I. Key Transformations in Legal Structure and Regulatory Approach
China’s intellectual property landscape is undergoing a major shift towards necessitating significant commercial utilization. An important aspect of this shift involves the China Trademark Non-Use Cancellation, which is addressed in the proposed amendments to the Trademark Law (CNIPA Draft Amendment, January 2023). These amendments fundamentally change the requirements for maintaining trademark registrations. Article 5 requires proof of actual commercial use or binding commitments to use prior to registration approval. Article 61 introduces a new post-registration verification process, mandating that rights holders submit Statements of Use every five years, with non-compliance resulting in automatic cancellation. These legislative changes aim to tackle persistent issues in trademark usage, as indicated by 2023 CNIPA data revealing that 34.7% of registered trademarks were inactive. This legal transformation is in line with significant progress in legal practices, as Chinese courts and administrative agencies have developed more advanced methods for assessing evidence over the last four years.
Judicial-Administrative Coordination Mechanisms
Three interrelated developments define current enforcement practices.
- First, the Beijing Intellectual Property Court noted that 87% of non-use cancellation appeals from 2021 to 2023 focused solely on disputes over the sufficiency of evidence.
- Second, the Supreme People’s Court issued binding evidentiary guidelines through its 2022 Judicial Interpretation No. 22, establishing a “high probability” standard that emphasizes commercial reality over formal accuracy.
- Third, CNIPA handled 63,291 non-use cancellation cases in 2023, with 58.4% resulting in full or partial cancellations, highlighting the importance of strong evidence in maintaining registrations.
II. Increased Scrutiny of Evidence: Legal Developments
Rigorous Authenticity Verification Standards
Both administrative and judicial authorities now require high-level validation for electronic evidence, dismissing submissions that lack institutional verification. The BIN HU SHAN REN case (CNIPA Decision SHANG PING ZI [2023] No. 213047) illustrates this trend, where un-notarized promotional content from Weibo and Taobao was rejected due to risks associated with platform editability. Similar rulings have invalidated payment confirmations sent via email without digital signature verification (PREVENT Mark Case) and unverifiable application screenshots (DA MAI GONG YU Case).
Conversely, CNIPA has increasingly utilized state verification systems to proactively authenticate evidence, as seen in the DAO DENG DO.D case, where VAT invoices were verified through the National E-Invoice Verification Platform. This investigative approach indicates a shift towards more active administrative evidence verification.
Essential Evidence Chain Requirements
Recent legal rulings have established that isolated documents cannot prove genuine commercial use. The 50 LAN beverage trademark case rejected authorization contracts that did not demonstrate market circulation. Similarly, the SI SHUI KU apparel registration was denied despite production agreements lacking retail evidence of market presence.
For export-oriented businesses, the PRECUT tools case determined that customs declarations must be accompanied by release certificates to show completed commercial transactions. These cases collectively establish a doctrine requiring interconnected documentation that traces commercial activities from production to market distribution.
Exact Mark-Goods Correlation Requirements
Precision in the use of marks across designated goods/services has become crucial. The MAVIC case invalidated registration despite significant product commercialization because the evidence showed minor stylistic differences from the registered mark. The Beijing High Court’s HPDC ruling determined that model name usage is non-trademark functionality, regardless of commercial scale. Additionally, the MAI DONG pharmaceutical case clarified that descriptive terms cannot gain trademark status through regulatory submissions. These precedents collectively assert that evidence must clearly show the exact registered mark functioning as a source identifier for the specified goods/services.
III. Contextual Flexibility in Modern Evidence Evaluation
The Token Use Reassessment Doctrine
The Supreme People’s Court has introduced a degree of flexibility tailored to specific sectors through the JIN JIANG FISHING case (Case No. (2020) ZUI GAO FA XING SHEN No. 9798). This significant ruling accepted less-than-perfect evidence from the fishing industry, where standard documentation was often impractical due to specialized practices. The court emphasized the importance of commercial reality over formal precision, applying a “high probability” standard while taking into account the unique characteristics of the industry. This shift recognizes the operational distinctions between manufacturing industrial equipment and consumer retail packaging.
Acknowledgment of Functional Equivalence Beyond Classifications
Administrative practices demonstrate flexibility regarding the classification of goods and services, allowing functional equivalence to go beyond literal definitions. In the LIANG ZHI LAO HU case, the court upheld the registration of medical ice packs based on evidence of antipyretic patches, acknowledging their essential medical equivalence despite differing names. Similarly, the CHU LIU XIANG ruling validated the commercialization evidence for Baijiu as “alcoholic beverages (excluding beer)” by establishing that Chinese liquor is a recognized subclassification. These rulings illustrate a more nuanced approach that prioritizes the actual nature, function, and consumer perception of goods and services over rigid classification standards.
IV. Implementation of Institutional Evidence Management Framework
Commercial Lifecycle Documentation Framework
To effectively preserve evidence, a systematic organization across three commercial phases is essential. Documentation for the production phase should encompass manufacturing agreements that include technical specifications for trademarked products, third-party quality certifications for large-scale production, and tax-compliant invoices that display registered trademarks. To verify commercialization, it is necessary to have distribution agreements that outline territorial rights, e-commerce transaction logs validated through platform mechanisms, and customs documentation with official release confirmation stamps. For promotional verification, blockchain-timestamped campaign materials, records of participation in exhibitions showcasing trademarks, and signed influencer contracts that reference trademarks are required.
