发布时间:2018-5-22

Trial Docket: (2016) Hu 0115 MinChu No. 13990
Appellate Docket: (2017) Hu 73 MinZhong No. 21
City of Shanghai
[Headnotes]
Determination of whether use of a mark identical with or similar to a registered trademark in OEM processing will constitute trademark infringement should be made in conjunction with justifiability of plaintiff's trademark registration, whether defendant has carried necessary and reasonable duty of care of examination, whether the OEM product will be sold domestically, and whether defendant has obtained trademark registration in the export destination country.
[Synopsis]
Plaintiff: BURBERRY LIMITED
Defendant: Ningbo China Light Imp.& Exp. Corp.
Third parties unrelated to the Case: Li & Fung (Trading) Co., Ltd., and HuiQian Suitcase & Bags Co., Ltd. of Pinghu City
Plaintiff Burberry Limited (Burberry) has obtained for grid pattern design trademark registration under No.G732879 (grid in color) and registration No. G987322 (black and white) for luggage, travel bags, handbags, purses in class 18. These registered marks, upon use and promotion by plaintiff have acquired considerable reputation and distinctiveness on the market. A third party unrelated to the case, Li & Fung (Trading) Co., Ltd., and defendant Ningbo China Light Imp. & Exp. Corp. (China Light) agreed that Li & Fung shall be a buyer's agent for Productos Avon of Ecuador, to purchase 7000 Set de Maletas Cuadros (the infringing product) from China Light. Thereafter, China Light placed an order for production with HuiQian Suitcase & Bags Co., Ltd. of Pinghu City, (HuiQian, not a party to this case), with clear indication of style, specification, design and verification standard. When China Light declared these products at issue with Shanghai Customs for export to Ecuador, the products were seized by the Customs. Burberry claimed that China Light's aforementioned activities infringed Burberry's exclusive trademark rights under registration, and sued for injunction, seeking damages of 3 million yuan. Defendant China Light countered that the appearance of the product at issue was not similar plaintiff's trademark; and defendant, being merely an agent for foreign trading, and not a manufacturer or seller, had exercised reasonable care, and was free of any fault, and therefore quested dismissal of plaintiff's complaint.
The trial court of Pudong, Shanghai found at trial that where a party for purposes of sale, asks another to process products at issue by designating style, specification, and design, and did sell the products at issue by exporting, such a party should be considered as the manufacturer and seller for purposes of the infringing products at issue. In the present case, the style, specification and design are all provided by defendant, which production completely reflects the intention of the defendant, and the OEM production involves materials printed with designs identical with or similar to a registered trademark constitutes trademark use. Meanwhile, defendant conducted business transaction with Li & Fung in the name of a seller, supplying its name as China Light in export declaration at the Customs as operator and sender of goods, for which defendant and its legal representative have affixed their seals, showing more than sufficiently that defendant was the manufacturer and seller of the infringing products at issue. Besides, defendant was not free of fault for the manufacture and sales of the infringing products at issue.
The trademark at issue, upon use and promotion by plaintiff, has established considerable market identity and relative distinctiveness. Defendant, being an import/export trading agent for self-run and other goods or technologies for a long time, failed to exercise reasonable and necessary care of examination of the trademark at issue, and is therefore negligent. For these reasons, defendant entrusting of the OEM production constitutes trademark infringement. The court thereby order injunction, and levied damages and awarded reasonable expenses, all in the amount of 630 thousand yuan. Defendant China Light was not satisfied with the trial court decision, and appealed. On appeal, it was affirmed.
[Judge's Comment]
Whether the use of a mark identical with or similar to a registered trademark in the OEM process constitutes trademark infringement should be determined in conjunction with the justification of plaintiff's trademark registration, whether defendant exercised necessary and reasonable care for examination, whether the OEM product are sold domestically, and whether defendant has obtained trademark registration in the export destination country, etc. The defendant in this case, by entrusting another to process the infringing products at issue for purposes of sales, is a coterminous manufacturer of the infringing product, whose entrusting of the OEM processing involving use in the material a design identical with or similar to the registered trademark constitutes trademark use. Meanwhile, being a trading agent for self-run products in import and export transactions, a long term importer and exporter, should carry greater responsibility for notice of what plaintiff claims than the ordinary relevant sectors of the general public. Besides, since plaintiff's registered trademark enjoys considerable market identity, defendant obviously failed its duty of necessary and reasonable care for examination. Therefore, defendant's entrusting of OEM process has constituted trademark infringement. 

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