How to Mark the Enterprise’s Name on OEM Products?

In the OEM system, how to make the enterprise’s name on OEM products? Shall we make the name of consignor or consignee, or both? This is a confusing problem in practice, even different local industry and commerce departments and quality supervision departments may make totally different decisions on such circumstance.

We believe that the marks of products shall have the following functions: (1) to help consumers to claim on products liabilities; (2) to guarantee fair competition and the consumer’s right to know; (3) where the products have been marked with trademark, it can be used to identify products’ source and guarantee the quality. Accordingly, the mark of products shall be regulated by laws and regulations of 3 fields, which are laws and regulations related to products’ quality, anti-unfair competition and protection of consumer’s rights and interests, and trademark. Therefore, we have to find solution by analyzing the laws and regulations in these 3 fields.

Firstly, laws and regulations related to products’ quality. “Product Quality Law”, Article 27, paragraph 2, stipulates that the marks on the products or the packages thereof shall be truthful, with name of the producer, name and address of the factory that manufactured. This law has not clarified the name of producer shall be consignor or consignee.

Several departmental rules provide as follows: Opinions on Several Issues Concerning the Implementation of the Product Quality Law (AQSIQ [2011] No. 83), Article 4 stipulates that on the supervision of the mark of products, (1) according to Article 27 of Product Quality Law, the marks on the products or the packages thereof shall be truthful, with name and address of the factory that manufactured, which shall be responsible for the quality of products. “Provisions Concerning Indicating Product Mark”, Article 9 stipulates that the name and address of the producer that is registered according to law and can undertake the liabilities for product quality shall be included in the product ‘s mark. ……an enterprise that is entrusted to process products for consigner and does not take charge of external distribution of the products shall indicate the name and address of the consigner on the products. In addition, Notice on Issues Related to Mark of Products on Processing Production License Management in OEM, Article 1 stipulates that the consigner with license shall be entitled to decide whether the name of consignee shall be marked on the products, which are required products license.

Therefore, for OEM, relevant laws and regulations related to product quality require the products shall be marked with the name and address of consigner.

Secondly, in view of fair competition and protection of consumers’ rights and interests, Anti-Unfair Competition Law and Protection of Consumers’ Rights and Interests Law have stipulated the forbidden articles on using the name of other enterprise’s name, making false representations which are misleading as to the quality of the goods. However, in view of the words of these laws, we cannot figure out if the OEM products have not been marked with the name of consignee’s name and address, whether this shall be deemed as misleading consumers. In practice, where an enterprise fails to mark the name of consignee’s name and address on OEM products, it shall be deemed as violating the above laws by some local industry and commerce departments, and would be punished. However, according to the current laws and regulations, the administrative punishments on such cases are doubtful.

Finally, in view of the regulations on using trademark, Trademark Law, Article 43 stipulates that where a party is licensed to use another party’s registered trademark, the name of the licensee and the place of origins of the products must be indicated on the goods that bear the registered trademark. So where the OEM products have to be marked with a registered trademark, the name and address of consignee shall be marked, otherwise, the consignee may be punished by the industry and commerce departments. In addition, due to failing to use trademark according to the trademark license contract, the consignee may undertake the liabilities for breaching the contract.
To sum up, where the OEM products have to be marked with a registered trademark, both consigners’ name and consignee’s name shall be marked. Where there is no registered trademark issue, both parties shall agree on whether the OEM products shall be marked with the consignee’s name in principal.

Note: Where the OEM products are imported, the circumstances maybe more complicated, the requirements on the imported products shall be taken into consideration. Due to limited space, we have not discussed in this part.