Online Reputation Legal Risks and Responses in Corporate IP Rights Enforcement — The Yu Jian Xiao Mian Case

How did a procedurally legitimate trademark enforcement action escalate within just four days into a reputational crisis that sent the company’s share price plummeting? From the perspective of online reputation legal services, this article reviews the entire course of the incident, dissects the legal judgments and missteps in online reputation management, and proposes a “Four-Question Stress Test” that enterprises should complete before initiating rights enforcement actions (particularly intellectual property enforcement).

I. A Four-Day Timeline: How a Bowl of Noodles Priced at Eight Yuan Toppled a Listed Company’s Reputation

On December 5, 2025, Yu Jian Xiao Mian (2408.HK) listed on the Main Board of the Hong Kong Stock Exchange, earning the title of “the first Chinese noodle restaurant stock.” Its 2025 revenue reached RMB 1.622 billion, a year-on-year increase of over 40%; net profit attributable to the parent company was RMB 106 million, up more than 70% year-on-year—its fundamentals were by no means weak[1].

On June 11, 2026, Yu Jian Xiao Mian engaged a third-party law firm to file a trademark infringement lawsuit against a husband-and-wife noodle shop named Yu Jian Xiao Mian (a different Chinese character rendering) in Nanyang, Henan Province, claiming damages of RMB 7,000 to RMB 8,000.

On June 12, the Livelihood Channel of Henan Radio and Television reported the matter. The shop owner, Ms. Mao, tearfully recounted before the camera that the opposing counsel had stated there would be no settlement without compensation and that they would “wait for the court hearing,” and uttered the words that quickly went viral across the internet: “For a bowl of noodles that costs eight yuan, I’d have to sell at least a thousand bowls—and a thousand bowls still have costs”[2]. That same day, Yu Jian Xiao Mian communicated its intention to withdraw the lawsuit.

On June 13, Yu Jian Xiao Mian issued a statement regarding the trademark incident, confirming the withdrawal and stating that it would reflect on its enforcement processes. But the storm did not subside: some prepaid membership holders began posting refund screenshots on social media platforms as a form of protest; some deliberately refunded balances of less than one yuan; and some consumers reported that the “refund anytime” function for stored value appeared to be restricted. A brand image crisis thus compounded into a consumer trust crisis[3].

In the early hours of June 15, founder Song Qi published “A Letter to Yu Jian Xiao Mian,” announcing that the registered Class 35 trademark “Yu Jian Xiao Mian” would be transferred to the other party free of charge, acknowledging that this was a major management failure, stating that the company “admits its mistakes, bears the consequences, and does not shift blame,” and announcing the suspension of cooperation with the outsourced law firm.

As of June 15, Yu Jian Xiao Mian’s share price had fallen more than 6%, with a cumulative decline of over 50% since its listing. A trademark enforcement case involving a claim of merely a few thousand yuan ultimately ended with a sharp drop in share price and a late-night apology from the founder[4].

II. Why Legitimate Enforcement Turned into an Online Reputation Crisis: Legality, Compliance, and Reasonableness Are Three Different Things

A common cognitive misconception is that as long as enforcement is legally grounded and procedurally compliant, nothing can go wrong. The Yu Jian Xiao Mian incident demonstrates precisely that legal legitimacy does not equal online reputation safety.

Let us first examine the legal dimension itself. The test for whether two word marks are similar is based on an overall comparison of their sound, form, and meaning, and whether such similarity is likely to cause confusion among the relevant public. Comparing Yu Jian Xiao Mian with Yu Jian Xiao Mian (the defendant’s mark), for Class 43 restaurant services, the two characters “Xiao Mian” (noodles) inherently possess weak distinctiveness; the distinctive elements lie primarily in “Yu Jian” (the plaintiff’s characters) and “Yu Jian” (the defendant’s characters, a homophone with different characters). However, the first characters differ, and the overall meanings are distinctly different. Therefore, although the Yu Jian Xiao Mian mark is relatively well known, the authors are not optimistic that Yu Jian Xiao Mian could prevail in this case as a matter of law.

