It is a common misconception that you do not need to register your trade mark in China if you are only manufacturing goods there for export purposes (i.e. OEM products). Many businesses assume that registration is required only in the countries where the goods are sold. This is not accurate.
The rule of thumb is simple: you should register your trade marks where your goods are sold (including future potential markets) and where they are manufactured.
This is particularly important in China because manufacturing and applying branding may be considered “use” sufficient to amount to trade mark infringement if another party has registered the same or a confusingly similar trade mark in China for overlapping goods - even if your goods are not sold to consumers in China.
Previously, businesses were able to easily rely on the “OEM exception” if they held the relevant trade mark registration in the destination country. However, trade mark rules in China continue to evolve, and this blanket exception is no longer guaranteed. Although whether an OEM product ultimately infringes a Chinese trade mark registration will depend on the specific facts of the case, this uncertainty is far from ideal.
In practice, what does this mean? Even if a dispute never reaches a court, your operations may still be disrupted.
Goods suspected of infringing a Chinese trade mark registration may be detained or seized at the border, or your logistics partner may even refuse to ship them before they reach that point.
If you’re lucky, you may be able to resolve the issue by providing proof of trade mark registration in the destination country. But, this is not always guaranteed, as different parties may adopt varying levels of caution - especially with rules that continue to evolve. And if goods are detained or seized, the resulting administrative burden, costs, delays, and lost sales can be significant.
To avoid this uncertainty, the most effective way to avoid OEM-related trade mark issues now or in the future is simple:
- Ensure you have the appropriate trade mark registrations in those countries where you use your trade marks.
- If you manufacture in China, you should also register your trade marks in China. As China is a first-to-file country (that is, the right to use a trade mark belongs to the first to register the trade mark) and because China has a highly crowded branding environment, filing as soon as possible is important.
How AJ Park can help
AJ Park’s expert team understands the challenging trade mark landscape in China
Contact us today if you need help protecting your important trade marks in China.
