OEM Manufacture and Trademark Use in China

OEM manufacture “use” of trademarks continues to be a hot issue following the Apple dispute last year, as seen in several recent cases.   George Chan, August Zhang, Chris Bailey at Rouse recently co-authored a short article* analyzing several recent rulings on OEM “use” of trademarks on goods manufactured only for export out of China (Article 52 of the Trademark Law). The article illustrates that despite recent suggestions to the contrary, the courts still consider that OEM manufacturing involves trademark use, although in legitimate cases of OEM solely for export, this may be a form of ‘reasonable use’. However, in trademark infringement cases involving reasonable use, it seems that use alone is no longer sufficient to determine whether trademark infringement has taken place; to find infringement, it is now necessary to establish a likelihood of confusion in the Chinese market. Outstanding issues include how the court will determine the legitimate owner of the trademark in the destination country and the “relevant public” for purposes of determining confusion.
The article was originally published in the World Trademark Reporter (WTR), here.

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