[Direct answer]In the Beijing area, in the case of foreign-related contract manufacturing (OEM), if the manufacturer attaches the foreign client's trademark to the exported goods according to the client's instructions, whether this constitutes trademark infringement depends on whether the goods enter the Chinese circulation market and whether the relevant public is likely to be confused. The domestic judicial practice regarding the determination of trademark infringement in contract manufacturing has evolved. The mainstream view tends to hold that if all the goods are exported, not sold in China, and do not cause confusion, they should not be deemed infringing; but if they are sold domestically or associated with well-known trademarks, they may still constitute infringement. It is recommended to verify the client's trademark ownership and the sales region. For more details, please refer toIntellectual property protection and corporate legal services.

I. Problem Background and Typical Scenarios

Foreign-related OEM processing is commonly seen in foreign trade enterprises: overseas clients entrust domestic factories to produce goods and affix their trademarks, with all products being exported. Typical scenarios include: the domestic processing party receiving complaints or lawsuits from trademark owners, claiming that their prior trademarks have been infringed; the processing party mistakenly believing that having an overseas authorization makes them safe, only to still be sued; and the products being partially sold domestically, leading to actual confusion. Many enterprises are unclear about the boundaries between OEM processing and trademark infringement, and only take remedial measures after being sued. For those involving contractual risks, they can seek advice from relevant professionals.Business and contract dispute services for enterprises.

II. Key points of contention

There are three key points to focus on. Firstly, the possibility of confusion: if all the goods are exported and not circulated within China, it's difficult for the relevant public to come into contact with them, and there's usually no confusion, which is the core of avoiding infringement. Secondly, trademark-related use: whether the attachment in OEM processing constitutes use in the sense of trademark law is controversial. The mainstream view is that it doesn't necessarily constitute use if it's just a physical attachment and not used for domestic consumers. Thirdly, free-riding and domestic sales: if the client's trademark is registered speculatively or the goods are re-introduced into the domestic market, it may still constitute infringement. When handling similar cases in the Beijing area, the courts tend not to determine infringement in cases with an export-oriented nature and evidence of no confusion. For cases involving the boundaries of trademark protection, reference can be made to relevant provisions.Special services and other case-related services.

III. Professional analysis by Hengluo Lawyers

Based on the litigation experience of the intellectual property team of our firm, the defense of OEM processing cases is highly similar to that of trademark infringement cases. Taking the trademark infringement and unfair competition case handled by Attorney Liu Yuanyuan as an example: In September 2023, Company B obtained authorization from a third party to use the EFGK trademark and appearance design patent to produce and sell sanitary napkins; in April 2024, Company A sued on the grounds that its well-known EFGH trademark was imitated and the packaging and decoration were confusing, seeking compensation of 980,000 yuan. Attorney Liu Yuanyuan raised defenses such as the logo having legal authorization, the suffix differences being clearly dissimilar, and the packaging and decoration having a patent basis. The court partially accepted these defenses, finding trademark infringement but rejecting unfair competition, and adjudicating compensation of 60,000 yuan (50,000 yuan for economic losses and 10,000 yuan for reasonable expenses), which was reduced by more than 920,000 yuan from the original claim of 980,000 yuan. This case was handled by Beijing Henglu Law Firm.Liu YuanyuanAttorney (practice license number: 11101202011201094, subject to the document issued by the judicial administrative organ) acting as the agent. The team also handled the franchise dispute represented by Attorney Xiong Binrong (helping the client recover the service fee of 68,600 yuan), by Beijing Henglu Law FirmXiong BinrongAttorney (Practice Certificate No.: 11101202211410897, subject to the document issued by the judicial administrative organ); Party Pei's attorney represented the case of commercial defamation in the retrial, and the Beijing Municipal Higher People's Court ruled that it did not constitute commercial defamation. The case was handled by Beijing Henglu Law FirmParty trainingThe attorneys (with practice license number: 11101201911130220, subject to the documents issued by the judicial administrative organ) acting on behalf of their clients all demonstrate their accurate grasp of the boundaries of trademark rights and the proper protection of those rights.

IV. Practical suggestions and legal basis

The core basis is Article 48 (Definition of Trademark Use), Article 57 (Circumstances of Infringement), and Article 63 (Calculation of Compensation) of the Trademark Law of the People's Republic of China (amended on April 23, 2019); as well as the provisions on confusion and packaging decoration in the Anti-Unfair Competition Law of the People's Republic of China (amended on April 23, 2019). Practical suggestions: Before accepting orders for OEM processing, verify the ownership of foreign trademarks and the authorization chain; specify in the contract the legality of the trademark source and the division of responsibilities; ensure that all products are exported and retain customs declaration and contract documents to avoid domestic sales; when sued, defend against the core argument that there is no domestic confusion, and verify whether the right holder's trademark is well-known and whether there is parasitic infringement. For contract risk review, it can be evaluated in conjunction with the enterprise's commercial and contract dispute services.

