“Yunnan Baiyao” is a household‑known Chinese‑medicine brand. Nevertheless, products named “Yunnan Zhongyao” appeared on retail shelves, whose packaging adopts fonts and layout highly similar to those of “Yunnan Baiyao”. Is this coincidence or deliberate trademark free‑riding? In 2026, the Xuzhou Economic‑Technological Development Zone People’s Court concluded this trademark‑infringement dispute. Dissatisfied with the first‑instance judgment, the defendant filed an appeal; the Xuzhou Intermediate People’s Court upheld the original ruling on second instance. This case draws a clear legal red line for “riding‑on‑famous‑brands” and “edge‑ball‑playing” conducts.
Case Review: “Yunnan Zhongyao” or “Yunnan Baiyao”?
“Yunnan Baiyao” is a renowned Chinese‑medicine brand in China. Founded in 1902, it has gained extremely high popularity among consumers. Its registered trademarks have won honors including “China Time‑honored Brand” and “China Trademark Gold Award”, featuring unique distinctiveness in character design and color combination.
In early 2023, Yunnan Baiyao Company discovered “Yunnan Zhongyao” pain‑relief oil and sugar‑regulating antihypertensive oil products on the market. On the most prominent position of product packages, the words “Yunnan Zhongyao” were displayed in enlarged, eye‑catching artistic fonts, whose typeface bore strong similarity to the registered “Yunnan Baiyao” trademark. By contrast, the real manufacturer’s name was printed in small, inconspicuous font on the back of packages.
Yunnan Baiyao Company argued that the defendant’s conduct would easily cause consumer confusion and misrecognition and infringed its exclusive right to use registered trademarks. It therefore sued both the manufacturer and the selling pharmacy before the court, requesting cessation of infringement and RMB 500 000 compensation for economic losses.
Disputed Focus: Two Core Legal Questions
During the trial, the manufacturer of “Yunnan Zhongyao” defended that the two marks differ substantially in characters and connotation and shall not be deemed similar. It also contended that its products have low relevance to Yunnan Baiyao Group’s core product lines and consumers would not be misled.
The court held that the case revolved around two key legal issues.
Focus 1: Does the defendant’s use of the “Yunnan Zhongyao” mark constitute trademark‑use?
Judges pointed out that to identify trademark infringement, the mode of use shall be examined first. In this case, the defendant did not employ “Yunnan Zhongyao” merely as descriptive words for product efficacy. Instead, it displayed the mark prominently in artistic fonts on the most noticeable part of packages, with the sole purpose of enabling consumers to recognize the mark and distinguish product source. Pursuant to Article 48 of the Trademark Law of the People’s Republic of China, such conduct constitutes typical “trademark‑use”.
Focus 2: Whether such use is likely to cause market‑relevant‑public confusion?
The court compared the two marks. Both “Yunnan Baiyao” and “Yunnan Zhongyao” contain “Yunnan” and “yao (medicine)”. The characters “bai (white)” and “zhong (middle)” occupy similar positions within the mark and bear partial semantic and phonetic similarity. In terms of overall appearance, both adopt artistic fonts and elliptical layouts with red backgrounds. More importantly, the “Yunnan Baiyao” trademark enjoys high market reputation. When consumers select goods on shelves with ordinary‑consumer‑level attention, the prominently displayed “Yunnan Zhongyao” is highly likely to be mistaken for a product in the “Yunnan Baiyao” series, or to trigger the false impression of authorization, cooperation or corporate affiliation. As a peer‑industry operator, the defendant ought to have known the well‑known mark yet failed to perform reasonable avoidance obligations.
Court Judgment: Infringement Established, Compensation of RMB 100 000
The court held that without authorization, the defendant prominently used a mark similar to the registered “Yunnan Baiyao” trademark on similar goods. Such conduct qualifies as trademark‑use and is likely to confuse relevant‑public consumers, thus infringing Yunnan Baiyao Company’s exclusive trademark‑right.
The first‑instance court rendered the judgment: the manufacturer shall immediately cease production and sales of infringing products bearing the “Yunnan Baiyao”‑similar mark and destroy stocked infringing packages; it shall pay RMB 100 000 covering economic losses and reasonable litigation expenses; the selling pharmacy shall compensate RMB 3 000. The defendant appealed, and the Xuzhou Intermediate People’s Court affirmed the original judgment.
Case Takeaways: Edge‑ball‑playing Conduct Comes with Legal Costs
Some enterprises attempt to make minor alterations to others’ well‑known trademarks, assuming they can evade legal risks. Nevertheless, where similar marks are used on identical or similar goods and confusion‑inducing effect exists, trademark infringement shall still be established. Even if the defendant printed its real manufacturer name on products, prominent display of marks similar to third‑party registered trademarks on eye‑catching package positions still leads to infringement liability.
For enterprises, no fluke mentality shall be adopted for product naming and package design. Even a single‑character difference from a well‑known trademark combined with similar packaging may constitute infringement. Respecting intellectual‑property rights and building self‑owned differentiated brands represents the sound long‑term development path for enterprises.
