Louis Vuitton, the flagship brand of LVMH, has one of the most recognizable and widely copied logos in the world. So it is no surprise the company took legal action against a bubble-tea chain in the eastern Chinese city of Suzhou to settle a trademark case.

News last week that a court ruled in favour of the leather goods maker spread rapidly. But winning the case has proved to be a pyrrhic victory, sparking backlash rather than reinforcing the brand’s image.

While the European label is right to go after infringements of intellectual property in other countries, it must be more strategic in picking its battles to avoid creating reputational problems in markets that drive future growth. A recovery in China’s luxury spending is key to the success of the group and the global industry.

The target of the lawsuit, Molly Tea, was ordered to pay $1.5 million in economic damages and legal costs because its four-petal floral design was found to be too similar to the French brand’s famous monogram. It has reportedly vowed to appeal.

Though some lauded the decision as a step forward for rights protection in a field long plagued by counterfeiting, many online users rallied behind the Shenzhen-based tea seller, casting the dispute as cultural appropriation.

It is a potentially ominous accusation in a country where patriotic fervour has dented the bottom lines of major Western retailers like Nike, Adidas and H&M. The Swoosh maker has not fully recovered. As economic growth slowed, Chinese shoppers have become more pragmatic and price-sensitive.

Even though retail nationalism has cooled off, cultural issues remain highly combustible. Foreign brands can find themselves at the centre of a firestorm if consumers conclude they are profiting from local heritage at the expense of domestic players.

This is not an issue specific to China. Prada’s introduction of a leather footwear design last year that resembled India’s beloved Kolhapuri sandals set off a wave of online criticism.

In the case of Louis Vuitton, detractors argue that Molly Tea’s floral logo is a common symbol with roots in traditional Asian art, citing the Tang Dynasty’s baoxiang flower pattern.

Critics also pointed to the luxury house’s previous acknowledgment that its own monogram was inspired by Japanese designs that captivated Europe in the 1800s. Those artistic traditions ultimately trace back to China, they contend. To bolster the case, social media users widely shared images of similar symbols on an ancient lute kept at a prestigious museum.

Motifs, techniques and artistic styles have flowed across Asia for centuries, which makes it difficult to pinpoint a single origin. But whether or not those claims withstand historical scrutiny is almost beside the point.

Western firms should think twice before pursuing legal claims that can be perceived as asserting ownership over native design heritage. That is because brand equity increasingly depends on building emotional connections through shared values. Winning in court can still mean losing with consumers. Louis Vuitton had little to gain by suing Molly Tea.

The lesson also extends to LV’s sister brand Christian Dior. Consumers have been making comparisons for years between the French retailer’s blue-and-white Toile de Jouy canvas tote bags and the packaging used by beverage chains Chagee and Nowwa Coffee. The Dior motif was originally inspired by designs traditionally found on Chinese porcelain.

LVMH should instead focus on getting its China expansion strategy right, which requires no distractions. While the US remains the world’s largest luxury market at $130 billion, China’s $60 billion sector offers greater long-term growth potential. Sales are projected to increase as much as 6% annually, according to a June report by McKinsey. This follows a two-year decline that dragged down luxury stocks.

The group had the foresight to invest during the recent downturn by launching ‘The Louis,’ a three-story, pop-up exhibition in the heart of Shanghai last summer, which resonated with many Chinese Gen-Z shoppers. The decision should now be paying off as luxury sales recover. Revenue in the French company’s Asia region excluding Japan was up 7% in the first quarter, considerably better than last year’s 4% contraction in annual sales.

That momentum is worth protecting. The group’s future in China will depend less on how aggressively it defends every trademark than on whether shoppers continue to view its brands as culturally relevant and worthy of aspiration. Winning wallets is ultimately more valuable than winning lawsuits. ©Bloomberg

The author is a columnist for Bloomberg Opinion’s Asia team, covering corporate strategy and management in the region.

