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Perspective | How to Identify and Target the Actual Producers Behind Infringing Products, Rather Than Just Dealing with Form Manufacturers

Published:

2025-09-26

In trademark enforcement practice, infringers often set up shell companies in places like Beijing, Shanghai, and Tianjin, or even register companies in Hong Kong, China, or Germany—both domestically and internationally—to package their counterfeit products. This strategy not only helps them conceal their illegal activities but also significantly complicates the task of rights holders seeking legal redress: shell companies typically have no real assets, making it difficult to enforce court rulings; meanwhile, when defendants are foreign entities, challenges arise in terms of jurisdiction and applicable law. Given these circumstances, how should we effectively combat infringement and safeguard the legitimate rights and interests of rights holders?

In trademark enforcement practice, infringers often set up shell companies in places like Beijing, Shanghai, and Tianjin, or even register Chinese Hong Kong or German entities overseas to package their counterfeit products. This strategy not only helps them conceal their illegal activities but also significantly complicates the task of rights holders seeking legal redress: shell companies typically have no real assets, making it difficult to enforce court rulings; meanwhile, when the defendant is a foreign entity, challenges arise in terms of jurisdiction and applicable law. Given these circumstances, how should we effectively combat infringement and safeguard the legitimate rights and interests of rights holders?

This article explores, through a typical case study, how to establish an evidentiary chain to prove the identity of the actual producer, while integrating legal grounds and practical approaches to provide rights holders with an effective avenue for protecting their interests.

I. Case Summary

Lei Company discovered that infringing products circulating in the market were labeled with "Ou Company," a Hong Kong-registered entity, as the manufacturer. At this point, the company faces a significant challenge: If they sue Ou Company to cease infringement and seek compensation for damages, there’s a high likelihood that Ou Company is merely a shell corporation. Even if Lei wins the lawsuit, it may still be difficult to compel the actual manufacturer to stop producing the infringing products—effectively allowing the real culprit to go unpunished. Meanwhile, Ou Company is an overseas enterprise based in Hong Kong, China, creating jurisdictional and legal-application challenges in terms of enforcement. At the heart of this case lies a critical dispute: When the labeling of infringing products involves overseas or shell companies, presenting a barrier to rights protection, how can Lei Company use the chain of evidence to definitively identify the actual manufacturer—and thereby safeguard the legitimate rights and interests of the rights holder?

II. Points of Contention

How can we break through the identification of the form producer and prove the actual manufacturer of the infringing product, thereby safeguarding the legitimate rights and interests of the rights holder?

III. Establishing the Key Chain of Evidence to Identify the Actual Producer

The author conducted a thorough due diligence on Ou Company and its affiliated company, Hebei Mou'ang Company, uncovering the critical chain of evidence in this case. As a result, the court upheld the claim that Hebei Mou'ang Company was the manufacturer of the infringing products at issue. The process of establishing this evidentiary chain is outlined below:

1. Investigate the trademark used on the infringing product.

Through the author's investigation, it was determined that the infringing product uses the trademark of a company named "Mouang." Based on this evidence, the actual manufacturer of the infringing product can be identified as Hebei Mouang Company.

2. Obtain the brochure and business card of Company O at the exhibition.

After attending lubricant exhibitions across the country, we finally spotted Ouhua Company's booth at the expos in Xi'an and Nanjing, where we obtained their brochure as well as the business card of Ouhua Company's manager.

The brochure lists the address, phone number, and factory photos of Company O, all of which match those of Hebei Company A, further strengthening the strong likelihood that Hebei Company A is the actual manufacturer of the infringing products.

The manager listed on the business card of Company O matches the legal representative of Hebei Company A, further strengthening the strong likelihood that Hebei Company A is the actual manufacturer of the infringing product.

3. Retrieve the corporate records of Ou Company in Hong Kong.

The file shows that the registered household address of the person in charge of Company Ou is identical to the registered household address of the legal representative of Hebei Mou'ang Company.

4. Retrieve the registration files of Hebei Mou'ang Company.

The trademarks used by Company O on its infringing products, as well as in its brochures and business cards, all belong to the business cards of Hebei Certain Ang Company.

Based on the evidence provided, and applying the "Supreme People's Court's Reply Concerning Whether Victims of Product Liability Cases Can File Civil Lawsuits Against the Trademark Owner of the Product," as well as Article 108 of the Supreme People's Court's Interpretations on the Application of the "Civil Procedure Law of the People's Republic of China," the infringing product in question was manufactured by a company named Aong Co., which has Highly Probable , sufficient to establish that Company Ou and Company Mou jointly engaged in the production and sale of infringing products.

IV. Court Ruling Perspectives

The plaintiff, Lei Company, is the owner of the registered trademark No. 57033XX, which remains valid during its registration period. As such, the plaintiff's exclusive rights to this registered trademark are protected by law, entitling it to investigate and gather evidence regarding alleged trademark infringements, conduct product examinations, and file lawsuits. Therefore, the plaintiff is properly qualified as a party to bring this legal action.

Regarding whether the product in question constitutes an infringing product: According to Article 57, items (ii) and (iii), of the Trademark Law of the People's Republic of China, using a trademark that is similar to a registered trademark on identical goods without the permission of the trademark registrant—or using a trademark that is identical or similar to a registered trademark on similar goods in a manner likely to cause confusion—constitutes an act that easily leads to consumer confusion. Similarly, selling goods that infringe upon the exclusive rights of a registered trademark also falls under the category of trademark infringement.

