Complete Guide to China Trademark 3-Year Non-Use Cancellation for Foreign Businesses
For foreign brands planning to enter or already established in the Chinese market, understanding and effectively utilizing China’s “Three-Year Non-Use Cancellation” system is crucial for protecting brand assets and eliminating market obstacles. This article will systematically analyze all aspects of this procedure, focusing especially on the common challenges and strategies for foreign businesses.
Critical Information for Foreign Businesses
The “Three-Year Non-Use Cancellation” system has evolved significantly in recent years, with higher evidence thresholds and stricter requirements. This guide provides actionable strategies for both defending your trademarks and challenging competitors’ unused marks. Depending on the situation, you can also protect your trademark rights through Opposition, Declaration of Invalidity, and Litigation.
1 What is “Three-Year Non-Use Cancellation”?
“Three-Year Non-Use Cancellation” is a statutory trademark clearing procedure in China. The core regulation is: if a registered trademark has not been commercially used in China for three consecutive years without justifiable reasons, any individual or entity can apply to the China National Intellectual Property Administration (CNIPA) to cancel it.
Legal Definition of “Use” in China:
Under Chinese law, “use” is strictly defined and must meet the following conditions:
- Public, real, and legal commercial use
- Use on the approved goods or services
- Use within mainland China
Important: Holding a trademark registration certificate, engaging in token “symbolic use,” or using it only overseas will not be recognized as valid use.
2 Why is this System in Place? Core Objectives and Recent Developments
1. Clearing idle resources
Removing “zombie trademarks” and releasing naming resources for market participants with genuine needs.
2. Strengthening the obligation of use
Ensuring that trademark rights are based on and serve real commercial activities, preventing rights from being “idle.”
3. Combating malicious hoarding
Addressing trademark hoarding behaviors aimed at selling or hindering competition.
Important Evolution:
In order to prevent abuse of the system, Chinese authorities have significantly raised the thresholds for applying. Applicants are now required to submit more substantial preliminary evidence, steering the procedure back toward rationality and integrity.
3 Cost Breakdown: What to Budget For
Official Fees
The administrative fees paid when submitting the application. The current standard is approximately:
- Electronic application: 450 RMB/class
- Paper application: 500 RMB/class (gradually being phased out)
Exact fees may vary based on official announcements.
Investigation and Professional Service Fees
This is a non-negligible part of the total cost, including:
- Systematic market investigation fees to meet the evidence requirements
- Service fees for hiring local Chinese agencies to handle the case
4 Detailed Process Overview (12-18 months)
A typical “Three-Year Non-Use Cancellation” case follows this process, usually taking 12-18 months:
graph TD
A["Applicant collects preliminary evidence"] --> B["Submit cancellation application to CNIPA"]
B --> C["CNIPA formal examination"]
C --> D{Materials complete?}
D -->|No| E["Request supplementary materials"]
E --> B
D -->|Yes| F["Officially file case and notify trademark holder"]
subgraph S1 ["Stage 1: Application & Filing (1-4 months)"]
A
B
C
D
E
F
end
F --> G["Defendant's 2-month response period
**Critical stage**"]
subgraph S2 ["Stage 2: Core Dispute (2 months)"]
G
end
G --> H{Defendant submits evidence?}
H -->|Yes| I["CNIPA examines evidence from both parties"]
H -->|No| J["Considered as waiving defense rights"]
J --> I
I --> K[CNIPA makes ruling]
K --> L{Ruling outcome}
L -->|Maintain registration| M["Trademark remains valid"]
L -->|Cancel registration| N["Trademark cancelled"]
M --> O[Procedure ends]
N --> P{Appeal?}
P -->|Yes| Q["Apply for review or litigation within 15 days"]
P -->|No| R[Procedure ends]
subgraph S3 ["Stage 3: Examination & Ruling (6-12 months)"]
I
K
L
M
N
end
subgraph S4 ["Stage 4: Post-ruling relief (Optional)"]
P
Q
end
Note: This flowchart illustrates the complete “Three-Year Non-Use Cancellation” procedure in China. Complex cases or those involving appeals may extend beyond 18 months.
