In trademark infringement cases involving the sale of counterfeit goods, rights holders commonly seek the cessation of production and sales, destruction of infringing inventory and equipment, as well as significant financial compensation. These demands effectively impose manufacturer-level responsibilities on the alleged infringers. Notably, many accused parties claim to act solely as sellers rather than producers, and some co-defendants deny any unauthorized use of their corporate identities on the infringing products. Determining whether an alleged infringer qualifies as a manufacturer—thereby incurring greater civil liability—is a central issue in current trademark enforcement. This analysis consolidates practical approaches for identifying manufacturers based on representative cases, providing valuable guidance for judicial decision-making.
Representative Case Studies
Case 1: Shanghai Super Cute Culture vs. Shantou Huayou Toy Store
Shanghai Super Cute Culture, the owner of the Crown Monkey trademark, filed a lawsuit against Shantou Huayou Toy Store for unauthorized sales of counterfeit toys through the 1688 wholesale platform. Key evidence showed that the defendant maintained an inventory of 99,656 units, enforced minimum order quantities with tiered wholesale pricing, and shipped products from a Shantou warehouse matching its registered business address. Additionally, the store’s platform profile detailed its manufacturing facilities, workforce size, and focus on wholesaler and retailer clients. The court recognized these operational features as indicative of production activities rather than typical reseller behavior, leading to a ruling that warranted higher compensation beyond standard seller liability.
Case 2: Guangzhou Liby vs. Wen & Menglei Company
Guangzhou Liby brought claims against retailer Wen and the alleged manufacturer Menglei Company for selling counterfeit Super Power mosquito coils on Pinduoduo. Menglei successfully disproved involvement by providing authentic product packaging that significantly differed from the counterfeit versions, verifying that the pesticide approval codes on the infringing products belonged to an unrelated manufacturer, Snow Eagle Daily Necessities, and highlighting that the counterfeit packaging falsely listed a Shanghai address for Menglei. Retailer Wen admitted to fabricating Menglei authorization. Consequently, the court dismissed the claims against Menglei due to insufficient evidence and held only Wen liable as the seller.
Case 3: COFCO Group vs. Yulong, Aiviburg, and Impression Companies
COFCO Group filed suit against Yulong, Aiviburg, and Impression Companies for jointly producing counterfeit “Great Wall” wines. Forensic analysis revealed that barcodes on the bottle labels were exclusively linked to Impression Company, bottle caps bore the “Aiviburg” insignia, and production codes corresponded to Impression identifiers. Notably, Yulong production licenses did not align with the codes found on the counterfeit products, while Aiviburg admitted to counterfeiting Yulong credentials and issued a formal apology. The court determined that Aiviburg and Impression were responsible as manufacturers but cleared Yulong of liability despite its name appearing on the labels.
Legal Framework for Manufacturer Identification
Chinese jurisprudence utilizes a triad of interconnected methods to determine manufacturing status:
Business Scope Verification as a Preliminary Criterion
According to Article 13 of China Regulations on Enterprise Legal Person Registration, enterprises must operate strictly within their registered business scopes. Courts routinely review business licenses and industrial-commercial registrations to confirm manufacturing qualifications. Entities registered solely for wholesaling/retailing are generally deemed legally incapable of production, whereas those registered as manufacturers are presumed to have operational capacity. This initial assessment relies on the objective nature of registration records and serves as a deterrent against unauthorized activities beyond the registered scope.
Inter-Defendant Evidence Interaction for Clarifying Facts
Pursuant to Article 88 of the Supreme Court Evidence Rules in Civil Procedures, courts conduct a thorough evaluation of the relevance and interrelation of evidence. Strategic cross-examination among defendants plays a crucial role: defendants accused of identity misuse often provide disclaimers and authentic product samples; seller defendants typically disclose supplier information to invoke Article 64 of the Trademark Law, which exempts sellers unaware of infringement if they identify their suppliers; defendants who fail to respond may face adverse inferences. This dynamic evidentiary approach helps reveal genuine production relationships.
High-Probability Evidentiary Standard for Holistic Evaluation
In line with Article 108 of the Supreme Court Civil Procedure Interpretation, courts establish facts when evidence indicates a “high probability.” This process involves four key steps: comprehensive collection of production-related evidence such as inventory data and operational models; verification of fundamental facts like counterfeit approval codes; logical correlation between the evidence and the likelihood of production; and evaluation of the strength of any counter-evidence. Importantly, corporate labels on products provide only preliminary proof and must be supported by additional evidence such as production scale data, facility inspections, or digital identifiers like QR codes.
Together, these approaches form a robust framework for accurately assessing manufacturing status within the Chinese legal system.
Strategic Enforcement Guidance
Rights holders are encouraged to adopt a phased approach to evidence collection. This includes obtaining notarized records of online listings that indicate production-scale activities, such as minimum order quantities and inventory levels; issuing subpoenas for logistics data that connect shipments to defendant warehouses; and retrieving business scope information from the National Enterprise Credit Information System. During litigation, it is advisable to request courts to compel alleged manufacturers to provide production audits or license verifications, require retailers to disclose their suppliers through evidence preservation orders, and seek judicial authorization for cross-examinations among co-defendants. Additionally, leveraging technical evidence is crucial: scanning product barcodes or QR codes to trace authentic sources and using blockchain timestamping to securely preserve transient online listings.
Jurisprudential Significance
Article 57 of the China Trademark Law places increased liability on entities directly involved in manufacturing counterfeit goods, making their identification essential for effectively addressing infringement at its source. Courts consistently employ a comprehensive verification process that includes examining business registrations for manufacturing intent, facilitating adversarial interactions among defendants to reveal genuine production chains, and resolving evidentiary disputes based on the most probable conclusions. Rights holders should strategically integrate information from business scope registrations, digital transaction records, and indicators of production capacity to counter defenses effectively. This well-structured judicial framework offers practical guidance for distinguishing manufacturer liability, thereby enhancing trademark protection by targeting infringement at its origin.