Trademark disputes most commonly arise from forward confusion, where a smaller business adopts a mark identical or similar to a well-known brand in order to trade on its reputation. Reverse confusion operates in the opposite direction: a larger company begins using a mark that is identical or similar to one already owned by a smaller, earlier rights holder. The larger company’s market dominance, advertising expenditure, and brand recognition cause consumers to associate the mark with the later user, gradually eroding the earlier owner’s brand identity. Although such conduct is rarely, if ever, deliberate, it carries significant legal consequences for both parties – the larger business risks liability for trademark infringement, whilst the smaller business risks losing its commercial opportunities. We have studied some recent cases in China which offer useful guidance on how Chinese courts approach this issue and where they draw the line.
Legal Basis
Reverse confusion is not expressly recognised under China’s Trademark Law. However, the Chinese courts have long addressed it through existing trademark infringement principles. Rather than treating reverse confusion as a separate cause of action, courts analyse it through the ordinary likelihood of confusion framework – principally Article 57 of the Trademark Law and the Supreme People’s Court’s judicial interpretations on trademark similarity and likelihood of confusion.
Notably, bad faith on the defendant’s part is not required; the Chinese courts primarily focus on the likelihood of confusion, although the defendant’s intent may still be considered a relevant factor. Even where a later user adopts a mark independently, infringement may be found if its market influence causes consumers to associate the earlier trademark with the later user. This creates particular risk for large companies whose strong brands and rapid expansion may strengthen consumers’ association of the mark with them rather than the earlier owner.
Practical Boundaries
Chinese courts accept reverse confusion claims but apply meaningful limits. In addition to the general requirement of mark and goods similarity – a prerequisite shared with all confusion-based claims – cases suggest that courts are particularly concerned with three questions:
- Is the plaintiff asserting a legitimate trademark right?
- Has the plaintiff actually used, or genuinely intended to use, the mark?
- Is there a real risk of reverse confusion?
1. Courts Are Reluctant to Protect Bad-Faith Registrations
China’s first-to-file system creates obvious opportunities for bad-faith filings. Courts have therefore been cautious about extending reverse confusion protection to rights tainted by bad faith – otherwise, a party could secure a questionable registration at minimal cost and use reverse confusion as a mechanism to extract value from a genuine market participant that later invests heavily in the mark.
The Fendi Footwear Case (Liaoning High Court decision issued in 2025) illustrates this point. The plaintiff held a registered “芬迪” (FEN; DI) mark and argued that the defendant’s extensive promotion of its “芬廸” sign (slight difference in the second character, but also pronounced as FEN; DI) had created reverse confusion. The court rejected the claim. The court found that, after its establishment, the plaintiff had repeatedly applied for marks identical or similar to FENDI’s well-known trademarks and trade name, many of which had already been refused or invalidated. In the course of its business, the plaintiff had used its marks in an irregular manner, deploying signs such as “FIDI BY FENDI” and similar combinations, which clearly demonstrated an intent to capitalise on the defendant’s registered trademark goodwill rather than to build a stable correspondence between itself and its own registered mark. In these circumstances, the court declined to use reverse confusion as a tool to protect what it viewed as an illegitimate commercial strategy.
2. Genuine Use Still Matters
Reverse confusion is ultimately designed to protect the source-identifying function of a trademark. Where a registered mark has never been used, courts may be reluctant to give it expansive protection, particularly if the right holder has made no genuine effort to build goodwill under the mark.
In the Sheng Lin Qi Jing Case (Beijing Haidian District Court decision issued in 2021), Beijing Shenlinqijing relied on several “身临其境” registrations (Shen; Lin; Qi; Jing, a Chinese idiom meaning “as if personally present”) when challenging the widely known television programme “声临其境” (Sheng; Lin; Qi; Jing, a play on that idiom emphasising immersion through sound) (Note: the two marks share similar pronunciation but are different in terms of the first character and overall meaning). The court rejected both forward and reverse confusion arguments, finding that television audiences primarily associated the programme with its content, broadcasting platform and producer rather than with its title alone. The court also noted that one of the plaintiff’s registrations had never been used in the designated services, and that there was no evidence of preparation or investment towards such use. While this was not the sole reason for rejecting the claim, it further weakened the plaintiff’s position and reinforced the court’s view that the alleged infringement had not impaired any legitimate commercial interests associated with that mark. The decision shows that lack of genuine use may significantly weaken a reverse confusion claim.
