The NTD team recently secured favorable judgments in two trademark infringement lawsuits on behalf of a famous outdoor-sports brand. Both cases centered on the contentious legal issue of how to determine infringement when counterfeit goods bearing a registered trademark are offered for rental. These judgments provide important practical guidance for judicial determination and legal application concerning trademark infringement arising from rental conduct.
In both cases, the defendants were ski-equipment rental shops. They procured large quantities of ski boards bearing counterfeit reproductions of the client’s trademark from unknown sources, and offered them for rental to consumers. By leveraging the reputation and goodwill of the client’s trademark, the infringers attracted consumers and generated illicit profits through the continuous commercial rental of the counterfeit goods. The counterfeit ski boards differed significantly in quality and performance from the client’s products. Once put into the rental market, they not only unfairly seized the client’s market share but also generated negative consumer feedback due to product defects, harming legitimate rights of consumers. To stop the infringement, restore market order, and safeguard its trademark rights, the client entrusted our firm with a comprehensive enforcement strategy, pursuing both administrative complaints and civil litigation.
Legislatively, Article 57 of China’s Trademark Law does not explicitly enumerate the commercial rental of trademark‑infringing goods as a statutory act of infringement. This leaves an absence of direct statutory basis for the characterization of such conduct.
In administrative enforcement practice, Article 12 of the CNIPA’s Measures for Calculating the Illegal Turnover in Trademark Infringement Cases explicitly provides that when goods are rented out in infringement of a registered trademark, the illegal turnover shall be calculated based on the rental income—essentially recognizing the infringing nature and punishability of renting trademark-infringing goods. In 2024, the Putuo District Market Supervision Administration (Intellectual Property Office) of Shanghai investigated a case involving the rental of vehicles bearing renowned marks such as “Rolls‑Royce” for wedding services. Based on an official opinion from the CNIPA, the authority held that the rental of counterfeit goods constituted “other acts of infringement of the exclusive right” under Article 57(7) of the Trademark Law. Since then, administrative enforcement authorities have adopted consistent criteria for the characterization of such rental‑related trademark infringement behavior.
Judicially, Chinese courts have yet to reach a uniform adjudicative standard concerning trademark infringement arising from the commercial rental of counterfeit goods. Some courts characterize such conduct as authorized use of another’s trademark as prohibited under Article 57(1). Others have found infringement without specifying the exact provision. Drawing an analogy from Article 108 of the Beijing High People’s Court’s Guidelines for Determining Patent Infringement (2017), which states that “renting out a product that infringes a patent right shall be deemed as selling the product”, the commercial rental of counterfeit goods can also be expansively interpreted as a sale of the goods, which may support application of Article 57(3) of the Trademark Law.
Given inconsistent legal application across administrative and judicial authorities in such cases, our team established infringement findings in the two cases by accurately defining the nature of rental‑related trademark infringement and strictly adhering to the constitutive elements of trademark infringement. We also compiled and summarized similar administrative and judicial precedents to strengthen the legal basis for the court’s reference. In terms of the nature of the conduct, we argued that renting trademark-infringing goods is a commercial use of the goods for profit through a time‑limited, compensated transfer of the right to use them. Objectively, the rental operators relied on the reputation and goodwill of the trademark to attract customers, using the infringing goods as a vehicle to provide rental services for profit. Consumers rely on the trademark to identify the source of the goods and enter into rental transactions based on their trust in the mark’s reputation. In this regard, such conduct objectively performs the trademark’s source‑identifying function in commercial activities, satisfying the essential requirement of “trademark use” for establishing trademark infringement. In terms of subjective fault, the operators were well aware that the goods infringed the registered trademark but still used them for commercial profit, demonstrating obvious intentional fault. As to the consequences, the rental of the infringing goods diverted sales and rental opportunities from the authentic products, seizing business profits that rightfully belong to the trademark owner. Moreover, the inferior quality of the counterfeit goods inevitably harms the reputation and market value of the trademark. Accordingly, the commercial rental of trademark-infringing goods falls within the scope of Article 57(1), (2), (3), or (7) of the Trademark Law, and shall be deemed trademark infringement.
Ultimately, the Market Supervision Administration found the opposing parties liable for trademark infringement, seized the counterfeit products and illegal gains, and imposed fines. The court also adopted our arguments, holding that the commercial rental of the trademark-infringing goods constituted trademark infringement, and imposing civil liability on the infringers. Notably, the court applied punitive damages in one of the cases, effectively safeguarding our client’s legitimate rights and interests.
These decisions move past the long-held view that trademark law targets only manufacturing and sales-related misconduct. They bring production, sales, and rental—as well as other commercial activities—within the broader concept of “trademark use”. They clarify that the commercial rental of goods bearing infringing trademarks constitutes trademark use, and amounts to trademark infringement, with punitive damages applicable where statutory requirements are met. These cases provide valuable judicial guidance for brand owners combating similar trademark-infringement conducts and also offer instructive reference for the application of law in similar cases.
These cases were handled by attorneys Jenny HUANG and Mingyue XU of NTD IP Attorneys.
Jenny HUANG
Partner
Attorney-at-Law
Trademark Attorney
Jenny is specialized in legal services related to intellectual property, unfair competition, data protection, corporate compliance, and other fields. Since joining NTD in 2014, Jenny has represented numerous domestic and international clients in handling brand protection strategies and full-process protection of brand operations, including trademark administrative litigation, trademark civil litigation, administrative enforcement, trademark transfer and negotiation, domain name disputes, customs protection, commercial franchising, and commercial arbitration. The total damages awarded in civil litigation and arbitration cases handled by Jenny exceed 90 million RMB. Dozens of the cases handled by Jenny have been selected as typical/excellent cases by Beijing Higher People's Court, China Trademark Association, Beijing Trademark Association, and Beijing Xicheng District Lawyer Association. Additionally, Jenny has successfully overturned multiple 2nd instance civil judgments and secured favorable judgments for the clients during the retrial procedures. Her diligent and professional spirit and rich experience in litigation and arbitration have been recognized by many clients.
Mingyue XU
Attorney-at-Law
Trademark Attorney
Ms. Xu specializes in trademark law, anti-unfair competition law and copyright law. She has extensive practical experience in civil litigation, administrative litigation, administrative law enforcement, customs intellectual property protection, domain name dispute resolution and commercial contract dispute resolution. Having represented and participated in numerous major, difficult and complex intellectual property cases, she excels at systematically analyzing core case points and delivering effective solutions.
Ms. Xu has long provided legal services for well-known multinational corporations across China, the United States, Europe, and Japan in industries including apparel, bags and suitcases, food and beverage, technology, chemicals, machinery and equipment, education and publishing.
