Perspective | A Brief Analysis of Whether Using Someone Else's Registered Trademark in a Product "Background Image" Constitutes Trademark Infringement

Company A was established in 1930 and is China's largest production base for heavy-duty vehicles. In 2009, a graphical trademark registered by Company A was recognized as a well-known trademark. In 2022, Company A obtained approval to register a word trademark, followed by the approval of a graphical trademark in 2023. In 2021, the legal representative of Company B successfully registered the "Wei Yue" trademark. Company A's brand enjoys high recognition and a strong reputation, making it a crucial identifier for both industry players and consumers when distinguishing its products and services from those of competitors.

In April 2024, a survey conducted by Company A revealed that an individual business in Yinchuan City was selling high-temperature composite grease products bearing the corporate name of Company B. The product’s outer packaging and prominent areas prominently displayed the phrase "Grease Specified for Use by Company A," while the background image featured a graphic logo identical to Company A’s registered trademark, along with the words "Product of Company A." These markings were either identical to or highly similar to Company A’s registered trademark. Further investigation showed that Company B was also promoting, showcasing, and selling the same infringing products on its official website and the Kuaishou app. Company A subsequently purchased the exact same infringing products from two shops located in the Automotive Parts Market of Jinzhong City, Shanxi Province. A notary office certified the entire purchase process, and the notarized products were duly sealed for safekeeping. On this basis, Company A filed a lawsuit against Company B with the People’s Court, alleging infringement of trademark rights and unfair competition. However, Company B failed to appear in court without valid justification, prompting the People’s Court to proceed with a trial in absentia.

The court of first instance found that although the products in question fall under Class 4, just like the goods designated for use under Company A's registered trademark, the packaging—specifically the prominent placement on the top and front of both the inner and outer boxes—clearly features Company B's trademark "Wei Yue," serving as the primary identifier of the product's origin. Company A's trademark, by contrast, is not directly used on the products. Second, although the packaging bears the words "Lip Grease Specified for Use by Company A's Customers," the Company A trademark embedded within these words is not employed as a means to identify the product's source. Consequently, the relevant public would not perceive it as the key element for recognizing the product or as the focal point of its identification—thus, it does not constitute trademark-like usage. Third, while the outer packaging does feature an automotive graphic accompanied by Company A's trademark, this image is used merely as a background element and remains extremely small in size. The trademark itself is so subtle that only careful observation by consumers could even detect it, rendering it incapable of serving as a distinctive identifier. Therefore, it also fails to qualify as trademark-like usage. For these reasons, the court rejects the plaintiff's claim that the defendant has infringed upon the exclusive rights of the registered trademark.

Company A has filed an appeal against the first-instance court's ruling on trademark infringement, arguing that the packaging boxes—front and back—as well as the products themselves bear graphic logos identical to Company A's registered trademark. Although the truck-background graphic is small in size, it appears repeatedly on both the front and back of the packaging and even directly on the products. Moreover, the vehicle design within the pattern closely resembles Company A's heavy-truck logo, and the cumulative effect of its repeated use could still lead to consumer confusion. Company A contends that the first-instance court failed to examine the illegality of the "Company A Products" label featured in the background image, resulting in a one-sided factual determination. Additionally, the court awarded only RMB 100,000 in damages (including reasonable expenses), which is grossly inadequate and clearly unfair given the extensive scope of the infringing products. These products are widely distributed across multiple regions, including Shanxi and Ningxia, as well as online platforms like Kuaishou, indicating large-scale production and prolonged sales activities. Furthermore, Company A's official website has continuously displayed the infringing products, while Kuaishou videos reveal ongoing filling operations, underscoring the vast reach and significant impact of this infringement.

The company name or business title is the primary identifier that distinguishes one enterprise from another, used in commercial transactions to indicate the source of goods or services. In market operations, if a business operator violates the principles of good faith and commercial ethics, intentionally seeking to unfairly benefit by attaching themselves to someone else's trademark, brand name, or other well-known and reputable business identifiers, this constitutes an infringement upon others. Prior rights must face negative evaluations under the Anti-Unfair Competition Law due to infringement, and bear corresponding legal responsibilities.