Thus, when an action may have only a fifty percent chance of success legally yet is destined to bear one hundred percent of the online reputation pressure, the rational choice should have been to conduct an online reputation assessment first before deciding whether to proceed. But Yu Jian Xiao Mian apparently lacked an internal process for assessing, in advance, how a legal action would play out in terms of online reputation.

III. Not an Isolated Case: From Qing Hua Jiao to Tongguan Roujiamo, Similar Online Reputation Crisis Scripts Keep Repeating

Broadening the perspective, Yu Jian Xiao Mian is by no means the first enterprise to stumble in trademark enforcement. In recent years, there have been several similar incidents. In the 2021 Tongguan Roujiamo case, the Tongguan Roujiamo Association, invoking a geographical indication collective trademark, sued hundreds of snack shops across the country whose names contained the characters “Tongguan,” demanding compensation and even franchise fees. After public outrage erupted online, the China National Intellectual Property Administration (CNIPA) stated clearly: the registrant has no right to license use and collect franchise fees from merchants outside the designated area of origin, nor the right to prohibit merchants within the region from legitimately using the geographical name contained therein; the relevant department of the Supreme People’s Court simultaneously stated that collecting so-called membership fees through litigation is inconsistent with the Trademark Law. That same day, the association in question issued an apology letter and ceased enforcement[5]. In the nearly contemporaneous Qing Hua Jiao (green Sichuan pepper) case, Shanghai Wancuitang sued multiple Sichuan restaurants; in January 2022, the Sichuan High People’s Court reversed the first-instance judgment on appeal, holding that the restaurants’ use of “Qing Hua Jiao” constituted an objective description of a dish seasoning, representing fair use rather than trademark use, and that the mark’s distinctiveness was weak and its scope of protection should not be overly broad, dismissing all claims; the People’s Court Daily, supervised by the Supreme People’s Court, subsequently commented that trademarks should not be reduced to tools for staking claims and extorting profit[6].

Compared with the “Tongguan Roujiamo” and “Qing Hua Jiao” cases, Yu Jian Xiao Mian does not appear to have engaged in mass enforcement (an AlphaLawyer search shows only 3 cases in the past five years with Yu Jian Xiao Mian as plaintiff), and the disputed mark does not suffer from the legal vulnerability of generic name or geographical name fair use. Yet the common thread is that, in terms of online reputation outcomes, the rights holders appear to have won the trademark registration but lost the hearts of the public—and in the end, they may not even win the lawsuit itself.

Regarding the abuse of trademark rights and intellectual property rights, judicial authorities and administrative regulators have formed a clear and consistent negative stance. In particular, the “enforcement factory” model—outsourced to legal services companies or law firms that handle cases in bulk, using litigation or exorbitant claims to pressure small merchants into paid settlements—is not only legally unstable but also highly explosive in reputational terms. Yu Jian Xiao Mian’s announcement suspending cooperation with the outsourced law firm and calling for scientific and healthy trademark protection is, in a sense, a belated response to the policy signals conveyed above.

IV. An Underestimated Role: The Retained Lawyer Is the Enterprise’s First Spokesperson

In this incident, what first ignited public sentiment was not the lawsuit itself, but the wording of the retained counsel when facing the media.

According to multiple media reports, the retained counsel emphasised in an interview that “three out of four characters are the same, constituting overall similarity,” and the statement “no settlement without compensation—wait for the court hearing” was circulated[7]. This readily gave the public the impression of condescension and aggressiveness, forming a stark contrast with the tearful husband-and-wife shop owners before the camera, instantly creating the image of a listed company bullying the small and weak. Some self-media outlets directly characterised it as a negative case study for the legal profession[8].

