[Direct answer]It is necessary to distinguish between authorization and fault. In OEM (Original Equipment Manufacturing) cooperation, the contractor produces products according to the requirements of the client and attaches the trademarks provided by the client. If the client enjoys legal rights to the trademarks or has obtained valid authorization, the contractor usually does not constitute trademark infringement; however, if the contractor knowingly processes the products without authorization, or fails to fulfill its obligation of reasonable review and uses the trademarks beyond the scope of authorization, it may still bear legal responsibility. According to Article 57 of the Trademark Law of the People's Republic of China (amended in 2019) regarding infringement of the exclusive right to use a registered trademark. The key action is for the contractors to review the ownership of trademarks and authorization documents before signing processing contracts, and to clarify the guarantee of infringement and the division of responsibilities.

I. Problem Background and Typical Scenarios

Foreign trade OEM is a common business model: the client provides the trademark and drawings, and the OEM factory produces the products according to the samples and exports them under the client's brand. Once the client is sued for trademark infringement, the focus of the dispute often lies in who should bear the responsibility between the client and the OEM factory, and whether the OEM factory can be exempted from liability. The focus of responsibility depends on whether the authorization chain is complete and whether the OEM factory has fulfilled its obligation to review the products.

II. Key points of contention

Firstly, whether contract manufacturing constitutes trademark use. Secondly, the authenticity and validity of the client's authorization documents. Thirdly, the contract manufacturer's obligation to conduct reasonable reviews and pay attention to standards. Fourthly, the responsibility for using the trademark beyond the scope of authorization. Fifthly, the different consequences of overseas processing and export, and domestic sales.

III. Professional analysis by Henglue Lawyers

The trademark liability of contract manufacturers primarily hinges on whether they have legitimate authorizations and whether they fulfill their duty of review. The trademark infringement and unfair competition disputes handled by Henglue Lawyers provide direct evidence of this. Firstly, a well-known paper company sued for trademark infringement and packaging design confusion, seeking nearly one million yuan in compensation. The lawyer representing the defendant argued that the disputed logo originated from a legally registered trademark and was used with authorization. The suffix differences were obvious, and the general public could distinguish between them. The packaging design had a patent basis, but the rights holder only submitted copyright registration without proving actual use and influence, which did not constitute "packaging design with certain influence". Moreover, the infringement period was short, the scale was small, and the product had been discontinued, so the high compensation claim lacked basis. The court partially accepted the argument, finding trademark infringement but not unfair competition, and the compensation was much lower than the plaintiff's claim. Secondly, in a franchise contract dispute, the franchisee discovered after signing the contract that the headquarters did not have the corresponding franchise qualifications, and the related trademarks were invalid, with the headquarters subsequently going missing. The lawyer argued that the contract purpose could not be achieved and the fees should be refunded based on the contract nature, qualification defects, and statute of limitations. The court supported the refund based on the performance and fault. The common lesson from these two cases is that the legality of the trademark and authorization chain is the fundamental fact determining liability attribution. With legitimate authorization, non-similar logos, and compliant usage scope, liability can often be precluded or mitigated. However, with missing qualifications, invalid authorizations, or exceeding scope, it is difficult to avoid liability. For contract manufacturing, the contractor should verify the trademark registration certificate and authorization documents when signing the contract with the client, clarify the authorization scope, duration, and geographical area, and stipulate that the client shall bear responsibility for rights defects. This case was handled by Beijing Henglue Law Firm.Liu YuanyuanThe attorney (practice certificate number: 11101202011201094, subject to the certificate issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

Action List: 1. Verify the trademark registration certificate, authorization letter, and the rights holder's identity before signing the contract; 2. Clearly define the scope of authorization, duration, geographical area, and liability for infringement in the contract; 3. Retain written confirmation from the client regarding the provided designs and trademarks; 4. When sued, defend against claims by proving lawful authorization, non-similarity of logos, and the circumstances of infringement; 5. For overseas processing, pay attention to sales regions and customs declaration compliance. Main Legal Basis: Articles 57, 63, and 64 of the Trademark Law of the People's Republic of China (amended in 2019); Provisions on contractual liability in the Civil Code of the People's Republic of China (effective since January 1, 2021); Specific applications shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglu Law Firm's Advice

Three key points about OEM/ODM: Generally, there's no infringement if you have legal authorization, but if there's no authorization or the scope of use exceeds the authorized limits, it's hard to avoid liability. Before signing a contract, you need to review the ownership of the trademark rights. The contract should specify the guarantee against infringement and the division of responsibilities. For issues related to intellectual property and corporate law, you can seek professional advice.Intellectual property and corporate lawWe can provide a comprehensive solution for services, which includes the processing of contracts if necessary.Business and contract disputes in enterprisesFor plates involving foreign trade, you can refer to the relevant information\nFinancial capital and cross-border transactions involving foreign entitiesFor inquiries regarding the enforcement of compensation, please refer to the relevant columnCreditor's rights and debts, and enforcementFor any questions or difficulties, please contact the team.Special servicesTeam.

VI. Frequently Asked Questions

Q1: If an OEM factory produces products for a client under their brand name, does this constitute infringement of intellectual property rights?

If the client has legal rights or valid authorization to the trademark, the contract manufacturer's processing according to the agreement usually does not constitute infringement; however, if the contract manufacturer knows that he/she does not have the right to use the trademark, fails to fulfill his/her obligation of review, or exceeds the scope of authorization, he/she may still be held liable.

Q2: How can contract manufacturers prevent trademark liability?

Before signing the contract, verify the trademark registration certificate and authorization documents to confirm the scope of authorization, duration, and geographical area. Specify the infringement guarantee and responsibility division in the contract, and retain the materials confirming the entrustment.

Q3: How much does it cost to litigate against an alleged infringement?

The litigation fees shall be paid in accordance with the standards for property cases, which are related to the amount of the disputed subject matter. Fees for appraisal, notarization, or investigation and evidence collection shall be charged separately, and the specific fees shall be subject to the approval of the court and the relevant institutions.

Q4: How long does it usually take to adjudicate such cases?

The first-instance ordinary procedure usually lasts several months, and it will take longer if it involves the identification of well-known trademarks, appraisals, or appeals. The quality of evidence organization has an impact on both the duration and the outcome of the case.

Q5: If the trademark provided by the client is invalid, what should the contract manufacturer do?

The relevant processing should be stopped immediately, and the process evidence of the rights documents provided by the client should be fixed; claim compensation from the client according to the contract, and file a lawsuit for recovery of damages if necessary.

The above content is based on the compilation of judicial practices in the Beijing area. The facts of individual cases and the jurisdiction of the court may affect the conclusions. Welcome to consult Henglu Law Firm about specific situations.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Intellectual property protection legal services·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.