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The value of a professional solicitor lies not merely in winning cases, but in ensuring the enterprise survives.

——Solicitor Yang Siping, JAVY Law Firm

Less than a year after launching, a distinctive Beijing-based internet sensation enterprise suddenly received court summonses—facing substantial claims for trademark infringement. For a start-up with meagre registered capital and yet to turn a profit, this sum was virtually catastrophic.

Months later, the case concluded with a relatively reasonable settlement. The opposing party voluntarily removed all negative online content, allowing the business to resume normal operations. This rollercoaster experience offers valuable lessons for every entrepreneur.

01 Seemingly Professional Advice Sows the Seeds of Major Trouble

Fast forward to the end of the year before last, when a uniquely positioned company was making final preparations for its grand opening. With its exquisite décor and innovative concept, everything appeared full of promise.

Prior to opening, the proprietor consulted an agency and received a seemingly reassuring response: ‘Your trademark is usable. Should any conflicting trademarks arise, we can assist in their revocation, ensuring your trademark registration is secured.’

It was precisely this ‘professional’ advice that led the proprietor to proceed with confidence in using the mark. With all fit-outs and promotional materials in place, the company opened its doors as scheduled.

02 Crisis Strikes: An Unbearable Burden for Start-ups

Just months after opening, a court summons shattered the calm—the trademark owner formally lodged infringement allegations, demanding cessation of use and compensation. The claimed damages amounted to an astronomical figure beyond the start-up's wildest imagination.

More gravely, the opposing party began publishing accusations across major platforms, directly damaging the company's reputation. Legal and commercial crises erupted simultaneously.

Only then did the operators realise the opposing party had long registered the trademark in the relevant category. The ‘cancellation’ promised by the previous agency had never materialised, and the infringement allegations were about to become reality.

03 Professional Analysis: Building a Three-Tier Defence System

Upon taking the case, we faced a situation seemingly highly unfavourable to the defendant—clear trademark ownership and the opposing party having submitted evidence of trademark use.

However, through professional analysis, we constructed an effective defence system:

First, we conducted a thorough examination of the opposing party's rights foundation. Investigations revealed that the trademark owner had never engaged in actual business operations within the relevant field. The ‘evidence of use’ submitted contained obvious flaws: the purported business address was in fact a residential property, and the relevant contracts raised numerous doubts. We systematically demonstrated to the court that the trademark had not been put to genuine use, amounting at best to ‘symbolic use’. The registered trademark in question was highly susceptible to cancellation.

Second, we solidified the legal basis for non-compensation. Article 64 of the Trademark Law provided our pivotal argument: where the registered trademark owner cannot prove actual use within the preceding three years, nor demonstrate other losses incurred due to infringement, the alleged infringer bears no liability for damages.

Thirdly, we presented data and evidence. We submitted comprehensive financial statements demonstrating the company's severe cumulative losses and insolvent status. These robust figures proved that this micro-enterprise could not possibly have derived any ‘infringement profits’.

04 Rational Settlement: Rebirth for the Enterprise

Following multiple rounds of courtroom and out-of-court negotiations, both parties reached a settlement: the compensation amount was reduced to a reasonable level, the opposing party permanently deleted all negative online content, and committed to no further publication.

This outcome signifies:

The survival rights of a start-up enterprise are safeguarded

Brand reputation is restored, and operations return to normal

Both parties avoid prolonged, substantial financial and time expenditures

Upon signing the settlement record, both sides likely reflected: ‘This lesson stands as an unforgettable chapter in my business career.’

05 Four Pitfall-Avoidance Guidelines for Entrepreneurs

First, prioritise trademarks; never put the cart before the horse. Complete trademark searches and registrations before launching products or services. Trusting assurances that ‘you can use it first and secure rights later’ is akin to running naked through a commercial minefield.

Second, professional judgement trumps cheap advice. In legal services, true value lies in precise assessment and risk prevention. When selecting service providers, focus on their professional credentials and capabilities.

Third, startups must cultivate a heightened awareness of risk. While large corporations may withstand litigation fluctuations, a single lawsuit could spell the end for a fledgling venture. Risk prevention must be prioritised from the outset.

Fourth, the cost of risk assessment far outweighs remedial action. Conducting a comprehensive intellectual property review before project launch incurs minimal expense. Once infringement occurs, however, the consequences—including damages, reputational damage, and client attrition—are multifaceted and severe.

06 The True Value of Specialist Solicitors

Post-settlement, the client's enterprise continues to operate. The disputed signage has been replaced, yet this experience remains etched in the entrepreneur's memory.

This case vividly illustrates the dual value of specialist solicitors in business development: not merely as litigation representatives, but as risk strategists. Through professional analysis, we not only substantially reduced the settlement amount but, more crucially, ensured a viable enterprise survived and gained a fresh start.

Entrepreneurs often ask: ‘Is hiring a solicitor worth the expense?’ My answer is: ‘Compared to the potential costs of business risks, professional legal support is the most cost-effective investment.’

A trademark is not merely a logo; it is the talisman safeguarding a business's lifeline. A solicitor is not just a firefighter; they are the guardian of the enterprise. In the uncertain realm of commerce, professionalism, prudence, and reverence for the rules are the only path to enduring growth.