Research on the Definition of the Boundary of Indirect Infringement

of Trademark Rights in Cross-Border E-Commerce and the

Improvement of Relevant Laws

Zihan Xu

School of International Business Communications, Dongbei University of Finance and Economics,

Dalian, Liaoning, 116012, China

Keywords: Definition of Infringement Boundary, Article 57 of Trademark Law, Contributory Infringement, Punitive

Damages, Liability of Cross-Border E-Commerce Platforms.

Abstract: In the context of the swift expansion of cross-border e-commerce, the issue of indirect infringement of

trademark rights has become increasingly prominent, especially the illegal printing of logos and the trademark

infringement in processing with foreign brands. Focusing on these two issues as central research topics, this

paper employs case study and comparative analysis techniques to thoroughly investigate the delineation of

indirect trademark infringement boundaries. The research finds that Article 57 of the Trademark Law has

deficiencies in the provisions on indirect infringement, such as vague concepts and unclear definitions of

liability. This paper proposes enhancements to serve as a reference for amending the Trade-mark Law and to

foster the regulated growth of the cross-border e-commerce sector. The research results show that clarifying

the legal liability for indirect infringement is of great significance for maintaining market order and promoting

fair competition.

1 INTRODUCTION

In the context of the global economy's integration and

the swift advancement of Internet technology, cross-

border e-commerce, as a novel form of international

trade, is experiencing un-precedented growth. While

experiencing such rapid growth, there has also been a

significant increase in trademark rights infringement

cases. According to the "Cross-border E-commerce

Infringement Data Report (Industry Data Analysis)",

the number of infringement cases in the cross-border

e-commerce field in 2019 increased by 30%

compared to the previous year. Among them, the

number of intellectual property infringement

complaints reached 2.3 million, and 54% of the

complaints were related to intellectual property

issues. The "2019 Report on Counterfeiting and

Infringement in the Chinese Market" released by the

International Brand Association further pointed out

that there were more than 480 million counterfeiting

and infringing products in the Chinese market,

involving an amount as high as 750 million yuan.

While cross-border e-commerce is instrumental in

fostering international trade and economic expansion,

the infringement of trademark rights has emerged as

a critical barrier to its continued development. In

practice, many actors who ultimately commit

trademark infringement (i.e., direct infringers) do not

produce goods by themselves. Instead, they obtain

goods from manufacturers through a business

network composed of wholesalers, retailers, and

trans-porters. By employing logo and packaging

producers as well as advertising intermediaries, the

latter assist in infiltrating the infringing goods into the

market. In addition, subjects such as business

premises managers and talent intermediaries can

provide direct infringers with various key resources

such as venues, manpower, materials, and equipment.

Finally, enterprise-based direct infringers may also be

controlled and influenced by senior executives, parent

companies, or major shareholders. The progress of

the trademark system has been accompanied by

universal, diverse, and group-based infringement

phenomena. The participation of non-direct

infringing subjects not only enables them to reap

considerable illegal benefits for themselves but also

fuels the occurrence of direct trademark infringement.

Based on the above phenomena, China's trademark

system has begun to classify some serious and typical

indirect acts as indirect infringement (Cai,2023).

Xu, Z.

Research on the Deﬁnition of the Boundary of Indirect Infringement of Trademark Rights in Cross-Border E-commerce and the Improvement of Relevant Laws.

DOI: 10.5220/0013969200004912

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 1st International Conference on Innovative Education and Social Development (IESD 2025), pages 139-145

ISBN: 978-989-758-779-5

139

Although Article 57 of China's Trademark Law

has certain provisions, it has obvious deficiencies in

theoretical logic and system construction and can

hardly be regarded as a perfect system. The clauses

on illegal printing of logos and contributory

infringement constitute the substantive content of the

indirect infringement regulations, but there are

problems such as vague definitions of acts and

chaotic system structures. Item (6) of Article 57 of the

Trade-mark Law takes trademark indirect

infringement as the object of regulation and limits the

object of regulation to contributory infringement acts

under the domination of the actor's subjective

intention. This regulatory approach restricts the

behavioral patterns that the trademark indirect

infringement system can adjust, resulting in the

inability of this clause to provide sufficient

institutional supply when facing diverse forms of

indirect infringement acts (Wang, 2021).

