By Elena Wu
In July 2025, the Shanghai Pudong New Area People’s Court rendered an effective criminal judgment in a case involving the unauthorized use of the “DIOR” trademark in connection with children’s fashion show services. The case has attracted wide attention not only because of the involvement of a world-famous luxury brand, but also because it represents Shanghai’s first criminal judgment applying the latest judicial interpretation on service trademark counterfeiting.
The ruling offers important guidance on how Chinese courts assess “same trademark,” “same service,” and “trademark use” in criminal cases involving service marks, issues that are increasingly relevant in the experience-driven, event-based, and platform economy.
Background: Fashion Shows as a Vehicle for Trademark Abuse
The registered owner of the “DIOR” trademark is Christian Dior Couture, with registered services including Class 41 services such as organizing and arranging fashion shows, cultural and artistic events, and exhibitions.
From 2020 onward, the principal defendant, Huang, established and operated several media companies that organized children’s fashion shows in multiple cities. Without authorization from the trademark owner, these events made extensive use of signs such as “DIOR” and “DIOR FASHION SHOW” on stage backdrops, promotional posters, invitation letters, and online marketing materials. Parents were charged participation and service fees for their children.
To reinforce the appearance of official affiliation, the organizers also sourced low-cost clothing resembling DIOR designs through informal channels, altered labels and tags, and used these garments repeatedly in the shows.
The activities generated substantial income over several years before the defendants were arrested in late 2023 and mid-2024 respectively.
Core Defense and the Central Legal Question
The main defense raised by Huang was twofold:
1. Service Classification Defense.
The defendant argued that the activities should fall under Class 35 services (organizing fashion shows for advertising purposes), rather than Class 41 services (organizing fashion shows per se), and therefore did not constitute use on the “same service” as the registered DIOR mark.
2. Descriptive or Fair Use Defense.
It was further argued that “DIOR” was used merely to indicate the brand of clothing used in the service, constituting reasonable or descriptive use rather than trademark use.
These arguments raised a fundamental question central to modern trademark enforcement: When does the use of a famous mark in a service context cross the line from reference to infringement and from infringement to a criminal offense?
Court’s Key Findings: Clarifying Criminal Standards for Service Trademarks
1. “Same Trademark” and “Same Service” Are Assessed Substantively
The court rejected a formalistic approach to service classification.
Although the defendants attempted to characterize their activities as advertising services, the court examined the substance of the activities, concluding that the core content was the organization and staging of fashion shows, falling within Class 41, the same category covered by DIOR’s registered service trademark.
This reflects a consistent judicial trend: courts will look beyond the label chosen by the defendant and assess the real nature of the service provided.
2. Clear Recognition of “Trademark Use” in a Service Context
The court emphasized that using “DIOR” and “DIOR FASHION SHOW” prominently on event materials enabled the public to identify the source of the service itself, not merely the clothing involved.
Such use went far beyond what would be necessary to describe service content or explain the type of products involved. It therefore constituted typical service trademark use, rather than informational or descriptive use.
Importantly, the court highlighted both:
the objective likelihood of public confusion, and
the subjective intent to free-ride on the reputation of a well-known brand.
This dual analysis aligns with China’s criminal trademark jurisprudence, where intent and market impact are key considerations.
3. “Fair Use” Has Narrow Limits in Criminal Contexts
The court made clear that fair or descriptive use is not a safe harbor when:
the mark is used as a core branding element of the service,
the use creates an appearance of official authorization, and
the defendant deliberately leverages the goodwill of a famous trademark.
In other words, commercial storytelling or marketing creativity cannot disguise trademark appropriation, especially where famous brands are concerned.
4. Illegal Gains in Service Trademark Crimes
Another important clarification relates to the calculation of illegal gains.
The court held that where defendants profit primarily from service fees, those fees should be treated as illegal income. Even if clothing or other products are provided as part of the service, deductions are only possible where the products are legitimate, and the service fee clearly includes a separable product price.
In this case, the clothing itself was counterfeit and repeatedly reused, leaving no basis for cost deduction.
Criminal Liability and Sentencing
The court ultimately found both defendants guilty of counterfeiting a registered trademark under Article 213 of China’s Criminal Law: Huang, as the principal offender, was sentenced to three years and six months’ imprisonment and a substantial fine. Wang, a secondary participant who confessed and cooperated, received a suspended sentence and a lesser fine.
All counterfeit goods, labels, and tools used in the crime were confiscated, and illegal proceeds were recovered or ordered to be returned.
Broader Implications: Why This Case Matters
For International Brand Owners
This case sends a strong signal that China’s criminal enforcement extends fully to service trademarks, not only goods. Luxury, fashion, education, entertainment, and event-based brands are increasingly exposed to service-side misuse, and Chinese courts are prepared to respond with criminal sanctions where the circumstances are serious.
For Domestic Operators and Event Organizers
The ruling draws a clear line: using a famous brand name to create “official-looking” services without authorization is a crime.
This is especially relevant in sectors involving children’s activities, training programs, exhibitions, competitions, and branded experiential events.
For the Trademark System as a Whole
The case reflects a broader evolution in China’s IP enforcement philosophy:
protection is no longer limited to tangible goods,
consumer perception and public trust are central concerns, and
misuse of famous marks in services can trigger criminal, not merely civil, consequences.
Conclusion
The Pudong Court’s judgment makes clear that “DIOR” remains DIOR, regardless of whether it appears on a handbag or on a stage backdrop.
In an economy increasingly driven by services, experiences, and branding narratives, this case provides much-needed clarity on how trademark law and criminal law apply to service-based infringement.
For brand owners, it reinforces confidence in China’s enforcement mechanisms. For operators, it serves as a cautionary reminder that borrowing brand prestige without authorization can carry severe legal consequences.