The High People's Court of Shandong Province

Civil Judgment

No. (2025)L.M.Z.1451

Appellant (Defendant of First Instance): Yantai Baofuling Biotechnology Co., Ltd. (Hereinafter referred to as “Baofuling Company”), Domicile: No. 7 Xingang Road, Penglai Economic Development Zone, Penglai District, Yantai City, Shandong Province, P.R. China.

Legal Representative: Sun Xin, General Manager of Baofuling Company.

Appellant (Defendant of First Instance): Gong Peizhou, male, born on May 21, 1967, Chinese (Han ethnic group), residing at Room 1, Unit 2, Building 60, Xinghai Community, Yantai Economic and Technological Development Zone, Yantai City, Shandong Province, P.R. China.

Appellant (Defendant of First Instance): Gong Jucong, male, born on June 28, 1989, Chinese (Han ethnic group), residing at Room 102, Building 1, Family Quarters of Yantai Port Bureau, Xigang Street, Penglai District, Yantai City, Shandong Province, P.R. China.

Appellant (Defendant of First Instance): Sun Xin, female, born on April 1, 1978, Chinese (Han ethnic group), residing at No. 1, Unit 2, Building 60, Xinghai Community, Yantai Economic and Technological Development Zone, Yantai City, Shandong Province, P.R. China.

Jointly Entrusted Litigation Agent of the Four Appellants: Yin Hongjun, Lawyer at Shandong Shuyuan Law Firm.

Jointly Entrusted Litigation Agent of the Four Appellants: Jiang Jianming, Lawyer at Shandong Shuyuan Law Firm.

Appellee (Plaintiff of First Instance): Beijing Baoshutang Scitech Pharmaceutical Co. Ltd (Hereinafter referred to as “Baoshutang Company”), Domicile: No. 10, Zhongxing Road, Liangshuihe (South of Liangshuihe Village), Changping Science and Technology Park, Changping District, Beijing, P.R. China.

Legal Representative: Lin Peili, Chairperson of Baoshutang Company.

Entrusted Litigation Agent: Yu Bowen, Lawyer at Beijing Wei Chixue Law Firm. Entrusted Litigation Agent: Yu Xiaoou, Lawyer at Beijing Wei Chixue Law Firm. Defendant of First Instance: Cixi Yasigeli Plastic Packaging Factory, Domicile: Dongbutou Village, Zhangqi Town, Cixi City, Ningbo City, Zhejiang Province, P.R. China.

Investor: Hu Kaiming.

Defendant of First Instance: Longgang Tengfei Printing Technology Co., Ltd. (Hereinafter referred to as “Tengfei Company”), Domicile: Room 101, Floor 1, Building 12, Rainbow Smart Entrepreneurship Park, No. 511-731, Rainbow Avenue, Longgang City, Wenzhou City, Zhejiang Province, P.R. China.

Legal Representative: Xia Yuanlu, Executive Director and General Manager of Tengfei Company.

Appellants Yantai Baofuling Biotechnology Co., Ltd. (hereinafter referred to as “Baofuling Company”), Gong Peizhou, Gong Jucong and Sun Xin, who were not satisfied with the Civil Judgment No. (2025)L.06.M.C.5 issued by the Intermediate People's Court of Yantai City of Shandong Province, filed an appeal to this Court against the Appellee Beijing Baoshutang Scitech Pharmaceutical Co. Ltd (hereinafter referred to as “Baoshutang Company”) for the case of disputes on infringement of trademark rights and unfair competition involving Defendant of First Instance Cixi Yasigeli Plastic Packaging Factory (hereinafter referred to as “Yasigeli Packaging Factory”) and Defendant of First Instance Longgang Tengfei Printing Technology Co., Ltd. (hereinafter referred to as “Tengfei Company”). After accepting the case (“this Case”), this Court formed a collegial panel in accordance with the law and conducted the trial. This Case has now concluded.

Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin jointly appeal, requesting: 1. To revoke the first and second items of the First-Instance Judgment which state "to jointly compensate Baoshutang Company for economic losses of RMB10,000 due to unfair competition" and to change the ruling to dismiss Baoshutang Company's claims in such two items; 2. To correct the distribution of the Case Acceptance Fee and the Preservation Application Fee by the Court of First Instance because such distribution is obviously unjust. Facts and Reasons: (I) The Court of First Instance's determination that Baofuling Company engaged in unfair competition and hence was ordered to compensate RMB10,000 to Baoshutang Company is a determination based on a factual error. 1. The accused infringing packaging and decoration used by Baofuling Company was designed and used by Beijing Bao Zhi Tang Medical Research Institute Penglai Branch (hereinafter referred to as “Bao Zhi Tang Penglai Branch”) and commissioned to be designed by Penglai Sanhe Network Technology Co., Ltd. (hereinafter referred to as “Sanhe Company”) in 2005 and the Bao Zhi Tang Penglai Branch applied for copyright registration for that decoration pattern, with the registration certificate indicating the completion date of the creation as April 5, 2005 and the first publication date as April 8, 2005. Even if the decoration design contract provided by Baoshutang Company is genuine, it can only prove that its commissioned design and production time for the packaging decoration involved in the case is June 27, 2011, which is later than the time Bao Zhi Tang Penglai Branch designed, produced and used the accused infringing packaging and decoration. Bao Zhi Tang Penglai Branch was established by Gong Peizhou and the use of this packaging design by Baofuling Company does not constitute infringement. 2. The "Compound Camphor Cream" produced and sold by Baoshutang Company is a medication, while the "Baofuling Antibacterial Cream" produced and sold by Baofuling Company is an antibacterial disinfectant product. The two belong to different categories of products and there is no competitive relationship between Baofuling Company and Baoshutang Company, thus not constituting unfair competition. 3. The packaging design of the accused infringing product is significantly different from that of Baoshutang Company's "Compound Camphor Cream," and both products clearly indicate their respective product names, registered trademarks and manufacturers' names, which will not cause confusion among the relevant public. 4. The "Drug Advertising Review Form" submitted by Baoshutang Company in the first instance shows that during the period from 2017 to 2018, it only published advertisements for the "Compound Camphor Cream" through mass media and medical and pharmaceutical professional media, with limited promotion efforts and scope, lacking significant influence. 5. Gong Peizhou, Sun Xin and Gong Jucong are merely employees of Baofuling Company and their actions were performed in the course of their duties. The Court of First Instance's determination that the three bear joint liability for compensation with Baofuling Company is not based on legal grounds. (II) The trial court's allocation of litigation costs is inappropriate. Based on the proportion of the supported amount to the claimed amount, the Case Acceptance Fee that Baofuling Company should bear is RMB2,131 and the preservation fee is RMB467.

Baoshutang Company argues that (I) the conduct of Baofuling Company constitutes unfair competition. 1. The evidence submitted by Baofuling Company is insufficient to prove that the accused infringing packaging design was commissioned by Bao Zhi Tang Penglai Branch; the registration time for the related works is all after 2018, which is later than the completion date of the packaging design for the involved products by Baoshutang Company on June 27, 2011 and cannot prove that it holds copyright over the accused infringing packaging design. 2. The involved product "Compound Camphor Cream" of Baoshutang Company has participated in exhibitions nationwide after changing to a new packaging in 2012 and has signed procurement agreements with Beijing Tongrentang, Ali Health Pharmacy and others, which sufficiently proves that the product has a high level of recognition. 3. Baofuling Company and Baoshutang Company both opened stores on e-commerce platforms, targeting patients who have a need for sterilization and disinfection after burns and the two companies are in a competitive relationship. 4. The packaging and decoration of the infringing products are highly consistent with certain influential product packaging and decoration elements of Baoshutang Company in terms of overall color, layout structure, text patterns and gold foil materials, constituting similarity.

(II) Gong Peizhou, Sun Xin and Gong Jucong constitute joint infringement with Baofuling Company. Gong Peizhou and Sun Xin are husband and wife, Gong Peizhou and Gong Jucong are father and son. Gong Peizhou and Sun Xin are shareholders, legal representatives and supervisors of Baofuling Company, while Gong Jucong and Sun Xin are shareholders, legal representatives and supervisors of Beijing Baofuling Biotechnology Co., Ltd. (hereinafter referred to as Beijing Baofuling Company). The infringing acts not only reflect the will of the two companies but also the individual will of Gong Peizhou, Sun Xin and Gong Jucong as legal representatives and company shareholders. As former responsible agents of Baoshutang Company, Gong Peizhou and Sun Xin, knowing the fame of the trademark and product packaging of Baoshutang Company involved in the case, jointly established Baofuling Company, Beijing Baofuling Company, Ban Kah Chai TCM Technology (Shandong) Co., Ltd. (hereinafter referred to as Ban Kah Chai Company), with the purpose of infringement, maliciously registering trademarks related to Baoshutang Company and Gong Peizhou, in collusion with his son Gong Jucong, produced infringing products bearing the trademark of Baoshutang Company. Therefore, Baofuling Company and others are essentially tools for Gong Peizhou, Gong Jucong and Sun Xin to carry out infringing acts and the three have obvious subjective intent to infringe, constituting joint infringement with Baofuling Company. (III) The trial court determined that the allocation of litigation costs based on the nature of the infringement by Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin is fair and reasonable.

Yasigeli Packaging Factory and Tengfei Company did not submit any statements.

Baoshutang Company sued the trial court requesting a ruling: 1. Yantai Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin immediately cease their infringement on Baoshutang Company’s registered trademarks No. 3602358 "宝树堂/Baoshutang/Bao Shu Tang", No. 3511900 "BAO FU LING" and No. 524847 "

The trial court found the following facts:

(I) Facts related to the trademark, packaging, decoration and popularity of Baoshutang Company involved in the case

1. Relevant information about the trademark, packaging and decoration of Baoshutang Company involved in the case

(1) Company profile of Baoshutang Company. Baoshutang Company was established on November 30, 2001, as a foreign-invested, non-wholly owned limited liability company, with a registered capital of USD6.8 million. Its business scope covers: medicine production; medicine wholesale; entrusted medicine production; medicine retail; food production; food sales; health food production; and food internet sales, etc. Baoshutang Company has produced more than 40 varieties of medicines, including Compound Camphor Cream (formerly known as “宝肤灵/Baofuling/Bao Fu Ling”), Guilu Zishen Pills and Shou Wu Pills, etc.

(2) The trademark situation of Baoshutang Company involved in the case. On July 30, 1990, the trademark number 524847 "" was approved for registration, with the approved goods classified under Class 5: Traditional Chinese Medicine. On January 14, 2005, the trademark number 3511900 "BAO FU LING" was approved for registration, with the approved goods classified under Class 5: Human Medicine (goods ceased). On October 14, 2005, the trademark "宝树堂/Baoshutang/Bao Shu Tang" with registration number 3602358 was approved for registration, with the designated goods being in Class 5: medicines, disinfectants, Chinese medicinal herbs, medicinal wine, and baby food. Baoshutang Company is the rights holder of the above three trademarks, all of which are currently valid.

