SHANGHAI PUDONG NEW DISTRICT PEOPLE'S COURT, DECISION OF 14 APRIL 2011, NOKIA V. WUXI JINYUE CORPORATION; SHANGHAI HIGH COURT THIRD CIVIL TRIBUNAL, SHANGHAI SHENDA AUDIO ELECTRONICS V. JIULIDE ELECTRONICS, NO. 65 (2009)

In two recent cases, the courts came to different conclusions in what on the face seems to be similar cases. Both involved branded products that were made for export only, yet in the Nokia case the original equipment producer (OEM) was found guilty of infringement; whereas in the Shenda case, the court found in favor of the OEM.

The Nokia v. Wuxi Jinyue Case

On 12 June 2010, Shanghai Customs discovered 2,250 sets of LCD television casings and components bearing the "NOKIA EGYPT" trademark.

Click here to see trademark.

Wuxi Jinyue Technology Co., Ltd (Wuxi Jinyue) was identified as the consignor of the suspected goods declared for export.

In the hearings, Nokia alleged that Wuxi Jinyue had:  

• used without authorization a trademark that was similar to its NOKIA trademark

Click here to see Nokia's trademark.

• and attempted to confuse the relevant public by associating its products with Nokia.

Despite that the products were designated for export, the Shanghai Pudong People's Court was of the opinion that the OEM Wuxi Jinyue had infringed Nokia's exclusive rights since the use of the mark would be likely to confuse the relevant public.

The Shenda v. Jiulide Case

In the Shenda v. Jiulide case, Jiulide, the Chinese subsidiary of Jolida, Inc., a U.S. audio equipment manufacturer, successfully defended an infringement action in China by arguing that OEM products destined for export market under a foreign mark and not sold in China did not infringe a Chinese registration for the same mark.

The Shanghai High Court held that since all the goods in this case were to be exported to the U.S., there was no likelihood of confusion by the "relevant public" in China.  

Why the Different Decisions in Two Cases That Seem Similar?

Nokia v. Wuxi Jinyue differs from the similar Shenda v. Jiulide case in which the Shanghai Higher People's Court found that the OEM Jiulide had not infringed the trademark rights of Shenda because the products were manufactured solely for export (to the U.S.) to a company (Jolida), which owned the trademark in the U.S.

Another difference in Shenda v. Jiulide lies in the OEM's existing relationship to its purchaser (Jiulide is wholly owned by Jolida) and Jolida's valid U.S. trademark rights in the suspected marks.

On another note, the Shanghai High People's Court also came to a widely discussed conclusion that the trademark in question was regarded to be used by the OEM's customer (Jolida) rather than the OEM itself, and since the OEM's customer was an overseas company, the court held that the trademark had not been used in China. The ramifications of this argument are yet to be seen.

These decisions confirm that, to be on the safe side, it is as relevant as ever for brand owners and their OEM's to register trademarks in China.