3. There Must Be a Real Risk of Reverse Confusion
Reverse confusion remains a confusion-based doctrine. The central question is whether the defendant’s market presence has become so dominant that consumers begin to associate the plaintiff’s mark with the defendant rather than with its true owner.
The Mi Tu Case (Guangdong High Court decision issued in 2023) provides a helpful illustration of both the scope and the limits of reverse confusion protection in China – Huisen, a relatively small toy manufacturer, owned earlier registered “咪兔” (Mi Tu) marks covering products including plush toys, toy dolls and smart toys. Xiaomi later adopted and extensively promoted the “米兔” sign (different in first character, but also pronounced as Mi Tu) as part of its broader ecosystem of consumer products and children’s products. At first instance, the Shenzhen Intermediate Court found that Xiaomi’s extensive promotion of the “米兔” brand and its substantially greater market influence had created a reverse confusion scenario. The court emphasised that Huisen had registered and genuinely used its mark before Xiaomi adopted the “米兔” sign; had accumulated a degree of goodwill through legitimate business operations, and faced the risk that Xiaomi’s overwhelming market presence would sever the association between Huisen and its own trademark. In the court’s view, consumers could easily assume that Huisen’s products originated from, or were affiliated with, Xiaomi, thereby impairing the source-identifying function of the earlier mark.
The Guangdong High Court reversed that decision. Significantly, it did not question Xiaomi’s commercial strength, nor did it suggest that bad faith was required. Instead, the court returned to the traditional likelihood-of-confusion analysis. The court placed considerable weight on the parties’ actual use of their marks, the respective reputations they had developed, consumer survey evidence and evidence of marketplace perception. Taking these factors together, the court concluded that consumers were unlikely either to believe that Xiaomi’s products originated from Huisen or to assume that Huisen’s products originated from, or were connected with, Xiaomi. The reverse confusion claim therefore failed. The outcome was later confirmed when the Supreme People’s Court dismissed Huisen’s re-trial application in 2024, effectively leaving the Guangdong High Court’s decision in place.
The case highlights an important practical boundary. A substantial disparity in market influence does not, by itself, establish reverse confusion. Genuine use by the plaintiff and extensive promotion by the defendant may support such a claim, but courts will still require convincing evidence that consumers are likely to become confused as to source, sponsorship or commercial affiliation. The decision also demonstrates that Chinese courts are reluctant to use reverse confusion as a mechanism for reserving future market space for a trademark owner beyond the actual scope of confusion demonstrated by the evidence.
Practical Takeaways
Reverse confusion is recognised in Chinese practice but does not automatically favour the first registrant. Recent cases suggest that courts are attempting to strike a balance between protecting legitimate prior trademark rights and preserving fair competition.
Protection is more likely where the plaintiff:
- Acquired the trademark in good faith.
- Has genuinely used the mark.
- Can demonstrate a real likelihood that consumers will associate its goods or services with the later user.
Broadly speaking, the cases suggest that Chinese courts are willing to protect genuine businesses and legitimate brand-building efforts, but are reluctant to extend reverse confusion protection to registrations that exist only on paper.
Conversely, Protection is less likely for:
- Bad-faith or speculative registrations.
- Marks that exist only on paper with no genuine use.
- Claims based solely on the defendant’s greater size or investment.
For multinational companies, trademark clearance should not focus solely on whether a prior mark is famous. A relatively small business with a modest market presence may still have a viable reverse confusion claim if it owns earlier rights, has genuinely used its mark and can establish a likelihood of confusion. Companies entering China, launching new brands, or investing heavily in marketing should therefore assess not only traditional infringement risks, but also whether their own market success could create reverse confusion concerns.
For further information, please contact:
Dorie Wong, Partner, Bird & Bird
dorie.wong@twobirds.com
