Mengchun’s Comments
This case concerns an unfair competition dispute over the ownership of product packaging and decoration following the breakdown of a long-term business cooperation.
A particularly noteworthy aspect of the case is that one of the defendants owned the relevant trademark in China. Nevertheless, the court held that the rights and interests in the overall product packaging and decoration belonged to the plaintiff, the overseas manufacturer and supplier.
The court emphasized that ownership of packaging and decoration does not necessarily follow ownership of a trademark incorporated into the packaging or copyright in the packaging design. Instead, the key question is whether, through actual commercial use, the overall packaging and decoration has established a stable and unique source-identifying relationship with a particular business operator.
The decision provides useful guidance for disputes arising after the termination of long-term manufacturing, distribution or other commercial relationships, where trademark ownership, product manufacturing, distribution and accumulated goodwill may involve different parties.
I. Key Issue
How should ownership of rights and interests in product packaging and decoration be determined?
II. Court’s Interpretation
The Hangzhou Intermediate People’s Court held that protection of product packaging and decoration under China’s Anti-Unfair Competition Law derives from its function of distinguishing the commercial source of goods.
Accordingly, ownership should fundamentally be determined by whether, through commercial use, the packaging and decoration has established a stable source-identifying relationship with a particular business operator.
In other words, the relevant rights and interests should belong to the operator whose actual use of the packaging and decoration has caused it to perform a source-identifying function and accumulate goodwill.
In making this assessment, relevant evidence may include:
- The producer or supplier identified in product images and detail pages on online stores;
- Media reports identifying the brand and packaging with a particular business operator; and
- Company information displayed through product traceability codes.
The court further emphasized that packaging and decoration are merely symbols. Their source-identifying significance derives from the goodwill represented by that symbol.
Product Packaging and Decoration vs. Trademark Rights
Trademark rights and rights and interests in product packaging and decoration are independent rights and do not have a relationship of subordination or inclusion.
Product packaging and decoration protection covers the overall commercial image created by the distinctive arrangement and combination of its constituent elements..
Accordingly, when determining ownership, courts should consider the packaging and decoration as a whole. The fact that a registered trademark appears as one element of the packaging does not mean that the rights and interests in the entire packaging and decoration necessarily belong to the trademark owner.
Product Packaging and Decoration vs. Copyright
The date recorded in a copyright registration certificate concerns the completion or first publication of a work. It does not establish when the packaging and decoration began to be commercially used and to perform a source-identifying function.
Copyright protects original expression, while protection of product packaging and decoration under the Anti-Unfair Competition Law concerns the source-identifying function of a commercial sign.
Accordingly, the date of copyright registration does not necessarily correspond to the date on which rights and interests in product packaging and decoration arose.
Similarly, ownership of product packaging and decoration does not depend on when general brand promotion began. The decisive question is whether the overall visual appearance has established a stable and unique source-identifying relationship with a particular business operator.
III. Case Background
The plaintiff was established in Australia in 2014 and owned the relevant trademarks in Australia, New Zealand, the United States and other jurisdictions.
Earlier, in 2007, one of the plaintiff’s founders and his family had established Defendant 2, a biotechnology company in China, which owned the relevant trademark in China. Defendant 1, a Guangzhou trading company, was established in 2010.
The plaintiff and Defendants 1 and 2 maintained a long-term cooperation concerning the sale of dairy products under the disputed brand.
Under the cooperation arrangement, the plaintiff was responsible for research and development, design and production, and first used the disputed brand on products exported to China. Defendants 1 and 2 acted as distributors responsible for sales in China.
The brand was consistently positioned as an Australian brand with products originating from New Zealand.
The parties’ cooperation ended in 2022.
Thereafter, Defendants 1 and 2 sold the disputed products through an online store operated by Defendant 3.
The product cans displayed the disputed trademark. Certain QR codes and product traceability information identified the plaintiff, while some QR codes directed consumers to the plaintiff’s official website. Promotional materials on Defendant 2’s Chinese-language website also indicated that the disputed brand originated from the plaintiff.
The plaintiff alleged that Defendants 1 and 2 used packaging and decoration similar to its product packaging and decoration without authorization.
The plaintiff further alleged that certain statements concerning the origin and upgrade of the products constituted false advertising, and that the use of the plaintiff’s registered commodity barcodes constituted unfair competition.
The plaintiff sought injunctive relief, elimination of adverse effects and RMB 1 million in damages.
