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This was published 1 year ago
Chatime reusable cups binned after KeepCup sues for trademark infringement
By Jessica Yun
Hundreds of reusable cups have ended up in landfill after KeepCup launched legal action against Chatime Australia, accusing the bubble tea chain of selling unlawful products and profiting off the use of its brand name without permission.
KeepCup instituted proceedings in the Federal Circuit Court against Chatime in late January after discovering it was marketing and selling a reusable cup packaged with the words “KEEP CUP” in its bubble tea stores and on Woolworths’ shelves. The image, logo and name of KeepCup are registered trademarks.
KeepCup is suing Chatime Australia for selling reusable cups marketed as ‘Keep Cups’.
KeepCup managing director Abigail Forsyth said she was taking Chatime to court to protect the business’ reputation and that Chatime’s products were an infringement of intellectual property.
“There’s an onus on bigger businesses and people who have brands to respect the brands of other people,” she said.
“When we see people who are using our trademark, we have to take steps to enforce that they recognise it. For the most part, no one hears about it.”
The bubble tea chain has faced scrutiny before: a 2019 investigation by this masthead revealed Chatime was covering up rampant underpayment of its workers, many of whom were international students. As far back as 2009, Chatime had underpaid workers by more than $10 million across its franchise network of 111 stores at the time.
Forsyth co-founded KeepCup in 2009 with her brother Jamie after opening a cafe and wanting to reduce the amount of disposable coffee cups they saw ending up in landfill. KeepCup now employs more than 50 people, are the cups are used in 65 countries, generating $11.4 million in profits in the 2019 financial year, according to the company’s most recent financial report filed to ASIC.
‘[KeepCup] has become a word people often don’t realise is a trademark because it’s so associated with the behaviour, not just the product.’
KeepCup managing director Abigail Forsyth
In documents filed to court, Forsyth stated she became aware of Chatime selling the reusable cups around October last year. On November 15, she instructed law firm Marque Lawyers to demand the bubble tea chain stop selling the products and to recall about 900 cups that remained on sale in Woolworths stores nationally. KeepCup launched proceedings on January 20 after Chatime failed to provide evidence of doing so.
“When you use that name, there’s all these associations that come with it and all the work that we’ve put into our original product. So when that’s used to represent another product, it causes damage to us,” Forsyth said.
This is KeepCup’s second lawsuit against a beverages chain for selling products allegedly infringing upon its intellectual property. KeepCup sued coffee chain Gloria Jean’s in 2017 for releasing a reusable cup using a design it said was similar to theirs. The matter was eventually settled for an undisclosed amount and the coffee chain now sells Gloria Jean’s-branded KeepCups on its website.
KeepCup argues Chatime Australia is infringing upon its trademarks and intellectual property.
Forsyth said the business wanted Chatime to stop selling the offending products, financial recompense on profits made on items sold, and legal costs to be covered.
“The outcome you’re always looking for is the infringing behaviour ceases, that any advantage that’s caused by that infringing behaviour is compensated, and that your expense in pursuing your rights is compensated.”
She said that KeepCup had driven such a “cultural shift” in consumer behaviour that it had gradually become a metonym for the general habit of using a reusable cup, like ‘Google’ for internet searches, rather than referring to the branded item itself.
“It has become a word that people often don’t realise is a trademark because it’s so associated with the behaviour, not just the product, which is great. But this is one of the outcomes of that,” she said.
“They’re using our good name to create to generate profit and revenue. And the other thing is if the product is not a great product, they’re also damaging our brand.”
The reusable cups are no longer sold in Woolworths but are still available in some Chatime stores. The supermarket giant pulled about 500 Chatime cups off shelves in early February after receiving instructions from the bubble tea chain to dispose of them. When contacted by this masthead, a number of Chatime staff around the country said the reusable cups were still for sale or had run out and would be restocked some time next week. At the time of publishing, Chatime’s social media posts about the reusable cups remain online.
KeepCup is represented by Marque Lawyers while Chatime Australia is represented by Bird & Bird. Bird & Bird senior associate Tom Johnston said the bubble tea chain was looking to settle the matter outside the courts.
“We are instructed that Chatime has always and will continue to work towards an amicable resolution of this matter. If unresolved, Chatime will vigorously defend the claim in any legal proceedings,” Johnston said.
Chatime is a Taiwanese bubble tea franchise chain founded in 2005. It has retail outlets in Malaysia, China, India, Vietnam, Singapore, Hong Kong, Thailand, and other Asian countries as well as Dubai, Canada, the UK, Mexico and the US, and more than160 stores in Australia.
According to ASIC records, Chatime Australia has four people listed as directors, three of whom live in Taiwan and one based in Sydney.
The first court date for the case has been set for February 17 and heard by Judge Robert Cameron in Sydney.
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