Reverse Passing Off in China: What Trademark Owners Need to Know

2026-05-29

        Among the typical cases of trademark administrative protection for 2025 recently released by the China National Intellectual Property Administration (CNIPA), the "Mengyouyou" trademark infringement case in Shanghai has drawn particular attention. In this case, a party bought tricycles bearing the "Mengyouyou" brand and, without the trademark owner's permission, replaced the outer packaging with their own mark and sold the products. They were eventually ordered to stop the infringement, had the infringing packaging confiscated, and were fined[i]. What makes this case stand out among so many typical cases is that it involves a relatively rare type of trademark infringement: reverse passing off.

In fact, this is not the first time reverse passing off has been selected as an annual typical case. Last year, among the national typical cases of administrative IP protection for 2024 issued by the CNIPA, the "Qianren'gang" down jacket trademark infringement case was also chosen as one of the top ten trademark cases. In that case, a party purchased down jackets of other brands, removed the original trademarks without permission, replaced them with self-printed "Qian·Ren'gang" hang tags and shopping bags, and then sold the products[ii]. The fact that reverse passing off cases have been selected for two consecutive years fully demonstrates that this atypical form of trademark infringement has attracted significant attention from law enforcement agencies.

So what exactly is reverse passing off? How is it different from the typical counterfeiting we are familiar with? How should trademark owners respond to such infringement? This article will systematically explain this special type of trademark infringement from three dimensions: conceptual analysis, case study, and practical advice.

1. What Is Trademark Reverse Passing Off?

The concept of reverse passing off may sound rather obscure at first. To understand it, we first need to clarify “passing off” (the typical counterfeiting act) that stands in contrast to it.

Typical counterfeiting is what we commonly call "fake goods." Specifically, suppose trademark owner A's mark is protected. Another party B, without A's permission, uses A's trademark on the goods that B produces or sells, thereby passing off B's goods as A's. In this situation, the infringement mainly concerns the mark of the goods' origin.

Reverse passing off exhibits opposite characteristics. Specifically, B first legally purchases genuine goods of A, but then without A's consent, removes or replaces the trademark on the goods, affixes B's own mark to them, and puts the goods back into the market for sale. Here, the infringement focuses on the mark itself rather than the physical goods.

Article 57(5) of the Trademark Law of China clearly states that "changing a registered trademark and put goods bearing the changed trademark on market without consent of the owner of the registered trademark" constitutes an infringement of the exclusive right to use a registered trademark. Thus, the constitutive elements of reverse passing off include three aspects: first, without the consent of the trademark registrant; second, the original trademark is changed or replaced; third, the replaced goods are put back on the market. Such acts not only violate the legitimate rights of the trademark registrant but also harm consumers' right to know, causing consumer confusion or misidentification regarding the source of the goods.

2. Three Classic Types of Reverse Passing Off

In practice, reverse passing off is not limited to the form of "selling after replacing the label." Based on different modes of conduct, it can be summarized into three types.

The first type is selling after replacing the trademark. This is the most typical form. After obtaining genuine goods, the infringing party removes the original trademark, replaces it with their own, and then puts the goods into the market for sale. The aforementioned two annual typical cases both fall into this category.

The second type is selling after covering the original trademark. Unlike the first type, the infringing party does not remove the original trademark but directly covers it with their own before putting the goods into the market. The 2016 "Malata" case is a typical example. In that case, the trademark owner produced and sold "Malata" brand tablet computers. The defendant bought these tablets, covered the original trademarks with its own mark, and sold them through relevant channels. The court found that the defendant's act deprived the plaintiff of the opportunity to display its trademark to the public, caused consumer confusion regarding the source of the goods, hindered the plaintiff's trademark from fulfilling its source identification function and building brand goodwill, and thus constituted trademark infringement[iii].

The third type is selling after removing the original trademark. This is the most subtle form. After obtaining genuine goods, the infringing party removes the original trademark but does not affix a new one, then directly sells the goods. In the 2003 "Yinzhi" case, the court held that even without adding a new mark, the act of removing the original trademark still severed the connection between the trademark owner and consumers, preventing consumers from identifying the source of the goods, and therefore constituted infringement.

3. Why Is Reverse Passing Off Considered Atypical?

Reverse passing off is called an "atypical" trademark infringement because it subverts the public's traditional understanding of trademark infringement. Generally, people believe trademark infringement means selling counterfeit products. However, in reverse passing off, the goods sold by the infringer are completely genuine; the uniqueness lies in the replacement of the trademark on the goods. In other words, the infringer does not imitate the original trademark owner's product; instead, they use the very goods legally produced by the trademark owner.

So why does this act still constitute infringement? The key lies in the core function of a trademark: identifying the source of goods. Consumers identify the producer of a good through its trademark. In reverse passing off, the infringer replaces the original trademark, leading consumers to mistakenly believe the goods originate from the infringer, thereby depriving the trademark owner of the opportunity for brand exposure in the market and intercepting the goodwill the trademark owner has accumulated over time.