(3) The packaging and decoration of the medicines in question used by Baoshutang Company . On December 9, 2003, the Beijing Municipal Medical Products Administration approved Baoshutang Company's application to modify the packaging label design of "Compound Camphor Cream." The attached style includes the unwrapped design of the outer packaging box of the old packaging claimed by Baoshutang Company (see Figure 1-1).

On September 1, 2017, the third party Zhejiang Qinggeng Yudu Industrial Co., Ltd. issued a written statement, indicating that it accepted the commission from Baoshutang Company on January 1, 2011, to provide design and printing services for the outer packaging of the product "Baoshutang BAO FU LING Compound Camphor Cream." The floral pattern on the outer packaging box of "Baoshutang BAO FU LING Compound Camphor Cream" was independently designed by them according to the requirements of Baoshutang Company and was completed on June 27, 2011, after confirmation and modification by Baoshutang Company. Zhejiang Qinggeng Yudu Industrial Co., Ltd. has been providing printing services for the outer packaging boxes of "Baoshutang BAO FU LING Compound Camphor Cream" with the aforementioned floral pattern to Baoshutang Company since 2011, with the specific attached figure being the new packaging box design of the pharmaceutical product claimed to be protected by Baoshutang Company (see Figure 1-2).

On February 25, 2025, Tmall "Baoshutang Flagship Store" sold a total of over 40,000 units of Baoshutang Company’s Compound Camphor Cream with new packaging and decoration through 5 sales links, using the ""  "bao fu ling" and "宝树堂/Baoshutang/Bao Shu Tang" logos in promotional images; JD’s Baoshutang Pharmacy Flagship Store received over 20,000 reviews for 4 links of the new packaging of "Compound Camphor Cream"; Pinduoduo’s "Baoshutang Pharmacy" sold the new packaging of "Compound Camphor Cream" for a total sales exceeding RMB4.88 million. The internal packaging bottle in Baoshutang Company's new packaging uses the "bao fu ling" logo in the upper left corner.

The packaging and decoration claimed by Baoshutang Company in this Case consists of two versions: one is the blue old packaging box and packaging bottle used by Baoshutang Company from 2003 to 2012 (see Figure 1-1), and the other is the white new packaging box used by Baoshutang Company since 2012 (see Figure 1-2).

Figure 1-1: Old packaging bottles and boxes of the Compound Camphor Cream used by Baoshutang Company before 2012	Figure 1-2: The new packaging box of Compound Camphor Cream used by Baoshutang Company after 2012

2. The Business Operations and Reputation of Baoshutang Company Regarding the Involved Medicine

From 2003 to 2009, Baoshutang Company promoted its product "Compound Camphor Cream", which used the trademark(s) "" "宝树堂/Baoshutang/Bao Shu Tang" and the old packaging claimed by Baoshutang Company, f, which had minor differences in packaging and decoration, through Guangzhou Mingying Advertising Co., Ltd., Guangdong Xiaosheng Advertising Co., Ltd., Beijing Peking University Epoch Advertising Co., Ltd., as well as publications such as the Sun Newspaper, Information Times, China Daily News and the Chinese Guide to Over-the-Counter Medication Use and Purchasing. ; it also conducted publicity reports on its founder Xie Kunzong and the Compound Camphor Cream products produced by the company in publications such as Taiwan Network (taiwan.cn), Taiwan Shin Sheng Daily News, and Taiwan Figures, and on CCTV's programs "Time Together across the Strait" and "Stories of Taiwanese Businessmen".

From 2017 to 2018, the "Drug Advertising Review Form" submitted by Baoshutang Company to the Beijing Municipal Medical Products Administration showed that Baoshutang Company published advertisements for its "Compound Camphor Cream" through mass media and medical, pharmaceutical professional media, using the trademarks "” and "宝树堂/Baoshutang/Bao Shu Tang" on its products.

On March 20, 2019, Baoshutang Company signed a "Brand Flagship Store Cooperation Agreement" with AliHealth Pharmacy Chain Co., Ltd. , authorizing AliHealth Pharmacy Chain Co., Ltd. to establish a "Baoshutang Flagship Store." In 2020, Baoshutang Company signed a "Commodity Purchase and Sale Contract" with AliHealth Pharmacy Chain Co., Ltd. , under which AliHealth Pharmacy Chain Co., Ltd. purchased "Compound Camphor Cream" and other products from Baoshutang Company.

On August 20, 2019, Baoshutang Company signed the "Printing Cooperation Contract" with Zhejiang Hongrun Packaging Technology Co., Ltd., entrusting Zhejiang Hongrun Packaging Technology Co., Ltd. to produce the packaging boxes and product manuals for "Baoshutang Bafuling Compound Camphor Cream" (strengths: 15g, 25g, 30g, 50g, 100g, 130g) and other traditional Chinese medicine products. The cooperation period is from September 1, 2019, to August 31, 2024.

From 2019 to 2023, Baoshutang Company signed the "Commodity Purchase Agreement" with Beijing Tongrentang Health Pharmaceutical Co., Ltd. and Beijing Tongrentang Commercial Investment Group Co., Ltd., providing various strengths of "Compound Camphor Cream" products totaling approximately RMB440,000.

The audit report for Baoshutang Company for the years 2002 to 2005 issued by Beijing Zhongyantong Certified Public Accountants Co., Ltd. shows that in 2002, the operating revenue of Baoshutang Company was RMB18,033,010.27 , with a net profit was RMB5,745,982.86; in 2003, the operating revenue was RMB18,384,655.62 , with a net profit was RMB3,174,081.79; in 2004, the operating revenue was RMB33,273,911.30 , with a net profit was RMB9,208,775.08; in 2005, the operating revenue was RMB36,760,731.39 , with a net profit was RMB10,745,752.97. The audit report for Baoshutang Company for the years 2012 to 2016 issued by Hualixin (Beijing) Certified Public Accountants Co., Ltd. shows that in 2012, the operating revenue was RMB50,118,731.09 , with a net profit was RMB14,859,210.89; in 2013, the operating revenue was RMB42,990,266.96 , with a net profit was RMB9,535,269.31; in 2014, the operating revenue was RMB40,896,073.13 , with a net profit was RMB7,505,201.32; in 2015, the operating revenue was RMB31,487,565.50 , with a net profit was RMB1,427,922.90; in 2016, the operating revenue was RMB29,898,060.81 , with a net profit was RMB656,116.80. The audit report for Baoshutang Company for the year 2023 issued by Beijing Hengcheng Yongxin Certified Public Accountants (General Partnership) shows that in 2023, the operating revenue of Baoshutang Company was 43,758,983.54 , with a net profit was 11,362,210.47.

(II) Facts related to the alleged infringement behavior in this Case

1. Basic information about Baofuling Company, Yasigeli Packaging Factory and Tengfei Company

Baofuling Company was established on March 14, 2014, with a registered capital of RMB15 million. Its business scope covers the production of antibacterial (bacteriostatic) agents; research on traditional Chinese and Western medicines, and food technology, etc. The two individual shareholders are Gong Peizhou and Sun Xin (who are spouses to each other), serving as the legal representative and supervisor of the Company, respectively. On January 16, 2025, the legal representative of the company was changed to Sun Xin and the supervisor was also changed to Sun Xin.

Yasigeli Packaging Factory was established on August 15, 2005, and is a sole proprietorship, with investor Hu Kaiming. Scope of Business: Manufacturing and processing of plastic packaging boxes, plastic container products, electronic components, electrical accessories, hardware accessories, and molds.

Tengfei Company was established on December 30, 1997, as a limited liability company, with operations in packaging, decoration printing and other printing services.

2. Facts of the Alleged Infringement

(1) Basic Situation of the Criminal Case

On October 17, 2022, law enforcement officers from the Administration for Market Regulation of Penglai District, Yantai City inspected the storefront and underground garage of the Wantai Weilan Bi'an community, seizing 354 bottles of filled but uncapped "Compound Camphor Cream," 296 bottles of 50g blue cap "Compound Camphor Cream," 346 bottles of 100g blue cap "Compound Camphor Cream," 122 bottles of 130g blue cap "Compound Camphor Cream," 1 bottle of 50g transparent packaging "Compound Camphor Cream," 450 bottles of 100g transparent packaging "Compound Camphor Cream," as well as 30 boxes of packaging bottles and 10 boxes of packaging boxes for "Compound Camphor Cream," and photographed various styles of outer packaging boxes and inner packaging bottles of "Compound Camphor Cream."

On April 4, 2023, Penglai Branch of Yantai Public Security Bureau issued the Prosecution Opinion Document No. P.G.(S.Y.H.)S.Z. [2023] 169, stating that, after legal investigation, it was found that Xia Yuanlu, the legal representative of Tengfei Company, produced more than 221,150 packaging boxes for Baoshutang brand "Compound Camphor Cream" for Gong Peizhou on December 22, 2018, July 11, 2019, and July 20, 2019, without providing authorized proof materials, and received payment of RMB99,600.

On July 24, 2023, during questioning by the Food and Drug Environmental Investigation Team of Penglai Branch of Yantai Public Security Bureau, Gong Peizhou stated that the packaging bottles for "Compound Camphor Cream" were custom-made through Yasigeli Packaging Factory operated by Hu Kaiming in Cixi City, Zhejiang Province. When Hu Kaiming asked for the procedures regarding the packaging of the Compound Camphor Cream bottles, he could not remember what documents were provided. When the police presented the "Business License of Enterprise Legal Person," "Trademark Registration Certificate," and "Power of Attorney" provided by Yasigeli Packaging Factory, Gong Peizhou stated that the "Business License of Enterprise Legal Person" should have been provided to him by Baoshutang Company or the Dalian branch of Baoshutang Company after which he helped connect with Hu Kaiming and that the "Trademark Registration Certificate" and "Power of Attorney" were not provided to Hu Kaiming by Gong Peizhou.