The court found that Defendant Company B is an entity closely related to the business operations of Company A, and therefore should have been aware of the brand’s goodwill and market recognition. By unauthorizedly using the promotional slogan “Lipstick Designated by Company A’s Customers” on its product packaging—slogan that directly references Company A’s name and target customer base—the defendant clearly demonstrated a subjective intent to capitalize on Company A’s established reputation in order to enhance its own trading opportunities. This conduct is sufficient to mislead consumers into believing that the products in question are specifically associated with Company A. Consequently, the defendant’s actions constitute unfair competition.

According to Article 57 of the Trademark Law of the People's Republic of China, any of the following acts constitutes infringement of the exclusive right to a registered trademark: (2) Using a trademark that is similar to a registered trademark on identical goods without the permission of the trademark registrant, or using a trademark that is identical or similar to a registered trademark on similar goods in a manner likely to cause confusion. As this provision clearly indicates, establishing trademark infringement typically requires two core prerequisites: first, the existence of "trademark use"; and second, that such use is "likely to cause confusion." In this case, the outer packaging boxes—front and back—as well as the products themselves, bear markings identical to the registered trademark of the plaintiff, Company A. Although the truck-background graphic logo is small, it appears repeatedly on both the front and back of the packaging and directly on the product. Moreover, the vehicle design within the logo closely resembles the plaintiff’s heavy-truck graphic, and the cumulative effect of its repeated use could still lead to consumer confusion.

The determination of distinctiveness should focus primarily on whether the mark can effectively distinguish the source of goods, rather than on its physical size. In this case, the graphic mark in question is identical to the plaintiff’s registered trademark and appears repeatedly as the main visual element across the outer packaging box—on both the front, side panels, and even directly on the product itself—thus establishing a stable identity function. On the front of the product packaging, the automotive image is prominently centered, positioned alongside the text "Lubricant Specified for Use by Company A." Together, these elements create an integrated commercial appearance that naturally leads consumers to associate the image with the accompanying text, thereby reinforcing their perception of the "Company A" brand. It’s important to note that trademark distinctiveness is not an absolute concept—it is closely tied to factors such as how the mark is used and the cognitive abilities of the relevant public. Whether a mark is considered distinctive cannot be judged solely based on its physical dimensions. In specific commercial contexts, even a relatively small mark can still be readily recognized by consumers if it features a unique design, enjoys high brand recognition, or, through repeated appearances, creates a distinctive visual impact that sets it apart in the marketplace.

Background decoration does not equate to non-trademark use. According to Article 76 of the Implementation Regulations of the Trademark Law of the People's Republic of China: Using a mark that is identical or similar to a registered trademark of another party as the product name or product packaging design on the same or similar goods, thereby misleading the public, constitutes an infringement of the exclusive right to use the registered trademark as stipulated in Paragraph 2 of Article 57 of the Trademark Law. The automobile graphic in question is not merely a "casual embellishment" on the packaging; instead, it occupies the visual focal point on the front of the package and appears three times across individual product packages. Far from being a mere "background decoration," this automobile graphic serves as the central tool—used in conjunction with the infringing text—to create confusion among consumers.

Furthermore, considering the intent behind this move, why would Company B choose a pattern highly similar to Company A's trademark as its background, especially when paired with the text label "Designated Supplies for Company A's Users"? This combination of actions clearly goes beyond mere aesthetic enhancement or decoration—it reflects a deeper commercial strategy. Specifically, Company B aims to leverage Company A's strong market reputation and influence, subtly suggesting that its product is somehow specifically associated with Company A (e.g., through licensing, compatibility, or official endorsement), thereby swaying consumers' purchasing decisions. Such a usage strategy, designed to establish a connection and hint at a shared origin, inherently carries the potential to "identify the source of goods," thus aligning perfectly with the essential characteristics of "trademark use."