5 Key Differences Between Chinese and Foreign Practices
| Key Difference | Chinese Practice | Insights for Foreign Businesses |
|---|---|---|
| Eligibility to Apply | “Anyone” can apply without proving interest. | Your trademark may be challenged by any competitor, speculator, or even unrelated third parties, creating a broader risk. |
| “Use” Standards | Requires “public, real, and legal” commercial use, and the exact registered trademark must be used. | Any slight modification to the trademark for market adaptation in local promotions (such as font, color) could create legal risks. |
| Burden of Proof | After the procedure is initiated, the burden of proof immediately shifts to the trademark holder (your company), which must submit evidence within 2 months. | You must systematically and proactively maintain usage evidence. Collecting evidence at the last minute often fails to form a valid evidence chain. |
6 Targeted Case Studies
Case Study: “GEOX” Trademark Cancellation Review
Core Case Analysis: Insights for Foreign Businesses
| Case Name | Parties Involved | Core Issue | Key Ruling and Insight |
|---|---|---|---|
| “响” Trademark Cancellation Case | Defendant: Suntory Japan | Was the simplified “响” trademark actually used? | Suntory used the traditional version “響” in China. Registered trademark design must match exactly with actual use. |
| “西域骆驼” Trademark Case | Defendant: American Company | Was the evidence of use provided genuine? | Inconsistent evidence was presumed fraudulent. China has zero tolerance for false evidence. |
| “亨特道格拉斯” Invalidity Case | Applicant: Swiss Company | How to deal with malicious trademark hoarding registered for over 5 years? | Proven malicious hoarding resulted in the cancellation of the trademark. For malicious registrations, alternative actions beyond “Three-Year Non-Use” can be pursued. |
7 Practical Offensive and Defensive Strategies
7.1 As a Trademark Holder (Defender): Evidence File Checklist
Creating a systematic “China-style” evidence archive is your strongest defense. Please follow this checklist and archive all usage evidence related to the Chinese market on a quarterly or annual basis:
| Evidence Type | Specific Items and Examples | Key Requirements and Notes |
|---|---|---|
| Sales Evidence |
|
Contracts and invoices must match, showing trademark, date, product/service, and parties involved. The product name on the invoice should ideally include the trademark. |
| Advertising Evidence |
|
Evidence should reflect public promotional activities and sustained investment. Online screenshots should be notarized on a regular basis (e.g., quarterly). |
| Contracts/Official Documents |
|
License agreements should ideally be registered with CNIPA to enhance their credibility. Manufacturing agreements should show use of the trademark during production. |
| External Recognition Evidence |
|
Third-party evidence holds strong credibility, supporting your brand’s market presence and recognition. |
| Annual Summary Evidence |
|
Comprehensive reports can demonstrate the ongoing use of the trademark, reinforcing other evidence. |
7.2 As a Cancellation Applicant (Offensive Side): Evidence Collection Checklist
Before applying, it is crucial to systematically gather evidence that the target trademark has not been used. The following checklist will guide your efficient work:
| Investigation Stage | Specific Actions and Evidence Type | Collection Method and Value |
|---|---|---|
| Preliminary Search |
|
Provides evidence that the trademark is not in active commercial use and that the registrant might have no relevant business. This is the basis for launching the investigation. |
| In-depth Market Investigation |
|
Proves that the trademark has not been used in specific industry sectors, ruling out its use in niche markets. |
| Comprehensive Analysis |
|
Forms a logically consistent evidence chain, proving the trademark has not been used for the required period, meeting the new application requirements. |
8 Risk Assessment and Success Rate Judging Criteria
8.1 For Defenders: Is Your Trademark Safe?
You can quickly assess the “Three-Year Non-Use” risk level of your trademark using the table below. Each standard can be evaluated as “Yes/No,” or rated from 1 to 5 (5 being the best).