This paper intends to start with two common

issues in trademark rights indirect infringement,

namely, the illegal printing of logos and trademark

infringement in foreign-related processing with

supplied brand names. By using the case analysis

method and the comparative analysis method and

through in-depth analysis, it will further explore the

demarcation of the boundary of trademark rights

indirect infringement, and then explore the main

deficiencies in Article 57 of the Trademark Law and

put forward ideas for improvement. The goal is to

offer robust backing for the enhancement of

Trademark Law and, concurrently, to encourage the

regulated advancement of the cross-border e-

commerce sector.

2 COMMON CATEGORIES OF

INDIRECT INFRINGEMENT OF

TRADEMARK RIGHTS

2.1 Illegal Printing of Logos

2.1.1 Definition

Articles 30 and 31 of the "Standards for Judging

General Trademark Violations" stipulate acts such as

illegal printing of logos. The term "illegal printing of

logos" denotes the unauthorized act of reproducing

logos that are identical or similar to those registered

trademarks belonging to others, which contravenes

the "Trademark Law" and associated legal statutes, or

the act of breaching prohibitions stipulated by these

regulations. Specifically, it includes situations such as

illegally undertaking a printing business without

obtaining corresponding qualifications, printing

logos that pretend to be registered trademarks,

changing registered trademarks with-out

authorization, and failing to indicate the information

of the licensee. Trademark printing units are obliged

to verify whether the trademark patterns violate the

prohibition regulations and whether they are the same

as the registered trademarks of others on the same

kind of goods. They should conduct inquiries through

official channels to fulfill their verification

obligations. If they are negligent in fulfilling their

verification obligations and lead to the occurrence of

infringement acts, it will constitute an illegal act of

contributory infringement.

2.1.2 Applicable Laws and Existing Disputes

Given that the act of illegal printing of logos has

already been regulated by Item 4 of Article 57 of the

"Trademark Law", the "Regulations for the

Implementation of the Trademark Law" further

regards "printing" as a form of contributory act. As a

result, when dealing with cases involving the printing

of various materials (such as product packaging and

brochures, etc.) with others' trademarks, it will lead to

unnecessary conflicts of regulations.

In practice, the act of illegal printing of logos

often occurs in the field of processing and

contracting, such as the OEM processing industry.

However, in the few judicial judgments that discuss

the determination of indirect infringement, there is no

indication of citing Item 4 of Article 57. Instead, it is

subsumed under the contributory infringement

clause.

2.1.3 Research Significance

The act of illegal printing of logos at the theoretical

level does not go beyond the scope of contributory

infringement, but it does not mean that it has lost its

value of independent existence. Because this has

essentially gone beyond the debate on dogma and has

risen to a proposition of legislative techniques and the

goals of the rule of law. As the trademark legal frame-

work evolves, the "specific provision on indirect

trademark infringement" is expected to be

incorporated into future legal revisions. Describing

and regulating indirect infringement acts in a general

way in the special article is undoubtedly somewhat

sloppy and negligent, and it will also reduce the

special article to a general clause on indirect

infringement. What truly endows the special article

with judicial significance should be more operable

and targeted categorized rules. In this regard, the

IESD 2025 - International Conference on Innovative Education and Social Development

140

clause on illegal printing of logos has played a very

good exemplary role (Cai,2023).

2.2 Foreign-Related Processing with

Supplied Brand Names

2.2.1 Definition

Foreign-related processing with supplied brand

names, also known as foreign-related OEM

processing, is a trade form in which the processing

party within China accepts the entrustment of the

overseas trademark owner, attaches the designated

trademark to the processed products, and exports all

the products. Due to the conflict between the

borderless nature of commodity circulation and the

territoriality of trademark rights, disputes over

trademark infringement in foreign-related processing

with supplied brand names occur frequently (Liu,

2024).

2.2.2 Case Analysis

In the recent landmark "Honda" case adjudicated by

the Supreme People's Court, the Court determined

that the concept of "likely to cause confusion" within

China's Trademark Law does not equate to actual

confusion but rather signifies the potential for

confusion to occur. This interpretation implies that

the actual interaction of the relevant public with the

allegedly infringing goods and the actual

manifestation of confusion outcomes are not essential

elements for establishing" likely to cause confusion."

In this instance, the actions of the two respondents

posed a risk of confusion. Consequently, the conduct

of the two respondents was deemed to have infringed

upon the three trademarks in question, belonging to

Honda Company.

