China Trademark Law - Non-use Cancellation Actions
Almost all the jurisdictions allow non-use cancellation actions. Most of them, for example Austria, Argentina, Egypt, Italy, etc, allow challenging trademark registration on non-use grounds where the trademark has not been used for five consecutive years. A five-year non-use grace period exists in practically all European countries. Whist some other jurisdictions provide for a shorter non-use grace period – of three consecutive years, such as China, USA etc.
In China, the legal ground for filing non-use cancellation is straightforward.
The newly amended Chinese Trademark Law came into effect as of May 1, 2014. Article 49 of the new Trademark Law provides that: Where the registered trademark has become the generic name of the designated goods or has not been used for 3 consecutive years without proper reason, any entity or individual may file an application with the CTMO for the revocation of the registered trademark. Trademark Office shall rule within nine 9 months since the filing date of the application of the non-use cancellation. Whilst Article 44 of the previous Trademark Law stipulates that: Where any person who uses a registered trademark has committed any of the following acts, the Trademark Office shall order him to rectify the situation within a specified period or even cancel the registered trademark: (1) where a registered trademark is altered unilaterally (that is, without the required registration); (2) where the name, address or other registered matters concerning the registrant of a registered trademark are changed unilaterally (that is, without the required application); (3) where the registered trademark is assigned unilaterally (that is, without the required approval); (4) where the use of the registered trademark has ceased for three consecutive years.
Based on Article 49 of the New Chinese Trademark Law, if a registered trademark is not used in three consecutive years after registration, any entity or individual can file cancellation application against it with the Chinese Trademark Office. It doesn’t mention that the claimant should be “interested person”. Hence, we assume that the claimant is not required to prove its legal interest.
The CTMO accepts both applications to cancel a trade mark registration in relation to all designated goods and services, and applications to cancel a registration in relation to only part of the designated goods and services.
Generally speaking, a cancellation application on the ground of non-use can be based on a statement that the mark has not been used for at least three consecutive years prior to the filing date of the cancellation application. In support of the application, the applicant can submit the result of a brief Internet search as evidence, for instance, a print-out from a popular search engine (BAIDU, GOOGLE, etc) showing no ‘hits’ resulting from a search of the owner and goods/services covered by the disputed mark.
Starting time of application for three-year non-use trademark cancellation
Undoubtedly, one of the fundamental requirements to claim the cancellation against the trademark registration based on three-year non-use is that the third anniversary of the trademark registration has expired, starting from the registration date to the application date of cancellation. In practice, there are conditions that the registration date (the time when the exclusive right to use a trademark is granted) is inconsistent with the date when the trademark registration status is confirmed —
Trademark registration after opposition procedure
For a trademark obtaining registration after the opposition procedure, the date when the exclusive right to use the trademark is granted is inconsistent with the date when the registration status is confirmed. Where the registration in question is made following unsuccessful opposition proceedings, the earliest date on which a non-use cancellation action can be filed is three years from the date of the decision in the opposition proceedings.
International trademark registrations designating China for territorial extension
Article 49 of the new Implementing Regulations of the Trademark Law of the People's Republic of China, which was also took effect on May 1, 2014, provides that Where applicants apply for canceling internationally registered trademarks in accordance with the provisions of Paragraph 2 of Article 49 of the Trademark Law, they shall apply to the Trademark Office after three years as of the expiration date of the time limit for rejection of international registration application of the trademarks; where, upon the expiration of the time limit for rejection, such trademarks are refused for review or are under procedures relating to objections, the applicants shall apply to the Trademark Office after three years as of the date when the decisions on approval of the registration made by the Trademark Office or the Trademark Appeal Board take effect.
Article 66 of the new , which also took effect on May 1, 2014, provides that: Any entity or individual may, under conditions of 3-year non-use without proper reason stipulated in Article 49 of the Trademark Law, apply to the Trademark Office for cancellation of the registered trademark. When submitting an application, applicant should explain the situation. The CTMO should notify the registrant after acceptance. The CTMO shall notify the trademark registrant submit evidence of use which occurs before the cancellation application, or proper reasons for non-use within 2 months of receiving the notification.
If the registrant cannot provide either appropriate evidence of use within the prescribed period, or legal justification for non-use, such as force majeure, or legal or governmental policy, the CTMO will proceed to remove the disputed mark from the Register. If appropriate evidence of use, or justification of non-use, is provided, the registration will be maintained.
In brief, the evidence could be the agreement or brochures or advertisement or invoice or anything else which can prove that you had ever used the trademark within the past 3 years from the date which the request was filed. But if you have registered the trademark in separated classes, you must provide the use evidence in all of the classes, if not, it can only prove that you have used the trademark in parts of the classes of the trademark when the evidences have been accepted, and the trademark in other classes would be cancelled.
The cases of cancellation of trademarks for three-year non-use have been on the rise in the recent years and have attracted more and more attention. For foreign brand owners this is both a shield and a sword. It can offer a way to clear the path if your brands have been hijacked in China. At the same time, an action for non-use poses a potential threat to defensive registrations and other legitimate place-holding registrations for overseas brands you may want to roll out in the Chinese market in the future.
ABOUT THE AUTHOR: Han Yuanyuan
Han Yuanyuan is an Associate in the MMLC Group. MMLC assists start-ups, listed companies and government groups with technology and IP law in China and across the globe.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.