All enterprises covet the premium reputation of well-known trademarks, yet those who attempt to free-ride on such brands will face staggering legal liabilities.
The High People’s Court of Guangdong Province delivered a final judgment on a trademark free-riding case. A Zhongshan bathroom technology company used signs similar to the well-known trademark "Shangpin Zhapei" on integrated cookers and other products, constituting trademark infringement and unfair competition. The court ordered the defendants to pay a total of 5 million yuan to cover the brand owner’s economic losses and reasonable rights-protection expenses.
The Well-Known Trademark "Shangpin Zhapei"
The plaintiff is a joint-stock company founded in 2004 under the brand Shangpin Zhapei, a pioneer of the whole-house customized furniture concept in China. Its registered trademark was approved in 2011 for range hoods, gas stoves and other kitchen and bathroom appliances. Thanks to years of continuous R&D investment and nationwide marketing, "Shangpin Zhapei" enjoys extremely high popularity in the home furnishing sector and has been recognized as a well-known trademark in prior effective judgments.
The main defendant is a bathroom technology company based in Zhongshan. Two affiliated Foshan enterprises were also implicated: a Shunde Shangpin Zhapei company and an electrical appliance firm, forming a chain of infringing entities across multiple regions.
The case was first heard by the Guangzhou Intellectual Property Court, with the final ruling issued by the High People’s Court of Guangdong Province. The judgment has taken legal effect.
Facts of Infringing Conduct
Starting in 2018, the brand owner discovered products including range hoods, electric water heaters, integrated cookers, water purifiers and smart showerheads printed with signs highly similar to "Shangpin Zhapei". Infringement extended beyond physical products to online sales channels and investment promotion campaigns.
The defendants adopted a systematic infringement strategy covering five aspects:
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Trademark infringement: Unauthorized use of marks similar to the plaintiff’s well-known trademark on various goods;
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Trade name infringement: Incorporating "Shangpin Zhapei" into corporate registered names;
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Domain name infringement: Registering and operating multiple domain names containing the Pinyin initials of "Shangpin Zhapei";
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E-commerce infringement: Mass promotion and sales on JD, Taobao, Douyin, Pinduoduo and other platforms;
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Investment promotion infringement: Building official websites and conducting franchise recruitment to mislead consumers about product origin.
The infringing activities lasted from 2021 onwards, triggering widespread consumer confusion and demonstrating obvious subjective intent to free-ride on the brand’s goodwill.
Trial Process & Core Disputes
The plaintiff filed a lawsuit with the Guangzhou Intellectual Property Court in 2018. It argued that the defendants’ use of disputed marks on range hoods, water heaters and electric ceramic stoves created an association with the plaintiff’s trademark registered for furniture due to overlapping functions, usage and sales channels, amounting to trademark infringement on similar goods. The plaintiff also applied for recognition of its trademark as a well-known trademark to obtain cross-class protection.
The defendants raised two major defenses:
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They owned the registered trademark No.11768001 "Shangpin Zhapei", approved in 2017 for Class 11 goods including kitchen appliances, so their usage constituted legitimate use of their own registered trademark.
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Products such as range hoods and water heaters were dissimilar to furniture covered by the plaintiff’s trademark; their use of the mark fell within the scope of their own registered trademark and did not constitute infringement.
The first-instance court confirmed trademark infringement and unfair competition, ordering the three defendants to pay total compensation of 5 million yuan. The Zhongshan bathroom firm bore joint and several liability for 2.8 million yuan, and the Foshan electrical appliance company bore joint and several liability for 4 million yuan. However, the court rejected the plaintiff’s application for well-known trademark recognition and ruled infringement solely based on similarity of goods.
Dissatisfied with the verdict, all parties filed appeals with the High People’s Court of Guangdong Province.
Dispute 1: Is well-known trademark recognition necessary in this case?
The appellate court held that the accused goods (integrated cookers, range hoods, water purifiers, smart showerheads, etc.) were neither identical nor similar to the goods covered by the registered trademark (furniture, office furniture). Mere relevance to household use could not establish similarity.
Pursuant to Article 13 of the Trademark Law of the People’s Republic of China and relevant judicial interpretations, where accused goods fall under dissimilar classes and the mark is likely to mislead the public and harm the trademark owner’s interests, the trademark must be recognized as well-known to grant cross-class protection. The court therefore confirmed that well-known trademark recognition was necessary for this case.
Dispute 2: Had the trademark achieved well-known status prior to the infringement?
After comprehensive review of evidence submitted by the plaintiff, the court verified the following facts:
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The plaintiff adopted "Shangpin Zhapei" as its corporate name upon establishment in 2004, with the trademark formally registered in 2013.
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Franchise stores were opened nationwide across dozens of provinces and cities starting in 2005.
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From 2010 to 2018, the brand launched extensive advertising across print media, online platforms, TV dramas, transportation hubs, bus bodies and expos, and signed celebrity endorsers starting in 2011. It has won numerous municipal, provincial and national industry honors.
The court concluded that the trademark was widely known among relevant consumers long before the infringement began. The recognition strictly complied with the judicial principles of case-by-case, passive and on-demand identification of well-known trademarks.
Final Judgment
In 2022, the High People’s Court of Guangdong Province issued its final ruling, partially upholding the first-instance judgment and confirming the full compensation amount:
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All three defendants shall immediately cease production and sales of integrated cookers and other products bearing the infringing marks.
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The Foshan Shunde Shangpin Zhapei Kitchen & Bathroom Company shall stop using its corporate name containing "Shangpin Zhapei" and cancel all related domain names.
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The defendants shall publish a public statement in national media to eliminate adverse impacts; total compensation remains 5 million yuan. The Zhongshan bathroom firm bears joint liability for 2.8 million yuan, and the Foshan electrical appliance company bears joint liability for 4 million yuan.
Case Warnings
The presiding judge emphasized that well-known trademarks receive heightened judicial protection due to their high public recognition and commercial value. Minor alterations to registered trademarks used to skirt the law will still be deemed infringement if they confuse ordinary consumers over product origin.
This case delivers a clear warning to all market operators: well-known trademarks enjoy cross-class legal protection. Even use of similar marks on unrelated product categories may constitute infringement if consumer confusion is likely.