We can use a metaphor: the trademark owner is like the person who plants a fruit tree, while the infringer is the one who steals the fruit. The infringer does not cultivate the tree but takes the ripe fruit, affixes their own label, and sells it. The fruit itself still comes from the original tree, but its value and reputation are attributed to the infringer, thereby depriving the tree's owner of the brand recognition and goodwill accumulated through their labor. This is the special characteristic of reverse passing off: it infringes not upon the product itself but upon the goodwill and market opportunities the trademark owner has built through their mark.

4. Perspectives from Judicial Practice

The inclusion of reverse passing off in law may be traced back to the 1994 "Maple Leaf" v. "Crocodile" case[iv], the first reverse passing off dispute in China. At that time, the Trademark Law did not explicitly prohibit reverse passing off, and the court ultimately ruled from the perspective of unfair competition. This case sparked extensive discussion in academia and practice and directly led to the addition of the reverse passing off provision in the 2001 amendment of the Trademark Law.

Since then, judicial practice has gradually enriched. The 2016 "Malata" case established the principle that covering the original trademark also constitutes replacement. The 2024 "Qianren'gang" case and the 2025 "Mengyouyou" case also demonstrate the feasibility and enforcement strength of administrative protection in reverse passing off cases.

Furthermore, judicial practice regarding the core constitutive element of reverse passing off, the act of "putting on the market," is continuously evolving and refining. For example, in the 2014 XCMG Group motor grader case[v], the defendant removed or covered the trademark on the plaintiff's goods and used the goods as exhibits or for promotional display but did not actually put them into the market for sale. The court held that although such acts might affect the trademark owner's brand recognition and market reputation, they did not constitute reverse passing off trademark infringement because they did not enter the circulation link. Instead, they should be considered unfair competition or false advertising. In the 2023 Volvo car movie prop case[vi], the defendant used the involved cars as props for movie filming and obscured the trademarks on the vehicles. The court held that the cars with obscured trademarks were only used to meet the plot requirements, were not put into the market circulation domain, and would not cause consumer confusion regarding the source of the relevant props, so the act did not fall within the scope of reverse passing off regulation. In a 2024 case involving a certain robot[vii], the defendant used the modified, de-branded products of others as tools for providing its own testing services in its external promotions. The court held that the act of "putting on the market" is not limited to sales; such acts of converting the goodwill accumulated by the original trademark owner into assistance for the infringer's own business activities through trademark replacement also constitute reverse passing off.

The evolution above shows that judicial authorities' determination of "putting on the market" has broken through the traditional concept of "sales acts" and extended to "goodwill utilization," thereby effectively combating new types of infringement. At the same time, the boundaries for determining reverse passing off remain clear, adhering to the criteria of whether the source identification function of the trademark is impaired and whether the correspondence between the goods and the trademark is cut.

5. What Should Rights Holders Do?

If rights holders discover that their products have been relabeled, how should they protect their rights?

The first step is to preserve evidence. Through notarized purchases, web page evidence collection, blockchain forensics, and other methods, rights holders should secure evidence of the infringer selling the relabeled products. They should also keep records comparing the original product with the relabeled product.

The second step is to choose a path for rights protection. Reverse passing off cases can be resolved through three avenues. An administrative complaint filed with the Administration for Market Regulation is relatively efficient and suitable for cases where the infringing facts are clear; the "Qianren'gang" case was successfully investigated and dealt with through administrative procedures. Civil litigation in a people's court can claim cessation of infringement and compensation for damages. If the amount involved is large, criminal prosecution by reporting the case to the public security authorities may be considered. Each path has its pros and cons. Rights holders can choose based on the specific circumstances of their case or adopt a combination strategy of administrative action first followed by civil action to improve efficiency.

The third step is to consider the possibility of turning an adversary into an ally. Not all infringers are beyond communication. In a case mediated by the Suining County Court in 2025[viii], the infringer admitted the facts, paid compensation of 600,000 RMB, and ultimately ended up becoming the rights holder's brand agent in Xinjiang. This situation of turning an infringer into a cooperative partner can be a pleasant surprise for rights holders.

For specific methods of evidence preservation and rights protection strategies, please refer to our article "Enforcement Measures for Trademark Owners," which provides practical guidance for actions.

Conclusion

Trademark infringement is far more than just counterfeits or fake goods. Although reverse passing off is not as common as traditional counterfeiting, its harm is equally serious. It uses genuine products as cover to quietly eat away at the trademark owner's brand value and market opportunities. More troublesome is that once a quality problem occurs with a relabeled product, consumers often hold the original trademark owner responsible, and brand reputation suffers without anyone noticing.

In today's increasingly important brand economy, companies must understand this invisible form of infringement and establish a complete brand protection system including channel monitoring, trademark surveillance, and rapid response. Planning is essential to respond calmly when infringement occurs.