have negative evaluation, but only indicates the order of registration. The full text of the statement involved is an apology statement. It is impossible to produce negative evaluation of Cottonfield Company in combination with this background, and Cottonfield Company failed to provide evidence to prove the damage to its goodwill. 

In this regard, Beijing Intellectual Property Court held in the second instance hearing that under the circumstances that the effective judgment had determined that the "MUJI" trademark of Cottonfield Company was a legally registered trademark, instead of a hijacked trademark, the statement involved still contained the statement "MUJI trademark was hijacked by other companies", which was inconsistent with the facts determined by the previous judgment and contained certain derogatory evaluation. Therefore, the court maintained the first instance ruling in terms of MUJI Company's act of issuing the statement involved in the case constituted an act of damaging the commercial reputation and commodity reputation of Cottonfield Company by fabricating and disseminating false information. 

As for the adverse effects produced, according to the Beijing Intellectual Property Court, The act of MUJI Company issuing the statement involved in the case constitutes an act of damaging the business reputation and commodity reputation of Cottonfield Company by fabricating and disseminating false information. It should bear corresponding civil liabilities for its actions, and comprehensively consider factors such as the subjective malice degree of MUJI Company, the proportion of the sued behavior in the statement involved and the degree of impact, and the duration of the disclosure of the statement involved, and determine the amount of compensation for economic losses of Cottonfield Company as appropriate. The amount of economic loss determined by the first-instance judgment is too high, and the court comprehensively considered the subjective purpose of issuing the statement involved in the case, the proportion of the sued dispute statement in the statement involved in the case, the objectivity of the full text of the statement involved in the case, the damage degree and correlation degree of the sued behavior to the goodwill of Cottonfield Company, and the specific circumstances of the sued behavior. In the final judgment, the court ruled that MUJI Company shall compensate Cottonfield Company for economic losses and reasonable expenses to stop infringement, totaling 100,000 yuan.