Taihe Case | In the second-instance appeal of an AI‑e‑commerce trademark infringement case, attorneys Tang Xuebin and Qian Nanhui of Taihe (Taizhou) secured a reversal of the lower court’s ruling, safeguarding their client’s brand rights.

Release Date:

2026-07-09

Recently, the case of Jiangsu Feng’ao Biotechnology Co., Ltd. v. a certain business establishment and its operator in Panlong District—represented by Attorney Tang Xuebin, Executive Director of Taihe (Taizhou), and Attorney Qian Nanhui—has concluded with a favorable final judgment. The Intermediate People’s Court of Kunming City reversed the first-instance ruling and ordered the opposing party to bear liability for trademark infringement. This case centers on a pressing issue in today’s e‑commerce sector: trademark‑infringement disputes arising from platform‑generated, AI‑automated promotional videos. After an initial defeat at the first instance and a determined second‑instance effort, the case ultimately turned in favor of the client, effectively safeguarding the client’s registered trademark rights and earning high praise.

Case Review

The client, Jiangsu Feng’ao Biotechnology Co., Ltd., is a well‑known domestic manufacturer of propolis products and legally owns the registered trademark “Feng’ao.” The trademark’s approved scope of use covers propolis dietary supplements and other related goods. After years of operation, the brand has built substantial market recognition and a strong reputation, and it has been designated as a highly reputable trademark in Jiangsu Province. Subsequently, the client discovered that an e‑commerce operator, while selling propolis products of other brands on a certain online platform, had its store page automatically embedded with the client’s brand‑promotion video. The video prominently featured the “Feng’ao” trademark, thereby easily misleading consumers. In response, the client filed a trademark‑infringement lawsuit. At first instance, the court held that the video was an automated AI‑generated recommendation by the platform, that the merchant did not actively use the trademark itself, and that there was no intent to infringe; moreover, the merchant had exercised due diligence. Accordingly, the court dismissed the client’s claim. Faced with this unfavorable outcome, Attorneys Tang Xuebin and Qian Nanhui meticulously dissected the case, pinpointed its core issues, and vigorously initiated the second‑instance appeal proceedings.

Core Disputes and Agency Responses

The two principal points of contention in this case are also hotly debated issues in the intellectual property field today: first, whether e‑commerce merchants should bear liability for trademark infringement when platform‑generated AI automatically recommends content that they are passively required to display; and second, what level of due diligence obligations do e‑commerce merchants owe with respect to the promotional content on their stores. During the trial, the two attorneys got straight to the heart of the matter: by independently activating the platform’s intelligent display feature, e‑commerce merchants also possess the authority to disable or remove such content; failure to promptly rectify non‑compliant material constitutes a failure to exercise reasonable care, precluding any claim of exemption. All outward‑facing promotional materials posted in an e‑commerce store are subject to a statutory duty of review on the part of the operator. Moreover, an e‑commerce merchant’s mere receipt of an “infringement‑free” response from the platform’s customer service cannot substitute for compliance with legal requirements. If an e‑commerce merchant discovers infringing content yet deliberately ignores it, such conduct amounts to negligence, and the merchant must accordingly bear liability for trademark infringement. In addition, the attorneys highlighted that key electronic evidence presented by the opposing party suffered from evidentiary defects; coupled with a comprehensive chain of evidence, this demonstrated the factual existence of infringement. Ultimately, the appellate court fully accepted our core arguments, holding that the e‑commerce merchant had indeed committed trademark infringement and issuing a revised judgment accordingly.

Significance of the case

The outcome of this case’s second-instance judgment holds significant reference value for determining trademark infringement in the current context of e‑commerce intelligence: it clarifies the lifelong duty of e‑commerce operators to review the promotional content of their stores, delineates the reasonable scope of the duty of care owed by small and micro e‑commerce merchants with respect to intellectual property, and provides clear judicial guidance for trademark enforcement in the digital commerce era.

Conclusion

Technological neutrality does not equate to exemption from liability for infringement. E‑commerce AI algorithms and intelligent recommendation systems represent industry trends, but platform‑related technical vulnerabilities and algorithmic flaws should not be shifted onto trademark owners, nor may they serve as a shield for infringing conduct. While the judiciary embraces the development of new business models, it must steadfastly uphold the fundamental principle of intellectual property protection.

Lawyer Tang Xuebin

Executive Director of Taihe (Taizhou) Law Firm

Executive Director and Senior Partner, Taihe (Taizhou) Law Firm

Member of the Chinese Peasants and Workers Democratic Party and a member of the CPPCC Committee of Gaogang District, Taizhou City;

Legislative Consultation Advisor to the Taizhou Municipal Committee of the Chinese People’s Political Consultative Conference;

Member of the Corporate Law Committee of the Jiangsu Provincial Lawyers Association;

Director of the Corporate Law and Corporate Legal Counsel Committee of the Taizhou Lawyers Association;

Member of the Internal Supervision Committee and Deputy Director of the Social and Legal Affairs Committee of the Taizhou Municipal Committee of the China National Democratic Construction Association;

Taizhou City’s “Clean and Close” Business Environment Observer.

Professional Expertise

He is proficient in complex commercial litigation and arbitration, corporate law, and corporate legal advisory services, with extensive practical experience in areas such as corporate legal risk management, investment and M&A matters, disputes over corporate control, various contract disputes, debt recovery, trademark infringement, and anti-unfair competition.

Attorney Qian Nanhui

Taihe (Taizhou) Law Firm

Professional Expertise

He is proficient in civil and commercial litigation and corporate legal advisory services, with extensive practical experience in corporate legal risk management, various contract disputes, corporate debt recovery, trademark infringement, labor disputes, and preventive legal strategies.

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