In a recent court ruling, the Beijing First Intermediate People's Court dismissed a lawsuit filed by Lan and others against Pangu Shih Investment Co. Ltd. for alleged infringement of their "Pangu" trademark rights. The court concluded that the case involved the issue of reverse confusion under trademark law, which refers to the confusion of the source or association between a later trademark and an earlier one, rather than the traditional forward confusion.

Lan registered the "Pangu" trademark in February 2006 and authorized the Pangu Restaurant in Changsha, Hunan, to use it. Meanwhile, Pangu Shih Investment Co. Ltd. was registered and established in 2008 and operates the Pangu 7 Star Hotel in Beijing's Chaoyang District. Lan and others claimed that the Pangu Shih Company's use of the "Pangu" mark on the top of its hotel building and on outdoor LED screens for "Pangu outdoor media" and "Pangu LED investment" infringed on their exclusive right to use the "Pangu" trademark.

The court ruled that although Lan's registration of the "Pangu" trademark preceded that of Pangu Shih Investment Co. Ltd., the latter had established high visibility and influence in the hotel and catering service industry. Consequently, the later trademark's high degree of notoriety would overshadow the earlier one, thereby severing the connection between Lan and the "Pangu" trademark he registered and authorized. The court concluded that this was contrary to the spirit of China's trademark registration and protection, which emphasizes the protection of prior rights.

The court also noted that the "Pangu" mark on the top of the hotel building was not implemented by the defendant and, therefore, did not infringe Lan's trademark rights. Additionally, the use of "Pangu outdoor media" and "Pangu LED investment" did not involve the use of the "Pangu" mark for services such as "restaurant" covered by the No. 3730953 trademark, which was approved for use.

This is the first trademark infringement case in China involving reverse confusion, which refers to the confusion of the source or association between an earlier trademark and a later one. The ruling shows the protection of the legitimate rights and interests of the prior trademark owner and provides a useful reference for future similar cases.