2.2.3 Applicable Laws and Existing Disputes

Judging foreign-related processing with supplied

brand names as constituting trademark infringement

based on the act of using trademarks in a formal

sense: Before the promulgation of the new Trademark

Law in 2013, this paper collected a total of 6 typical

cases in which foreign-related processing with

supplied brand names was judged to constitute

trademark infringement. There were two reasons for

the courts to make judgments of trademark rights

infringement: First, the principle of the territoriality

of trademarks. Second, based on the provisions of

Article 3 of the Regulations for the Implementation

of the Trademark Law in 2002 and Paragraph 1 of

Article 52 of the Trademark Law in 2001, the courts

judged that the act of foreign-related processing with

supplied brand names constituted trademark

infringement.

Recognizing foreign-related processing with

supplied brand names as a non-trademark use act and

then judging that it does not constitute trademark

infringement: After the promulgation of the new

Trademark Law in 2013, courts tended to judge that

foreign-related processing with supplied brand names

did not constitute trademark infringement. There

were two reasons: First, the principle of the

territoriality of trademark rights. Second, the

mainstream view in academia and judicial precedents

holds that the attaching act in foreign-related

processing with supplied brand names does not

constitute an act of use in the sense of trademarks.

Judicial practice of adjudicating foreign-related

processing with supplied brand names according to

the standard of "reasonable duty of care + substantial

damage".

3 DEFINITION OF INDIRECT

INFRINGEMENT

3.1 Comparison Between Direct

Infringement and Indirect

Infringement

3.1.1 Nature of Infringing Acts

Based on whether the actor directly infringes upon the

exclusive rights of the trademark owner, trademark

infringement acts can be divided into direct

infringement acts and indirect infringement acts.

Direct acts of infringing trademark rights refer to

the acts implemented by the actor without the

permission of the trademark owner and which are

controlled by the exclusive rights of the trademark

owner. In the situation where the standard of

"likelihood of confusion" is introduced, typical direct

trademark infringement acts include the act stipulated

in Item (1) of Article 57 of the Trademark Law, that

is, "using a trademark identical to a registered

trademark on the same kind of goods without the

permission of the trademark registrant", as well as the

act stipulated in Item (2) of Article 57 of the

Trademark Law, that is, "using a trademark similar to

a registered trademark on the same kind of goods, or

using a trademark identical or similar to a registered

trademark on similar goods, which is likely to cause

confusion, without the permission of the trademark

registrant".

Research on the Deﬁnition of the Boundary of Indirect Infringement of Trademark Rights in Cross-Border E-commerce and the

Improvement of Relevant Laws

141

Indirect infringement acts mean that if the actor

does not directly implement the acts con-trolled by

the exclusive rights, but his acts may provide

conveniences for the direct infringement acts of

others, such as providing places, warehousing,

transportation and other convenient conditions to the

direct infringers and indirectly facilitating the

occurrence of direct infringement acts, such acts will

also damage the exclusive rights (Li and Li, 2019).

Therefore, it is necessary to bring the acts of

indirectly infringing trademark rights into the

regulatory scope of the Trademark Law.

3.1.2 Requirements for Subjective Fault

Direct infringement generally does not require proof

that the actor has subjective intention. As long as the

infringing act is implemented, it can constitute

infringement.

To establish indirect infringement, it is necessary

to demonstrate that the individual had a subjective

intent or was negligent, meaning that the person

knowingly provided significant assistance when they

were aware that others were preparing to or in the

process of committing direct infringement acts.

3.2 Constituent Elements of Indirect

Infringement

Item (6) of Article 57 of the Trademark Law uses two

keywords when describing the forms of infringing

acts, namely, "intention" and "assistance". This

means that only when an act simultaneously meets the

two conditions of "intentional infringement" and

"contributory infringement" can it be recognized as

an infringing act according to this clause.

"Intentionality" denotes a subjective mental attitude

where an individual deliberately engages in an act,

fully aware that their behavior is likely to result in the

violation of another's civil rights and interests. This

subjective state of mind includes two elements: First,

the "cognitive factor", that is, the actor's "clear

knowledge" of the consequence of infringement;

second, the "volitional factor", that is, the actor has

the will to achieve the consequence of infringement

(Wang, 2021). "Contributory act" means assisting

others to make it convenient for others to implement

infringing acts. Contributory infringement can be

regarded as a special form of joint infringement, and

there should be a mutual intention between the

contributor and the assisted person, that is, they have

a common intention. In this sense, the infringing act

implemented by the contributor also belongs to the

intentional infringing act. The "intention" stipulated

in Item (6) of Article 57 of the Trademark Law

emphasizes the subjective element of the

"contributory infringer", and the infringing acts

regulated by this clause are limited to contributory

infringement acts. (Xiong, 2023)