Regarding whether the defendant, a company named Ao, constitutes infringement: The packaging of the product in question prominently features Ao Company's trademark. According to relevant provisions of the "Supreme People's Court's Reply on Whether Victims of Product Infringement Cases Can File Civil Lawsuits Against the Trademark Owner of the Product as Defendant," since Ao Company provided the trademark for use on the infringing product, it should be regarded as the manufacturer. Although the packaging indicates that the manufacturer is Ou Company, the production address and toll-free service number listed there are identical to those featured in Ao Company's own promotional materials. Furthermore, the "brand logos" listed under "Subsidiary Brands" in the promotional brochure provided by Lei Company are all registered trademarks owned by Ao Company. Additionally, Lei Company submitted a business card belonging to Li, who is identified as the General Manager of Nordic Company and also serves as the legal representative of Ao Company. Therefore, in accordance with Article 108 of the Supreme People's Court's Interpretation on the Application of the Civil Procedure Law of the People's Republic of China—specifically, "When evidence presented by a party bearing the burden of proof has been examined by the People's Court and, when combined with relevant facts, leads to a high degree of certainty regarding the existence of the fact to be proven, such fact shall be deemed established"—the evidence provided by Lei Company corroborates each other, strongly suggesting that the infringing product was indeed manufactured by Ao Company. Consequently, this court finds the evidence credible and accepts it as sufficient to prove that Ao Company produced the infringing product. By using a mark strikingly similar to the plaintiff's registered trademark on the same type of goods without the plaintiff's authorization, Ao Company has infringed upon the plaintiff's exclusive right to its registered trademark and, as such, must legally bear civil liabilities, including ceasing the infringement and compensating for any resulting damages.

V. Evidence Chain Due Diligence Method

When handling rights protection matters involving overseas or shell companies, lawyers can conduct extensive due diligence on the company's affiliated entities. The methods of due diligence include, but are not limited to:

1. Attend the exhibition. By attending trade shows across the country showcasing similar products, collecting brochures and business cards from each exhibitor not only helps with individual cases but also aids in uncovering clues to more infringement cases.

2. Follow social platforms like Douyin and Kuaishou. Given the widespread popularity of platforms like Douyin and Kuaishou, some manufacturers showcase their products on these platforms, where a wealth of clues regarding infringing products can often be discovered.

3. Follow the webpage. A website can both showcase a manufacturer’s corporate strength and display a wide range of products in its product showcase area—some of which may even include numerous clues pointing to potential infringement.

4. Due diligence documents of the affiliated company held internally within the enterprise. By accessing internal records, comprehensively understand relevant information about affiliated companies—including their historical change records, associated entities, and personnel.

5. Market research. Through extensive market research, we identify the sellers of infringing products and persuade them to provide legitimate sources, thereby relieving the sellers of liability. This approach ultimately aims to encourage sellers to reveal their supply channels or even pinpoint the actual manufacturers responsible for the infringing products.

6. Check trademarks registered by affiliated companies and the actual controller. By checking whether trademarks registered by affiliated companies or the actual controllers have been used on infringing products, we can identify the true manufacturer.

7. Visit the factories of the real producers. This approach carries significant risks and is suitable only for exploring the perimeter of the factory; entering it recklessly is strongly discouraged.

The above outlines only some of the due-diligence approaches for the evidence chain; specific analysis is required for each individual case to identify the actual producer and safeguard the legitimate rights and interests of the rights holder.

VI. Conclusion

When handling rights protection cases involving overseas-registered or shell companies, lawyers can conduct extensive due diligence on the companies' affiliated entities to build a robust chain of evidence, thereby establishing a high degree of probability for their claims. This due diligence may involve activities such as attending trade shows and exhibitions for promotional purposes, analyzing online information, examining connections between corporate executives and related firms, monitoring platforms like Douyin, and reviewing registered trademarks. By uncovering as many links as possible between the overseas or shell company and its affiliates, lawyers can convincingly demonstrate—beyond reasonable doubt—that the affiliated company is, in fact, the actual producer of the infringing products. This approach enables them to name the true manufacturer as the defendant, ultimately achieving the goal of protecting the client's rights and interests.

VII. Legal Counsel’s Advice

Given that current infringement cases are becoming increasingly covert, making it gradually more difficult to protect one's rights, failing to successfully safeguard your interests due to an incomplete chain of evidence could lead to significant losses. Therefore, it is advisable to promptly hire a professional lawyer when your rights are violated, in order to achieve twice the result with half the effort.

P.S.: Applicable Legal Provisions

Article 64, Paragraph 2 of the Trademark Law of the People's Republic of China: Sellers who can prove that they were unaware the goods they sold infringed upon registered trademark rights, and who can also identify and provide information about the supplier, shall not be held liable for damages.

"Reply from the Supreme People's Court on Whether Victims of Product Liability Cases Can File Civil Lawsuits Against the Trademark Owner of the Product as Defendants": Any enterprise or individual who affixes their name, corporate name, trademark, or other identifiable markings to a product, thereby indicating their role as the manufacturer of that product, shall be deemed a 'producer' as defined under the Civil Code of the People's Republic of China and the Product Quality Law of the People's Republic of China.

Article 69 of the "Civil Procedure Law of the People's Republic of China" stipulates that legal facts and documents duly notarized through statutory procedures shall be regarded by the people's courts as the basis for ascertaining facts, unless there is contrary evidence sufficient to rebut the notarial certification.

The Supreme People's Court's Interpretation on the Application of the Civil Procedure Law of the People's Republic of China, Article 108 states: "If the people's court, after examining the evidence submitted by a party bearing the burden of proof and considering relevant facts, is firmly convinced that the existence of the fact to be proved is highly probable, it shall recognize that such a fact exists." These legal provisions are sufficient to establish that the parties jointly engaged in the production and sale of infringing products.

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