On April 8, 2024, the People's Procuratorate of Penglai District, Yantai City, Shandong Province issued the Prosecution Document No. Y.P.J.X.S. [2024] 76, with Baofuling Company as Defendant Entity, and Gong Peizhou and Gong Jucong as Defendants. After a legal trial, it was found that from 2019 to 2022, Defendant Gong Peizhou used raw materials to produce "Baofuling Antibacterial Cream" at his Baofuling Company, and arranged for his son, Defendant Gong Jucong, to fill and produce Beijing Baoshutang brand “Compound Camphor Cream” in a storefront located between building 12 and building 10 of Wantai Weilan Bi'an community in Xingang Street, Penglai District, Yantai City, and exported it through Zhongtong Logistics to Malaysia, the Philippines, and other places, with a case value of approximately RMB300,000. It was determined by Yantai Administration for Market Regulation that the "Compound Camphor Cream" produced by Gong Peizhou and his son Gong Jucong was disguised as a medicine using a non-medicinal product and should be classified as counterfeit medicine. The People's Procuratorate of Penglai District, Yantai City, Shandong Province believes that Defendant Entity Baofuling Company and Defendants Gong Peizhou and Gong Jucong produced and sold counterfeit medicine, and the circumstances are serious. Their actions violate the provisions of Article 141 of the Criminal Law of the People's Republic of China, the criminal facts are clear, and the evidence is solid and sufficient. They should be held criminally liable for the crime of producing and selling counterfeit medicine.

On January 7, 2025, the People's Court of Penglai District of Yantai City, Shandong Province issued Criminal Judgment No. (2024)L.0614X.C.295 with Defendant Entity being Baofuling Company and Defendants being Gong Peizhou and Gong Jucong. It was found that from 2019 to 2022, Gong Peizhou utilized his business, Baofuling Company, to produce Baofuling antibacterial cream raw materials and arranged for his son, Gong Jucong, to fill and produce Beijing Baoshutang brand “Compound Camphor Cream”, which was exported to Malaysia and the Philippines via Zhongtong Logistics, with a total value of approximately RMB300,000 and illegal profits of RMB30,000. It was determined by Yantai Administration for Market Regulation that the "Compound Camphor Cream" produced by Gong Peizhou and his son Gong Jucong was disguised as a medicine using a non-medicinal product and should be classified as counterfeit medicine. The People's Court of Penglai District of Yantai City, Shandong Province held that Defendant Entity Baofuling Company violated national drug management regulations by producing and selling counterfeit drugs, with serious circumstances. Defendant Gong Peizhou, as the directly responsible supervisor, and Defendant Gong Jucong, as the directly responsible person, both constituted the crime of producing and selling counterfeit drugs. The Court ruled: (I) Defendant Entity Baofuling Company was convicted of producing and selling counterfeit drugs and fined RMB500,000; (II) Defendant Gong Peizhou was sentenced to three years of imprisonment, with a four-year probation, and fined RMB150,000; (III) Defendant Gong Jucong was sentenced to three years of imprisonment, with a three-year probation, and fined RMB100,000; (IV) Defendants Gong Peizhou and Gong Jucong were ordered to return the illegal gains of RMB30,000, which were confiscated and turned over to the national treasury; the seized items in the Case were to be disposed of by the seizing authority in accordance with the law; (V) Defendants Gong Peizhou and Gong Jucong were prohibited from engaging in drug production, sales, and related activities during the probation period.

(2) The trademarks and packaging and decoration conditions of the products seized in criminal cases

Upon retrieval and examination of the criminal case files, the products seized in the criminal case (2024)L.0614X.C.295 were Compound Camphor Cream products in two different types of packaging and decoration, which are substantially identical to the blue old packaging and decoration used by Baoshutang Company before 2012 and the white new packaging upgraded and used by Baoshutang Company since 2012. The outer packaging of the products bears Baoshutang Company's trademarks "BAO FU LING", "宝树堂/Baoshutang/Bao Shu Tang" and “” and the name "Beijing Baoshutang Scitech Pharmaceutical Co. Ltd" (see Figures 2-1 and 2-2). Baoshutang Company claims that the portion of the accused products produced and sold by Baofuling Company has used Baoshutang Company's trademarks ,packaging and decoration, which constitutes counterfeit products, infringing Baoshutang Company's exclusive trademark rights and constitutes unfair competition.

Figure 2-1: The first product packaging bottle seized from Baofuling Company in the criminal case	Figure 2-2: The outer packaging boxes of the first and second products seized from Baofuling Company in the criminal case

(3) Other packaging and decoration conditions of the accused infringing products obtained by Baoshutang Campany

On October 10, 2017, Meng Yue, the entrusted agent of Beijing Wei Chixue Law Firm, arrived at Beijing Guoli Notary Public Office to apply for evidence preservation. Under the supervision of notary Xue Weiping and staff member Wang Xiaotian, Meng Yue operated the notary's computer, accessed the Taobao website, searched for " Bao Fu Ling Antibacterial Lotion 100g," clicked the first link on the second line, with the product name " Bao Fu Ling Antibacterial Lotion 100g Mosquito Bite Relief Cream Genuine Product Directly Sold by Manufacturer Bao Zhi Tang," and purchased two products. The page displayed the store as Penglai Bao Zhi Tang Medical Research Institute, with a unit price of RMB248. On October 20, 2017, under the supervision of the notary, Meng Yue received and opened the express package, which contained two products, along with one ordinary value-added tax invoice and one receipt, issued by Baofuling Company. The notary took photos of the products inside the package before sealing them. The photos attached to the notarized document show that the product's outer packaging box (see Figure 2-3) is mainly white, with the black words "宝肤灵" and "BAO FU LING" arranged vertically in the center front, and the small text "(Antibacterial Lotion)" below. The lower part contains the company name of Baofuling, and the upper right corner has the small black text "Patent No.: 201510682155.2". The upper left corner features the "Bao Zhi Tang" logo, and the right half of the front has a large heart-shaped gold embossed design, with the production date marked as July 25, 2017. Beijing Guoli Notary Public Office issued Notarization Certificate No. (2017)J.G.L.N.Z.Z.10009 on November 3, 2017, certifying the aforementioned process.

On November 16, 2018, Zhu Baohai, the entrusted agent of Baoshutang Company, arrived at Beijing Guoli Notary Public Office to apply for evidence preservation. Under the supervision of notary Yang Hong and staff member Lin Lu, Zhu Baohai operated the notary's computer, accessed the Taobao website, searched for "Baofuling," clicked on " Bao Fu Ling Antibacterial Lotion 100g Mosquito Bite Relief Itching Burn Relief Cream Skin Itching Cream Genuine Product," with the store being Baofuling Factory Store. The price for this product was RMB300. Then he clicked on " Bao Fu Ling Antibacterial Lotion Genuine 15g Mosquito Bite Skin Itching Cream Adult Wet Itch External Care," priced at RMB38, and clicked on "Baofuling Genuine Antibacterial Cream 60g Skin Itching Cream Body Care Adult Wet Itch Red Itch Red Groin External Use," priced at RMB150. The product detail page indicated a promotion of buy two get one free. He purchased two of each product, totaling RMB976, and Baofuling Company issued one ordinary value-added tax invoice. On November 20, 2017, Zhu Baohai received and opened a courier package under the supervision of the notary, which contained three boxes each of three types of Bao Fu Ling Antibacterial Lotion. The notary took photos of the products inside the package before sealing them. The photos attached to the Notarization Certificate show that the outer packaging box of the "Bao Fu Ling Antibacterial Lotion 100g" is the same as the product purchased under Notarization Certificate No. (2017)J.G.L.N.Z.Z.10009 (issued by Beijing Guoli Notary Public Office) (see Figure 2-3).

The "Bao Fu Ling Antibacterial Lotion 60g" has a blue outer packaging box and an inner packaging bottle with a blue cap and white body (see Figure 2-4). The front of the blue outer packaging box features a vertically arranged silver-white label "宝肤灵" and "BAO FU LING" in the center, with the white small text "Patent No. : 201510682155.2" at the top, and the white text "(Antibacterial Lotion)" and the name of Baofuling Company at the bottom. The four corners of the front are designed with silver-white traditional Chinese patterns; the inner packaging bottle has a blue cap and white body, with a vertically arranged blue label "宝肤灵", "BAO FU LING" and small black text "Design Patent No. : ZL201730171813.1" in the center. The bottom features black text "Antibacterial Cream for Skin" and the name of Baofuling Company, with blue decorative patterns at the corners. Beijing Guoli Notary Public Office issued the Notarization Certificate No. (2018)J.G.L.N.Z.Z.3012 on December 13, 2018, to notarize the above process.

Figure 2-3: The first outer packaging box of the Bao Fu Ling Antibacterial Lotion produced by Baofuling Company	Figure 2-4: The second packaging box and bottle of Bao Fu Ling Antibacterial Lotion produced by Baofuling Company

On February 27, 2024, Baoshutang Company entered the Tmall "Baofuling Flagship Store" and searched for "Baofuling Genuine Antibacterial Body Emulsion for Skin Allergies, External Use, Itch Relief Ointment from Tongren Baoshutang". The product detail page showed that this product was a blue-packaged Bao Fu Ling Antibacterial Lotion (see Figure 2-4), with a sales price of RMB258.

On April 12, 2024, Guangzhou Baoshutang Biomedical Co., Ltd. entered the Tmall "Baofuling Flagship Store" and found that the products sold in this store included the infringing blue-packaged Bao Fu Ling Antibacterial Lotion in question (see Figure 2-4).

On March 21, 2025, the entrusted agent of Baoshutang Company, Chen Haifeng, went to the Beijing Qiushi Notary Office to apply for evidence preservation. Under the supervision of notary Gao Chang and notary assistant Chen Anyue, Chen Haifeng used his mobile phone to open the Taobao APP, searched for "Baofuling", chose the store "Yantai Baofuling Biotechnology Co., Ltd.", browsed and purchased 3 boxes of "Bao Fu Ling Antibacterial Cream for Skin 100g" (RMB300/box) and 3 boxes of "Bao Fu Ling Antibacterial Cream for Skin 60g (with 15g free)" (RMB150/box), spending a total of RMB1,315. On March 24, 2025, under the supervision of notary Gao Chang and notary assistant Zhang Yi, Chen Haifeng received and opened the express package. The notary personnel photographed the products inside the package before sealing them respectively. On March 26, 2025, Beijing Qiushi Notary Office issued the Notarization Certificate No. (2025)J.Q.S.N.J.Z.Z.177, notarizing the above-mentioned process. Upon unsealing the aforementioned sealed product in Court, the outer packaging of "Bao Fu Ling Antibacterial Cream for Skin 60g" (see Figure 2-5) is entirely blue. The front center features the silver-white logo "宝肤灵" and "BAO FU LING" arranged vertically, with small white text above stating "Design Patent No. : ZL201730171814.6," and at the bottom in white, it reads "(Antibacterial Cream for Skin)" and the company name "Beijing Baofuling Biotechnology Co., Ltd." The four corners of the front feature silver-white patterns; the inner packaging bottle has a blue cap and a white body, with the front center displaying the vertically arranged blue logo "宝肤灵" and "BAO FU LING" and small black text stating "Design Patent No.: ZL201730171813.1." The bottom features black text "(Antibacterial Cream for Skin)" and the company name "Beijing Baofuling Biotechnology Co., Ltd." with blue traditional Chinese-style pattern designs at the four corners. Both the outer packaging box and the inner packaging bottle indicate that the manufacturing company is "Yantai Baofuling Biotechnology Co., Ltd.," and the production date is February 15, 2025. The outer packaging of "Bao Fu Ling Antibacterial Cream for Skin 100g" (see Figure 2-6) is primarily white, with the front center featuring the black vertically arranged logo "宝肤灵" and "BAO FU LING," along with small text stating "(Antibacterial Cream for Skin)." The bottom displays the blue company name "Beijing Baofuling Biotechnology Co., Ltd." and the upper right corner contains small black text "Design Patent No.: ZL201730171812.7," while the right half of the front features a large heart-shaped golden hot-stamped pattern.

