CHINA Trends and Developments Contributed by: Dr James Luo and Angie Guo, Lawjay Partners
This evolving jurisprudence acknowledges that, as commercial activities increasingly migrate to virtual spaces, trademark protection must adapt to safe- guard brand identity and consumer interests across all commercial contexts. Judicial recognition of virtual trademark use Recent judicial decisions have established a clear framework for assessing trademark use in virtual envi- ronments, focusing on two key aspects: commercial exploitation and consumer perception. Courts consid- er whether registered marks are displayed in digitally distributable content and used for direct or indirect profit, user traffic acquisition, platform engagement, or enhancing the perceived value of digital assets. Simultaneously, they examine whether a stable asso- ciation exists between the sign and the known brand in the public’s mind, whether consumers believe there is authorisation, affiliation, or endorsement by the trademark owner, and whether actual or likely confu- sion regarding commercial source is demonstrated. When collectively present, these elements satisfy the statutory threshold for trademark use under Article 48 of China’s Trademark Law . Accordingly, unauthor- ised trademark application in NFTs, virtual stores, or metaverse environments may constitute infringement under Article 57, even in the absence of physical goods. This evolving jurisprudence acknowledges that as commercial activities migrate to digital spaces, trade- mark protection must extend to virtual contexts where brand identity maintains equivalent source-identifying functions as in traditional commerce. Platform liability and contributory infringement China’s regulatory framework imposes specific obli- gations on AI platforms regarding virtual content. Under the Interim Measures for the Management of Generative Artificial Intelligence Services (2023) and the Measures for the Identification of AI-Generated Synthetic Content (2025), platforms bear statutory duties including: • implementing conspicuous identification mecha- nisms for AI-generated content (eg, digital water- marks);
• establishing filtering systems for high-risk key- words and images associated with well-known trademarks; and • maintaining efficient notice-and-takedown proce- dures per Article 42 of the E-Commerce Law. The Guangzhou Internet Court’s 2024 ruling in the Ultraman AI Generation Case established that plat- forms that possess actual or constructive knowledge of ongoing intellectual property infringement and fail to take reasonable preventive measures may be held liable for contributory infringement. Accordingly, platforms that disregard clearly infringing prompts such as “generate LV bag” or fail to imple- ment adequate screening mechanisms to detect trademark similarity in outputs may be deemed to have constructive knowledge and face joint liability. The legal principle remains clear: virtual space does not constitute a legal vacuum. Where trademark use occurs in commercial contexts and serves source- identifying functions, trademark law maintains full applicability. This evolving landscape necessitates that both rights holders and platform operators adapt their compliance strategies to address challenges in the virtual environment, while recognising that funda- mental trademark principles continue to govern digital commerce. AI Shopping Agents: Algorithmic Intermediation and Trademark Protection Definition and impact AI shopping agents are conversational systems that utilise artificial intelligence to enable intelligent prod- uct selection and automated shopping. Operating on a “conversation as search” model, these systems – such as Amazon Alexa, Google Shopping, Taobao’s “Ask,” JD.com’s “Jingxiao,” and Douyin’s “AI Shop- ping Assistant” – leverage natural language process- ing and machine learning to shift consumer behav- iour from “visual recognition” to “semantic matching.” While enhancing precision marketing, this transfor- mation introduces novel legal challenges, particularly regarding whether algorithmic recommendations con- stitute “trademark use.”
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