There is an online reputation principle easily overlooked by both enterprises and lawyers: in corporate enforcement scenarios, every public statement by retained counsel is taken by the public as the attitude of the enterprise itself. The lawyer thinks they are stating a legal position; what the public hears is the company’s values. When lawyers pursue precision and toughness in legal expression, they may simultaneously be creating an impression of arrogance and indifference in the court of public opinion.

The deeper problem lies in the lack of online reputation coordination between external counsel and the enterprise. Outsourced law firms are typically accountable only for legal outcomes, not for corporate reputation, and their performance metrics and incentives do not include an online reputation dimension. When an enterprise outsources enforcement without simultaneously establishing an online reputation review mechanism for external communications, professional correctness and online reputation losses occur at the same time. Yu Jian Xiao Mian’s subsequent announcement suspending cooperation with the outsourced law firm is, in a sense, the price paid for this coordination failure—but this action itself may have sown a contradiction with its “no blame-shifting” statement, as discussed below.

V. Secondary Online Reputation: What Escalated a Brand Crisis into a Trust Crisis May Have Been the Response Itself

If the lawsuit against the husband-and-wife shop was the first wave of crisis, then the stored-value refund controversy is a classic case of secondary online reputation.

After the withdrawal, the incident had room to cool down. But the concentrated refunds by some prepaid members, the symbolic protest of refunding balances of less than one yuan, and rumours that the “refund anytime” function appeared to be restricted shifted the spotlight from a trademark dispute to how the enterprise treats its own consumers. The first wave damaged brand business reputation; the second wave shook consumer trust—and for a chain restaurant enterprise dependent on member repeat purchases, the latter is far more substantive.

Secondary online reputation follows a pattern: when the first-wave response touches the vital interests of a broader group, or exposes inconsistency between the enterprise’s words and deeds, the controversy feeds itself. Stored-value refunds are a legitimate consumer right; any flaw in the refund experience will be interpreted as “a big store bullying customers,” resonating with the earlier “big bullying small” narrative.

This raises another principle for online reputation management: when quelling the first wave of crisis, one must simultaneously anticipate the second-wave reactions that each remedial action may trigger, and ensure that messaging and experience can withstand magnified scrutiny. Yu Jian Xiao Mian staff later clarified that the refund channel had never been closed and that inquiry volume had merely increased[9], but the timing of the clarification lagged behind the build-up of public sentiment—precisely the most common failing in handling secondary online reputation.

VI. The Particularity of Listed Companies: The Interplay of Reputation, Share Price, and Information Disclosure

For a listed company, a reputational crisis is never merely a public relations issue.

Yu Jian Xiao Mian’s share price continued to decline amid the controversy[10]—a transmission chain that every listed company should heed. Reputational risk can directly impact share price as an online controversy escalates, and abnormal share price fluctuations may in turn trigger information disclosure obligations and chain reactions in investor relations. When a seemingly minor commercial dispute begins to affect secondary market performance, the response is no longer the concern of the marketing department alone but requires coordination among legal, the board secretary’s office, investor relations, public relations, and external counsel.

This is precisely the crux of what distinguishes listed company online reputation from that of ordinary enterprises: the response plan must not only address public sentiment but also simultaneously assess whether the matter constitutes a disclosable event, whether external messaging is consistent with previously disclosed information, and whether the founder’s personal statements might be interpreted as corporate commitments. The founder’s late-night personal apology letter was a plus in terms of online reputation, but in the context of listed company governance, the boundary between personal statements and corporate actions, and the enforceability of commitments, all require prior legal review.

VII. Deconstructing the Apology Letter: What a High-Scoring Apology Got Right, and What Risks It Left Behind

Song Qi’s apology letter was indeed commendable in terms of online reputation management technique. It possessed the elements of a high-quality apology: in attitude, it admitted mistakes and did not shift blame; in action, it offered the specific, costly, concrete step of transferring the trademark free of charge, rather than empty platitudes; in values, it reaffirmed the corporate culture of integrity and business reputation and called for scientific and healthy trademark protection, completing the reconstruction of its value stance. Compared with the boilerplate “we are verifying” and “we attach great importance” of most corporate crises, the sincerity of this letter was palpable.