If the court determines solely that "Company A's user-specified grease" constitutes infringement without examining the illegality of the "Company A Product" label, this would represent a one-sided factual assessment. "Company A" is the plaintiff's corporate abbreviation, which, through extensive and continuous promotional efforts by the plaintiff, has earned numerous national and market accolades, enjoying significant brand influence. As a result, a stable and close association has been established between the company and its trademark, firmly cementing its identity in the marketplace. Notably, the phrase "Company A Product" appears prominently on the front and back of the packaging boxes for the infringing products, as well as on images of the product trucks. In fact, "Company A Product" and "Company A User-Specified Grease" are used side by side on the packaging, complementing each other and jointly reinforcing the false claim of "authorization by the plaintiff." If only the latter is prohibited while the former is allowed to persist, it would effectively enable the defendant to evade legal regulation through fragmented usage—clearly contradicting the legislative intent of China's Anti-Unfair Competition Law. Allowing the defendant to continue using the "Company A Product" label would lead to several detrimental consequences: it could indirectly undermine the validity of the court’s binding judgment; the defendant might go on to replace "Company A User-Specified Grease" with "Company A Product," thereby perpetuating the infringement; it would further exacerbate widespread industry-wide violations; and competitors in the same sector would likely follow suit, adopting the same deceptive practice of "disassembling a well-known trademark while attaching product descriptions."

The determination of trademark infringement and likelihood of confusion should follow the principle of “ Overall Observation "The principle of 'main part comparison.' In this case, on Company B's packaging, the tiny trademark design of Company A is repeatedly and systematically arranged, creating a distinctive background texture. This repeated use transforms the originally subtle individual pattern into a cohesive visual symbol that is easily recognizable as a whole. Such a "cumulative effect"—where quantitative changes eventually lead to qualitative shifts—significantly enhances the trademark's presence and distinctiveness. Courts reviewing similar cases should not overlook the overall confusing impact created by this "overlapping usage." Although the background graphic trademark itself may be small, its frequent repetition across both the front and back of the packaging, as well as on the product itself, coupled with the striking resemblance between the vehicle motif in the pattern and the plaintiff's heavy-truck graphic, collectively can still give rise to consumer confusion. More importantly, Company B's packaging explicitly labels the product as "Supplies Specified by Company A's Users." This highly directional statement acts almost like a "user guide," subtly directing consumers to notice and interpret the meaning behind the background design. The text claims the product is "specified" for Company A's users, yet the very same background pattern happens to mirror Company A's trademark. These two elements reinforce each other, powerfully reinforcing the misleading impression that there is a specific connection between Company B's product and Company A—ultimately leading to consumer confusion and misidentification. Taken individually, the single trademark element within the background might indeed appear "minuscule," but when viewed together with its cumulative effect from repeated appearances and the clear, guiding text on the packaging, the overall manner in which it is used is enough to confuse consumers about the product's true origin or brand affiliation."

This case serves as a wake-up call for businesses regarding product packaging and advertising practices. To avoid getting caught up in similar legal disputes, companies should establish a rigorous intellectual property compliance review mechanism.

First, exercise caution when using other people's trademarks as backgrounds or decorations: Never assume that using someone else's registered trademark as a "background," "decoration," or by simply shrinking or distorting it will help you avoid infringement risks. As long as the purpose of your use is to capitalize on another party's goodwill, there is a high likelihood that it will be deemed trademark infringement or unfair competition.

Second, emphasize the "overall impression" and the "cumulative effect": When designing product packaging, it’s essential to evaluate from the consumer’s overall perspective. Even minor or ambiguous elements alone cannot guarantee safety when combined as a whole. Additionally, repeatedly and systematically using others’ identifying elements can significantly increase the likelihood of confusion.

Third, strict limitations on indicative usage: If it is indeed necessary to indicate on the packaging that the product is suitable for another brand, strict adherence to the "indicative fair use" guidelines is mandatory. Under no circumstances should such statements imply a sponsorship, licensing, or authorization relationship. In this case, the phrase "designated supplies" clearly exceeds the boundaries of reasonable use.

Fourth, establish an intellectual property review process: Before finalizing product packaging and advertising strategies, companies should have a professional lawyer conduct an intellectual property risk assessment. A comprehensive review of potential infringement risks should be carried out for all design elements, including but not limited to text, graphics, color combinations, background patterns, and more.