Zhoushan City Aquatic Product Alliance initiated a civil action against Beijing Shenmaren Food Sales Co. ("Shenmaren"), on the grounds that " Zhoushan Jingxuan Daiyu" produced by Shenmaren with the indication of "ZHOUSHANDAIYU" prominently printed on the package would likely mislead the public and infringe upon the exclusive right of Zhoushan City Aquatic Product Alliance to use the mark. Zhoushan City Aquatic Product Alliance requested Shenmaren to cease the infringement and compensate for their losses.
Shenmaren defended that their products were made from Daiyu ("hairtail" in Chinese pinyin) in Zhoushan district, thus they were legitimate to use "ZHOUSHANDAIYU" and such use did not constitute infringement to the trademark right of Zhoushan Aquatic Product Alliance. Moreover, Shenmaren claimed that they also used their own mark "Xiaojiaolong" on the products, and thus their use of "ZHOUSHANDAIYU" would not cause confusion to the public. Upon hearing, Beijing First Municipal Intermediate People's Court held that:
Whether Shenmaren infringes upon the exclusive right of the said certification mark should not depend on the likelihood of misleading the public on the origin of products but the likelihood of causing misrepresentation of a given quality of the products from that origin. Zhoushan Aquatic Product Alliance's claim that Shenmaren's prominent printing of "ZHOUSHANDAIYU" on the package would be likely to cause confusion to the public and infringe the exclusive right of using the certification trademark, was made based on a misunderstanding of law, and Zhoushan Aquatic Product Alliance virtually mixed up the Certification Marks and Common Trademarks. Whether the mark is prominently used or causes confusion as to the origin are irrelevant to the finds of infringement of Certification Mark. In this case, the mark "ZHOUSHANDAIYU and the device" is a geographical identification of the certification mark, certifying that the products bearing such mark come from Zhoushan territorial waters. Therefore, labeling Daiyu ("hairtail" in Chinese pinyin) originated from Zhoushan territorial waters as "Zhoushan Jingxuan Daiyuduan" is a legitimate way to use a geographical identification and does not infringe upon the exclusive right of Zhoushan Auqatic Product Alliance to use the certification mark.
The Court therefore rejected all claims of Zhoushan Aquatic Product Alliance. Zhoushan Auqatic Product Alliance disagreed with this judgment and appealed to the Beijing High People's Court. According to Article 16 section 2 of the PRC Trademark Law, Article 6 and Article 49 of the Implementing Regulations of the Trademark Law on geographical indication, and Article 18 section 2 of the Administrative Measures Concerning the Registration of Collective Marks and Certification Marks on "legitimate use of geographical indication", Beijing High People's Court held that Zhoushan Aquatic Product Alliance, as the registrant of the said certification mark, should permit natural person, legal person or other organizations to use the certification mark on goods that has met the requirement for use of said geographic indication. Moreover, any natural person, legal person or other organization who does not request authorization to use the certification mark may also duly use the geographic indication on the products it sells if such products met the condition, and Zhoushan Aquatic Product Alliance does not have the right to prohibit such use. However, Zhoushan Aquatic Product Alliance has the right to request the cease of the production and to bring a claim for infringement of certification mark when the goods bearing a geographical indication do not originate in the region indicated. The evidence presented by Shenmaren was insufficient to prove that the goods they sold originated from Zhejiang Zhoushan territorial waters. Under such circumstances, marking "Zhoushan Jingxuan Daiyuduan" on the products was regarded as an illegal use of the certification mark and such use constituted infringement to the exclusive right to use the said certification trademark. Shenmaren should bear the legal responsibilities to cease the infringing activities and to compensate the losses of Zhoushan Aquatic Product Alliance. The Beijing High People's Court therefore supported the claims of Zhoushan Aquatic Product Alliance. This is the first certification mark infringement case, and the judgment has indicative effect on clarifying the criteria in finding infringement of certification mark which differ from those of other trademarks.
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