Why Enterprises With Registered Trademarks Still Lose RMB 3 Million in Damages? — New Judgment of Shanghai IP Court Clarifies Legal Boundaries of Combined Trademark Use
2026-07-08 10:39:21
Why Enterprises With Registered Trademarks Still Face RMB 3 Million Damages — New Shanghai IP Court Judgment Defines the Boundaries of Combined Trademark Use
Introduction
Does owning a registered trademark allow enterprises to use the brand freely and safely?
After obtaining trademark licensing rights, may enterprises freely combine multiple trademarks or adjust graphic and text layouts for commercial promotion?
In recent years, enterprises in the apparel, consumer goods, food and other industries have increasingly adopted brand design methods such as “graphic + text combination”, “dual-trademark portfolio” and “brand upgrading iteration” to shape brand images. However, improper adjustments may easily cross the legal boundaries of standardized trademark use and constitute trademark infringement.
A recent judgment rendered by the Shanghai Intellectual Property Court reaffirms a critical judicial rule: the possession of legally registered trademarks or trademark licenses does not exempt users from infringement liabilities. Where enterprises recombine, modify or redesign registered trademarks, if the overall visual effect is likely to cause confusion among relevant consumers, trademark infringement may still be established. In this case, the defendant was ordered to pay a total of RMB 3 million in economic losses and reasonable litigation expenses, and the second-instance judgment upheld the original ruling.
Boxiang’s Professional Strength in Brand Protection and High-Value Trademark Litigation
Shanghai Boxiang Law Firm has long focused on brand protection and high-value trademark litigation. The firm provides professional intellectual property legal services for domestic and foreign brand owners in cases involving trademark infringement, trademark invalidation, non-use cancellation, unfair competition and other IP disputes.
Focusing on the most controversial issues in brand enforcement — including trademark similarity determination, standardized trademark use, trademark licensing, combined trademark application, e-commerce platform infringement and high compensation calculation — the Boxiang legal team has formed mature evidence organization systems and targeted litigation strategies.
In this case, Anqi (Guangzhou) Fashion Industry Co., Ltd. entrusted the legal team of Shanghai Boxiang Law Firm to handle the litigation. Facing challenges including long online sales cycles, massive e-commerce transaction data, complex licensing chains and diversified infringing logo forms, the team organized solid evidence from multiple dimensions, including actual trademark usage, authorization verification, platform evidence preservation, sales data retrieval and consumer confusion likelihood. All key opinions were fully adopted by the court.
Core Dispute: The Key Lies in How Trademarks Are Used, Not Whether Licenses Are Held
The defendant in this case had long sold apparel products under the “BAD BOY” brand on mainstream platforms including Vipshop and Tmall. The defendant claimed that it had obtained valid licenses for the “BAD BOY” word mark and relevant graphic trademarks, and that its commercial use was therefore legitimate and non-infringing.
Superficially, the dispute centered on the validity of trademark authorization. In essence, the decisive factor of the case was whether the post-licensing usage complied with standardized trademark specifications.
This represents the most easily overlooked legal risk in current trademark infringement disputes.
Boxiang’s Litigation Strategies to Resolve Core Disputes
In response to the defendant’s “legitimate authorization” defense, the Boxiang team did not merely conduct literal or graphic comparison. Instead, we formulated targeted litigation arguments based on the latest judicial review standards for trademark infringement.
1. Proving the disputed logos constituted trademark use in commerceThrough physical product verification, notarized purchases, official store details and promotional materials, the team proved that the disputed marks were prominently and continuously used on commodities and commercial pages to identify product sources, which constitutes typical trademark use under the Trademark Law.
2. Proving unauthorized recombination and modification of licensed trademarksAlthough the defendant held formal trademark licenses, it arbitrarily adjusted the certified graphic elements and adopted a fixed layout of “eagle pattern on the top, text on the bottom” in commercial scenarios. Such modified combination produced a highly similar overall visual effect to the prior right trademark. The team successfully argued that licensed trademarks may be combined in use but cannot be arbitrarily altered or restructured, which was fully recognized by the court.