In particular, the letter handled the order of attribution quite prudently: it first characterised the incident as a major management failure of the company itself, explicitly admitting mistakes without shifting blame, and only then mentioned suspending cooperation with the outsourced law firm. Self-attribution first, adjustment of external cooperation later—this sequence largely avoided the impression of pushing responsibility onto the law firm. Had the adjustment of external cooperation been explicitly framed as part of improving the company’s internal future enforcement review mechanism, the effect might have been even better.

VIII. Practical Recommendations: Before Enforcement, Complete This Round of Online Reputation Stress Testing

The value of the Yu Jian Xiao Mian incident is that it provides a reusable case study for enterprises that hold intellectual property rights yet directly face the public. As online reputation lawyers, the authors’ team offers, for similar situations, a “Four-Question Stress Test” that enterprises should complete before initiating enforcement actions.

Question One: The Question of Power Asymmetry. Will the public construct a “strong bullying the weak” narrative between the enforcement target and the enterprise? A listed company versus a husband-and-wife shop, a leading brand versus an individual business, a platform versus a small merchant—such targets naturally attract public sympathy. Once the “big bullying small” frame is formed, it is virtually irreversible. Enforcement against such targets must be subject to a far higher threshold than usual.

Question Two: The Question of Proportionality. Are the enforcement means proportionate to the harm suffered? Filing a lawsuit and claiming damages directly, compared to first sending a cease-and-desist letter and seeking negotiation and rectification, is a more aggressive action. When actual damages are difficult to quantify and the amount in dispute is minimal, deploying litigation—the heaviest tool—is easily interpreted as “a big store bullying people” or “pressing one’s advantage mercilessly.”

Question Three: The Question of Sequencing. Does the enforcement action leave room for withdrawal and remedy if the online controversy escalates? Many enterprises find themselves in a passive position because once litigation is initiated and tough statements are made, withdrawal becomes “losing face.” Enforcement should proceed in stages, placing the most irreversible and most aggressive actions last, leaving a window for observation and manoeuvre as online opinion develops.

Question Four: The Question of Messaging. Have the statements of all external communication parties—especially retained counsel—been subject to online reputation review? Enterprises should agree in advance with external law firms on external communication guidelines, clearly defining lawyers’ boundaries of expression before the media, and separating legal toughness from online reputation restraint. Lawyers may insist on legal positions without expressing them in a condescending manner.

Of the four questions, if the answer to even one is unsettling, the enterprise should pause initiation or adjust its enforcement path. One of the purposes of enforcement is to protect business reputation, yet a mishandled enforcement action will destroy business reputation at an even faster rate.

IX. Conclusion: Front-Loading Online Reputation Risk into Legal Decision-Making

The Yu Jian Xiao Mian incident is not an isolated public relations accident but a concentrated eruption of the long-standing disconnect between corporate legal actions and online reputation risk. In an environment where any dispute can be instantly recorded, edited, and disseminated, every legal action by an enterprise is simultaneously an online reputation action; every external document and every statement by counsel is a component of corporate reputation.

Legal teams must not only answer “can we sue” and “can we win,” but also “what will online reputation look like after we sue” and “is the enterprise prepared to bear it.” Front-loading online reputation risk assessment into the legal decision-making process—bringing legal, public relations, and external counsel to the same table before taking action—is precisely the hallmark of mature corporate reputation governance, and the value of online reputation legal services.

● Notes:

[1] China Securities Net, “Yu Jian Xiao Mian’s 2025 Profit Doubles; Global Store Count Exceeds 500,” March 27, 2026, https://www.cnstock.com/commonDetail/658293.

