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Hong Kong courts

Tenpence to close last two bubble tea stores in Hong Kong, but legal fight with Xing Fu Tang firm is far from over

  • Local distributor loses High Court battle with Taiwan’s CEO International
  • But two sides are still locked in a legal dispute over trademark
PUBLISHED : Thursday, 03 January, 2019, 8:23pm
UPDATED : Friday, 04 January, 2019, 9:28am

Two more popular Taiwanese bubble tea shops run by a Hong Kong distributor in the city will close in three weeks’ time, a court heard on Thursday.

Lawyers for CEO International, the creator of the bubble tea brand Xing Fu Tang, made the announcement at the High Court, where they have been seeking a temporary ban on Tenpence International.

The two companies have been involved in a bitter court battle over copyright infringement since Hong Kong’s Tenpence opened its first store in Causeway Bay in August. Two other franchise stores, in Yuen Long and Tsim Sha Tsui, followed.

Tenpence shocked customers two days ago when it announced on its Facebook page that it would close its Causeway Bay shop.

On Thursday, barrister John Yan Mang-yee SC, for the Taiwanese firm, said the Hong Kong distributor had also promised to close the other stores on January 20, putting an end to the bitter court fight.

Tenpence’s move came as a surprise, as its lawyers had indicated in court a week ago it would contest the allegations, even though the presiding judge, Mr Justice David Lok, believed CEO International had a strong case.

Yan said since the hearing last Friday, the distributor had written to the Taiwanese firm, offering to close its shops.

The judge ordered Tenpence to pay all legal costs, and told the firm to disclose the identity of anyone who had approached it about opening a franchise, as the Taiwanese firm requested.

Yan said his client would like to clarify with those potential clients that it was the founder.

“It’s our brand,” he said.

Forget one lump or two, Shanghai takes its tea dirty, cheesy and fruity

The Taiwanese brand, Xing Fu Tang, is popular for its brown sugar bubble milk tea, which is made with stir-fried black tapioca pearls. It has opened more than 60 franchise stores in Taiwan and around the world, from Hong Kong to Vancouver.

The legal battle began in November with Tenpence suing the Taiwanese firm, saying that under its contract, it was the bubble tea brand’s sole local distributor, so CEO International should not be allowed to set up its own store here.

But, CEO International fought back and asked the High Court to stop the Hong Kong franchisee selling the bubble drinks.

While the court battle came to a halt on Thursday in Hong Kong, the legal fight between the two companies is far from over. The Hong Kong firm is suing the brand founder in Taiwan for licensing it a trademark that had not been registered.