This is a 2025 typical invention‑patent civil case published by Guangzhou Intellectual Property Court, reflecting a common risk‑avoidance tactic in China’s export‑oriented hardware manufacturing sector. Many domestic manufacturers engaging in overseas export business set up an independent foreign‑trade shell company, undertaking all cross‑border order signing, customs declaration, overseas delivery and invoice issuance. The real manufacturing factory never appears on commercial invoices, customs declaration documents, product outer labels or overseas sales contracts. Once patent litigation occurs, the foreign‑trade shell claims it merely purchases finished goods from unknown third‑party suppliers and denies manufacturing liability. In this case, the hidden actual production enterprise is anonymized as Summit Precision Co., Ltd., and its export‑oriented foreign‑trade shell is named Horizon International Trading Co., Ltd. The plaintiff holds a valid invention patent for a new‑energy industrial cooling module widely exported to overseas industrial markets.
The plaintiff obtained invention‑patent authorization for its industrial cooling module in 2020, and invested large‑scale capital in product iteration and overseas market promotion. In late 2024, the patentee discovered large quantities of infringing cooling modules exported from Chinese ports to multiple overseas countries. All customs‑declaration forms, commercial invoices and sales contracts were issued under Horizon International Trading Co., Ltd. The plaintiff entrusted overseas agents to purchase infringing modules from foreign importers and completed notarized evidence fixation. Technical comparison confirmed that all core technical features of accused products fully fell within the protection scope of the plaintiff’s invention patent.
The plaintiff sent cease‑and‑desist letters to Horizon International Trading. The foreign‑trade shell company replied that it only conducted pure import‑and‑export agency business, and did not own any production workshop or processing equipment. It argued that all cooling‑module products were sourced from unidentified domestic suppliers, and it should not bear manufacturing‑related patent‑infringement liability. Horizon International Trading maintained low registered capital, no R&D personnel, and its office location was a shared commercial service office. If the court only held this foreign‑trade shell liable, the real large‑scale manufacturer Summit Precision would escape core manufacturing‑infringement liability, and the plaintiff could hardly obtain adequate compensation through enforcement against an asset‑light trading entity.
The plaintiff filed litigation against Horizon International Trading. During pre‑trial evidence exchange, the defendant only submitted incomplete purchase slips and deliberately concealed upstream supplier information. Realizing that surface commercial documents could not uncover the hidden manufacturer, the plaintiff filed an application to the court for evidence production order and customs‑document investigation, requesting access to Horizon International Trading’s complete supplier files, bank payment records, domestic logistics delivery manifests, supplier communication records and customs‑export supporting documents.
After the court approved the evidence‑obtaining application, critical factual evidence gradually emerged. Massive bank payment records demonstrated that nearly all payment for infringing cooling‑module goods was transferred to Summit Precision’s corporate bank account. Domestic logistics manifests showed that all accused products were directly shipped out from Summit Precision’s industrial manufacturing plant. Internal business chat records further proved that Horizon International Trading possessed no independent product‑development capacity. Product technical parameters, product improvement schemes and after‑sales technical support for overseas customers were all provided by Summit Precision. Horizon International Trading existed merely as an export‑oriented front‑end shell controlled by Summit Precision, specially set up to separate manufacturing subject information from cross‑border export documents. Core management personnel were cross‑appointed between two entities; part of Horizon International Trading’s operating costs were directly covered by Summit Precision.
The core legal controversy of this case was whether Summit Precision, as the hidden actual manufacturer whose name never appeared on export documents, should jointly bear patent‑infringement civil liability. Summit Precision argued that it did not sign direct sales contracts with overseas end‑customers, and all export formalities were completed by the independent‑legal‑person Horizon International Trading, so it should not be identified as a manufacturing infringer.
The intellectual‑property court comprehensively reviewed capital flow records, logistics evidence, personnel correlation, business dependency and the subjective purpose of establishing the foreign‑trade shell. The court held that manufacturing patent‑infringement liability cannot be evaded simply by setting up a controlled foreign‑trade shell company to handle all export formalities. Summit Precision completed the core manufacturing act of infringing products; Horizon International Trading implemented selling and offering‑for‑sale acts for export purposes. The two parties jointly completed the whole patent‑infringement chain including manufacturing, selling and offering for sale. The court ordered both defendants to immediately stop manufacturing, selling and offering for sale infringing cooling modules, destroy special production moulds, and jointly compensate the plaintiff for economic losses plus reasonable rights‑protection expenses including notarization fees, technical appraisal fees and attorney fees.
This case delivers high‑value practical guidance for patent owners facing export‑type patent infringement. First, customs‑declaration subject information cannot be directly equated with the actual manufacturer. Export‑oriented foreign‑trade shells are frequently deliberately deployed to conceal real production factories. Second, for export‑related patent‑infringement disputes, right holders shall actively apply to courts for investigation into customs documents, supplier ledgers and bank capital records; these documentary materials constitute key evidence to trace hidden manufacturing entities. Third, when clues indicate the existence of hidden actual manufacturers, right holders should strive to add suspected manufacturing entities as co‑defendants in early litigation phases, instead of only suing the outward‑facing foreign‑trade shell. Winning judgment only against asset‑light trading shells often leads to unsatisfactory enforcement results. Patent right holders should pay attention to collecting multi‑dimensional circumstantial evidence such as shipment addresses, capital‑receiving accounts and internal business communication records, which play decisive roles in breaking deliberately separated corporate structures in export‑oriented patent‑infringement cases.
1. National Intellectual Property Administration of China official website: https://www.cnipa.gov.cn
2. Supreme People’s Court IPR Judgment Database: https://ipr.court.gov.cn
3. China Customs IP Protection Guideline: http://www.customs.gov.cn
4. ICLG Patents Laws and Regulations China 2026: https://iclg.com/practice‑areas/patents‑laws‑and‑regulations/china
