A Seller Claims Lawful Source in China: How Trademark Owners Should Check the Evidence

By Pan Jianxing · Published 3 October 2026

A retailer accused of selling goods bearing an unauthorised trademark may identify a wholesaler and produce an invoice. For an overseas brand owner, the useful question is whether those records establish the source of the particular goods in dispute. A supplier name alone does not resolve every element of the defence, but a supported defence should not be dismissed merely because the brand did not authorise that supplier.

Keep two investigations distinct: whether the goods infringe the China trademark right, and whether this seller has a defence to compensation. An invoice is evidence about acquisition. It is not, by itself, proof that the product is genuine or that the trademark owner consented to its sale.

Start with the applicable defence

Article 64, second paragraph, of the Trademark Law as amended in 2019 addresses a seller who did not know that the goods infringed a registered trademark, can prove lawful acquisition and identifies the supplier. When the statutory conditions are met, the seller does not bear compensation liability under that provision. Do not describe this as a general exemption for manufacturers or every participant in the supply chain.

Article 4 of the Supreme People's Court's IP evidence provisions, Fa Shi [2020] No. 12, requires evidence of lawful acquisition, including the purchasing channel, reasonable price and direct supplier. Source evidence commensurate with the defendant's reasonable duty of care can establish that burden and support a presumption of lack of knowledge. Business scale, professional expertise and market trading practices can inform the assessment.

Match the documents to the disputed batch

Create a comparison sheet using the purchased sample, the seller's sales record and the source documents. Record product names, model numbers, quantities, dates, packaging identifiers and any batch references. Explain differences rather than silently treating similar descriptions as identical. A broad invoice for accessories may require further evidence to connect it to a particular marked product.

• Order and invoice: check the buyer, issuer, dates, product description and quantities against the goods alleged to infringe.
• Payment: connect the payee and amount to that transaction, noting refunds, aggregated payments or unexplained differences.
• Delivery: compare dispatch, receipt and warehouse records with the claimed supplier and purchasing period.
• Supplier identity: distinguish a shop name or contact nickname from the legal person or individual actually supplying the goods.

Ask which documents existed at the time of purchase and which were prepared later. A later explanation may still be relevant, but it should be labelled accurately and checked against contemporaneous records. Do not allege fabrication solely because a document was supplied after proceedings began.

Examine reasonable care using concrete facts

The review should address this seller's circumstances. Identify the relevant trading practice and explain its significance. If the price is said to be implausibly low, preserve a meaningful comparison for the same product, condition, volume and period. A retail price from another country is not automatically a sound benchmark for a wholesale purchase in China.

Keep evidence of previous communications, product descriptions, packaging discrepancies and representations about authenticity. Assess whether the seller received a sufficiently specific earlier warning and whether it concerned the same goods and right. Receipt of an accusation is a relevant fact to examine; it does not automatically prove that every later sale was knowingly infringing.

Separate what the records show from what remains uncertain. A missing delivery note may justify a focused request for an explanation. It does not, without more, prove that the entire purchasing account is false. The court assesses the evidence and the legal conditions together.

Use supplier information to plan the next step

A credible source account may provide an upstream investigation lead. Preserve the full supplier details and the documents connecting that supplier to the disputed goods. Check the supplier's actual role before deciding whether further evidence collection, a separate claim or another procedural step is appropriate. A company named on one invoice is not automatically the manufacturer.

Do not merge the retailer's sales and the supplier's quantities into an unsupported total. Record what each transaction proves and avoid counting the same goods twice. Any claim against another party needs its own factual and legal basis, together with a jurisdiction and service review.

Keep the requested remedies separate

A compensation defence does not grant permission to continue selling infringing goods. Article 60 expressly provides for stopping sales in the corresponding administrative context. The relief sought in a civil case still needs to be framed against the facts and applicable rules; an administrative provision should not be presented as if it were itself a civil judgment.

This article uses the 2019 law as the current baseline checked on 3 October 2026. The 2026 revision takes effect on 1 January 2027. Recheck the operative provisions and transition issues for the relevant conduct and proceedings rather than carrying Article 64 numbering into a later case without review.

For an initial assessment, contact Pan Jianxing with the China registration number, the seller's claimed role and a non-confidential outline of the source documents. Detailed invoices and commercial records can follow after the conflict check and secure sharing arrangements.

Pan Jianxing
China-qualified lawyer · Partner, 北京市长安律师事务所
Beijing & Shenzhen
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