Yunnan Baiyao Trademark Infringement Case: ¥1.8 Million Compensation Awarded — Confusing Imitations Easily Mislead Consu
Guangzhou Sailixin Market Research Co., Ltd.
A years-long dispute between genuine brand Yunnan Baiyao and copycat products in the toothpaste industry ended with a nearly 130-page judgment.
As a time-honored household brand, Yunnan Baiyao toothpaste launched in 2005 has ranked top among domestic toothpaste brands, relying on its distinctive blue-and-white packaging and reliable quality.
However, starting from 2016, counterfeit toothpaste named "Yunnan Zhongyao" with highly similar packaging and only one differing character flooded the market. After investigation, Yunnan Baiyao Group found a total of 26 infringing products across 14 series. The brand filed a lawsuit against a daily necessities manufacturer and a cosmetics company based in Guangzhou, as well as a mall retailer in Yixing before the Wuxi Intermediate People’s Court of Jiangsu Province.
Deliberate Piggybacking Scheme
The trademark dispute traces back to March 2016, when Fengcai Company first filed an application to register the trademark "Yunnan Zhongyao", which was rejected by the Trademark Office. The rejection did not stop the infringer. From 2016 to 2022, Fengcai Company repeatedly submitted trademark applications for "Yunnan Zhongyao" with different character layouts and fonts, all of which were rejected.
Despite repeated failures in trademark registration, two Guangzhou-based companies kept producing and selling products. Fully aware of the rejected applications, they used slightly varied versions of the "Yunnan Zhongyao" mark alongside packaging and trade dress nearly identical to Yunnan Baiyao toothpaste, and continued large-scale sales.
In 2023, Yunnan Baiyao initiated litigation against the three defendants.
Granular Judicial Comparison of Copycat Toothpaste Products
The case featured an unusually complex volume of evidence, covering 26 products in 14 series, each requiring detailed comparative analysis.
The presiding judge described the case as an "exhibition of counterfeit toothpaste". With dozens of notarization documents and physical counterfeit products on hand, the court conducted millimeter-level comparisons of trademark text, pronunciation and visual appearance, and even simulated the 3-second quick glance experience of ordinary consumers browsing retail shelves.
The court held that "Yunnan Zhongyao" and "Yunnan Baiyao" are highly similar in text composition, pronunciation and visual presentation. Even where the mark was arranged vertically, the dominant color scheme and background proportion remained almost identical to the genuine goods. Such minor layout differences failed to distinguish the two products clearly, thus constituting confusingly similar trademarks.
Detailed comparison findings: Some products simply replaced "Baiyao" with "Zhongyao" while retaining the exact same font and layout; others adopted vertical text arrangement but kept matching color proportions. All these details collectively formed trademark similarity.
Obvious Subjective Malice
As early as January 2018, the Trademark Review and Adjudication Board of the National Intellectual Property Administration issued a review rejection ruling, confirming that "Yunnan Zhongyao" and "Yunnan Baiyao" are visually and phonetically similar and likely to cause source confusion among the public, amounting to similar trademarks.
Nevertheless, Fengcai Company ignored the ruling and kept submitting new trademark applications for "Yunnan Zhongyao", all of which were rejected. Under such circumstances, the two Guangzhou enterprises continued using the similar marks and packaging, demonstrating obvious intentional infringement.
Comprehensive Imitation of Product Trade Dress
The court further confirmed that the overall color palette, design elements and layout of infringing product packaging closely resembled Yunnan Baiyao Langjian toothpaste.
The "Yunnan Zhongyao" mark on counterfeit products matched the genuine "Yunnan Baiyao" mark in font, color, position and proportion on the toothpaste boxes. All parties operated overlapping businesses in daily necessities including toothpaste and competed directly with each other. The unauthorized use of the well-known brand’s distinctive packaging and trade dress constituted unfair competition.
Determination of Compensation Amount
Taking into account the brand’s high reputation, sales volume, severity, geographic scope and adverse impact of the infringement, the court consolidated evidence of all similar infringing products for unified evaluation to ensure reasonable compensation calculation.
The court emphasized that consumers would easily mistake the counterfeits for genuine products during quick shelf browsing, cutting Yunnan Baiyao’s sales volume. Inferior quality of copycat goods would also damage the genuine brand’s reputation.
First-Instance Judgment (January 19, 2024, Wuxi Intermediate People’s Court)
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The two Guangzhou companies shall immediately cease production and sales of toothpaste infringing Yunnan Baiyao’s registered trademark rights, discontinue use of infringing packaging and trade dress, and pay a total of RMB 1.8 million covering economic losses and reasonable legal expenses. They shall also publish a public statement on China Consumer News to eliminate adverse impacts.
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The Yixing mall retailer shall pay RMB 10,000 as compensation for losses and legal costs.
Second-Instance Verdict
Dissatisfied with the first-instance ruling, the two Guangzhou manufacturers filed an appeal. On June 17, 2024, the High People’s Court of Jiangsu Province dismissed the appeal and upheld the original judgment.
Core Case Takeaways
Selected as one of the Top 10 IP Judicial Protection Cases of Wuxi Courts in 2024, this case delivers far-reaching judicial guidance beyond the single victory of the brand.
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Benchmark for granular, detailed trademark trial
The court conducted item-by-item comparison between each counterfeit product and the plaintiff’s trademarks and packaging, balancing overall visual impression and partial details. It avoided wrongful infringement findings based solely on minor partial similarities, and also prevented overlooking substantial overall similarity due to tiny differences, ensuring accurate and fair infringement identification.
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Severe crackdown on brand piggybacking
The infringer repeatedly attempted to register similar trademarks despite constant rejections, yet continued mass production and sales, ultimately bearing a RMB 1.8 million compensation penalty. The judgment sends a clear signal: courts will severely punish persistent, malicious copycat "edge-walking" infringers with prior trademark rejection records.
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Product packaging and trade dress enjoy independent legal protection
The case established both trademark infringement and unfair competition liability for imitating distinctive packaging. Even slightly altered trademarks cannot evade liability if the overall product appearance creates consumer confusion.
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Retailers bear reasonable examination obligations
The mall retailer’s RMB 10,000 compensation serves as a reminder for all distributors: exercise caution when purchasing goods resembling well-known brands and retain complete purchase vouchers. Even mere resale may lead to infringement litigation and compensation liability.
