In August 2025, the Wuhan Intermediate People's Court ordered two food companies to pay Xiaomi RMB 7.5 million (approximately USD 1.04 million) for selling dairy products under the name "XiaoAi Classmate" — the identical name of Xiaomi's AI voice assistant. The court applied well-known trademark cross-class protection under Article 13 of China's Trademark Law, bridging Class 9 (smart devices) and Class 29 (dairy products). Foreign brand owners with recognition in China should pay attention: this case shows Chinese courts are willing to pierce through formally valid trademark registrations when bad faith is evident, and to award damages exceeding the statutory RMB 5 million cap.

The case went to appeal. Hubei High Court held hearings in March and April 2025 and issued its final judgment on May 22, 2025. The first-instance decision became public through China Judgments Online in June 2026.

Why This Case Matters

Most trademark disputes stay within their Nice classification. A shoe brand sues another shoe brand. A software company goes after a copycat app. This one is different.

Xiaomi's "XiaoAi Classmate" (小爱同学) is the wake word for its smart speakers and the name of its AI assistant, used by 131.7 million monthly active users as of mid-2024. It is registered in Class 9 — software, smartphones, speakers. The defendants, Henan XiaoAi Classmate Biotechnology Co. and its Shanghai subsidiary, registered the same three characters in Class 29 for yogurt, cheese sticks, and milk drinks. Different categories. Different products. Same name.

The defendants did not stop at naming. Their promotional materials offered "buy 60 packs of XiaoAi cheese sticks, get a XiaoAi smart speaker free" and promised resellers "a Xiaomi premium laptop" for hitting annual sales targets. Their Douyin account posted Xiaomi product videos alongside dairy ads, captioned with "smart voice commands everyone can use: XiaoAi Classmate."

The Wuhan court saw through it. The defendants' Class 29 registration, originally filed by an unrelated third party in 2016 and later transferred, had been revoked for non-use by March 2022. A second Class 29 application filed by the defendants themselves in 2020 was invalidated by CNIPA in December 2024. The court found the trademark was never used in good faith. It was a vehicle for free-riding.

What This Means for Foreign Companies

Three takeaways from the Wuhan court's reasoning that apply regardless of whether your brand is Chinese or foreign:

1. A registered trademark in a different class is not a safe harbor. The defendants argued they had a valid Class 29 registration during part of the infringement period. The court rejected this. When actual use shows clear intent to confuse — bundling your product with the brand owner's products, mimicking their marketing — formal registration does not protect you.

This matters for foreign brands facing copycats in China. If a local company registers your brand name in Class 25 (clothing) while you hold Class 9 (electronics), the old advice was "register defensively in all 45 classes." This case suggests a sharper alternative: prove bad faith in how they actually use the mark, and you may not need full-class registration.

2. Courts will look at real-world commercial behavior, not just the trademark register. The Wuhan court's analysis focused heavily on the defendants' sales tactics — the bundled promotions, the Xiaomi-branded rewards for distributors, the social media posts blending smart home products with dairy. None of these appeared in the trademark register. All of them mattered.

3. Damages can exceed the statutory cap when commercial scale is large enough. China's Trademark Law sets a statutory maximum of RMB 5 million for cases where actual losses or infringer profits are hard to prove. The court here found the defendants' self-reported network of 800 dealers, combined with dairy industry profit margins of 25-30%, pushed actual profits well past that ceiling. The full RMB 7.5 million award — including RMB 100,000 in legal costs — was upheld.

What to Do Next

If your brand has meaningful recognition among Chinese consumers, even without a formal well-known trademark determination from CNIPA:

Document your recognition now. Xiaomi presented monthly active user data (131.7 million), media coverage, advertising spend, and an independent market survey. You do not need to wait for litigation. Compile sales figures by province, social media follower counts, media mentions, and any third-party brand ranking reports. This evidence package can be decisive if you need to move quickly.

Monitor beyond your own class. The XiaoAi case involved dairy products — a category no reasonable person would associate with a technology company. Yet the court found the "relevant public" for smart speakers and yogurt overlapped significantly because both are everyday consumer goods. Use trademark watch services that scan across all 45 Nice classes, not just your core categories.

Act against bad-faith behavior, not just bad-faith registrations. The defendants' most damaging evidence was not the trademark application itself. It was the bundled promotions, the social media mimicry, and the Xiaomi-branded distributor incentives. If a competitor is using your brand's reputation as a sales tool — regardless of what their trademark certificate says — document the behavior. It may be more useful in court than a CNIPA invalidation alone.

Leverage the Trademark Law revision. The fifth amendment to China's Trademark Law, currently undergoing its second review in the National People's Congress, will explicitly codify that applications filed without genuine use intent are to be refused (draft Article 18). It also introduces fines of up to RMB 250,000 for bad-faith applications and administrative penalties for misleading use of registered marks. The legal environment is moving in rights holders' favor.

The Commercial Reality

The RMB 7.5 million verdict is a signal, but the real deterrent is something else. The court ordered both defendant companies to change their corporate names — they can no longer call themselves "XiaoAi Classmate" anything. For businesses whose entire brand identity was built on borrowing another company's recognition, that order is existential.

One defendant's second trademark application (No. 48351266) was invalidated by CNIPA in December 2024. The company appealed to Beijing Intellectual Property Court, which rejected the appeal in June 2025. It has now appealed further to Beijing High Court. Criminal prosecution is not currently involved, but the case file shows the plaintiffs reserved the right to pursue additional legal remedies.

For foreign brands, the broader development to watch is the judicial trend toward higher damages. The Supreme People's Court's new judicial interpretation on punitive damages (effective May 1, 2026) explicitly lists "resuming infringement after settlement" as a factor supporting a finding of willfulness, and allows multipliers of up to five times the calculated base. Combined with the cross-class protection doctrine demonstrated in this case, China's trademark enforcement toolkit for well-known brands is becoming considerably sharper.