Featuring three essential Q&As on inconsistencies between actual use and registration, and strategies for responding to non-use cancellation.

In recent years, the number of non-use cancellation cases has surged, with a consistently high rate of trademark cancellation. Securing a trademark registration is no longer a one-time effort and maintaining it requires ongoing attention and strategy. In practice, commercial use of registered trademarks can give rise to a range of challenges, such as the trademark may only be used on a small scale, used on goods or in a form that differs from its registered version, or applied solely within the company, as well as risks like infringement disputes, liability claims, and bad-faith cancellation actions. This chapter provides an in-depth look at the relevant laws, common pitfalls, and effective strategies in dealing with non-use cancellation, offering guidance for companies on how to better protect their registered marks.

Focusing on trademark use and response strategies related to non-use cancellation, we have selected three essential Q&As from Chapter 7: Standard Use and Legal Maintenance of Registered Trademarks of the Practical Q&A Guide to Cutting-Edge Intellectual Property Issues, co-authored by Wolters Kluwer, Lusheng Law Firm, and its strategic partner Rouse.

Selected Practical Q&As

【Use Inconsistent with Registration - On Goods】If a registered trademark receives a non-use cancellation filed by another party, but the goods actually sold by the registrant are inconsistent with the goods approved for registration by the Trademark Office, can the registration be maintained?

Article 22 of the Trademark Law prescribes that when applying for registration, an applicant should follow the regulated goods subclassification system and use appropriate categories and names of goods. 

Article 23 of the Trademark Law specifies that a separate application for registration should be submitted if a registrant wants to obtain exclusive rights for use beyond the approved goods.

Additionally, as outlined in relevant provisions of the Trademark Law, the Guidelines from the Beijing High People's Court Concerning the Trial of Cases Involving Trademark Rights, and the Guidelines for Trademark Examination and Adjudication 2021, the registrant is required to use its trademark within the scope of registration.

The goods that the registrant advertises and sells under a trademark must align with the scope approved at the time of its registration. If the trademark is used on part of the approved goods only, the registration can be maintained on the specific part of goods and on the approved goods similar to the ones in use.  The similarity of goods is determined from their functions, purposes of use, production department, sales channels and target consumer groups, all of which are commonly conveyed in the Classification Book of Similar Goods and Services. Should any updates on the book lead to any change in the assessment of goods similarity, the principle of benefiting the registrant shall apply, and the version of Classification Book that supports the maintenance of registration will be adopted.

If the goods in actual use are not listed under standard commodity names in the Classification Book, but they are essentially the same as the approved goods or fall under their subcategories, this can still be considered valid use. Instances of such an event include “lubricating oil” versus “lubricants” or “Chinese patent medicines” versus the specific names of Chinese medicines.

However, if the goods in actual use are neither of the same kind nor subcategories of the approved goods, their use does not constitute valid trademark use, even if they are similar to the approved ones.

The criteria for determining the use of approved services of service trademarks are fundamentally similar to those for commodity trademarks.

Regarding “promotion/sale of goods/services for others” in Subclass 3505 of Class 35 in the Classification Book, it is essential to clarify that if a goods provider sells products directly to consumers (either independently or through distributors), the trademark in use is a commodity mark, rather than a service mark for “sales/promotion for others.”

Furthermore, according to the Guidelines from the Beijing High People’s Court on the Trial of Cases Involving the Grant and Confirmation of Trademark Rights, as well as the Guidelines on the Application for Registration and Use of Service Marks in Class 35 issued by the State Intellectual Property Office, the following conditions apply:

• “Promotion/Sale for others” refers to providing services such as advice, planning, promotion and consultation to facilitate the sale of goods or services to other parties. The recipients of these services should be the providers and distributors of goods or services. This definition excludes the situation where the goods or services are sold directly to consumers through retail or wholesale channels, with profits derived from price differences.

