In recent years, Chinese trademark law has undergone a notable shift, with greater focus placed on the genuine use of trademarks. As a result, there has been a marked increase in cases where defensively registered trademarks have been cancelled due to lack of authentic commercial use. Registering and maintaining a trademark requires considerable time and financial resources, a challenge that is especially pronounced for companies managing large portfolios that may include hundreds or even thousands of marks. Consequently, effectively managing and “revitalizing” these inactive defensive trademarks has become a critical and urgent issue that calls for practical solutions.
Many foreign trademark owners, however, have yet to fully recognize this change. They often hold onto the outdated notion that once a trademark is registered, it remains permanently protected—a “set-and-forget” asset. In reality, this mindset is no longer aligned with the current direction of China’s trademark policies. It is therefore essential for foreign trademark holders to give this matter their full attention. They should carefully evaluate whether their registered trademarks are actively in use and develop clear strategies to reactivate those that are not.
A recent article <新形势下商标管理实践与应对策略——聚焦囤积与撤三制度> published by China Trademark Association offers an in-depth discussion on this subject. Given its valuable insights, I summarized some key points below for your convenience and reference.
I. Introduction
In its continuous efforts to uphold an effective trademark management system and promote fair market competition, the Chinese government has steadily improved its policies and regulations regarding trademark usage and the evidence needed to prove such use. Two key articles in the China Trademark Law—Article 4, which prohibits trademark hoarding, and Article 49, which sets up a mechanism to cancel trademarks that have not been used for three consecutive years—have significantly influenced trademark law practice. These legal provisions mark a clear transition from a system focused solely on registration to one that prioritizes authentic commercial use. For businesses and trademark agencies, thoroughly understanding these policies and developing strong, forward-thinking strategies is not just recommended but essential for successfully navigating the complexities of China’s current intellectual property environment and protecting valuable brand assets. This paper explores the practical effects of these laws, drawing on landmark cases such as “Yu Hui Bao,” “Zhen Jin Jiu,” and “Mona Lisa” to offer a detailed analysis and practical recommendations.
II. Interpretation of National Policies Regarding Evidence of Trademark Use
(I) Defining and Regulating Trademark Hoarding under Article 4 of the Trademark Law
Trademark hoarding presents itself in various forms in practice, making a clear and precise definition essential for effective regulation. Currently, the identification of hoarding behavior relies on a comprehensive evaluation of both subjective and objective factors.
From a subjective perspective, trademark hoarding involves “bad faith” actions, where applicants knowingly seek trademark registration not for genuine use but to gain improper benefits by accumulating marks. Such tactics may include selling trademarks at inflated prices, initiating infringement lawsuits to extract settlements, or hindering competitors’ business activities. A typical example is speculators who target well-known trademarks by registering numerous similar marks solely to resell them to the original trademark owners or other businesses at a premium. This behavior fundamentally breaches the principle of good faith and clearly demonstrates subjective malice.
Objectively, trademark hoarding is characterized by applications for a number of trademarks that exceed the reasonable needs of production and business operations. The concept of “normal production and business needs” is concrete and must be evaluated in light of the applicant’s business scale, industry characteristics, and development plans. For example, a small retail company applying for a large volume of trademarks across unrelated categories within a short period is likely engaging in hoarding. Additionally, hoarders often follow identifiable patterns, such as extensively imitating and preemptively registering famous or well-known trademarks, registering names of prominent individuals or corporate trade names, monopolizing public resources, or repeatedly and maliciously applying for trademarks linked to the same enterprise. These practices result in the unreasonable occupation of trademark resources and disrupt the orderly registration process.
Since the 2019 amendment to the Trademark Law, the China National Intellectual Property Administration (CNIPA) has established a multi-dimensional examination system to assess the applicant’s genuine intent to use the trademark. This system considers factors such as the volume of applications, the public nature of the terms involved, and the applicant’s actual business needs, effectively curbing malicious trademark hoarding and encouraging enterprises to apply for trademarks based on legitimate commercial purposes.