| Evaluation Dimension | Safe (Low Risk) Performance | Dangerous (High Risk) Performance | Self-Assessment |
|---|---|---|---|
| Consistency of Trademark Design | All commercial activities in China use the trademark exactly as registered. | The trademark used differs in font, color, or graphical elements. | |
| Completeness of Evidence Chain | Able to provide a consistent evidence chain of contracts + invoices + actual goods/promotion for the core goods/services over the past three years. | Evidence is isolated or scattered (e.g., only contracts, no invoices), or concentrated in a specific period. | |
| Continuity of Use | Sales or promotional activities are reasonably distributed over three years, in line with industry practices. | Only a few token transactions or activities, or a sudden surge in activity before being challenged. | |
| Evidence Coverage | Evidence covers most of the core registered goods or services. | Evidence only covers a small range of goods, leading to the possibility of partial cancellation. | |
| External Evidence Support | Third-party evidence (e.g., media coverage, industry awards) supports brand activity in China. | All evidence is self-generated without any external objective evidence. |
Conclusion Reference:
8.2 For Attackers: Is It Worth Filing a Cancellation Application?
Before investing, assess the likelihood of success based on these five key factors:
Strength of Non-Use Evidence
The more comprehensive and compelling negative evidence (e.g., long-term lack of use across multiple channels, business closure), the higher the success rate.
Trademark Holder’s Status and Nature
- Professional Trademark Hoarders/Shell Companies: They rarely use trademarks, making the success rate high.
- Well-established Foreign Enterprises: Likely to have strong evidence, making challenges difficult; proceed with extreme caution.
- Small to Medium Enterprises with Abnormal Operations: Might be poorly managed, yielding a medium success rate.
Resources and Evidence Preparation
Can you afford the investigation costs and time? Can you provide qualified preliminary evidence? The more prepared you are, the higher your success rate.
Risk and Cost
Assess the importance of the target trademark to your business. If it’s crucial, even with a lower success rate, it may still be worth pursuing. Also, consider potential counteractions (e.g., malicious lawsuits).
Success Rate Estimate:
High (>70%)
Medium (40%-70%)
Low (<40%)
Final Decision Advice: When the success rate is “medium” or “high” and the trademark is of significant commercial value, it is worth initiating the procedure. If the success rate is low, unless there are strategic reasons, it’s not advisable to proceed lightly.
9 Frequently Asked Questions (FAQ)
Q1: Our company has a globally unified brand usage policy, but we have to make minor adjustments for the Chinese market. Does this pose a risk?
A: Yes, there is a risk. As mentioned, the safest approach is to apply for a separate trademark registration for the version used in China. If only the adjusted version is used and the original registered version is not, it may be subject to cancellation due to “non-use for three consecutive years.”
Q2: Can we count the sales made by our distributors in China as use?
A: Yes, but under strict conditions: 1) You have a proper trademark licensing agreement with the distributor; 2) This licensing agreement should ideally be registered with CNIPA (while not mandatory, it greatly strengthens the evidence); 3) You can provide a chain of evidence showing the distributor’s real sales activities in China (such as distribution contracts, corresponding invoices).
Q3: If the trademark is partially canceled (i.e., canceled only in some approved goods), will it affect our original trademark certificate?
A: Yes, the CNIPA will issue a “Partial Cancellation of Trademark Registration Decision” and publicly announce it. Although the original certificate may not need to be returned immediately, the scope of trademark rights has legally changed, and in future enforcement or licensing, the modified scope must be followed.
Q4: Do all documents need to be translated into Chinese and notarized when submitting evidence?
A: Yes, this is a key requirement for foreign companies. All documents originating outside China (e.g., statements from the parent company, overseas advertising contracts) typically need to be:
- Translated into Chinese by a qualified translation agency.
- Notarized in the country where the document was issued.
- Certified by a Chinese embassy or consulate.
This process takes time, so plan ahead during the 2-month response period. Documents generated within China (such as contracts with Chinese customers or photos from Chinese exhibitions) do not require this process.