• If shopping malls, supermarkets or other business entities can prove that they cooperate with commodity suppliers by providing venues and promotional support, their trademark use may be considered lawful. This includes offering promotional plans, advertisements, posters and consultation services. If their advice, planning and promotional activities for suppliers can be verified, it meets the requirements of use under the Trademark Law.

【Use Inconsistent with Registration - On Trademark】In a non-use cancellation, if the sign image in actual use differs  from the trademark approved for registration, can the registration be maintained?

According to Article 24 of the Trademark Law, if a registrant wants to change the sign of its registered trademark, a new application for registration shall be filed.

Paragraph 1 of Article 49 states that if a registrant alters the registered trademark, or alters the registrant’s name, address or any other registration details while using the mark, the local administrative department for industry and commerce will require the registrant to make rectifications within a specified timeframe. If the registrant fails to comply, the Trademark Office should cancel the trademark registration.

Based on this, the actual representation of the trademark used by the registrant should be the same or substantially similar to the form that was approved at the time of registration.

Additionally, according to the relevant provisions of the Beijing High People’s Court on Several Legal Issues Requiring Attention in Current Intellectual Property Adjudication, the purpose of establishing the non-use cancellation system is to encourage and supervise registrants’ trademark use, as well as to return idle trademark resources to the public domain rather than punishing the registrants. Therefore, the principle of preponderance of evidence should be adhered to, and the examination of evidence of use shall not be overly stringent.

The current administrative and judicial practice in case review is consistent with the interpretation of this legislative purpose. Article 26 of the Provisions of the Supreme People's Court on Several Issues Concerning the Trial of Administrative Cases Involving the Grant and Confirmation of Trademark Rights clearly states that “if the difference between the registered form and the sign in use is minor so that the distinctive features of the registration do not change, it shall be regarded a valid use of the registered mark.”

In addition, according to the relevant provisions of the Guidelines for Trademark Examination and Adjudication 2021 on non-use cancellation, the following circumstances shall not be regarded as a lawful trademark use under the Trademark Law:

• (3) Use that alters the dominant part and distinctive features of a registered trademark.

In other words, under the non-use cancellation system, the requirements for the form of use of a registered trademark are relatively flexible. Minor adjustments that do not change the dominant part or distinctive characteristics of a registered mark will be regarded as a legal use. However, once the distinctive part of the registered mark is changed and the change leads to significant visual differences, it does not constitute a valid use of the original registered mark.

In the Beijing Administrative Final No. 3983, which resulted in the cancellation of the trademark “NATURONE” in 2018, the Beijing High People’s Court held that the trademark actually used by the registrant was “Infinite Energy” (in Chinese) alongside “NATURONE”. The court held that the Chinese for “Infinite Energy” functioned as the distinctive identifier, making it difficult for consumers to associate the sign in use with the disputed mark and with the same source of goods. As the registrant’s use changed the main distinctive part of its registered mark, the registration was cancelled.

Based on all the above, enterprises should apply for registration using the trademark images that they plan to use. The actual use of the trademark must remain consistent with the registered versions. If significant modifications to the trademark are needed, a new registration should be submitted promptly.

【Overall Strategy for Coping with Non-use Cancellations】How can the risk of non-use cancellations be reduced? And how can a rights holder effectively cope with non-use cancellations filed by others?

As any entity or individual may apply to the Trademark Office for cancellation of a registered trademark that has not been used for three consecutive years – in accordance with Paragraph 2 of Article 49 of the Trademark Law and Article 66 of the Regulations for the Implementation of the Trademark Law – registrants cannot prevent others from filing an application for cancellation, but can use legal means and proactive maintenance measures to reduce the risk of the trademark being cancelled.

The first of such measures is to plan ahead for the registration and use of trademarks. Before submitting the application for registration, the specific form of use of the trademark and the specific goods/services designated should be clarified, and the consistent trademark image and goods/services should be used in the application filing. The corresponding evidence of use should be preserved after registration.

