Yili SATINE (top) and Mengniu Selected Meadow (bottom) packaging (Source: JD.com)
China's Supreme People's Court has rejected a retrial application from China Mengniu Dairy Company Ltd, upholding a lower court's ruling that the packaging of its "Selected Meadow" milk constituted unfair competition. The decision brings a definitive end to the IP dispute between two of the country's largest dairy companies and establishes a legal standard protecting the "overall visual effect" of product packaging.
In a June 2026 ruling identified as (2026) Zui Gao Fa Min Shen No. 1294, the top court ordered Mengniu to immediately cease infringement and pay Inner Mongolia Yili Industrial Group Co., Ltd. 5 million yuan in damages and legal costs, affirming a Jiangsu Provincial Higher People's Court decision.
The dispute centered on the packaging that Yili introduced for its "SATINE" pure milk in 2020, featuring a creamy white background with dark green accents and artistic grassland motifs. Yili argued that since launching the brand in 2006, and particularly after the packaging update, it had achieved national recognition through extensive advertising and promotion, including hiring renowned singer Zhang Jie as brand ambassador. Mengniu countered that its "Selected Meadow" brand had existed since 2014, and the accused product entered the market in December 2023, promoted by famous actor Xiao Zhan.
All three court levels adopted a holistic test for infringement. The Jiangsu high court noted in its 2025 judgment that the two packages were similar in the color, style, and placement of logos; font, shade, and positioning of text; and the overall artwork featuring dairy cows and pastures. The overall visual effect was found to be similar, likely causing consumer confusion. The court rejected Mengniu's defense that its packaging used common dairy industry elements—cows, pastures, greenery—and therefore lacked distinctiveness.
In its ruling, the Supreme People's Court provided final clarity on this issue. The court held that while such elements are common in dairy packaging, their combination could still serve to identify the source of goods, and their distinctiveness should not be denied merely because they were commonly used. The court also affirmed that Yili's packaging had acquired "certain influence" through extensive sales and promotion before Mengniu's accused product launch in December 2023.
Separately, Mengniu argued that some individual elements of its packaging were derived from its own prior design patents. The top court rejected this defense, stating that the law protects the "pattern, arrangement, and overall style" of a trade dress, and local elements' sources could not negate a finding of overall similarity.
The ruling has significant implications for China's consumer goods industry. Legal practitioners say the decision establishes that the overall visual similarity in packaging is more decisive than differences in individual elements. Companies designing new products must now conduct careful risk assessments against the overall trade dress of established brands.
