Case Background
Qingdao Baiyang Pharmaceutical Co., Ltd. was founded in 2005 and listed on the ChiNext Board of the Shenzhen Stock Exchange in June 2021. As an industrial platform with strong independent brand development capabilities, its core Dical calcium supplement series launched in 2002 has ranked first in import calcium sales for nine consecutive years. The company owns a portfolio of trademarks registered under Class 5 for infant food, vitamin preparations, medical nutritional supplements and other goods. The marks enjoy high market recognition and have been recognized as well-known trademarks by courts in prior litigation.
Qingdao Baiyang Pharmaceutical jointly holds the Dical D-CAL trademark series with a third party, registered for Class 5 products including infant food, vitamin formulations, medical nutrients and human pharmaceuticals. Years of continuous operation have made these trademarks widely known, and they were previously judicially affirmed as well-known trademarks.
Litigation Process & Disputed Issues
In 2025, Qingdao Baiyang Pharmaceutical discovered infringing goods bearing confusingly similar trademarks sold on an e-commerce platform. Investigation revealed the manufacturer was Anhui Ha Mou Pharmaceutical Co., Ltd., a repeat infringer. The plaintiff filed a lawsuit against the manufacturer and its retail partner before the Changshu People’s Court.
Anhui Ha Mou Pharmaceutical produced multiple children’s nutritional products including liquid calcium, seaweed calcium and fruit & vegetable iron supplements, all packaged with logos highly similar to the plaintiff’s registered trademarks.
These goods were sold online by Changshu Fan Mou Maternal & Infant Store. The identical confusing marks appeared on product listing pages and display images.
The plaintiff claimed the manufacturer’s production and the store’s sales infringed its exclusive trademark rights. It requested the court to order both defendants to cease infringement and compensate for economic losses plus reasonable legal costs. Given the manufacturer’s history of repeated infringement, the plaintiff additionally sought punitive damages.
Mid-litigation, Anhui Ha Mou Pharmaceutical abruptly completed company deregistration via simplified administrative procedures, an obvious attempt to eliminate liability by erasing the corporate entity.
In response, the plaintiff adjusted its legal strategy. Relying on the Company Law provisions on joint and several liability for sole-shareholder companies, it filed a motion to add Zhou Mou, the company’s only shareholder, as a liable party. The plaintiff argued Zhou Mou submitted false undertakings to secure deregistration while fully aware of pending litigation. His deliberate debt evasion disqualified him from the protection of limited liability.
Court Trial & Findings
The court confirmed Qingdao Baiyang Pharmaceutical and its co-registrants owned Trademark No. 1708530 and No. 1728454. The co-owners authorized Baiyang to independently initiate infringement proceedings.
Side-by-side comparison proved the accused logos fully incorporated the Chinese wordmark of the plaintiff’s trademarks, creating similar marks used on identical goods likely to confuse consumers. Production license numbers and manufacturer information listed on product pages traced all infringing goods back to Anhui Ha Mou Pharmaceutical, confirming manufacturing liability. Changshu Fan Mou Maternal & Infant Store bore secondary infringement liability for online sales.
The manufacturer’s pre-judgment deregistration became the critical turning point of the case.
Citing Article 19 of the Judicial Interpretation II of the Company Law, the court ruled shareholders who obtain corporate deregistration through false liquidation reports may be held personally liable for corporate debts. As the sole shareholder, Zhou Mou submitted false undertakings and failed to provide evidence separating personal assets from corporate property.
The court held Zhou abused corporate personality and limited liability by intentionally dissolving the firm amid unresolved litigation. The court pierced the corporate veil and ordered Zhou to bear joint and several liability for all corporate debts incurred before deregistration.
Calculation of Compensation
On the claim to cease infringement: since the manufacturing company had been dissolved and no evidence proved Zhou personally engaged in production or sales, this demand was dismissed.
On compensation: lacking precise proof of actual losses, the court determined damages within the statutory range after weighing three core factors:
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Anhui Ha Mou Pharmaceutical was a repeat infringer with prior adverse judgments, demonstrating obvious subjective malice.
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The disputed products were infant liquid calcium and maternal-child nutritional supplements tied directly to minors’ physical health, falling within sensitive livelihood-related consumer sectors.
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The manufacturer’s deliberate corporate deregistration and Zhou’s false undertakings reflected clear intent to evade legal liability.
Taking punitive considerations fully into account, the court ordered Zhou to pay a total of RMB 1 million covering economic losses and reasonable legal expenses. As the downstream seller, Changshu Fan Mou Maternal & Infant Store was ordered to bear joint liability for RMB 80,000 of the total award, based on its infringement duration, sales volume and minor role in the supply chain.
Neither party filed an appeal, and the judgment has taken legal effect.
Case Implications
This case delivers comprehensive regulatory warnings covering all stages of trademark infringement: repeated malicious production-level infringement, corporate deregistration to dodge liability, and complicit downstream retail sales. The court adopted a thorough, substance-over-form judicial approach to impose liability at every link.
Substantively, the judgment clarifies shareholders cannot escape personal liability by securing company deregistration via false liquidation filings, establishing a consistent judicial rule that those behind infringing entities cannot evade accountability.
On damages measurement: recognizing maternal-child products impact infant health, the court incorporated punitive logic into statutory compensation, issuing a strong judicial signal of stringent IP protection for livelihood-related consumer goods.
The court allocated joint liability proportionally according to each party’s role and illegal gains, building a full-chain accountability system spanning manufacturers to retail channels. This judicial model strongly deters malicious trademark infringement and sets a replicable precedent for cleaning up the maternal-child consumer market.