The second measure is to set up an internal evidence collection process. Under the current non-use cancellation mechanism, advertising and sales materials constitute the most important evidence. Completeness of the evidence chain is critical. It is recommended to coordinate the legal, marketing, sales, accounting and logistics departments within the enterprise; archive the advertising, exhibition, sales, trade and logistics evidence related to the trademark, and pay attention to the matching and correlation of materials between different departments.

After receiving the Notice of Providing Evidence of Use for Non-use Cancellation from the Trademark Office, the following conditions may apply:

• If the registrant decides to maintain the trademark, it shall respond to the Trademark Office within the statutory time limit (two months from the date of receipt of the notice) by either explaining the justifiable reasons for non-use during the dispute period (usually objective reasons such as force majeure, policy restrictions, or bankruptcy liquidation, with relevant proof for the reasons) or submitting relevant evidence for actual use of the mark.
• If the disputed mark is important, but the evidence of use is insufficient, it is still necessary to collect relevant evidence of use in preparation for responding to the Trademark Office. It is also recommended to conduct a background check of the counterparty and seek a possible amicable settlement where the circumstances allow.
• Upon receipt of the Notice, an internal review should be conducted. If the disputed mark is found to no longer be in use, a further review of pending legal cases should be performed. The registrant can refrain from responding to the Trademark Office if the disputed mark is not cited in any live cases. As a result, the disputed mark will be cancelled.

Other Notable Q&As from This Chapter

• 【Symbolic Use】If a registered trademark is subject to a cancellation raised by other party – based on the mark’s non-use in three consecutive years – can the registration be maintained if the mark was used in a limited number of advertisements or exhibitions during that period?
• 【Non-public Use – Preparatory Stage】In a non-use cancellation case, if the registrant made continuous preparations for trademark use in the disputed three years – but started the trademark use after that – can the registration be maintained?
• 【Non-public Use – Transaction with Related Parties】In the case of a non-use cancellation, if the registrant used its trademark in transactions with its related entity and kept proof of these transactions, can the registration be maintained?
• 【Trademark License or Assignment during the Dispute Period】In the case of a non-use cancellation, if the registrant licensed or assigned the disputed mark to others during the disputed three-year period, can this maintain the registration?
• 【Impact of Trademark Non-use Cancellation on the Plaintiff’s Rights to Sue】If a registered trademark is cancelled due to “non-use for three consecutive years”, can the trademark owner still sue others for trademark infringement?
• 【Impact of Trademark Cancellation on Compensation Claims for Infringement】If a registered trademark is cancelled due to "non-use for three consecutive years", can the trademark owner claim compensation against the infringements committed during the validity period of the trademark?
• 【Bad Faith Trademark Cancellation Claim】Can the registered trademark owner claim compensation for the damage suffered by others who abuse the trademark administrative procedure to maliciously file for trademark cancellation?

Request a Full Copy

In collaboration with our strategic partner Lusheng in China and Wolters Kluwer, Rouse has developed a valuable resource for rightsholders: “The Practical Q&A Guide to Cutting-Edge Intellectual Property Issues in China”. This guide, compiled by over 30 senior China IP experts from the two leading IP firms, addresses the key concerns of businesses by providing insights on patents, trade marks, copyright, trade secrets, internet unfair competition, intellectual property investment, and punitive damages in an accessible Q&A format. It offers readers the latest legal interpretations, case studies, and practical guidance applicable to their operations.

To request a full copy, please complete the form through the link here.

Please note due to publishing restrictions we may not be able to fulfil every request. The application will be reviewed, and the report will only be available to corporate organizations. Thank you for your understanding.

Chapter Contributors

Alice Yu, Head of Shanghai Litigation Team, Lusheng Law Firm, ayu2@lushenglawyers.com

Melanie Zhu, Principal, Head of Shanghai Trade Marks & Brands Team, Rouse, mzhu@rouse.com

Laura Zhao, Senior Trade Mark Attorney, Rouse, lzhao@rouse.com

Susie He, Associate, Lusheng Law Firm, she@lushenglawyers.com