(II) The Three-Year Non-Use Cancellation System under Article 49 and Recent Enhancements
Article 49 of the Trademark Law allows any individual or organization to apply to the Trademark Office to cancel a registered trademark if it has not been used for three consecutive years without valid justification. In recent years, the government has refined and strengthened this system. On one hand, applicants must now file cancellation requests in their own name and submit relevant commitment documents, which helps prevent abusive or malicious cancellation claims. On the other hand, trademark owners face more stringent requirements when submitting evidence of use. They are expected to provide a comprehensive set of documents—such as contracts, invoices, and sales records—to clearly demonstrate the trademark’s commercial use. This has notably increased the evidentiary burden on respondents.
The Zhen Jin Jiu (真金酒) trademark cancellation case serves as a successful example of defending against such challenges. Kinmen Kaoliang Liquor Co., Ltd. filed to cancel a trademark owned by Liansheng Wine Co., Ltd., citing three years of non-use. In response, Liansheng Wine presented a robust collection of evidence, including distribution agreements, sales agency contracts, and various transactional documents related to sales of Zhen Jin Jiu products to China Express Airlines. These pieces of evidence corroborated each other, forming a complete and convincing chain that demonstrated genuine commercial use in the relevant market. After reviewing the case, the court determined that Liansheng Wine’s evidence sufficiently proved the trademark’s legitimate and effective use during the specified period, thereby upholding the decision of the Trademark Review and Adjudication Board. This case highlights the vital importance of proactively gathering, preserving, and thoroughly substantiating evidence when facing a three-year non-use cancellation challenge.
In contrast, the Mona Lisa(蒙娜丽莎) trademark cancellation case illustrates the risks associated with insufficient evidence. Mona Lisa Group Co., Ltd., dissatisfied with a final ruling by the Beijing Higher People’s Court ((2021) Jing Xing Zhong No. 1608) in an administrative dispute over a cancellation review, filed for a retrial concerning the cancellation of its trademark for products such as lavatories (flush toilets) and closets. The company argued multiple points: that there were justified reasons for non-use beyond its control, that the third-party applicant acted in bad faith, that it had commercially used the trademark during the relevant period, that the trademark’s reputation extended to related goods, and that the cancellation procedure was unlawful. Guangzhou Mona Lisa Building Materials Co., Ltd., the respondent, maintained that the contested decision was lawful and should be upheld. Upon retrial, the Supreme People’s Court found that Mona Lisa Group’s evidence was insufficient to prove genuine, legal, and effective commercial use of the trademark on the specified goods. In February 2022, the court rejected the retrial application. This case clearly demonstrates the significant risk of trademark cancellation under the three-year non-use system when the respondent fails to provide adequate evidence.
III. Tailored and Innovative Approaches for Corporate Trademark Management
(I) Trademark Application Phase
Strategic Trademark Portfolio Planning: Companies should align their trademark strategies closely with their core business objectives, stay informed about industry trends, and proactively secure trademark categories relevant to potential future business ventures. At the same time, it is important to manage the volume of applications carefully, filing only as needed based on actual business operations. This approach helps avoid being perceived as acting in bad faith, thereby minimizing application costs and legal risks.
Proactive Preparation of Usage Evidence: Prior to submitting a trademark application, businesses should develop a clear plan for trademark use and gather supporting documentation. This includes preparing a detailed business plan outlining how the trademark will be utilized in upcoming activities, marketing strategies to promote it, and anticipated market impact. Additionally, a product development roadmap should be created to demonstrate how the trademark integrates with product evolution, underscoring its necessity and practical application.
(II) Trademark Usage and Management Phase
Establishing a Comprehensive Evidence Reserve System: Given the strict evidence requirements under the three-year non-use cancellation rule, companies need to build a robust and systematic evidence reserve. This system should encompass multiple facets:
1. Customized Project Execution: For industries such as software or advanced manufacturing, companies can reinforce trademark use evidence by undertaking tailored projects for clients that clearly showcase the trademark in real business contexts. All related documentation—from proposals to final reports—should prominently feature the trademark.
2. Diverse Promotional Activities: In sectors like FMCG and fashion, evidence can be accumulated through marketing campaigns. For example, including promotional items bearing the trademark with product sales and explicitly referencing these in sales contracts and invoices. Collaborations with popular intellectual properties or well-known brands should highlight the trademark in agreements, promotional materials, and sales platforms. Supporting documents such as contracts, invoices, and webpage links should be preserved, with technical measures like notarization or trusted timestamps employed to securely validate this evidence.