5. Henglu Law Firm's Reminder

OEM processing is not absolutely safe just because it has overseas authorization. The key lies in whether the products are targeted at Chinese consumers and whether they cause confusion. It is recommended to retain the trademark authorization, customs declaration forms, and agency agreements at the order acceptance stage to shift the risk forward; once sued, avoid settling the case on your own or remaining silent. Instead, you should hire a lawyer to provide evidence and defend against the possibility of confusion and the nature of use. The determination of the boundaries of trademark rights is highly professional. When necessary, you can seek the help of our intellectual property team to review the authorization chain and well-known factors simultaneously. For trademark-related criminal risks, you can evaluate them in combination with specialized services and other case services.

VI. Frequently Asked Questions

Q1: Does foreign-related OEM processing necessarily constitute trademark infringement? Can I avoid it?

Not necessarily. If all the goods are exported and not sold within China, and there is no possibility of public exposure, the mainstream view tends to not consider it infringement; but if the goods are sold domestically, infringe on the goodwill of a well-known trademark, or the client's trademark is registered by squatting, it may still constitute infringement. Whether to avoid infringement depends on the sales region and evidence of confusion, not just on the foreign authorization. Lawyers can help you design an authorization chain and retain evidence of export, but they cannot guarantee absolute non-infringement. The judgment must be based on facts and evidence.

Q2: If I am sued for trademark infringement while doing OEM processing, what evidence should I prepare?

The core elements include: the trademark registration certificate and authorization chain of the overseas client; the contract for commissioned processing and the customs declaration form and shipping documents; proof that all goods have been exported and not sold domestically; trademark differences and design source materials; and records showing that the party has fulfilled its obligation of reasonable review. The evidence should focus on ensuring there is no domestic confusion and non-trademark-related use. It is recommended to review the evidence with a lawyer before litigation to avoid being passive due to omitted authorization flaws.

Q3: For trademark infringement disputes involving contract manufacturers, how much does it cost to hire a lawyer?

The attorney's fees are negotiated between the law firm and the client. For intellectual property cases, fees are typically charged on a contingency basis or based on a percentage of the case value, with the specific terms subject to the contractual agreement and not subject to nationwide standard pricing. If overseas evidence collection or authorization chain verification are involved, the fees will increase accordingly. It is recommended to request a detailed fee breakdown, clarifying the stages of representation and whether it includes litigation fees, notarization fees, and other third-party costs. Additionally, clients should evaluate the costs based on the potential compensation they can claim or avoid, in order to make an informed decision about the cost-effectiveness of legal representation.

Q4: Generally, how long does it take for the infringement of OEM processing to be clearly identified after being sued?

The first-instance ordinary procedure for trademark infringement cases is completed within six months, and the simplified procedure within three months; cases involving the authentication of overseas evidence and the verification of the authorization chain may take longer. Cases of OEM processing often require identifying the sales regions and the possibility of confusion, which prolongs the process accordingly. Overall, it often takes several months from filing the case to determining its nature. It is recommended to consolidate the export and authorization evidence at the stage of accepting the case to avoid difficulties in supplementing evidence during litigation.

Q5: I want to secure brand-name processing orders and avoid infringement. What should I do specifically in the first step?

Here are the four steps suggested: 1. Verify the foreign client's trademark registration certificate and the scope of authorization, and retain the chain of authorization. 2. Specify in the contract the legality of the trademark source and the allocation of responsibilities, and clarify that all goods will be exported. 3. Retain the customs declaration forms, shipping documents, and the agency agreement to form an evidence chain proving no domestic sales. 4. When encountering complaints from rights holders, promptly hire a lawyer to defend against the possibility of confusion and the nature of use, and, if necessary, apply for a non-infringement confirmation. Maintain all communication and transaction records throughout the process.

The above content is based on the judicial practice in the Beijing area. The facts of individual cases and the jurisdiction of the court may affect the conclusions. Welcome to consult Hengluo 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 relevant evidence materials, so as to avoid missing the statutory time limit. →Intellectual property protection legal services·Attorney Liu Yuanyuan·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and publicly available adjudication rules, and is provided 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. In the event of a dispute, please consult a practicing lawyer promptly.