Study On The Question Of Strict Product Liability For Trademark Licensor

It is more than 160 years after the naissance of modern Product Liability Law. With the advancement of Science and Technology and Society, the doctrine for imputing product liability has developed from contractual liability to tort liability and from negligent liability to strict liability. At the same time, the entity bearing product liability has also been broadened. Not only manufacturers but also sellers will possibly be charged with product liability; the former including finished producers and manufacturers of component parts and suppliers of materials, the latter including wholesalers and distributors and retailers. Against this background, many developed country, such as America and E.U., have all pursued to impute trademark licensor with product liability, according to the quality assurance function of trademark and some acts of the licensor. The former is inclined to take the rules whether the licensor has substantially participated the licensee's manufacture or design or distribution; the latter is apt to adopt the rules whether the licensor has manifested he is the manufacturer of the defective goods through his trademark.In 2002, the Supreme people's Court of our country has issued the judicial explanation: any entity or individual who indicates itself/himself to be the product producer shall belong to the"manufacturers"of the products. That is to say, our Supreme Court is inclined to impute the trademark licensor with strict product liability according to"the apparent manufacturer doctrine". Unfortunately, this explanation has not indicated the nature of licensor's product liability, has not shown clearly on what conditions the licensor will bear the strict product liability, and has not developed clear rules for determining whether trademark licensor can be held strictly liable for personal injuries caused by their licensee's defective products. No doubt these problems will make courts troubled very much when deciding whether the licensor will be imputed the strict product liability, and also will discourage the trademark owner's enthusiasm for permitting license that can stimulate greater investment and thus contribute to the overall economic good of society.In order to resolve the problems of our Supreme Court's judicial explanation, in this Article, I argue that we should apply the apparent manufacturer doctrine to the trademark licensor. But this doctrine should be confined in two situations:⑴when a licensor induces reasonable consumers to believe the licensor manufactured the product, or⑵when a licensor induces reasonable consumers to believe the licensor controlled the standards for manufacturing the product. Under either prong of the proposed test, however, a plaintiff should be required to show the reasonable consumer of the licensed product would have such reliance that the licensor manufactured the product or controlled the standards for manufacturing the product when buying the product. In this Article, I also argue, according to the nature of his liability, even if he is the apparent manufacturer, the licensor should be provided with a safe harbor from liability if he can demonstrate that the actual manufacturer of an allegedly defective product is solvent and is subject to the jurisdiction of the court, or would like to accept the jurisdiction of the court and submit guaranty. The proposed approach will provide courts with clear and feasible rules when deciding whether the licensor should be imputed the strict product liability. The approach will also make the licensor assure on what conditions he will bear the liability and know how he can avoid the potential danger of being charged with the liability. So this approach can effectively resolve the problems of the Supreme Court's judicial explanation.