3.3 Judgment Methods

Certain academics concur with the categorization of

"trademark utilization" as a component of trademark

infringement, positing that "trademark utilization"

could stand as a distinct element within the

framework of infringement, on par with the potential

for confusion. An opposing perspective suggests that

the criteria for trademark use under the Trademark

Law differ between trademark protection and

infringement scenarios. In the realm of trademark

infringement, the mere possibility of discerning the

origin of goods is sufficient to qualify as trademark

use, without necessitating the actual outcome of

identifying the goods ‘source.’ The nature of

trademark use is undoubtedly an element of

trademark infringement, yet its role within the context

of infringement merits further examination.

Regarding the criteria for judgment, this standard

indeed broadens the 'scope of trademark use' to

include areas of productive application previously

regarded as infringement and 'invisible use' in the

digital realm. However, the assessment of the actor's

subjective intent remains a topic requiring additional

deliberation (Liang, 2021)."

Firstly, non-trademark use hardly leads to

consumer confusion and thus cannot constitute an

infringement of trademark rights. Consequently,

when ascertaining the violation of trade-mark rights,

it is necessary to first review whether there is

trademark use. If not, the infringing act loses its basis

for existence; if so, continue to review whether there

is the possibility of confusion. Secondly, regarding

the application of the possibility of confusion, the

subject of the possibility of confusion can be

generalized as the relevant public, including

consumers who identify the source of goods or

services based on trademarks in market transactions

and other special operators. When judging whether

there is the possibility of confusion, the attention of

consumers should meet the standard of "a reasonable

person". Meanwhile, the possibility of confusion only

refers to the possibility of confusion within the

jurisdiction of China's Trademark Law.

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4 APPROACHES TO THE

IMPROVEMENT OF

RELEVANT LAWS

4.1 Improving the Legal Provisions on

Indirect Infringement of

Trademark Rights

The system construction of trademark infringement

acts can refer to the dualistic legislative model of

"direct infringement - indirect infringement" in the

relatively mature Japanese law in the world at present.

(Item 1 of Article 37 of the Japanese Trademark Law

targets direct infringement, and Items 2 to 8 stipulate

indirect infringement.) According to Item 1 of Article

37 of the Japanese Trademark Law, Direct

infringement primarily focuses on actions that are

directly associated with the use of registered

trademarks. This encompasses employing a

trademark that is identical to a registered one on the

goods specified, or utilizing a trademark that is either

identical or similar on goods that are similar, resulting

in confusion among consumers. Items 2 to 8 of

Article 37 of the Japanese Trademark Law stipulate

indirect infringement acts. These acts include

possessing items affixed with registered trademarks

or similar trademarks for transfer or delivery,

possessing items indicating registered trademarks or

similar trademarks to use registered trademarks or

similar trademarks on designated goods or similar

goods, and transfer, delivering or possessing items

indicating registered trademarks or similar

trademarks to enable others to use registered

trademarks or similar trademarks on designated

goods or similar goods, etc. This dualistic legislative

model helps to clarify the boundaries of infringing

acts, protects the legitimate rights and interests of

trademark owners, and provides a legal basis for the

determination of trademark infringement and the

pursuit of liability.

