Where is the line drawn between a similar trademark and a confusingly similar trademark, the latter deemed an infringement? How does the Chinese government assess the "likelihood of confusion"?

In a recent case, a small Chinese firm defended its trademark against disputes from a leading multinational automaker.

Let's take a look at the visuals below. To the left is a trademark owned by Zhejiang Xunda Plastic & Mould Co. Ltd., side by side with the famous Mercedes-Benz emblem.

Xunda, a manufacturer of molds and injection molded auto and motorcycle parts in Taizhou, Zhejiang province, selected the trademark design created by a design firm in 2004, Taizhou Daily reported.

During the public comment period of the trademark registration process in 2006, Mercedes-Benz filed a claim arguing that Xunda's trademark could confuse customers into thinking that they were buying products from Mercedes-Benz.

According to Chinese trademark law, Xunda was ordered to cease the use of the trademark while the case was under review. So Xunda refrained from using the logo between 2006 and 2009, until the State Administration for Industry & Commerce recently ruled in favor of Xunda in a final judgment.

"We never thought about mimicking an existing famous brand," Xunda Chairman Lin Huazhi told Taizhou Daily, "We have established our brand in our own circle, mostly motorcycles and electric bikes."