In July 2026, the Intermediate People’s Court of Dongguan, Guangdong Province issued a final judgment, concluding a five-year cross-border trademark rights protection lawsuit.

U.S. fashion footwear brand Sam Edelman secured a compensation award of RMB 1 million in China. More importantly, the judgment established a vital judicial rule: a trademark invalidation ruling has retroactive effect, meaning trademark registration certificates cannot act as a shield against infringement claims. This judicial logic fundamentally rejects the prevalent malicious practice of squatting trademarks first then using them to defend against infringement accusations.

I. Origins of Infringement

Edelman Footwear Co., Ltd. is a wholly-owned subsidiary of Caleres, Inc. from the United States. Its flagship brand Sam Edelman is famous for women’s shoes, handbags and fashion accessories, with business presence across 32 countries and its official entry into the Chinese market in 2015.

Starting in 2021, the defendant Wang and Dongguan Aijing Trading Co., Ltd. carried out systematic infringing acts with elaborate measures to feign legality. They slightly modified Sam Edelman’s registered trademarks to create confusingly similar logos designed to evade official examination, filing over 20 squatting trademark applications and corresponding copyright registrations with the State Intellectual Property Office.

Subsequently, they mass-sold counterfeit goods via Tmall, WeChat, Douyin and physical stores, fully copying the distinctive trade dress of Sam Edelman’s iconic BAY shoe line. They also fabricated fake brand history for false promotion. Worse still, the defendants leveraged their squatted trademarks and copyright registrations to file oppositions and invalidation petitions against seven legitimate trademarks owned by Sam Edelman, deliberately disrupting the brand’s normal business operations.

II. Pre-Litigation Administrative Measures & Civil Lawsuit

Prior to filing civil claims, the plaintiff’s legal counsel, Chang Tsi & Partners, implemented a full set of pre-emptive rights protection strategies. They filed oppositions and invalidation applications against all over 20 squatted trademarks held by the defendants. All of these marks were ultimately rejected for registration or invalidated, stripping the defendants of their core legal defense.

In December 2024, the plaintiff coordinated with Dongguan Administration for Market Regulation to conduct an on-site raid on the defendant’s physical stores, seizing 42 pairs of counterfeit shoes and imposing administrative penalties. The defendant’s submitted documents including trademark acceptance notices, copyright registration certificates and design patent certificates were all dismissed as valid grounds for legal use.

After removing all administrative obstacles, the plaintiff filed a civil lawsuit for trademark infringement and unfair competition with the Second People’s Court of Dongguan in 2024.

The first-instance court fully upheld the plaintiff’s claims: it confirmed Sam Edelman’s trademark rights are stable, the defendant’s logos constitute confusingly similar trademark infringement; the trade dress of the BAY shoe line qualifies as distinctive trade dress with market influence, and the counterfeit products bear nearly identical visual appearance, amounting to unfair competition.

The first-instance judgment ordered the defendants to cease all infringing activities, publish a public statement to eliminate negative impacts, and pay a total of RMB 1 million covering economic losses and reasonable legal expenses.

The defendants appealed to the Intermediate People’s Court of Dongguan against the ruling.

III. Final Appeal Judgment & Established Judicial Rule

In July 2026, the Dongguan Intermediate People’s Court handed down the final judgment, dismissing the appeal and affirming the original award.

The core dispute of the appeal was whether the defendant’s trademark registration certificates could serve as a valid defense against infringement. The defendants argued that the registration certificates proved lawful use — the core of their alleged "legalized" infringement scheme.

The appellate court gave a clear ruling: all relevant trademarks owned by the defendants had been lawfully invalidated. Trademark invalidation carries retroactive force, meaning trademark rights never existed from the filing date, and thus cannot exempt the defendants from infringement liability. A trademark registration certificate only proves temporary ownership of exclusive rights; once invalidated, its validity is traced back to the application date, so it cannot be used to refute infringement allegations.

The court further confirmed that the trade dress of the BAY shoe line receives independent protection under the Anti-Unfair Competition Law. The RMB 1 million compensation sum was deemed reasonable, as the judge fully weighed the brand’s reputation, scale of infringement, subjective malice and the plaintiff’s legal costs.

IV. Case Significance & Legal Takeaways

This case serves as an important judicial precedent with four key implications:

1. Squatted trademarks cannot defend against infringement claims: Trademark invalidation is retroactive to registration. Registration certificates are no legal shield for infringing acts, thoroughly banning the malicious tactic of trademark squatting for later defense.
2. Trade dress offers supplementary IP protection beyond trademarks: Distinctive product appearance is protected under unfair competition law, providing powerful remedies against copycat products with minor mark alterations.
3. Full rejection of systematic chain infringement: Courts refuse to recognize the whole set of malicious operations including trademark squatting, copyright registration, reverse opposition filings, cross-platform counterfeit sales and registration-based defense. Trademark and copyright registrations shall not be abused as tools for unfair competition.
4. A proven dual-track protection model combining administrative crackdown and civil litigation: Administrative enforcement secures infringement evidence while civil lawsuits recover financial damages, forming a complete closed-loop brand rights protection system.