Li Auto said it respects the fair use of the term by other companies, but the auto film store was impersonating Li Auto for commercial activities including sales and group purchases.
Li Auto explained why it is suing an auto film store that shares the same Chinese name, after several media reports generated a lot of discussion.
Li Auto isn't suing for ordinary trademark infringement, the company said in a statement posted on Weibo today, adding that the use of the term Li Xiang (理想) is very widespread in life, and that it respects the reasonable use of the term by all sectors and has no intention of taking legal action.
The company is suing the film store because it was impersonating Li Auto for commercial activities including sales and group purchases and was reported by local car owners, the statement said.
The company will insist on taking legal action to defend its rights against such impersonation of Li Auto that causes consumer confusion, it said.
The case is currently under review and Li Auto has already submitted evidence to the court, the company said, adding that it is confident that the court will make a fair judgment according to the law on the basis of ascertaining the facts.
Just this past weekend, several local media outlets reported that Li Auto was claiming 1.2 million yuan ($167,000) for trademark infringement and unfair competition against the auto film store, which is located in Linyi, Shandong province in eastern China.
The auto film store, which opened in 2012, includes the word Li Xiang (理想) in its name because that was the childhood name of the store's owner, Mr. Zhu, according to a July 23 report by Yicai.
The store sells products that have nothing to do with Li Auto, and Mr. Zhu can't understand Li Auto's move to make the claim, according to the report.
The operating entity of Li Auto (理想 in Chinese) was established in July 2015 and in May 2018 applied for the registration of the Li Xiang-related Chinese trademarks.
Notably, information from data provider Qichacha shows that there are more than 90,000 companies registered in China that include the Chinese word Li Xiang in their names.