In some cases a party that has branded goods manufactured in China
for export ("OEM" manufacturing) holds the relevant
trademark in the country of destination, while another party holds
the relevant trademark in China. This raises the question whether
this could result in an infringement of the trademark rights of the
holder of the Chinese trademark.
Recently, the Supreme People's Court of China held that OEM manufacturing solely for export was not "use" under Chinese trademark laws as the exporter only engaged Chinese OEM manufacturers and did not distribute nor advertise the branded products in China. Even though the Supreme Court's opinion is not codified in statutory laws, it provides some degree of clarity and guidance to lower courts and administrative authorities as to how to deal with this legal issue in future practice.
To improve their position based on this recent Supreme Court ruling, it will help non-Chinese trademark right holders if they expressly provide in agreements with their OEM manufacturers that the manufactured products are made solely for export. In addition, they should provide proof to the OEM manufacturers that they legitimately possess the trademark rights in the country of destination.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
