Calculating Base Damages and Multipliers in Chinese Trademark Infringement
Base damages under PRC Trademark Law Article 63 follow strict evidentiary priority, with multipliers up to five times applied for willful infringement.
OEM Manufacturing Mark Exposure
Meaning
Customs supervision and trademark law in Chinese export manufacturing govern whether applying foreign marks to goods produced solely for export constitutes actionable infringement. Managing oem manufacturing mark exposure requires evaluating if affixed registered trademarks cause domestic consumer confusion when products are shipped directly overseas. Under the precedent set by the Supreme People’s Court in the PRETUL and HONDA cases, pure original equipment manufacturing does not constitute trademark infringement if goods never enter the Chinese domestic market.
Exemption from liability terminates if any portion of the production batch is diverted into domestic retail channels or sold at local trade fairs.
Border Seizure
Border control authorities inspect export shipments to verify that affixed logos align with registered trademark rights recorded on the General Administration of Customs system. Local trademark holders frequently register rights in China to block export shipments produced by genuine foreign brand holders under contract manufacturing agreements. When customs detains factory shipments, oem manufacturing mark exposure manifests as immediate export delays and port storage fees.
Foreign buyers must file administrative oppositions or present trademark authorization letters to secure release of trapped cargo.
Domestic Circulation
Legal protections extended to export manufacturing fail when products breach domestic distribution boundaries. If a factory owner sells surplus inventory or uncollected production runs to domestic buyers, statutory trademark protection applies in full. Domestic sales activate immediate administrative enforcement by local Market Supervision Bureau teams.
Proof of local retail exposure invalidates the export exemption, leaving both contract factory and foreign buyer liable for trademark infringement.
Liability Allocation
Contractual indemnification provisions between foreign buyers and Chinese factories allocate financial losses arising from customs detentions. Contract manufacturers routinely require foreign brand owners to guarantee that applied marks do not infringe domestic trademark registrations prior to initiating production runs.