How to Deal With the Cancellation Application for Ceased Use of a Registered Trademark for 3 Consecutive Years?

According to Article 49 of the “Trademark Law”, where the use of a registered trademark has been ceased for three consecutive years without good reasons, any entity or individual may apply to the Trademark Office for the cancellation of this trademark (hereinafter referred to as the “Cancellation for 3”). In view of this article, the trademark registrant shall keep an eye on the management of a registered trademark, which might be cancelled due to the “Cancellation for 3”.

How to deal with the “Cancellation for 3” from the perspective of the trademark registrant?
According to Article 49 of the “Trademark Law”, there are 2 solutions: first, the trademark registrant shall provide good reasons for the ceased use; second, the trademark registrant shall prove the relevant trademark has been used within three consecutive years.

With regard to the “good reasons”, Article 67 of the “Implementation Regulations for the Trademark Law” has prescribed 4 good reasons, which are, (1) force majeure; (2) government policy restriction; (3) bankruptcy liquidation; and (4) any other proper matters which cannot be attributed to the trademark registrant. However, those good reasons are small probability events, which might not be applied to the majority cases.

For the majority cases, the trademark registrant shall find the second solution.

According to Article 48 of the “Trademark Law”, the “use of a trademark” means using a trademark on goods, on the packages or containers of goods, in the trade documents of goods, or for advertisements, exhibitions, and other commercial activities for the purpose of identifying the origin of goods. According to the “Implementation Regulations for the Trademark Law”, and the “Standards for Trademark Examination and Trial”, the evidence for proving the “use of a trademark” normally includes: (1) sales-related documents, which include contracts, invoices, commodities and packaging labels, import and export inspection and quarantine certificates, Customs documents, catalogues, brochures, price lists, and etc.; (2) to promote or release the relevant trademark via newspapers, magazines, internet media, television, radio and other media or self-media and etc.; (3) company introduction leaflets, brochures and etc.; (4) commercial advertisements via emails and etc.; and (5) printed materials and other materials used in exhibitions and fairs.

In practice, while preparing relevant evidence, the following points shall be focused.

First, a trademark shall be used in “commercial activities”, which means a trademark has been used in promotions or transactions. Generally speaking, the “Cancellation for 3” system is aimed to encourage trademark registrant to use the relevant trademark for the purpose of identifying the origin of goods, and avoid the waste of trademark resources. Therefore, if there is no direct evidence which could prove the trademark has been used in transactions, then normally, the court would not support the defense of the trademark registrant. (See (2016) Jing 73 Hang Chu No. 4815).

Second, the independent general transaction records would not been deemed as an effective evidence to prove a “use of the trademark”. For example, in the case (2016) Jing 73 Hang Chu No. 5200, the Beijing Intellectual Property People’s Court points out that if the trademark registrant only provides the consignment contracts, orders, invoices, commodities’ photos without showing the trademark, or the packages without the mandatory information such as the manufacturer’s name and address and so on, and there is no other supportive evidence, then the trademark registrant fails to prove the trademark has been used in commercial activities.

Third, generally speaking, the license of a trademark could be deemed as a “use of the trademark”. However, if the trademark registrant could only provide the license contract, the Trademark Office and courts might still consider the trademark has been ceased to use. The “Standards for Trademark Examination and Trial” has clearly prescribed similar statements, and the courts hold the same opinion. In the case (2017) Jing Xing Zhong No.2107, the Beijing High People’s Court points out that if the trademark has not been used to implement the purpose of identifying the origin of goods,and the trademark registrant could only prove that it has transferred or authorized the trademark, or it has announced the trademark registration information, or it has relased the statement of the ownership on the trademark, then the trademark registrant fails to prove the “use of the trademark”.

Fourth, the single evidence would be deemed as a symbolic use of a trademark, which could not prove the “use of the trademark”. The single evidence includes advertising items, packages, very few transactions documents and etc.. Therefore, it is recommended to provide a variety of evidence, and form a chain of evidence.

The fundamental solution is to use the registered trademark and keep the relevant original evidence, such as emails, videos, notarization of the actual use and so on.