Figure 2-5: The first packaging box and bottle of "Bao Fu Ling Antibacterial Cream" produced by Baofuling Company	Figure 2-6: The second packaging box of " Bao Fu Ling Antimicrobial Cream" produced by Baofuling Company

In the Court Hearing of First Instance, Baoshutang Company claimed that through the evidence collection activities mentioned above on Taobao, it was proven that Baofuling Company has been unauthorizedly using outer packaging and decoration similar to that of Baoshutang Company's product on its produced and sold "Bao Fu Ling Antibacterial Cream for Skin" and "Bao Fu Ling Antibacterial Lotion" products since at least 2017, thus constituting unfair competition, and that this infringement has continued even after the filing of this Case.

(4) Opinions on packaging and decoration comparison

In the Court Hearing of First Instance, Baoshutang Company provided the old packaging box and bottle of its Compound Camphor Cream produced before 2012 (see Figure 1-1) and the new packaging box of its Compound Camphor Cream produced after 2012 (see Figure 1-2) as comparison objects. Baoshutang Company claimed that the infringing products being compared were the "Bao Fu Ling Antibacterial Lotion" and "Bao Fu Ling Antibacterial Cream" produced by Baofuling Company, which Baoshutang Company purchased and obtained evidence of through Taobao (see Figures 2-3, 2-4, 2-5, 2-6).

Comparison of Old Packaging Style: ① Packaging Box. The old packaging box (Figure 1-1) used for Baoshutang Company's proprietary drug and the outer packaging boxes of the accused infringing products shown in Figures 2-4 and 2-5 are all blue, square paper boxes. On the front side of the packaging boxes, the product name is printed in large characters in the middle, the company name is printed at the lower part, and decorative patterns are printed on all four corners. The difference lies in that the overall front text and patterns of Baoshutang Company's proprietary drug are in gold and white, with the top left corner bearing the "宝树堂/Baoshutang/Bao Shu Tang" logo, and the central text reading“Compound Camphor Cream (formerly known as “Bao Fu Ling”)” arranged vertically. The top right corner has an external use mark with a red background and white text; the text and patterns of the infringing packaging box are silver-white overall, with no logo in the top left corner, and the central text reading “宝肤灵” and "BAO FU LING" arranged vertically, with a small note below stating "(Antibacterial Lotion)" or "(Antibacterial Cream for Skin)". The bottom right corner has an external use mark with a red background and white text; the specific patterns of the corner decorations of Baoshutang Company's proprietary drug and the infringing packaging are slightly different, and the specific company names indicated at the bottom are different. ② Packaging Bottle. Both use round box containers with blue tops and white bodies, featuring blue pattern designs at the corners, the product name in the middle, and the company name at the bottom. The differences are as follows: on the central part of the packaging of Baoshutang Company’s proprietary drug, the product name is arranged vertically as the black characters “Compound Camphor Cream” and the blue characters “(formerly known as “Bao Fu Ling”)”, with a red-background-white-text “External Use” label on the upper right corner. On the front center of the accused infringing packaging and decoration, the characters are arranged vertically as the blue characters “宝肤灵” and “BAO FU LING” logo, followed by two smaller lines of text indicating the patent number and “(Antibacterial Lotion)” or “(Antibacterial Cream for Skin)”, with a red-background-white-text “External Use” label on the lower right corner. The specific patterns of the four-corner decorative designs on the packaging and decoration of Baoshutang Company’s proprietary drug and the accused infringing product differ to some extent, and the company names indicated at the lower part are also different.

Upon comparison of new packaging style, it is found that: Baoshutang Company's proprietary drug new packaging (Figure 1-2) and the accused infringing white packaging decoration (Figures 2-3, 2-6) both feature large black letters in the center of the front with the product name, the right half of the front displays the same golden heart-shaped pattern, and the lower part features a blue company name. The difference lies in that Baoshutang Company's proprietary drug new packaging has a "” logo in the upper left corner, a red background with white characters for the external use label and OTC label in the upper right corner, and the product name "Compound Camphor Cream" in large black letters, with small text "100 grams per bottle" below. The accused infringing packaging has a blank or gold pattern in the upper left corner, a patent number in the upper right corner, and the product name “宝肤灵” and “BAO FU LING” in large black letters arranged vertically, with small text "(Antibacterial Lotion)" or "(Antibacterial Cream for Skin)" below, and a red background with white characters for the external use label in the lower right corner. The company names on the lower part of Baoshutang Company's proprietary drug and the accused infringing product packaging are different.

(III) Facts Related to Compensation

Beijing Baofuling Company was established on January 14, 2019, with the legal representative being Gong Jucong, and shareholders being Sun Xin and Gong Jucong. The business scope covers biotechnology development, technology promotion, medical research and experimental development, etc.

Bao Zhi Tang Penglai Branch was established on April 1, 2005, with the approval date of June 1, 2017. It is a joint-stock enterprise, with the person in charge being Gong Peizhou. The business scope covers retail of pre-packaged snacks; medical research; development, technology transfer, and technical services in traditional Chinese medicine, Western medicine, and food technology, etc.

Ban Kah Chai Company was established on July 12, 2002, with the legal representative being Gong Peizhou, a registered capital of RMB3 million, and shareholders being Gong Jubao, Gong Peizhou, and Sun Xin. The business scope covers the production and sales of Class II medical devices; sales of disinfection devices; production and sales of Class I medical devices, etc.

On March 23, 2002, Gong Peizhou, in the name of Dalian Baoshutang, signed the "Business Sales Contract" with Baoshutang Company, which provided various pharmaceutical products, with the price of various Baofuling products amounting to RMB448,670, signed by "Gong Peizhou, Dalian Baoshutang" at the end of the contract.

On March 25, 2003, Baoshutang Company signed the "Business Sales Contract" with Dalian Lüshun Baicaoyuan Pharmacy, which provided various pharmaceutical products, with the price of various Baofuling products amounting to RMB427,944, stamped with the seal of Dalian Lüshun Baicaoyuan Pharmacy and signed by the legal representative Gong Peizhou at the end of the contract.

On June 21, 2019, Baofuling Company obtained the registration approval for Trademark No. 23982825 “宝肤灵 bao fu ling,” with the designated products falling under Class 5: nutritional supplements. On April 20, 2024, this trademark was transferred to Ban Kah Chai Company. On October 12, 2024, the Beijing Higher People’s Court rendered the Administrative Judgment No. (2024)J.X.Z.6208, holding that Trademark No. 23982825 constitutes a similar mark to Baoshutang Company’s registered Trademark No. 3511900 “BAO FU LING” on similar goods, and upholding the decision of the China National Intellectual Property Administration to declare Trademark No. 23982825 invalid.

On July 11, 2024, due to the similarity with Baoshutang Company's cited trademarks No. 24025708 "宝树堂宝肤灵/Bao Shu Tang Bao Fu Ling", No. 59837942 "宝树堂宝肤灵/Bao Shu Tang Bao Fu Ling", and No. 31407899 "宝树堂/Baoshutang/Bao Shu Tang", the application for registration of trademark No. 74127017 "宝舒堂宝肤灵/Bao Shu Tang Bao Fu Ling" filed by Baofuling Company in Class 5 was rejected by the China National Intellectual Property Administration upon re-examination.

According to the timestamp certification of April 1, 2025, 1. The Ouyun Chuang Rehabilitation Medical Store on the Pinduoduo platform sells four strengths of Baofuling products produced by Baofuling Company, namely 15g, 30g, 60g, and 150g, with the displayed sales quantity being 11,000+, 10,000+, 157,000+, and 5,086 pieces respectively. The outer packaging and decoration shown in the product display images are basically the same as those of the allegedly infringing products in Figures 2-4 and 2-5, with only slight differences in the patent number and company name. 2. The Muxi Rehabilitation Medical Store on the Pinduoduo platform sells four strengths of Baofuling products produced by Baofuling Company, namely 15g, 30g, 60g, and 150g, showing multiple links with a sales quantity of 300,000+ pieces, while other links show 5,002 pieces, 112 pieces, 109 pieces, 106 pieces, 108 pieces, 105 pieces, and 107 pieces sold. The outer packaging and decoration shown in the product display images are the same as those of the allegedly infringing products in Figures 2-4 and 2-5. 3. The Jinghui Shangpin Store on the Pinduoduo platform sells various strengths of Baofuling products produced by Baofuling Company, showing sales of 1,781 pieces, 1,268 pieces, 1,014 pieces, 21 pieces, and 300 pieces respectively. The outer packaging and decoration shown in the product display images are the same as those of the allegedly infringing products in Figures 2-4 and 2-5. 4. The Ansonglin Store on the Pinduoduo platform sells various strengths of Baofuling products produced by Baofuling Company, showing sales of 6,131 pieces, 358 pieces, 7 pieces, 47 pieces, 1,531 pieces, and 156 pieces. The outer packaging and decoration shown in the product display images are the same as those of the allegedly infringing products in Figures 2-4 and 2-5. 5. The Hongqi Taiji Health Flagship Store on the Pinduoduo platform sells various strengths of Baofuling products produced by Baofuling Company, showing sales of 1,169 pieces, 362 pieces, and 112 pieces. The outer packaging and decoration shown in the product display images are the same as those of the allegedly infringing products in Figures 2-4 and 2-5. 6. The TianTian12 store on the Pinduoduo platform sells various strengths of Baofuling products produced by Baofuling Company, showing sales of 980 pieces. The outer packaging and decoration in the product display images are the same as those of the alleged infringing products shown in Figures 2-4 and 2-5. 7. The "Baofuling" store on Douyin Mall shows a total of over 300 historical transactions. 8. The Mr. Mushroom Skincare Online Direct Sales Store on the Taobao platform sells various strengths of Baofuling products manufactured by Baofuling Company, showing over 500 historical transactions. The outer packaging and decoration displayed in the product images are the same as those of the alleged infringing products shown in Figures 2-4 and 2-5.

