I. The definition of non-use cancellation and introduction of basic coping strategy
In accordance with regulations of Chinese Trademark Law, “Where a registered trademark become a generic name of its designated goods or has not been used for an uninterrupted period of three years without justified reasons, any entity or individual may request CNIPA to cancel the registered trademark.” In terms of this provision, once the registration period is expired at the third year, any entity or individual can request CNIPA to cancel the registered trademark, in which the application is called “application for non-use cancellation” for short.
The system of non-use cancellation in China is to intensify the use of trademarks, mainly for the purpose of making trademark registrants activate their own trademark resources, clear idle trademarks and intensify the use of trademarks, thereby promoting the development of industry economy. For trademark owner, when the trademark has been submitted for non-use cancellation by the third party, how to deal with it?
To begin with, after receiving a non-use cancellation submitted from any entity or individual, CNIPA will schedule to inform the trademark registrant. The trademark registrant should submit actual use evidences to CNIPA within two months form the date of receipt of the notification. If the materials of actual use evidences are not provided, or the evidence materials provided are invalid and lack justified reasons until the expiry, CNIPA will cancel the registration of the trademark according to law.
Thus it can be seen from the above that the key to determine whether the trademark is canceled or not is the validity of the “evidence materials” submitted by the trademark registrant. Generally speaking, in commercial activities, the ways of public, legal and actual use of trademark to indicate the source of commodities or services, which aims to make the public distinguish different market entities providing commodities or services, are involved in the use-patterns of trademarks. Hereinto, “use” includes the voluntary use by trademark owners and licensed use (use by others) without violating the mind of trademark registrants. And the judgment that whether the actual use evidences are effective shall meet all the following four requirements:
- The requirement on time. The actual use trademark should be produced within the required three years. In view of current practice, the censorship rarely considers evidences beyond the designated period.
- The requirement on space. The materials of actual use evidences need to prove that the commodity/service is used in China. Materials of actual use evidences generated in other countries or regions are not generally believed as valid actual use evidences, corresponding with the territory characteristic of trademarks.
- The requirement on trademark sign. The trademark sign showed in actual use evidence materials should be consistent with the sign of cancelled trademark. If the trademark owner has multiple similar registered trademarks in the same classification, CNIPA will be more serious and cautious in the trademark sign examination. According to practical experience, when trademark registrants have only one registered trademark, the standard on the requirement for the trademark sign will be correspondingly lowered.
- The requirement on commodity/service. In the cases of “non-use cancellation”, the actual use evidences submitted by the party shall be the actual use evidences verifying commodities/services.
Based on practical experience, in view of the type of evidence materials, it’s easier for CNIPA to accept evidence materials of trademark related to invoice, certification of inspection and quarantine for commodity import and export, receipts for clearance of goods, public issued publication, exhibition and exposition, etc.
However, many trademark registrants are unable to provide actual use evidence in China, or the actual use evidences that can be provided are usually weak and hard to maintain its registration, is there nothing to do about the cancellation on its registered trademark by CNIPA? Actually not.
II. How to deal with the argument on non-use cancellation in the case of trademarks without any effective actual use evidences in China?
1. If there exists justified reasons of non-use of registered trademark, CNIPA should maintain the registration of the registered trademark.
In accordance with Articles 67 of Regulations for the Implementation of Chinese Trademark Law, following situations are involved in the justified reasons ruled by Article 49:
(1) force majeure
(2) government policy limits
(3) bankruptcy liquidation
(4) other justifications that are unable to blame on trademark registrants
Please turn to corresponding cases, if the trademark of trademark owners haven’t been used in China, with any one of the above justifications, the registered trademark can be maintained only if submit correspondent documentary evidence with relevant interpretations to CNIPA.
However, it is need to notice that CNIPA always strictly hears the above mentioned reasons，the registration can be maintained only with the support of sufficient reasons and evidences. In practice, there are few cases maintaining registration with “justification”.
2. If the registrant is unable to use registered trademark, which does not conform to the situation depicted in the justification, or the actual use evidences that can be collected are weak and hard to maintain registration, is there anything we can do instead of waiting for notification of judgment from CNIPA then cancelling the registered trademark? Yes, of course. Through effort, we can still maintain the registered trademark or regain registration of the said trademark.
2.1 Trademark registrants may actively contact with the applicant for non-use cancellation and come to an accommodation outside the case. For example, the trademark registrant issues letter of consent for subsequent application trademark of the applicant for non-use cancellation, for the purpose of exchanging the withdrawal of application for the non-use cancellation of the registered trademark by its applicant.
2.2 If a settlement cannot be reached with the applicant for non-use cancellation, at the same time of providing actual use evidences, the trademark registrant can submit a new registration application for the cancelled trademark. The newly submitted registered application may be rejected by CNIPA due to the prior application trademark of the applicant for non-use cancellation. At that time, it will be necessary to submit a further application for refusal examination, thereby waiting for the prior application trademark of the applicant for non-use cancellation to be finally rejected due to the registrant’s original registered trademark. As long as the original registered trademark of the registrant remains valid, CNIPA will not approve the registration application of the applicant for the non-use cancellation. Therefore, it is possible for the new registration application submitted by the trademark registrant to be approved.
III. Whether there are subsequent remedies if the registered trademark is cancelled in the procedure of no-use cancellation
If the trademark registrant does not receive the non-use cancellation notice, causing that the registered trademark is cancelled by CNIPA, or submits corresponding actual use evidences but leads to cancellation on the registered trademark by CNIPA due to insufficiency of evidence, the trademark registrant can positively prepare a new one after the issuance of non-use cancellation decision, and compliment and submit newly collected actual use evidences while submitting reexamination application of non-use cancellation to CNIPA within prescribed time. If the actual use evidences are determined to be valid, CNIPA will still maintain the registration of the registered trademark.
In addition, even though the registered trademark is ruled to be cancelled in the reexamination procedure of non-use cancellation, the trademark registrant can still submit litigation applications for first instance, second instance and even retrial, further prepare actual use evidences. If efficient actual use evidences can be provided, the court will still maintain the registration of the registered trademark.
In general, the applicant for non-use cancellation usually will not file an application for non-use cancellation targeting at registered trademarks without reasons. After receiving the notification of non-use cancellation, the trademark registrant may consider consulting with the applicant for non-use cancellation and achieving friendly negotiations while actively preparing for actual use evidences, so as to obtain the continued validity of the registered trademark with the cost as less as possible. If the negotiation fails, then it should focus on collecting actual use evidences related to registered trademarks that used on the approved goods/services items within the specified time in China. As long as the provided evidence of use is valid, CNIPA will rule to maintain the registration of the registered trademark. If the trademark registrant believes that the actual use evidence is weak and there is no justification for not using it, it may consider submitting a new registration application while submitting actual use evidences to obtain the registration of the said trademark again.