Evidence Chain Integration Strategy
A robust defense against cancellation relies on unbroken evidence chains that chronologically and transactionally trace commercial activities. Coordination between production and distribution requires that manufacturing dates occur before shipment records, with matching batch numbers. Transactional validation necessitates a connected documentation sequence where sales contracts reference payment receipt numbers that correspond with delivery confirmations showing the same trademark representations. The link between promotional and commercial activities requires that marketing campaign launch dates precede documented increases in sales volume through financial systems. Current evidentiary standards also demand technical consistency, such as VAT invoice numbers aligning with sales contract references without discrepancies.
Technological Authentication Framework
Modern evidence preservation necessitates institutional-grade technology that aligns with CNIPA authentication systems. Blockchain solutions, such as the Hangzhou Internet Court Blockchain, provide SHA-256 hashing at the time of evidence creation, while the Supreme People’s Court Judicial Blockchain Alliance offers multi-node verification that exceeds traditional notarization methods. E-invoicing integration with the Golden Tax System IV enables real-time verification codes embedded in QR-authenticated VAT documentation. Centralized digital repositories should employ immutable storage solutions like AWS S3 Glacier with WORM compliance or Alibaba Cloud OSS with cryptographic audit trail preservation.
Brand Implementation Standardization
Standards for visual prominence require that trademark representations cover a minimum of thirty percent of the main display areas on product packaging. The consistent application of the registered trademark symbol with all uses of the mark reinforces the intent to identify the source rather than merely serve decorative functions. Companies overseeing trademark portfolios should adopt typographical differentiation strategies to set apart subsidiary marks, using distinct visual features to prevent conflicts, as demonstrated in the POLOBYRALPHLAUREN case.
V. Industry-Specific Implementation Protocols
Implementation of Fast-Moving Consumer Goods (FMCG)
The retail-focused nature of FMCG operations requires a framework centered on point-of-sale verification. Essential documentation includes monthly retail audit reports from third-party sources that show shelf presence in key distribution channels. The technological aspect involves integrating blockchain timestamping into electronic point-of-sale systems to maintain unalterable transaction records. Compliance requires a distribution coverage of ninety-two percent for SKUs, supported by verified photographic evidence that confirms trademark visibility in retail environments.
Compliance in the Pharmaceutical Sector
Regulatory guidelines significantly shape the evidence needed for the commercialization of pharmaceuticals. New drug applications must present trademarked packaging to the National Medical Products Administration to verify trademark usage. During production, batch release certificates must specifically mention the applied trademarks along with quality control documents. Digital records must comply with electronic record standards similar to 21 CFR Part 11 regulations, ensuring the integrity of the audit trail throughout the product’s lifecycle.
Documentation for OEM Exportation
Original equipment manufacturers are facing heightened customs verification requirements. The PRECUT case highlighted the necessity for China Inspection and Quarantine certificates that clearly identify registered trademarks along with product descriptions. Evidence for international markets must include import documentation from the destination countries and local regulatory submissions that display Chinese trademarks. The integration of GS1 barcodes aids in supply chain tracking and automatically links trademark registration, providing irrefutable proof of commercialization.
VI. Development of Strategic Compliance Infrastructure
Institutional Evidence Management Framework
Large organizations should form specialized teams responsible for evidence management that conduct quarterly audits in line with ISO 27001 standards. These teams oversee the preservation of evidence across various departments, including procurement, production, marketing, and distribution, ensuring compliance with time integration requirements. The use of AI-driven predictive analytics can help automatically identify evidentiary gaps and expiration dates, allowing for timely corrective measures to mitigate cancellation risks.
Legislative Amendment Preparedness
Proactive companies are developing Statement of Use templates that align with the draft Article 61 requirements, featuring automatic blockchain verification fields that work with CNIPA systems. At the same time, corporate legal teams are creating intent-to-use protocols that include board-approved commercialization plans with phase-gate implementation markers and capital expenditure approvals that specifically address trademark deployment milestones.
Proactive Portfolio Risk Mitigation
Implementing strategic abandonment protocols is becoming increasingly important for non-core registrations that are unlikely to be commercially viable. Trademark consolidation initiatives aim to replace defensive registrations with strategically relevant marks that demonstrate potential for commercialization. To be prepared for litigation, it is essential to maintain updated pre-notarized evidence bundles on a quarterly basis, along with retaining expert witnesses who have technical validation credentials recognized by CNIPA tribunals.
VII. Strategic Imperatives for the Future
The swift alignment of judicial and administrative standards for evidence calls for systematic evidence management across organizations. According to industry benchmarking studies from 2023, forward-thinking companies that adopt thorough preservation systems experience a 78% reduced risk of cancellations. To ensure future compliance, organizations will need to integrate technology that goes beyond conventional legal practices, with blockchain authentication becoming crucial for preserving evidence. More industry leaders are designating Chief Trademark Officers who have the financial authority to oversee the implementation of preservation technologies, reflecting a growing understanding that upholding evidentiary integrity is now a strategic corporate asset rather than just a reactive legal requirement.
Key Legal References: Draft Amendment to the Trademark Law (CNIPA, January 2023); Supreme People’s Court Interpretation No. 22 on Evidence Examination in Intellectual Property Cases (2022); Administrative Measures for Electronic Data Authentication in Market Regulation (SAMR Order No. 56, 2021); CNIPA Guide to Examination of Trademark Use Evidence (2024 Revision).