IV. Court’s Holding
The Hangzhou Intermediate People’s Court held that the disputed product packaging and decoration had established a stable and unique source-identifying relationship with the plaintiff.
First, when the disputed products were sold through the relevant online stores, the product images and detail pages expressly identified the plaintiff as the producer or supplier.
The court considered product detail pages an important channel through which businesses communicate product information and commercial source to consumers. The identification of the plaintiff in those pages therefore supported the conclusion that consumers would associate the disputed packaging and decoration with the plaintiff.
Second, media reports concerning the disputed brand and packaging expressly identified them with the plaintiff.
The court held that media reports, as carriers of market information, could reinforce consumer recognition. The relevant reports therefore further strengthened the public’s understanding of the source of the brand and packaging.
Third, product traceability codes displayed the plaintiff’s company information. Defendant 2’s own Chinese-language website also contained promotional materials indicating that the disputed brand originated from the plaintiff.
The court further emphasized that packaging and decoration are ultimately symbols, while their source-identifying significance derives from the goodwill behind those symbols.
Even ownership of copyright in the packaging or a trademark incorporated into it does not necessarily mean that the owner also possesses the consumer-recognized goodwill accumulated in connection with the goods.
In this case, the products had consistently been marketed as imported dairy products, while the packaging identified the plaintiff as the supplier and Defendant 1 as the distributor.
The court therefore considered that consumers would regard the plaintiff as the manufacturer or party responsible for the quality of the products, while Defendant 1 was the distributor in China.
Based on these circumstances, the court concluded that the disputed packaging and decoration had established a stable and unique source-identifying relationship with the plaintiff and that the relevant rights and interests therefore belonged to the plaintiff.
Trademark Ownership Did Not Change the Conclusion
Defendants 1 and 2 argued that the trademark prominently displayed in the center of the disputed packaging was owned by Defendant 2 in China. They therefore contended that, to the extent the packaging performed a source-identifying function, consumers would associate it with Defendant 2.
The court rejected this argument.
The court held that trademark rights and rights and interests in product packaging and decoration are independent rights. The protectable subject matter of product packaging and decoration is the overall visual image created by the distinctive arrangement and combination of its constituent elements.
The plaintiff did not seek protection for the trademark in isolation. Rather, it sought protection for the overall visual appearance of the packaging, including its colors, patterns, textual layout and arrangement.
The source-identifying function of this overall image resulted from the relevant public’s accumulated market recognition of the plaintiff’s products and did not depend solely on the trademark appearing on the packaging.
Accordingly, Defendant 2’s ownership of the Chinese trademark did not establish ownership of the overall product packaging and decoration.
Copyright Registration Did Not Change the Conclusion
Defendants 1 and 2 also argued that media reports showing the disputed packaging predated the date recorded in the plaintiff’s copyright registration certificate and that the plaintiff therefore could not own the rights and interests in the packaging and decoration.
The court rejected this argument.
The court explained that the date recorded in a copyright registration certificate concerns the completion or first publication of a work and does not establish when the packaging and decoration began to be commercially used and perform a source-identifying function.
Copyright and product packaging and decoration protect different interests. Copyright protects original expression, whereas protection of packaging and decoration under the Anti-Unfair Competition Law concerns its commercial source-identifying function.
The court therefore concluded that the copyright registration date did not affect its determination that the disputed packaging and decoration had established a stable and unique source-identifying relationship with the plaintiff.
V. Judgment
On June 30, 2025, the Hangzhou Binjiang District People’s Court rendered the first-instance judgment.
The court ordered Defendants 1 and 2 to cease producing or commissioning the production of the infringing products, cease using the plaintiff’s registered commodity barcodes on their products, eliminate the adverse effects, and pay the plaintiff RMB 700,000 in damages, including reasonable expenses.
The three defendants were also ordered to cease selling the infringing products and to cease the false advertising at issue.
Defendants 1 and 2 appealed.
On July 21, 2026, the Hangzhou Intermediate People’s Court dismissed the appeal and affirmed the first-instance judgment.
Court:
Hangzhou Binjiang District People’s Court (First Instance)
Hangzhou Intermediate People’s Court (Second Instance)
Final Decision Date:
July 21, 2026
Case No.:
First Instance: (2024) Zhe 0108 Min Chu No. 2297
（2024）浙0108民初2297号
Second Instance: (2025) Zhe 01 Min Zhong No. 11416
（2025）浙01民终11416号
