Meaning
A pivotal judicial decision by the Supreme People’s Court of China regarding trademark infringement in original equipment manufacturing (OEM) established that exporting goods can constitute trademark infringement even if the goods are not sold domestically. The honda landmark ruling clarified that the use of a trademark on manufactured goods destined solely for export can mislead foreign consumers and damage the interests of domestic trademark holders. This decision marked a major shift from previous legal interpretations that favored OEM exports.
OEM Exemption
Prior to this decision, courts held that OEM production for export did not constitute trademark infringement because the products did not enter the Chinese consumer market. This perspective protected domestic contract manufacturers from being held liable for trade in foreign markets.
Infringement Analysis
The court focused on the act of applying the trademark to the product, ruling that this act itself constitutes trademark use under Chinese law. If a domestic entity holds a registration for that mark, the unapproved application of the mark on export goods is an infringement. This holds true even if the foreign buyer owns the trademark in the destination country.
Industry Impact
This decision created legal risks for Chinese contract manufacturers and international buyers. Companies must now conduct thorough trademark searches in China before initiating export-only manufacturing projects to avoid litigation or customs seizures.