Louis Vuitton, the flagship brand of LVMH, has one of the most recognizable and widely copied logos in the world. So it is no surprise the company took legal action against a bubble-tea chain in the eastern Chinese city of Suzhou to settle a trademark case.

News last week that a court ruled in favour of the leather goods maker spread rapidly. But winning the case has proved to be a pyrrhic victory, sparking backlash rather than reinforcing the brand’s image.

While the European label is right to go after infringements of intellectual property in other countries, it must be more strategic in picking its battles to avoid creating reputational problems in markets that drive future growth. A recovery in China’s luxury spending is key to the success of the group and the global industry.

The target of the lawsuit, Molly Tea, was ordered to pay $1.5 million in economic damages and legal costs because its four-petal floral design was found to be too similar to the French brand’s famous monogram. It has reportedly vowed to appeal.

Though some lauded the decision as a step forward for rights protection in a field long plagued by counterfeiting, many online users rallied behind the Shenzhen-based tea seller, casting the dispute as cultural appropriation.

It is a potentially ominous accusation in a country where patriotic fervour has dented the bottom lines of major Western retailers like Nike, Adidas and H&M. The Swoosh maker has not fully recovered. As economic growth slowed, Chinese shoppers have become more pragmatic and price-sensitive.

Even though retail nationalism has cooled off, cultural issues remain highly combustible. Foreign brands can find themselves at the centre of a firestorm if consumers conclude they are profiting from local heritage at the expense of domestic players.

This is not an issue specific to China. Prada’s introduction of a leather footwear design last year that resembled India’s beloved Kolhapuri sandals set off a wave of online criticism.

In the case of Louis Vuitton, detractors argue that Molly Tea’s floral logo is a common symbol with roots in traditional Asian art, citing the Tang Dynasty’s baoxiang flower pattern.

Critics also pointed to the luxury house’s previous acknowledgment that its own monogram was inspired by Japanese designs that captivated Europe in the 1800s. Those artistic traditions ultimately trace back to China, they contend. To bolster the case, social media users widely shared images of similar symbols on an ancient lute kept at a prestigious museum.

Motifs, techniques and artistic styles have flowed across Asia for centuries, which makes it difficult to pinpoint a single origin. But whether or not those claims withstand historical scrutiny is almost beside the point.

Western firms should think twice before pursuing legal claims that can be perceived as asserting ownership over native design heritage. That is because brand equity increasingly depends on building emotional connections through shared values. Winning in court can still mean losing with consumers. Louis Vuitton had little to gain by suing Molly Tea.

The lesson also extends to LV’s sister brand Christian Dior. Consumers have been making comparisons for years between the French retailer’s blue-and-white Toile de Jouy canvas tote bags and the packaging used by beverage chains Chagee and Nowwa Coffee. The Dior motif was originally inspired by designs traditionally found on Chinese porcelain.

LVMH should instead focus on getting its China expansion strategy right, which requires no distractions. While the US remains the world’s largest luxury market at $130 billion, China’s $60 billion sector offers greater long-term growth potential. Sales are projected to increase as much as 6% annually, according to a June report by McKinsey. This follows a two-year decline that dragged down luxury stocks.

The group had the foresight to invest during the recent downturn by launching ‘The Louis,’ a three-story, pop-up exhibition in the heart of Shanghai last summer, which resonated with many Chinese Gen-Z shoppers. The decision should now be paying off as luxury sales recover. Revenue in the French company’s Asia region excluding Japan was up 7% in the first quarter, considerably better than last year’s 4% contraction in annual sales.

That momentum is worth protecting. The group’s future in China will depend less on how aggressively it defends every trademark than on whether shoppers continue to view its brands as culturally relevant and worthy of aspiration. Winning wallets is ultimately more valuable than winning lawsuits. ©Bloomberg

The author is a columnist for Bloomberg Opinion’s Asia team, covering corporate strategy and management in the region.