The reasonable expenses incurred by Baoshutang Company for the present case include attorney fees of RMB50,000, notarization fees of RMB2,500, investigation and evidence collection costs of RMB200, costs for purchasing products of RMB1,315, and transportation, accommodation and meal expenses of RMB2,932 (for two persons), totaling RMB56,947. In addition, Baoshutang Company also claims that it has incurred the following expenses: preservation insurance premium of RMB1,500 for the present case, attorney fees of RMB24,721.41 for the case No. Y.P.J.W.D. [2023]53, case acceptance fee of RMB100, first-instance attorney fees of RMB24,900 and second-instance attorney fees of RMB10,400 for the case No. (2021)J.73X.C.Z.14381, as well as first-instance attorney fees of RMB25,000 and second-instance attorney fees of RMB13,000 for the administrative litigation regarding the invalidation of the “Bao Fu Ling” trademark.

(IV) Other Relevant Facts

On December 27, 2012, Yasigeli Packaging Factory received a copy of the power of attorney and trademark registration certificate via fax. The content of the power of attorney states, "Our company, due to business needs, entrusts Yasigeli Packaging Factory to print packaging bottles." Entrustor: Beijing Baoshutang Scitech Pharmaceutical Co. Ltd December 15, 2012." The copy of the trademark registration certificate shows that the trademark is No. 4034683 "宝树堂/Baoshutang plus graphic" trademark approved for registration by Baoshutang Company in Class 5. In addition, Yasigeli Packaging Factory has also provided a copy of the business license of Baoshutang Company.

On December 21, 2019, the People's Court of Shijingshan District of Beijing Municipality rendered the Civil Judgment No. (2018)J.0107M.C.29617 in the case filed by Plaintiff Baofuling Company against the Defendants Baoshutang Company and Beijing Baoshutang E-commerce Co., Ltd. for trademark infringement and unfair competition. The judgment confirmed that Baoshutang Company had used the “Bao Fu Ling” trademark earlier than Baofuling Company and such trademark had acquired certain market influence.

The Court of First Instance believes that based on the established facts, the evidence provided by Baoshutang Company can prove that it is the registrant of the trademarks No. 524847 "", No. 3511900 "BAO FU LING", and No. 3602358 "宝树堂/Baoshutang/Bao Shu Tang", all of which are currently still valid, and Baoshutang Company has the right to file this lawsuit. Through the claims and defenses of both parties, there are four focal issues of contention in this Case: First, whether the statute of limitations for litigation for this Case is expired; Second, whether the alleged infringing behavior constitutes trademark infringement; Third, whether the alleged infringing acts constitute unfair competition by unauthorized use of similar identifiable packaging or decoration that has certain influence from others; Fourth, if infringement is established, what legal liabilities Baofuling Company, Gong Peizhou, Gong Jucong, Sun Xin, Yasigeli Packaging Factory and Tengfei Company should bear.

(I) Whether the statute of limitations for this Case is expired

The Court of First Instance believes that, from the perspective of Baoshutang Company's claims, the infringement period for trademark infringement is from 2019 to 2022, while the infringement period for unfair competition is from 2017 until the filing of this Case in January 2025. Regarding the statute of limitations for the trademark infringement part, based on the facts established in this Case, the infringement facts were known to Baoshutang Company through the criminal case No. (2024)L.0614X.C.295. The statute of limitations for Baoshutang Company's claim of infringement in this part has not expired and Baofuling Company's defense regarding the statute of limitations for Baoshutang Company's claim lacks factual basis and is not accepted. As for the statute of limitations for the unfair competition part, according to the facts established in this Case, Baofuling Company has continuously engaged in the alleged unfair competition behavior from July 2017 until the filing of this Case and Baoshutang Company's claim of infringement in this part has not exceeded the statute of limitations.

(II) Whether the alleged infringing behavior constitutes trademark infringement

Baoshutang Company asserts that Baofuling Company, Gong Peizhou, Gong Jucong, Sun Xin, Yasigeli Packaging Factory and Tengfei Company have committed trademark infringement based on the facts established and determined in the effective criminal judgment No. (2024)L.0614X.C.295 issued by the People's Court of Penglai District, Yantai City, Shandong Province. This includes Baofuling Company's actions of counterfeiting Baoshutang Company's production of the fake drug "Compound Camphor Cream" from 2019 to 2022, during which Baofuling Company used Baoshutang Company's trademarks No. 524847 "", No. 3511900 "BAO FU LING" and No. 3602358 "宝树堂/Baoshutang/Bao Shu Tang" on the alleged infringing products. The trial court believes that the aforementioned facts have been confirmed by the effective criminal judgment and are consistent with the facts ascertained from the case files of the criminal case obtained by the trial court. It should be recognized that Baofuling Company used a trademark identical to that of Baoshutang Company's registered trademark on the same products. This act constitutes the infringement of trademark rights as stipulated in Item 1 of Article 57 of the Trademark Law of the People's Republic of China (2019 Amendment) and infringes upon Baoshutang Company's exclusive rights to the disputed trademark.

As for Baofuling Company, Gong Peizhou, Gong Jucong, Sun Xin, Yasigeli Packaging Factory and Tengfei Company's defense regarding the trademark not being used for three years, the trial court holds that the evidence provided by Baoshutang Company is sufficient to prove that Baoshutang Company actually used the disputed trademark through extensive advertising, signing business cooperation agreements and opening online sales stores in the three years prior to 2019. Therefore, the defense argument of Baofuling Company, Gong Peizhou, Gong Jucong, Sun Xin, Yasigeli Packaging Factory and Tengfei Company is unfounded and will not be accepted.

(III) Whether the alleged infringing act constitutes unfair competition by unauthorized use of packaging and decoration that are similar to those of others with a certain influence.

Baoshutang Company claims protection for two types of packaging and decoration: one is the blue old packaging box used by Baoshutang Company before 2012 for "Compound Camphor Cream" and the decoration on the old packaging bottle (see Figure 1-1) and the other is the white new packaging box used by Baoshutang Company for "Compound Camphor Cream" after 2012 (see Figure 1-2). The claimed infringement period is from 2017 to 2025 at the time of the first instance filing in this Case. The specific determinations are as follows:

1. Regarding the old blue packaging and decoration

The Court of First Instance held that, since the use of the packaging and decoration of the product by Baoshutang Company occurred before 2012, the evidence provided by Baoshutang Company in this Case can only prove that the packaging and decoration of the product had a certain influence before 2012 and cannot prove that the packaging and decoration of the product still had a certain influence after their discontinuation around January 2022 (three years prior to the lawsuit). Moreover, there is a significant difference between the old packaging and decoration of the product involved that Baoshutang Company previously used and the new packaging and decoration used after 2012. Therefore, it cannot be determined that the influence of the old packaging and decoration extends to the new packaging and decoration. Thus, Baoshutang Company's claim regarding the old packaging and decoration of the product involved does not meet the protection requirements of "having a certain influence" as stipulated in Item 1 of Article 6 of the Anti-Unfair Competition Law and the Court of First Instance did not support Baoshutang Company's request for protection of the old packaging and decoration of the product involved.

2. Regarding the white new packaging

The Court of First Instance held that Baoshutang Company claimed that the new packaging has a white background color, with a golden pattern on the right half of the front and the product name in the middle, with the manufacturing company below. The overall arrangement of these elements, especially the golden pattern on the right half of the front of the packaging, has a certain uniqueness, which can be recognized as having significant characteristics that distinguish the source of the product. The evidence provided by Baoshutang Company can also prove that the new packaging of the product involved has a certain influence due to the long-term publicity and use by Baoshutang Company. Therefore, the new packaging claimed by Baoshutang Company meets the protection requirements as stipulated in Item 1 of Article 6 of the Anti-Unfair Competition Law and should be protected according to law. From the facts established in this Case, Baofuling Company has been using the new packaging involved in the alleged infringement on its "BAO FU LING Antibacterial Lotion" since at least July 2017 (see Figures 2-3 and 2-6). A comparison shows that both parties' packaging has a white background color and the right half of the front of the packaging features the same golden pattern. The arrangement of the product name, manufacturer and other information is also largely the same, which can be recognized as similar packaging. This similarity is likely to cause relevant public confusion regarding the source of the products. It should be determined that Baofuling Company's use constitutes an act of unfair competition by unauthorized use of a similar mark on product packaging that has a certain influence from others.

(4) The legal responsibilities that Baofuling Company, Gong Peizhou, Gong Jucong, Sun Xin, Yasigeli Packaging Factory and Tengfei Company should bear should be outlined.

The Court of First Instance held that, since Baofuling Company used the same trademark as the trademark of Baoshutang Company on the accused infringing products it produced and sold, it infringed Baoshutang Company's exclusive right to the registered trademark. Meanwhile, it also used on goods identical or similar to those of Baoshutang Company a new packaging marks similar to the packaging of Baoshutang Company's involved products that has certain influence, constituting unfair competition. Therefore, Baoshutang Company's request for the court to order Baofuling Company to immediately stop using packaging similar to the white new packaging of the Compound Camphor Cream produced by Baoshutang Company on its "Baofuling" products, as well as to compensate for the losses suffered by Baoshutang Company due to trademark infringement and unfair competition, has factual and legal basis and the Court of First Instance supported this.