3. Proving overall visual similarity and public confusion likelihoodInstead of focusing on trivial local differences in lines, feathers or fonts, the team emphasized the overall visual impression, combined with the high reputation of the prior trademark and ordinary consumer attention standards, demonstrating that the overall presentation was sufficient to cause relevant audiences to mistakenly believe there is an association between the two brands. The court adopted this core argument.
Court’s Grounds for Finding Trademark Infringement
The Shanghai Intellectual Property Court held that:
1. The disputed marks were used in a trademark sense for commercial identification;
2. The involved products were identical apparel goods;
3. The defendant did not use the licensed trademarks in a standardized manner, but restructured and modified the certified marks to form an overall appearance highly similar to the prior valid trademark;
4. Such use was likely to cause source confusion among the relevant public.
Accordingly, the defendant was found liable for trademark infringement and ordered to cease infringement and compensate for losses.
Four Key Judicial Rules Established by This Case
Rule 1: Trademark licensing does not exempt users from infringement liabilityA trademark license only authorizes the use of the registered trademark in its certified form. It does not permit arbitrary redesign, recombination or visual modification beyond the registered scope.
Rule 2: Combined trademark use must comply with standardized specificationsRecombining multiple legally registered trademarks to create a new commercial logo may still constitute infringement if the overall visual effect is similar to others’ prior registered trademarks.
Rule 3: Trademark similarity judgment focuses on overall commercial impressionJudicial practice prioritizes the overall visual perception of consumers rather than partial differences in fonts, lines or local graphic details.
Rule 4: E-commerce display constitutes valid trademark useProduct detail pages, promotional images and platform display contents are all deemed trademark use under the Trademark Law and shall be included in infringement assessment.
Key Brand Compliance Risks for Enterprises
Based on this landmark case, enterprises shall strengthen brand management awareness and focus on the following compliance issues:
• Whether trademarks are used strictly in accordance with registered specifications after authorization;
• Whether unauthorized graphic redesign, recombination or deformation exists in commercial scenarios;
• Whether packaging, hangtags, product details and promotional materials maintain consistent trademark presentation;
• Whether e-commerce display contents may cause consumer confusion;
• Whether IP compliance review is completed before brand upgrading, co-branding design and VI system updates.
For brand enterprises, most trademark risks arise not during registration, but in subsequent market operation and brand promotion.
Why Early IP Lawyer Intervention Is Essential for Brand Operation
This case involves comprehensive professional issues including trademark licensing standardization, overall similarity judgment, e-commerce evidence preservation, sales data verification and infringement profit calculation.
These professional factors directly determine case winning probability, final compensation amount and enforcement efficiency.
Therefore, professional IP compliance review and risk assessment during key stages such as brand upgrading, product launch, co-branding cooperation and e-commerce promotion can effectively reduce operational risks and protect brand value, far more proactive than post-infringement litigation remedies.
Shanghai Boxiang Law Firm specializes in trademark infringement, trademark licensing disputes, trademark cancellation, invalidation, unfair competition and other IP-related matters. We provide one-stop legal services covering risk prevention, evidence preservation and litigation enforcement, helping enterprises build comprehensive brand protection systems.
Boxiang Legal Observation
In recent years, the judicial adjudication logic for trademark infringement cases has undergone obvious changes. The judicial focus has shifted from “whether two trademarks are identical” to “whether the overall commercial logo is likely to cause consumer confusion”.
Many enterprises mistakenly believe that holding registered trademarks or licenses allows flexible adjustment of graphics, fonts and combinations for marketing purposes. This case clearly indicates that trademark registration is only the starting point of brand protection — standardized and compliant use is the core of sustainable legal protection.
For growing brands, trademark management should no longer be limited to registration procedures. Instead, enterprises shall establish full-life-cycle IP compliance mechanisms covering brand design, marketing promotion, e-commerce operation and product packaging. The value of professional lawyers lies not only in litigation representation, but also in early risk identification, brand strategy formulation and long-term operational cost reduction.
