Original Equipment Manufacturer, commonly known as “OEM,” is and will continue to be a huge business in China. Whether OEM constitutes trademark infringement is of great practical significance to foreign companies whose manufacturing bases are in China, and the issue has always been the subject of hot debates. In OEM business, a local Chinese company manufactures the products on behalf of a foreign brand owner with the foreign brand owner’s trademark, but the products are solely for export and not sold in China.

In April 2014, the Supreme People’s Court (SPC) announced the list for China Courts 2013 Top 10 Innovative IP Cases. These Top 10 Innovative IP Cases were selected from over one hundred thousand (100,000) decisions of nationwide courts in China rendered in 2013, which have significant and innovative contribution to application of the laws and regulations.

In the recent practice, the famous carmaker Tesla Motors, Inc. filed two civil lawsuits in China in September 2013 before Beijing Third Intermediate Court, against ZHAN Bao Sheng. ZHAN is the registrant of the disputed trademark of the “TESLA TESLA MOTORS and T Design” in China, where Tesla Motors, Inc. has filed disputed cancellations before the Trademark Review and Adjudication Board (TRAB) as well. In one of the civil lawsuits, Tesla Motors, Inc.

Since the implementation of the Chinese Trademark Law 2001, the courts (the Beijing First Intermediate Court as the first instance court and the Beijing High Court as the second instance court) have been granted the final adjudication power for administrative cases involving the authorization and confirmation of trademark rights (hereinafter referred to as “Trademark Administrative Cases”), where interested parties sued the Trademark Review and Adjudication Board (TRAB) to court in connection with its administrative decisions in trademark rejection review, trademark dispute, and trademark cancellation review.

The cases of three-year non-use trademark cancellation have been on the rise in the recent years and have attracted more and more attention. However, as to some special circumstances (such as the trademark obtaining registration after the opposition procedure and the international trademark registration designating China for territorial extension), the registration date (the date when the exclusive right to use a trademark is granted) may probably be inconsistent with the date when the registration status has been confirmed (the date when the trademark administration or judicial authority finally determines and grants the trademark right).

The earliest Chinese regulations with regard to “examination on the disclaimer to the exclusive right to use the trademark” appeared in Trademark Examination Rules, which was promulgated by the Chinese Trademark Office (CTMO) in 1994. Rules 3 and 4 of the CTMO Notice on Issues concerning Trademark Examination Notification [Shang Biao (2000) No. 80] further stipulated the specific circumstances where the exclusive right to use the trademark should be disclaimed.

In April 2012, the Trademark Review and Adjudication Board (TRAB) announced the latest list of well-known trademarks recognized in China, including “Sina & design, Sina, SINA NET in Chinese,” and “SOHU in Chinese.” Up to date, around ten trademarks have been recognized as well-known in the Internet industry in China.

The newly revised Chinese Trademark Law 2013 adopts Article 58 which prescribes as follows: “Where the registered trademark or unregistered well-known trademark of others is used as a trade name contained in the enterprise name, which is likely to mislead the public and constitutes unfair competition, it shall be adjudicated under the Chinese Anti-Unfair Competition Law.”

In February 2013, the Supreme People’s Court (SPC) rendered a decision [The SPC Administrative Order (2012) Zhi Xing Zi No. 9] (the SPC No. 9 Order) on the re-trial case of the trademark “Duck King in Chinese” filed by Shanghai Huai Hai Duck King Roast Duck Restaurant Co., Ltd. (previously named as Shanghai Huai Hai Quanjude Roast Duck Restaurant Co., Ltd., hereinafter as “Shanghai Duck King”).

More and more multinational companies (MNCs) are realising that, as an indispensable part of a global IP strategy, importance of successfully enforcing IP right in China cannot be overstressed. Besides administrative remedy, initiating IP infringement lawsuit in China is widely considered as a feasible yet challenging measure for enforcing IP rights.