By April Fan
One of the recurring challenges in trademark enforcement in China is the conflict between a prior-used trade name (字号, zì hào) and a later-registered trademark. A recent case from a People’s Court in Shandong Province, clarifies the standards courts apply when assessing whether such a conflict constitutes trademark infringement, particularly when the registered mark has not been actively used in commerce.
This article analyzes the key findings of the case and offers practical takeaways for both domestic businesses and foreign trademark owners operating in China.
Case Overview
Trademark Owner (Plaintiff): Mr. Tu, owner of two registered “欧某某某” (OU*X) trademarks, covering furniture (Class 20) and advertising services (Class 35), registered in 2018 and 2019, respectively.
Defendant: Mr. Zhao and his wife, Ms. Li, who had been using the name “欧某某某” (OU*X) to sell furniture since 2016 and formally registered their business and associated entities between 2017 and 2020.
Claim: Mr. Tu alleged trademark infringement and demanded cessation of use plus damages totaling 300,000 RMB.
Key Legal Issues
1. Has the Plaintiff Used the Trademark Commercially in the Last Three Years?
Under Article 64 of the Trademark Law, if a trademark owner sues for infringement, but the defendant challenges the validity on the basis of non-use, the burden falls on the trademark owner to prove three years of continuous, genuine use on the designated goods/services.
Court's finding:
Mr. Tu failed to provide valid evidence of actual use of his trademarks during the relevant period. The submitted contracts and order forms:
Were dated before the relevant three-year period;
Did not cover products within the designated categories;
Lacked proof of fulfillment or corresponding sales data.
Conclusion: No valid trademark use = no damages, regardless of the trademark registration.
2. Does the Defendant Have a Prior Right to Use the Trade Name?
Under Article 59(3) of the Trademark Law, where a party has used a sign (even resembling a registered trademark) prior to the trademark’s registration, and the use has gained recognition and market influence, they may continue to use it within the original scope.
Court’s findings:
Mr. Zhao and Ms. Li had used “欧某某某” (OU*X) since 2016, predating Mr. Tu’s trademark applications.
Their sales covered multiple provinces and were supported by shipping records and business licenses.
Use on TikTok (Douyin) and registration of a new shop in 2020 were deemed consistent with the original business scope.
Conclusion: Defendant's continued use of the mark was lawful and within the prior-use scope, thus protected.
Legal Takeaways
For Chinese Rights Holders
Register early. Even if you use a trade name, registration offers stronger protection. But prior use may still offer a defense against later registrants.
Maintain evidence. Sales contracts, invoices, and product photos are critical to establish both use and reputation.
For Foreign Trademark Owners
Registration ≠ absolute protection. A valid certificate is not enough in litigation: you must show actual commercial use.
Watch for prior local use. Investigate local market usage before filing claims. Prior trade name use (字号, zì hào) by Chinese businesses, even if unregistered, may defeat your enforcement attempts.
Trademark enforcement ≠ brand monopoly. If another party used the name in good faith before your registration, courts may protect their continued use.
Broader Significance
This case reinforces the nuanced balance in China between the exclusivity of registered trademarks, and the good-faith rights of prior users of trade names.
It also underlines a central principle of China’s Trademark Law: actual commercial use and consumer recognition matter more than mere paperwork.
While China continues to strengthen its trademark protection regime, this decision reflects a commitment to fairness and continuity in business practices, ensuring that earlier local users are not unfairly displaced by later registrations.
Conclusion
China’s judicial system recognizes that not all infringements are equal, and not all trademarks, even if registered, are enforceable without evidence of actual use. For both local and international businesses, this ruling is a clear reminder: in China, use it or lose it (and respect those who used it first).
If you're facing a trademark/trade name conflict or need to assess prior-use risks before litigation, Allasya Law & IP is available to provide strategic guidance tailored to the Chinese market.