[2] The Paper (citing a report by the Livelihood Channel of Henan Radio and Television), June 15, 2026, https://www.thepaper.cn/newsDetail\_forward\_33380578; Tencent News, “Post-90s Owner of ‘Yu Jian Xiao Mian’ Shop in Nanyang, Henan: ‘Yu Jian Xiao Mian’ Sued Me for Trademark Infringement—The Designs Are Completely Different, Demanding Ten Thousand in Damages. For a Bowl of Noodles at Eight Yuan, I’d Have to Sell Over a Thousand Bowls. Plaintiff’s Counsel: At Least Seven or Eight Thousand, Otherwise Wait for the Court Hearing!”, June 12, 2026, https://news.qq.com/rain/a/20260612V0274X00.

[3] China.com, “Yu Jian Xiao Mian: Membership Refund Controversy Sparks Heated Discussion,” June 15, 2026, https://news.china.com/socialgd/10000169/20260615/49548961.html.

[4] The Paper, supra note 2, https://www.thepaper.cn/newsDetail\_forward\_33380578; Guangming Online, “Founder of ‘Yu Jian Xiao Mian’ Apologises for Suing ‘Yu Jian Xiao Mian’: Decides to Transfer Registered Trademark ‘Yu Jian Xiao Mian’ Free of Charge,” June 15, 2026, https://m.gmw.cn/2026-06/15/content\_1304496768.htm; China Fund News, “Yu Jian Xiao Mian Founder Apologises; Share Price Fell Over 6% at One Point” (reposted by Sina Finance), June 15, 2026, https://finance.sina.com.cn/wm/2026-06-15/doc-inicnckz5146903.shtml.

[5] People’s Daily Online (Xinhua News Agency), “Enforce Rights Rationally, Don’t Charge Arbitrarily! CNIPA Responds to ‘Xiaoyaozhen’ and ‘Tongguan Roujiamo’ Trademark Disputes,” November 26, 2021, http://society.people.com.cn/n1/2021/1126/c1008-32293225.html; Sina Finance, “Relevant Official of the Supreme People’s Court Responds: Geographical Indication Trademarks Have No Right to Restrict Others’ Use,” December 13, 2021, https://finance.sina.com.cn/chanjing/cyxw/2021-12-13/doc-ikyamrmy8589105.shtml; Dahe Net, “Supreme People’s Court Responds to ‘Tongguan Roujiamo’ Enforcement Issue!”, December 13, 2021, https://5g.dahe.cn/news/20211213936118.

[6] Xinhuanet, “Second-Instance Verdict in ‘Qing Hua Jiao’ Enforcement Case: Trademark Infringement by Chengdu Hot Pot Restaurant Not Established,” January 13, 2022, http://www.news.cn/legal/2022-01/13/c\_1128260713.htm; Ministry of Commerce China IPR Protection Network, “‘Qing Hua Jiao’ Trademark Dispute Case Included in Sichuan High Court Work Report; Recognised as Fair Use,” January 2022, http://ipr.mofcom.gov.cn/article/gnxw/sf/zz/zzsb/202201/1967791.html.

[7] China News Service, “‘Yu Jian Xiao Mian’ Sued ‘Yu Jian Xiao Mian’—Is That Reasonable?”, June 13, 2026, https://www.chinanews.com.cn/cj/2026/06-13/10639651.shtml.

[8] ZAKER, “‘Yu Jian Xiao Mian’s’ Lawyer Gave All Bosses a ‘Public Relations Lesson’,” June 14, 2026, https://www.myzaker.com/article/6a2e3dd68e9f0903c71ab99f.

[9] Shangyou News, supra note 2, https://www.163.com/dy/article/KVDCGJTV053469M5.html.

[10] Economic Observer, supra note, http://www.eeo.com.cn/2026/0614/915069.shtml; Sina Finance, supra note (disclosing the latest share price of HK$3.73, approximately 47% below the issue price), https://finance.sina.com.cn/wm/2026-06-14/doc-inickriq7324598.shtml.

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