Regarding whether Gong Peizhou, Sun Xin and Gong Jucong should bear joint liability for infringement with Baofuling Company, the Court of First Instance noted that Article 1168 of the Civil Code of the People's Republic of China states: "If two or more persons jointly commit an infringement that causes damage to others, they shall bear joint liability." The judgment summary of the case in the People's Court Case Database "A Certain Kitchen Company v. Tu Certain and Yu Certain et al. for Trademark Infringement and Unfair Competition" (Case Filing Number: 2024-09-2-159-002) is: "If a natural person is aware of another’s trademark rights and establishes different companies for the purpose of repeated infringement, while being the controlling shareholder and legal representative of the company, the company becomes a tool and carrier for the infringement. If the right holder claims that the natural person and the company constitute joint tortfeasors, and the natural person bears joint liability for the company's tortious acts, the People's Court should support this claim." The judgment summary of the case in the People's Court Case Database "Shanghai Certain Catering Company v. Shanghai Certain Management Company, Certain Investment Company, and Wang Certain for Imitation Dispute" (Case Filing Number: 2024-09-2-173-001) is: "If the legal representative or actual controller of a legal person knows that the actions carried out by the legal person constitute tortious acts, and that this legal representative or main responsible person actively participates in the implementation of the tortious acts, then such tortious acts reflect the will of the legal person and also the will of its legal representative or main responsible person, and it can be concluded that the legal representative or main responsible person jointly committed the tortious acts with the legal person, and should bear joint tort liability according to law." In this Case, firstly, from the perspective of the identity relations among Gong Peizhou, Sun Xin, and Gong Juciong, Gong Peizhou and Sun Xin are husband and wife, and Gong Peizhou and Gong Juciong are father and son, indicating a high degree of alignment in will and interests among these family members; secondly, from the roles and positions held by the three individuals in the two manufacturing companies involved in the alleged infringing product, Gong Peizhou and Sun Xin are the two individual shareholders of Baofuling Company, serving as the legal representative and supervisor of Baofuling Company, respectively, during the period of infringement; Gong Juciong and Sun Xin are the two individual shareholders of Beijing Baofuling Company, serving as the legal representative and supervisor of Beijing Baofuling Company, respectively, during the period of infringement. The infringing acts reflect both the will of the two corporate legal persons and the personal will of the legal representatives and shareholders; moreover, from the facts of the infringement, Gong Peizhou and Sun Xin, as former responsible persons of the agency of Baoshutang Company, jointly established Baofuling Company, Beijing Baofuling Company and Ban Kah Chai Company with the intent of infringement, maliciously registered the relevant trademarks of Baoshutang Company while being fully aware of the trademarks and packaging with certain influence used by Baoshutang Company and colluded with their son Gong Jucong to specifically produce counterfeit and infringing products against Baoshutang Company. The subjective intent of the three to use the companies as means to implement the alleged infringing acts is evident. In summary, the actions of Gong Peizhou, Sun Xin and Gong Jucong in the case constitute joint infringement, which also aligns with the situations pointed out in the rulings of the aforementioned two case database entries by the people's court. It should be recognized that the three above are jointly liable for infringement with Baofuling Company. The lawsuit request from Baoshutang Company for a verdict ordering Gong Peizhou, Sun Xin and Gong Jucong to immediately stop using a packaging that is similar to the new white packaging of the compound camphor lotion produced by Baoshutang Company on their "Baofuling" products, as well as for joint compensation for Baoshutang Company's economic losses, has factual and legal basis and the Court of First Instance supported it.

As for whether Yasigeli Packaging Factory should bear liabilities, although relevant evidence from the criminal case file shows that the packaging bottles of the Compound Camphor Cream produced and sold by Baoshutang Company were produced by Baofuling Company under the commission of Yasigeli Packaging Factory, evidence provided by Yasigeli Packaging Factory indicates that when it accepted the packaging business for the alleged infringing products, it had verified and retained the power of attorney with the seal of Baoshutang Company, trademark registration certificate, and other materials, fulfilling the corresponding review obligations, and there is no subjective fault on its part. There is also no other evidence in this Case to prove that it had the intent to assist in the infringement, thus Baoshutang Company's request to find Yasigeli Packaging Factory liable for trademark assistance infringement and seeking compensation lacks basis, and the Court of First Instance did not support it.

As for whether Tengfei Company should bear responsibility, since it did not fulfill a reasonable examination duty when accepting the commission from Baofuling Company to produce the packaging boxes, there was a certain degree of subjective fault on its part and thus the Court of First Instance supported Baoshutang Company’s claim to order Tengfei Company to constitute trademark assistance infringement and seek compensation.

As for the request made by Baoshutang Company for an apology, since an apology typically applies only in cases of infringement of personal rights and the main infringement suffered by Baoshutang Company in this Case is property rights and Baoshutang Company has not provided evidence to prove that its reputation has been severely damaged due to the infringement, the Court of First Instance did not support this request.

Regarding the amount of compensation, Baoshutang Company simultaneously claims punitive damages and statutory compensation in this Case, with a total compensation claim of RMB1.8 million. Among them, for the part of the trademark counterfeiting of Baoshutang Company for which the base amount can be determined, Baoshutang Company claims to apply five times the punitive damages totaling RMB298,800. For the part of the trademark counterfeiting of Baoshutang Company for which the base amount cannot be determined, and the part where Baofuling Company, Gong Peizhou, Gong Jucong, Sun Xin and Tengfei Company unauthorizedly used marks similar to the new packaging of Baoshutang Company's products that have a certain influence, it claims compensation of over RMB1.5 million. The total of the two parts amounts to RMB1.8 million.

Regarding the infringement compensation related to Baofuling Company, Gong Peizhou, Sun Xin and Gong Jucong's counterfeit trademark of Baoshutang Company, the first instance court held that the facts of the infringement involving the counterfeit trademark of Baoshutang Company and the profit of RMB30,000 have been confirmed by an effective criminal judgment. Therefore, there is no basis for Baoshutang Company's claim that the infringing profits can be divided into a part for which the base amount can be determined and a part for which it cannot be determined. Based on the determination of profits from the counterfeit Baoshutang Company trademark, the key to the specific amount of compensation for the counterfeit trademark lies in examining whether the punitive damages claimed by Baoshutang Company can be applied in this Case. From the facts established in this Case, Baofuling Company, Gong Peizhou, Sun Xin and Gong Jucong have engaged in the production of products bearing the counterfeit registered trademark of Baoshutang Company. The infringing products they produced have been determined as counterfeit drugs by an effective criminal judgment, which seriously harms the public interest and the personal health of society. This behavior meets the criteria established in the Supreme People's Court’s judicial interpretation for punitive damages regarding 'intentional' acts and 'serious circumstances.' Therefore, the first instance court supported Baoshutang Company's request for punitive damages in the trademark infringement part. Considering that the intentional infringement by Baofuling Company, Gong Peizhou, Sun Xin and Gong Jucong is evident, the infringement period spans from 2019 to 2022 being relatively long, and Baofuling Company has engaged in multiple malicious acts such as registering and transferring to its affiliated companies trademarks that are similar to Baoshutang Company's trademarks involved in the case, the first instance court determined the compensatory damages base at RMB30,000 and set the punitive damages multiplier at 3 times. Thus, Baofuling Company, Gong Peizhou, Sun Xin and Gong Jucong should compensate Baoshutang Company RMB120,000 for their trademark infringement (i.e. RMB30,000 + RMB30,000 × 3 = RMB120,000).

As for the compensation amount for Baofuling Company, Gong Peizhou, Sun Xin and Gong Jucong's unauthorized use of a new package bearing similar marks to those of Baoshutang Company which have a certain influence, which constitutes unfair competition, the facts established in this Case show that although Baofuling Company, Gong Peizhou and Gong Jucong Sun Xin have committed unfair competition since at least July 2017, apart from the evidence collected by Baoshutang Company in October 2017 and November 2018 showing the unauthorized use of similar marks, the substantial evidence provided by Baoshutang Company of the infringed products through related Taobao shops displays that they used the old blue package and decoration of Baoshutang Company that was in use before 2012. In addition to the aforementioned evidence, Baoshutang Company did not provide further evidence in this Case to prove that Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin produced and sold a large number of products using marks similar to the new packaging of Baoshutang Company's involved products after July 2017, especially after January 2022. Furthermore, as mentioned earlier, regarding the alleged unfair competition behavior of Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin, due to Baoshutang Company's long-term failure to exercise its right to sue, the Court of First Instance only supported the compensation claim for the unfair competition behavior implemented by Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin after January 2022. In summary, considering that Baoshutang Company did not provide evidence to prove the actual losses suffered by the rights holder due to the infringement or the benefits obtained by the infringer due to the infringement and other references, the Court of First Instance lawfully applied the statutory compensation method to determine that Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin should compensate Baoshutang Company for economic losses of RMB10,000 for the unfair competition behavior involved in this Case.

Regarding reasonable expenses, it was found that Baoshutang Company incurred legal fees of RMB50,000, notarization fees of RMB2,500, investigation and evidence collection costs of RMB200, product purchase costs of RMB1,315 and transportation, accommodation and dining expenses of RMB2,932 for this Case, totaling RMB56,947, which the Court of First Instance supported. Regarding the preservation insurance fee, Baoshutang Company can provide guarantees in various ways when applying for litigation preservation and this expense does not fall under reasonable expenses for rights protection, which the Court of First Instance does not support. Regarding the other expenses claimed by Baoshutang Company, as they were not directly incurred for rights protection in this Case, the Court of First Instance does not support them.

In summary, according to Articles 179, 188 Paragraph 1 and 1168 of the Civil Code of the People's Republic of China, Article 57 Item 1 and Article 63 Paragraph 1 of the Trademark Law of the People's Republic of China, Article 9 Paragraph 2, Article 10, Article 17, Article 18 and Article 21 Paragraph 1 of the Interpretation of the Supreme People's Court of the People’s Republic of China on Several Issues Concerning the Application of Law in the Trial of Civil Dispute Cases Involving Trademarks, Article 6 Paragraph 1, Article 17 Paragraph 3 and Article 22 Paragraph 1 of the Anti-Unfair Competition Law of the People's Republic of China (2019 Amendment), Article 4 Paragraph 2, Article 12 Paragraph 1 and 2 of the Interpretation of the Supreme People's Court of the People’s Republic of China on Several Issues Concerning the Application of the Anti-Unfair Competition Law of the People's Republic of China, Article 1 Paragraph 1, Article 3 Paragraph 2 and Article 4 Paragraph 2 of the Interpretation of the Supreme People's Court of the People’s Republic of China on the Application of Punitive Damages in Civil Cases Involving Intellectual Property Rights and Article 147 of the Civil Procedure Law of the People's Republic of China, the First-Instance Judgment is as follows: (1) Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin shall immediately cease using similar labels to the new white packaging of Baoshutang Company's Compound Camphor Cream on products identical or similar to those produced by Baoshutang Company; (2) Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin shall, within ten days from the date the judgment takes effect, jointly compensate Baoshutang Company for economic losses of RMB120,000 due to trademark infringement, jointly compensate Baoshutang Company for economic losses of RMB10,000 due to unfair competition and jointly compensate Baoshutang Company for reasonable expenses of RMB56,947 incurred, totaling RMB186,947; (3) Tengfei Company shall, within ten days from the date the judgment takes effect, compensate Baoshutang Company for economic losses of RMB5,000 for assisting Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin in implementing trademark infringement; (4) The other litigation requests of Baoshutang Company are dismissed. If the monetary obligation specified in the judgment is not performed within the designated period, Defendants shall pay double the interest on the delayed performance in accordance with Article 264 of the Civil Procedure Law of the People's Republic of China. The first-instance Case Acceptance Fee of RMB22,800 shall be borne by Baoshutang Company for RMB10,335 and jointly borne by Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin for RMB12,465; the Preservation Application Fee of 5,000 yuan shall be borne by Baoshutang Company for RMB1,773 and jointly borne by Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin for RMB3,227.

