Navigating GACC Export Whitelists and OEM Trademark Infringement Disputes
GACC export whitelists protect foreign OEM production by linking verified mainland factories directly to registered Chinese trademarks inside customs databases.
Honda Precedent
Meaning
Judicial interpretation of trademark infringement in the context of export manufacturing shifted following a 2019 ruling by the Supreme People Court. The honda precedent established that the production of goods solely for export still constitutes “trademark use” under Chinese law, potentially infringing on local registrations. For years, the prevailing view was that if products were not sold in the mainland, no consumer confusion could occur, meaning no infringement had taken place.
This case involved a local company producing motorcycle parts bearing a mark similar to Honda for an Indonesian buyer. The court ruled that even if the goods never enter the Chinese retail market, they can still cause confusion among the public, including exporters and digital consumers. This decision applies to all original equipment manufacturers operating in China who produce goods for foreign brand owners.
Its mandate stops the previous “safe harbor” for export-only production where the foreign brand owner did not hold the Chinese trademark. By expanding the definition of trademark use, the ruling increases the risk for factories and foreign buyers alike.
Infringement Standard
Determining whether a manufacturing activity violates a trademark now requires a broader look at the potential for confusion. The honda precedent moved away from the narrow “point of sale” test to a more holistic view of the market. This means that judges consider how the presence of the goods in the supply chain, at customs and in digital catalogs might affect the rights of a trademark holder.
Even if the Indonesian buyer owned the mark in Indonesia, the court found that the unauthorized use in China was illegal because Honda held the mark in the mainland. This shift has led to an increase in the number of lawsuits against factories that produce “look-alike” goods for export. The ruling clarifies that the right of a trademark owner is not limited by the destination of the goods but is tied to the act of manufacturing itself.
For a factory, this creates a duty of care to ensure that their customers have the rights to the marks they are printing. Failure to perform this due diligence can lead to the seizure of the entire shipment and heavy financial penalties.
Export Liability
Companies that use China as a global production hub must now re-evaluate their trademark portfolios to avoid legal disruptions. Under the honda precedent, a foreign brand owner who does not own their trademark in China can no longer rely on the export-only status to protect their supply chain. If a squatter or a local competitor registers the mark first, they can use that registration to stop the goods at the border.
This creates a point of leverage that bad-faith actors frequently use to demand high settlement fees from international firms. The liability extends beyond the factory to the export agent and the foreign buyer who arranged the production. To mitigate this, companies must file for trademarks in China even if they have no intention of selling to Chinese consumers.
This administrative step is now a prerequisite for a secure manufacturing strategy in the mainland. The ruling has also made customs officials more proactive in detaining goods that appear to infringe on local marks. This operational change means that “export-only” is no longer a valid defense during a customs audit or a court hearing.
Judicial Shift
Changing the legal landscape for original equipment manufacturing was a deliberate move to strengthen intellectual property protection in the country. The honda precedent reflects a move toward a stricter interpretation of the Trademark Law to discourage the production of infringing goods. While some earlier cases like Pretul provided a defense for exporters, the Supreme People Court has now prioritized the rights of the Chinese trademark holder.
This shift demonstrates that the statutory position of a registered mark is superior to the contractual arrangements of an export deal. Practitioners must now advise their clients that the old “OEM exception” is effectively dead for most practical purposes. If a manufacturing process involves the application of a logo or brand name, it is considered trademark use and must be authorized by the Chinese owner.
This boundary applies regardless of the quality of the goods or the identity of the end user. The consequence of this shift is a more standardized but also more dangerous environment for foreign entities who neglect their Chinese IP filings. Accurate legal clearance is now the only way to protect an export-oriented production line from sudden judicial intervention.
Intellectual Property Recordation Strategy for Export Manufacturing Assemblies
Record export manufacturing IP with Chinese customs across trademarks and utility models to enforce border protection and block rogue supplier shipments.
Trademark Squatting Filed against Your Own Chinese Character Mark
Secure Chinese character mark registrations across all product and service subclasses before sharing product details or contracting with mainland manufacturers.