4.2 Legal Liability for Trademark

Infringement

The core proposition of the legal liability for

trademark indirect infringement is damages, and there

is basically no room for "general discussion" or

integrated research (Cai,2023). The application of

punitive damages in indirect infringement is

governed by explicit criteria and fun-damental

normative standards. In the context of intellectual

property rights in China, the impo-sition of punitive

damages is contingent upon the intentionality of the

infringement and the severity of the infringement's

circumstances, but there are no limitations on aspects

such as the forms of the infringing act and the damage

results, thus providing room for its expanded

application. That is to say, there is no justification for

excluding indirect infringement from the purview of

punitive damages solely on the basis of its indirect

nature (Zhu, 2016). When judicial organs

independently apply punitive damages to indirect

infringement, they should especially adhere to the

principles of avoiding full compensation and limited

repeated punishment. Reducing the amount of fines

according to the principle of offsetting lighter

penalties within heavier penalties is the mainstream

idea for alleviating multiple punishments. On this

basis, combined with the discretionary power granted

to the courts by Article 6 of the "Interpretation of the

Supreme People's Court on the Application of

Punitive Damages in the Trial of Civil Cases

Involving Infringement of Intellectual Property

Rights", it is recommended to break the convention of

"the lower limit of twice" formed by past precedents

in indirect infringement cases, and explore the

possibility of applying declaratory punishment that is

"close to one time". Although China's Trademark

Law stipulates that punitive damages apply to serious

malicious trademark infringement acts, which is of

great significance for punishing infringers and better

protecting the rights of trademark owners, the key

issue is how to under-stand the term "malice" and

what the judgment standards are. The current law

does not have a clear definition. The Japanese

Trademark Law is worthy of reference for China in

this regard because it has clear provisions on the

subjective fault of the infringer and is easy to apply.

It is recommended that within the framework of

punitive damages, the subjective fault of the infringer

should be clearly stipulated, that is, the connotation

and judgment standards of the term "malice" should

be specifically defined, and the standards for judging

whether the consequences are serious should be

formulated. Only in this way can the method of

punitive dam-ages better play its due role (Xue and

Wei, 2018).

4.3 Improving the Intellectual Property

Warning System

As a way of negotiating rights, a standard warning act

contains the following contents: (1) facts of

infringement; (2) statements of rights; (3) appeals and

deterrence. The former two have the function of

information exchange, while the latter is strategic.

Information communication is conducive to

Research on the Deﬁnition of the Boundary of Indirect Infringement of Trademark Rights in Cross-Border E-commerce and the

Improvement of Relevant Laws

143

alleviating the knowledge requirements necessary for

rights negotiation, assessment and definition. The law

should encourage the parties to choose the most cost-

effective way. The infringement warning not only has

the strategic function of declaring the protection of

property rights, but also is a process of mutual

deterrence, mutual exploration of each other's

positions and determination of the boundaries of

property rights between the two parties.

"Infringement - Warning" is an important

argumentative procedure in intellectual property

rights. The clarification, definition and maintenance

of rights are realized in a highly confrontational

manner, which is determined by its special property

attributes. A feasible option is to make the

infringement warning a pre-procedure prior to the

litigation procedure, and the right holder can file a

lawsuit only after issuing a warning. In order to

enhance the "credibility" of the warning act, in the

design of the system, it can be considered that the

right holder must provide a guarantee when issuing a

warning; if the person who has received the warning

does not stop the infringement, it shall be regarded as

malicious infringement and shall bear an injunction

and punitive damages (Xie, 2017).

5 CONCLUSION

This study, after conducting an exhaustive analysis of

indirect trademark infringement within the realm of

cross-border e-commerce, arrives at the following

conclusions: The unauthorized reproduction of logos

and the infringement of trademarks in foreign-related

processing activities where brand names are provided

are prevalent forms of indirect infringement in this

sector. Establishing clear boundaries for these

activities is essential for the safeguarding of trade-

mark rights. Through case analysis and comparative

analysis methods, this paper has clarified the

boundaries between indirect infringement and direct

infringement, and pointed out the deficiencies in the

provisions on indirect infringement in Article 57 of

the Trademark Law, such as blurring the connotative

boundaries of indirect and direct infringement acts,

resulting in the two being confused. The findings of

this research underscore the importance of defining

the legal standing and liability associated with

indirect trademark infringement. Such clarification is

pivotal for regulating trademark usage within the

cross-border e-commerce sector and safeguarding the

legal rights and interests of trademark proprietors.

Furthermore, the contributions of this paper have

offered both theoretical underpinnings and practical

insights for the enhancement of Trademark Law.

Particularly in the context of cross-border e-

commerce, it has introduced novel viewpoints and

strategies for the protection of trademark rights. This

research has a constructive impact on fostering the

standardized growth of China's cross-border e-

commerce sector and bolstering its influence in global

trade. As cross-border e-commerce continues to

evolve rapidly, the challenges posed by indirect

trademark infringement are likely to become

increasingly significant. Therefore, it will be

necessary to further refine and improve Article 57 of

the Trademark Law in the future, clarify the specific

circumstances and legal liability of indirect

infringement, so as to adapt to new trade forms and

protection needs. Meanwhile, strengthening

international cooperation and unifying the protection

standards of trademark rights are also crucial for the

healthy development of global cross-border e-

commerce.

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