Weekly China Brand Protection News

April 3, 2025

1. The First Instance Court Ruled Parallel Import; The Second Instance Court Overturned, Finding Imported Goods Infringing

The Chongqing High Court has made a second-instance judgment in the trademark infringement dispute case between the appellant, Guangzhou Otiwa Biotechnology Co., Ltd. (“Otiwa”) and the appellee, Chongqing Beigou Network Technology Co., Ltd. (“Beigou”).

The first-instance court held that: First, according to the results of the QR code traceability, the products in question were genuine. Second, Shanniya is the overseas trademark owner of the disputed trademark. The products sold by Beigou had the authorization of Shanniya, and the products in question were purchased by Beigou from Shanniya through cross-border e-commerce channels. The source of these products is the same as Otiwa’s products, and the acquisition method is legal. The evidence in the case is sufficient to establish that Beigou’s product source is legal. Third, the evidence in the case also indicates that Beigou had reviewed the source and authorization of the products in question, and it had fulfilled reasonable due diligence obligations without subjective intention to infringe. Therefore, the first-instance court held that the goods in question were genuine products obtained by Beigou through parallel import methods. Beigou’s store clearly described that the goods in question had an official authorization certificate from Shanniya. The manufacturer, lake source code, and other information on the product cans also clearly indicated the origin of the product, which would not cause consumers to be confused about the source of the goods and did not damage the identification function of the trademark. Existing evidence was also insufficient to prove that the alleged infringing act affected the quality assurance function of the disputed trademark or resulted in the disfigurement or dilution of the trademark’s goodwill, and did not damage the trademark’s quality assurance function and goodwill-carrying function. Given that the existing evidence could prove that the allegedly infringing products were genuine and purchased through regular channels, the evidence claimed by Otiwa was insufficient to prove that Beigou had committed infringement.

The second-instance court reversed the first-instance judgment, holding that: Trademarks have territorial attributes, and trademarks are only effective within the registered territorial scope. Therefore, when determining whether a product is infringing, the judgment standard should be based on whether the mark used on the product has been authorized by the registered trademark owner in that country, whether the relevant mark is identical or similar to the registered trademark in that country, and whether the relevant goods are identical or similar to the goods approved for use under the registered trademark in that country, rather than using whether the source of the sold goods is consistent. Beigou did not provide evidence to prove that at the time of the alleged infringement, the import and sale of the allegedly infringing products were authorized by Otiwa, the owner of the disputed trademark. Therefore, the first-instance court’s determination that the allegedly infringing products were genuine products from Shanniya and purchased through regular channels, did not damage the identification function, quality assurance function, and goodwill-carrying function of the disputed trademark, would not cause consumer confusion about the source of the goods, and did not constitute infringement, was an error in determination, which this court hereby corrects according to law.

In importing and selling the allegedly infringing products in question, Beigou used the “Neurio Niu Rui You in Chinese” mark on the customs declaration form, prominently used the “Neurio” mark on the packaging of the allegedly infringing products sold through its Taobao online store, used the “Niu Rui You in Chinese” mark in the product name on the purchase page of the allegedly infringing products in its Taobao online store, and also prominently displayed the “Neurio” mark in the product images shown.

First, in terms of product category, the allegedly infringing product is a lactoferrin formula milk powder, with an English name containing “Milk Powder.” Based on its ingredients, it should be classified as a milk powder product, which is identical to the “infant milk powder” approved for use under trademark No. 25797592 and No. 25792637 in terms of product ingredients, functional purposes, sales channels, and target consumers, constituting identical goods.

Second, the “Neurio” mark used on the allegedly infringing products and network sales pages is identical to Otiwa’s registered trademark No. 61116472 “Neurio” and similar to No. 25792637 “Neuri”; the “Niu Rui You in Chinese” mark used on the network sales pages is identical to Otiwa’s registered trademarks No. 25797592 and No. 6114540 “Niu Rui You in Chinese.” Therefore, Beigou’s aforementioned allegedly infringing acts constitute infringement of the exclusive right to use a registered trademark.

2. The Supreme People’s Court Finds Copyright Infringement Despite Small Graphical Element in Disputed Trademark

The Supreme People’s Court issued a retrial judgment in the administrative dispute case regarding the trademark invalidation request between the plaintiff Li Feng, the defendant CNIPA, and the third party Heilongjiang Red Mangrove Animal Husbandry Co., Ltd. The court determined that the disputed trademark infringed upon Li Feng’s prior copyright work.

Copyrighted Work

Disputed Trademark

The court held: In this case, the work that Li Feng claims to have prior copyright to is the “Old Hoe Good Hoe” work. The graphical portion of this work depicts a farmer wearing a hat and holding a hoe while working in a field. This reflects the designer’s personality, possesses aesthetic value overall, demonstrates a certain originality, and constitutes an artistic work protected by the copyright law. The work registration certificate, court judgments, and other evidence submitted by Li can prove that he enjoys prior copyright to the work.

The “farmer carrying a hoe” portion included in the graphical part of the disputed trademark is almost completely identical to Li’s work in terms of character composition, hoe shape, and positioning. The two share similar compositional elements, design techniques, and visual effects, constituting substantial similarity under the copyright law. The work registration certificate, the application time of the cited trademark, and other evidence in the case can prove that the work was publicly available before the application date of the disputed trademark, and Red Mangrove company had the possibility of accessing it. Red Mangrove company’s application to register the disputed trademark damaged Li’s prior copyright to the work in question, constituting “damage to another’s existing prior rights” as referred to in Article 32 of the Trademark Law. Although the “farmer carrying a hoe” graphical portion does not occupy a large proportion of the disputed trademark, copyright infringement is not determined by the size of the proportion.

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