By Skye Zou
In trademark infringement disputes in China, defendants often raise the defense of "proper use of registered trademark" (规范使用注册商标, guīfàn shǐyòng zhùcè shāngbiāo), claiming they have legally used their own registered trademark.
However, this defense has limits, especially when a mark is used not to identify goods honestly, but to intentionally mimic or confuse with a more famous brand.
A recent Shanghai court case highlights how Chinese courts scrutinize such claims and delineate the line between legitimate trademark use and bad-faith brand appropriation.
This article aims at explaining the limits of the "Proper Use of Registered Trademarks" defense in Chinese Trademark Litigation
The Case: "梅林天子 (Méilín Tiānzǐ)" vs. the Famous "梅林 (Méilín)" Brand
Shanghai Canned Food Co., Ltd. (the plaintiff) owns multiple registered trademarks containing the well-known name "梅林" (Meilin), registered for products including canned meat. The company alleged that:
Shanghai Industrial Co. and Sichuan Food Co. produced and sold luncheon meat using the name "梅林天子" (Meilin Tianzi, roughly "Meilin's Chosen One") along with similar packaging elements.
The overall look, including shield logos, color scheme, and layout, was meant to mislead consumers into associating the products with the famous "Meilin" brand.
The defendants responded by asserting that they owned a registered trademark for "梅林天子" and used it within its legal scope, arguing that the visual additions were merely decorative and did not affect the core trademark.
Court’s Ruling: You can't hide infringement behind your own registration
Both trial and appeal courts rejected the defense. Here’s how they reasoned:
1. Proper Use Must Be Evaluated Holistically
Under China's "Regulations on Conflicts Between Trademarks and Prior Rights" and Article 56 of the Trademark Law, the use of a registered mark may be considered non-proper if:
- The mark is used with added or altered elements, changing its distinctive character;
- It is used beyond the approved goods or services;
- The combined visual or verbal elements create confusion with a better-known earlier mark.
In this case, the mark "梅林天子" was not used alone. It was integrated with other visual elements (shield, stars, lines, color blocks) in a way that visually resembled the plaintiff’s iconic mark. Despite being registered, the use intentionally blurred boundaries, crossing into infringement territory.
2. Subjective Intent and Market Context Matter
The court emphasized a combined subjective and objective test:
- Objectively, the design and branding were highly similar to the plaintiff’s products;
- Subjectively, the defendant’s explanation for registering "梅林天子" was not credible, especially considering that both companies operated in the same product market.
The court concluded that the defendants acted in bad faith, intending to free-ride on Meilin's reputation.
3. Mere Trademark Registration Doesn’t Grant Immunity
This case underscores that owning a trademark does not equal a right to mislead. The so-called “proper use” defense only applies if:
- The registered trademark is used as it is registered;
- It is used honestly, without intent to confuse or imitate another established brand.
When additional design choices are made with the purpose or effect of creating confusion, the use becomes non-proper, and the registered mark can be treated as a tool of infringement.
Comparative Perspective: How Does This Compare with Western Practice?
U.S. Trademark Law
Under U.S. law, fair use and use of own mark are valid defenses — but subject to good faith and absence of confusion. A defendant who uses their registered mark to mimic or associate with a senior brand would likely face liability under the Lanham Act, particularly for trade dress infringement or likelihood of confusion.
EU Perspective
In the EU, the concept of abuse of right and unfair advantage without due cause similarly limits how a registered trademark can be used. If the use is intended to take unfair advantage of the reputation of an earlier mark, courts will not accept the defense of registration.
China’s approach aligns with these international trends, balancing trademark exclusivity with consumer protection and honest business conduct.
Key Takeaways for Brand Owners and Legal Teams
Registering a trademark is only the first step. Its use must remain within legal and ethical boundaries.
Trademark design should avoid mimicry of known marks — even if some elements (names, colors, layout) are changed.
Don’t rely on registration as a shield. Courts will look at your intent, use context, and market behavior.
Use marks exactly as registered when possible. Alterations or combinations may strip the use of its "proper" nature.
In China, visual similarity, public recognition, and bad-faith intent can outweigh the formal ownership of a registered mark.
Final Word
The Shanghai case serves as a reminder: Trademark rights are not absolute. They exist to promote fair competition, not to camouflage unfair practices. Courts in China are increasingly ready to pierce the veil of formal registrations to expose bad-faith conduct, aligning their reasoning with global principles of trademark law.
For companies doing business in China or navigating global brand strategies, understanding the limits of trademark use — and the growing scrutiny on deceptive practices — is more important than ever.
If your company is involved in branding disputes or considering a defensive trademark strategy in China, the Allasya team is here to help assess risk, design effective IP strategies, and navigate litigation from both local and international perspectives.