During the second-instance period, the parties submitted new evidence in accordance with the law regarding the appeal request. This Court organized the parties to conduct evidence exchange and cross-examination. Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin jointly submitted the following evidences: 1. A one-page printout of the business information of the Bao Zhi Tang Penglai Branch, intended to prove that the Bao Zhi Tang Penglai Branch was established on April 1, 2005 and the person in charge is Gong Peizhou. 2. A copy of the "Graphic Design Contract", intended to prove that on April 5, 2005, Bao Zhi Tang Penglai Branch commissioned Sanhe Company to design and produce the accused infringing packaging decoration, which was used by Bao Zhi Tang Penglai Branch for the external packaging decoration of the "Baofuling" product. 3. Three copies of the "Work Registration Certificate" from Bao Zhi Tang Penglai Branch, intended to prove that Bao Zhi Tang Penglai Branch applied for copyright registration for the accused infringing packaging decoration, with the registration certificate indicating the completion date of the work as April 5, 2005 and the first publication date as April 8, 2005. 4. Five copies of the "Work Registration Certificate" from Baofuling Company, intended to prove that Baofuling Company applied for copyright registration for its packaging decoration and the "Baofuling" trademark. 5. The "Notarization" and "Costume Patterns" cover with 6 pages is intended to prove that the patterns and designs of the involved packaging have been widely circulated on the internet and in publications around 2010. The creation and use time of the accused infringing patterns by Baofuling Company is much earlier than this date and they were created independently by Baofuling Company, not solely by Baoshutang Company, which also does not enjoy prior rights. Evidence 1-5 is intended to jointly prove that Baofuling Company used the works of Bao Zhi Tang Penglai Branch for the decoration of "Baofuling" products, which does not constitute unfair competition. 6. Trademark registration certificate No. 18911622 and design patent certificate with application number 201730171812.7 are intended to prove that Baofuling Company lawfully enjoys the exclusive rights to the "宝肤灵bao fu ling" trademark and design patent rights and has the right to use the trademark and design. 7. The "Application for Support from Merchants on CCTV Mall" and "Receipt" are intended to prove that on August 22, 2013, Bao Zhi Tang Penglai Branch, in order to promote the involved products, handled the service to settle in CCTV Mall through Jinan Honghang Information Technology Co., Ltd. and paid an application fee of RMB150,000. 8. A copy of the "Outdoor Advertising Contract," intended to prove that on July 16, 2016, Baofuling Company leased two sides of an "Advertising Billboard" from Yantai Development Zone Modern Advertising Co., Ltd. to enhance the brand awareness of the involved product, with a lease term of 5 years at RMB50,000 per year. 9. A copy of the "Contract" and a copy of the "Receipt," intended to prove that on November 29, 2019, Baofuling Company entrusted Yantai Yilin Cultural Media Co., Ltd. to publish promotional content for the involved product at Yantai Penglai International Airport, with a cost of RMB60,000. 10. A copy of the "IPTV Advertising Cooperation Agreement," intended to prove that on November 18, 2023, Baofuling Company entrusted Sichuan Xibu Haohan Information Technology Co., Ltd. to promote the involved product and paid an advertising fee of RMB28,000. 11. "Airport Advertising Release Contract" and one printed advertisement photo, intended to prove that on January 16, 2025, Baofuling Company entrusted Yantai Runse Advertising Media Co., Ltd. to place advertisements for the involved products at Yantai PenglaiInternational Airport. 12. Shandong Economic Research and 2017 22nd China Beauty Expo Shandong Brand Pavilion and other publications containing advertisements, totaling 10 pages, intended to prove that Baofuling Company placed a large number of advertisements in journals such as Shandong Economic Research and 2017 22nd China Beauty Expo Shandong Brand Pavilion to promote the involved products. Evidence 7-12 are intended to jointly prove that both Baofuling Company and Bao Zhi Tang Penglai Branch have conducted extensive advertising for the accused infringing products and invested a large amount in advertising expenses and the increase in product sales is not derived from the packaging decoration claimed by Baoshutang Company. Baoshutang Company argues that: the above evidences were not submitted within the statutory time limit and does not constitute new evidence. There is no objection to the authenticity of Evidence 1, but there are objections regarding its purpose and relevance. There are objections to the authenticity, legality, relevance and purpose of Evidence 2; the contract was signed on April 5, 2005 and the signing and sealing entity is named "Penglai Sanhe Network Technology Co., Ltd.” (hereinafter referred to as “Sanhe Company”), but upon inquiry, it is found that at that time, the name of Sanhe Company was “Penglai Sanhe Technology Advertising Co., Ltd.”, thus this evidence is a forged evidence. There is no objection to the authenticity of Evidence 3 and 4, but there are objections regarding their relevance and proving purpose; the registration dates of the works in the aforementioned evidence are all later than the completion date of the decoration design involved in the case by Baoshutang Company and cannot prove that Baofuling Company has prior rights. There are objections to the authenticity, relevance and proving purpose of Evidence 5; the notarization certificate in this evidence has questionable seals and the printed material in this evidence is the second edition printed in February 2018, which is later than the completion date of the packaging decoration design in question by Baoshutang Company. The packaging decoration design's influence does not require all decorative elements to achieve high originality; as long as the overall decoration has a certain influence and can identify the source of the products, it should be protected and the patterns displayed in this evidence do not match the patterns on the product packaging of Baoshutang Company involved in the case. There is no objection to the authenticity of Evidence 6, but there are objections regarding its relevance and proving purpose; this trademark was maliciously registered by Baofuling Company and is irrelevant to this Case. The design patent has expired, which does not negate its constituting unfair competition. There are objections to the authenticity, relevance and proving purpose of Evidence 7; this evidence does not reflect any product packaging or decoration, making it impossible to confirm its relation to the packaging decoration of the alleged infringing products, nor can it prove the actual performance situation. There are objections to the authenticity, relevance and proving purpose of Evidence 8 and 9; the contents of the contracts cannot be confirmed to be related to the packaging decoration of the alleged infringing products, nor can the performance of the contracts be confirmed. There are objections to the authenticity, relevance and proving purpose of Evidence 10; the contents of this contract are unrelated to the alleged infringing products. There are objections to the authenticity, relevance and proving purpose of Evidences 11 and 12; the relevant photos depict products with blue packaging, not the white packaging of the alleged infringing products in this Case. Yasigeli Packaging Factory and Tengfei Company did not appear in court as summoned by this Court, which is deemed as a voluntary waiver of relevant litigation rights and does not affect this Court's determination of the aforementioned evidence. This Court believes that Evidences 1-5 belong to a group of Evidences, among which Evidence 1 is the business registration information of Bao Zhi Tang Penglai Branch and this Court confirms its authenticity. The probative effect will be evaluated in conjunction with Evidences 2-5; Evidence 2 is a contract signed on April 5, 2005, between Bao Zhi Tang Penglai Branch and Sanhe Company. However, according to the query information submitted by Baoshutang Company, the name of Sanhe Company shown on the contract is not the enterprise name of that company at the time and therefore, the formation date of the contract cannot be confirmed. This Court does not accept Evidence 2; the registration dates of works in Evidences 3 and 4 are both later than the earliest usage date of the packaging decoration of the disputed products by Baoshutang Company in 2012. Although the work registration certificate states that the publication date is April 8, 2005, Baofuling Company has not submitted relevant evidence to support this and cannot prove that Bao Zhi Tang Penglai Branch or Baoshutang Company has prior rights to the packaging decoration of the accused infringing products. Therefore, this Court does not accept Evidences 3 and 4. Evidence 5 pertains to a pattern design, while Baoshutang Company's claim for protection pertains to the overall decoration of the packaging of the disputed products, rather than individual components. Thus, this evidence has no direct relevance to the case and this Court does not accept it. In summary, Evidences 1-5 cannot achieve the proof objectives claimed by Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin and this Court does not accept any of it. The registered trademark involved in Evidence 6 is unrelated to the dispute in this Case and the application and authorization dates of the related design patent are both later than the earliest usage date of the packaging decoration of Baoshutang Company in 2012, failing to prove that Baofuling Company has prior rights and this Court does not accept it. Evidences 7-10 do not show specific product information and cannot prove any relation to the accused infringing products and this Court does not accept any of it. In Evidences 11 and 12, the advertised products are all the blue models involved in the case and not the white models being accused of infringement, therefore this evidence is irrelevant to the dispute in this Case and will not be accepted by this Court.

Baoshutang Company submitted the following evidences: 1. Timestamp certificate and the email correspondence regarding the relevant packaging design draft, intended to prove that Baoshutang Company is the prior rights holder of the packaging decoration of the involved products. 2. Invoice for attorney fees, intended to prove that Baoshutang Company incurred appellate costs of RMB35,000 to stop the infringement, which should be borne by Bafuling Company, Gong Peizhou, Sun Xin and Gong Jucong. 3. Screenshot of Sanhe Company's business registration information, intended to prove that Evidence 2 of Bafuling Company in the appellate case is forged. 4. Criminal case filing notification and report receipt, intended to prove that Bafuling Company has a consistent malicious intent of infringement and illegal activities. Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin jointly testified that there is no dispute regarding the authenticity of Evidence 1, but there are disputes regarding its content; neither the sender nor the recipient of the email is Baoshutang Company and the sending time is June 27, 2011, while Bao Zhi Tang Penglai Branch had entrusted Sanhe Company to design the infringing product packaging as early as April 5, 2005 and enjoyed prior rights. There is no dispute regarding the authenticity of Evidence 2, but there are disputes regarding its content, relevance and proving purpose; it does not fall within the scope of reasonable statutory expenses and no civil litigation entrustment agency contract, bank transfer voucher, or law firm receipt has been submitted, which cannot prove that the payment has actually been made. There is no dispute regarding the authenticity of Evidence 3, but there is a dispute regarding its proving purpose; this evidence can only prove facts such as the name change of Sanhe Company and cannot prove that the "Graphic Design Contract" submitted by Baofuling Company is forged. There is no dispute regarding the authenticity of Evidence 4, but this evidence is merely a procedural legal document and not a substantive conclusion and it is irrelevant to this Case. Yasigeli Packaging Factory and Tengfei Company did not appear in court as summoned by this Court, which is deemed as a voluntary waiver of relevant litigation rights and does not affect this Court's determination of the aforementioned evidence. This Court believes that the authenticity of Evidence 1 and 3 should be confirmed and its probative value will be comprehensively assessed in conjunction with other facts of the case. Evidence 2 is an invoice and there is no supporting evidence such as an agency contract or payment vouchers; therefore, this Court does not accept it. Evidence 4 is not directly related to the dispute in this Case and this Court does not accept it.

This Court confirms the facts determined by the Court of First Instance.

This Court believes that the focal issues in the second-instance dispute are: (1) whether the actions of Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin constitute unfair competition; (2) if they constitute unfair competition, whether the compensation amount determined by the Court of First Instance is appropriate.

(1) Regarding whether the actions of Baofuling Company, Gong Peizhou, Gong Jucai and Sun Xin constitute unfair competition

First, concerning whether Baofuling Company's actions constitute unfair competition. In this Case, Baofuling Company, Gong Peizhou, Gong Jucai and Sun Xin claim that the infringing products in question use packaging and decoration that are rights of Bao Zhi Tang Penglai Branch and that the white packaging of the alleged "Compound Camphor Cream" product from Baoshutang Company lacks influence; furthermore, there is no competitive relationship between Baofuling Company and Baoshutang Company and the white packaging used by Baofuling Company's infringing products does not constitute unfair competition. In this regard, our court believes that Item 1 of Article 6 of the Anti-Unfair Competition Law of the People's Republic of China (2019 Amendment) stipulates that operators shall not unauthorizedly use the same or similar labels as those of others that have certain influence in product names, packaging, or decoration, misleading others into thinking they are products of others or that there is a specific connection with others. Article 4 of the Interpretation of Supreme People's Court of the People’s Republic of China on Several Issues Concerning the Application of the Anti-Unfair Competition Law of the People's Republic of China stipulates that marks with a certain market reputation and significant characteristics distinguishing the sources of products may be recognized by the people's courts as “marks with a certain influence” as stipulated in Article 6 of the Anti-Unfair Competition Law. When the People's Court determines whether the labels stipulated in Article 6 of the Anti-Unfair Competition Law have a certain market reputation, it should comprehensively consider factors such as the degree of awareness among the relevant public within China, the time, area, amount, and object of product sales, the duration, extent, and geographical scope of promotion, and the protection status of the labels.; Article 12 provides that the People's Court may refer to the judgment principles and methods for determining whether trademarks are identical or similar when recognizing markings that are identical or similar to the "marks with certain influence" specified in Article 6 of the Anti-Unfair Competition Law. In this Case, Baoshutang Company claims that the packaging decoration of its “Compound Camphor Cream” product in white consists of: a square box with a white background color, with a golden heart-shaped pattern on the right side of the front; the product name arranged in black horizontal font in the middle of the front, with relatively large font size; a golden "" icon in the upper left corner; and the company name arranged in blue horizontal font at the bottom. This packaging decoration has certain originality in terms of color, pattern, text selection, arrangement, combination and layout. According to the facts established in the first instance, Baoshutang Company has been using this white packaging decoration on its “Compound Camphor Cream” product since 2012 and has published advertisements for the “Compound Camphor Cream” product through mass media and medical and pharmaceutical professional media and has participated in product exhibitions multiple times. At the same time, according to the facts established in Criminal Judgment No. (2024)L.0614X.C.295, Baofuling Company produced and sold counterfeit products of Baoshutang Company, one of which used an outer packaging decoration that was substantially identical to the white packaging decoration of Baoshutang Company’s “Compound Camphor Cream” product involved in the case. In light of the above facts, this Court believes that the white packaging decoration used by Baoshutang Company for the “Compound Camphor Cream” product has become well-known to the relevant public through Baoshutang Company's actual use and promotion, possessing significant features to distinguish its product source and Baofuling Company is also clearly aware of the white packaging decoration used by Baoshutang Company for the “Compound Camphor Cream” product involved in the case. Therefore, the Court of First Instance found that the white packaging decoration used by Baoshutang Company for the "Compound Camphor Cream" product constituted a packaging decoration with a certain influence and there were no improprieties. Both the "Compound Camphor Cream" product from Baoshutang Company and the "Baofuling Antibacterial Cream" product from Baofuling Company have antibacterial, anti-itch and disinfectant effects and their sales departments and consumer targets are basically the same; the two are similar products. Comparing the packaging designs of the two products, both packaging boxes are square with a white background color and the right half of the front features an overall heart-shaped golden pattern. The middle of the front has a larger black product name and the lower part contains the company name in blue font. The packaging designs are basically consistent in terms of text, patterns, colors and other elements of selection, arrangement and layout and they create a similar overall visual effect, which is likely to cause the relevant public to mistakenly believe that the accused infringing product is specifically linked to Baoshutang Company. Although Baofuling Company claims it has prior rights to the accused infringing packaging design, the name of Sanhe Company specified in the "Graphic Design Contract" signed between Bao Zhi Tang Penglai Branch and Sanhe Company in 2005 does not match the name of that company at the time and Baofuling Company has not submitted effective evidence to prove that Bao Zhi Tang Penglai Branch or Baofuling Company used the accused infringing packaging decoration prior to the use of the relevant product packaging decoration by Baoshutang Company in 2012. The registration certificate they submitted shows a registration date later than 2012, which also cannot prove that Baofuling Company has prior rights to the accused infringing packaging decoration. Therefore, their claims lack factual basis and this Court does not support them. The claims made by Baofuling Company and others regarding the lack of competitive relationship with Baoshutang Company and that it does not constitute unfair competition, are also devoid of factual basis, which this Court does not support. In summary, the Court of First Instance's determination that Baofuling Company's accused conduct constitutes unfair competition is not improper.

Secondly, regarding whether Gong Peizhou, Gong Jucong and Sun Xin constitute joint infringement with Baofuling Company. This Court holds that 1. From the perspective of identity relations, Gong Peizhou and Sun Xin are husband and wife and Gong Jucong is the son of Gong Peizhou; during the period in which the accused infringing actions occurred, Gong Peizhou and Sun Xin were shareholders of Baofuling Company, serving as the legal representatives and supervisors of the company, respectively, while Gong Jucong and Sun Xin were shareholders of Beijing Baofuling Company, also serving as the legal representatives and supervisors, respectively; the accused infringing products were simultaneously labeled with the company names of Beijing Baofuling Company and Baofuling Company. The aforementioned facts indicate that Gong Peizhou, Gong Jucong and Sun Xin are family members and that Baofuling Company and Beijing Baofuling Company are under the substantial control of Gong Peizhou, Gong Jucong and Sun Xin, reflecting a common will and interest among the three and the companies they control. 2. From the perspective of subjective intent, Gong Peizhou and Sun Xin were responsible for Baoshutang Company as agents and should have been aware of the registered trademark "BAO FU LING" under Registration No. 3511900 of Baoshutang Company. However, after the two registered and established Baofuling Company, they applied for the registration of the trademark "宝肤灵 Bao Fu Ling" under Registration No. 23982825 in the name of that company. This trademark was later declared invalid due to its similarity with Baoshutang's trademark under Registration No. 3511900; Baofuling Company, Gong Peizhou and Gong Jucong had produced and sold counterfeit products bearing the trademark in question from Baoshutang, one of which had packaging that was nearly identical to the white packaging of Baoshutang's "Compound Camphor Cream" product. The above facts indicate that Gong Peizhou, Gong Jucong, Sun Xin and Baofuling Company were all fully aware of the recognition of the white packaging of Baoshutang's "Compound Camphor Cream" product, yet they still used similar packaging decoration to produce and sell the infringing products, demonstrating a clear intent to infringe. 3. From the perspective of behavioral connection, Gong Peizhou, Gong Jucong and Sun Xin implemented the infringing act by controlling Baofuling Company and all three played significant roles in the infringement of this Case. In summary, the Court of First Instance's determination that Gong Peizhou, Gong Jucong, Sun Xin and Baofuling Company constituted joint infringement is not improper. The claims by Gong Peizhou, Gong Jucong, Sun Xin and others that their actions were performed in the course of their duties and did not constitute joint infringement lack factual basis and will not be supported by this Court.

(2) Regarding the appropriateness of the compensation amount determined by the Court of First Instance

Paragraph 3 of Article 17 of the Anti-Unfair Competition Law of the People's Republic of China (2019 Amendment) stipulates that the compensation amount for operators harmed by unfair competition behavior shall be determined according to the actual losses suffered due to the infringement; if the actual losses are difficult to calculate, it shall be determined according to the benefits obtained by the infringer due to the infringement. The compensation amount shall also include the reasonable expenses incurred by the operator to stop the infringement. If the operator violates the provisions of Article 6 or Article 9 of this Law and the actual losses suffered by the rights holder due to the infringement, as well as the benefits obtained by the infringer from the infringement, are difficult to determine, the people's court shall, based on the circumstances of the infringement, award the rights holder compensation of up to RMB5 million. In this Case, neither party submitted evidence proving the actual losses suffered by Baoshutang Company due to the infringement or the benefits obtained by Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin from the infringement. Considering the influence of the packaging decoration of the products involved in this Case from Baoshutang Company, the nature, circumstances and scale of the infringement by Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin, as well as the reasonable expenses incurred by Baoshutang Company to stop the infringement, the Court of First Instance lawfully determined that Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin shall jointly compensate Baoshutang Company for economic losses of RMB10,000, which is not improper.

In addition, Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin also claim that the litigation costs determined by the Court of First Instance are improperly allocated. In this regard, this Court holds that, according to Article 29 of the Measures on Payment of Litigation Costs, the losing party shall bear the litigation costs, except for those voluntarily undertaken by the winning party. In cases of partial victory and partial loss, the People's Court shall determine the amount of litigation costs each party shall bear based on the specific circumstances of the case. This Case involves trademark infringement and unfair competition disputes. The trial court found that the actions of Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin infringed upon the trademark rights of Baoshutang Company and constituted unfair competition and they should bear civil liability for ceasing the infringement and compensating for losses. Therefore, Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin are the losing parties and should bear most of the litigation costs. The trial court determined the amount of litigation costs to be borne by Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin based on the specific circumstances of this Case, which is not improper.

In summary, the appeal requests of Baofuling Company, Gong Peizhou, Gong Jucong and Sun Xin are unfounded and should be dismissed; the trial court's judgment is clear in its facts and correct in its application of law and should be upheld. According to the provisions of Item 1 of Paragraph 1 of Article 177 of the Civil Procedure Law of the People's Republic of China, the judgment is as follows:

The appeal is dismissed and the original judgment is upheld.

The second instance Case Acceptance Fee of RMB50 shall be borne by Yantai Baofuling Biotechnology Co., Ltd., Gong Peizhou, Gong Jucong and Sun Xin.

This judgment is a final judgment.

		Presiding Judge	Liu Weimin
		Judge	Zhou Miao
		Judge	Peng Zhen
This document is consistent with the original.
		March 27, 2026
		Judge Assistant	Zhang Qiong
		Clerk	Song Conghui

Original verdict download:

https://www.baofuling.com/Uploads/Download/TranslationNotarization-SecondTrial.pdf