3. Online Platform Management: In today’s digital landscape, online platforms serve as key channels for trademark display and promotion. E-commerce businesses and internet service providers should prominently feature trademarks on official websites and apps, publish related content such as product descriptions, demonstrations, and user reviews, and maintain records like screenshots, operational data, and download logs. Regular updates and content optimization help ensure the trademark’s continuous and stable online presence, reflecting its commercial vitality.
4. Integration of Varied Evidence Types: Beyond standard evidence, companies should collect additional proof of trademark use, including materials from industry trade shows (e.g., brochures, booth photos, flyers) and certificates or awards related to the trademark. Combining these diverse forms of evidence creates a synergistic effect that strengthens the overall credibility and persuasiveness of the trademark’s usage record.
Implementing a Multi-Entity Trademark Portfolio Strategy: Research shows that distributing trademark registrations across multiple affiliated entities can reduce the risk of cancellation of a core trademark. Companies may register and use trademarks under the names of subsidiaries or authorize partners to do so, thereby spreading risk. It is essential to maintain consistent and associated trademark use across these entities and establish coordinated management mechanisms to protect overall trademark rights effectively.
Promoting Standardization and Digitization in Trademark Management: Enterprises are encouraged to adopt trademark management software to enhance administrative efficiency through digital tools. This includes standardizing processes across all stages—from application tracking and usage monitoring to renewal reminders. Leveraging data analytics within such software can provide insights into application trends, usage patterns, and market feedback, enabling optimization of strategies and improving success rates. While standardization is key, flexibility should be preserved to accommodate the unique business, strategic, and cultural needs of each enterprise.
IV. Supporting Enterprises in Preparing Evidence of Use
Developing Tailored Evidence Plans: Considering the evidentiary requirements of the three-year non-use cancellation system, trademark agencies should design customized plans for collecting and preserving evidence of trademark use. These plans should be based on the client’s business profile, industry characteristics, and trademark portfolio. They will provide clear guidance on the focus and approach to evidence gathering, highlighting key points and methods suited to various business scenarios to ensure the evidence is authentic, comprehensive, and relevant.
Thorough Evidence Organization and Review: Regularly organizing and reviewing the evidence collected by enterprises is essential to maintain its quality. Evidence should be systematically categorized and archived by type, date, and business context for easy retrieval and use. During review, agencies must verify completeness, ensuring all necessary elements are included; assess relevance, confirming a clear connection to trademark use; and check legality, ensuring compliance with applicable regulations in evidence collection and formation. For any deficiencies identified, timely recommendations for supplementation and improvement should be provided to help enterprises establish a robust evidentiary chain.
Providing Expert Technical Support and Guidance: Delivering professional tools and technical advice for evidence preservation is a key responsibility of trademark agencies. Agencies should stay informed about emerging technologies and methods, such as trusted timestamps and blockchain-based evidence storage, and recommend these solutions to clients. They should explain the principles, operation, and benefits of these tools, assisting enterprises in mastering techniques for saving and managing electronic evidence, including encrypted document storage and web-page capture. Utilizing such professional tools and technologies enhances the credibility and probative value of evidence, empowering enterprises to effectively address trademark cancellation challenges.
Continuously Improving Service Systems: As trademark agency workloads increase, agencies should leverage professional management systems to boost service quality and operational efficiency. Ongoing investment in system optimization enables comprehensive monitoring and management of business processes. In critical areas like the three-year non-use cancellation, these systems can provide clients with timely, accurate information and expert services, thereby strengthening client trust and satisfaction.
Expanding Personalized Value-Added Services: In a highly competitive market where standardized services are easily replicated, agencies must enhance their ability to deliver personalized services. They should develop exclusive brand development strategies tailored to an enterprise’s industry, market positioning, growth stage, and brand objectives. For instance, for emerging technology firms, agencies might craft trademark portfolios and brand promotion plans centered on technological leadership, aligned with the client’s innovation and market expansion goals. For established traditional brands, agencies could design trademark protection and brand enhancement strategies that incorporate cultural heritage. By offering personalized value-added services, agencies not only address deeper brand development needs but also achieve greater service returns, thereby enhancing market competitiveness and differentiation.
Strengthening Professional Training and Case Analysis: Agencies should regularly conduct internal training sessions for their professional teams, inviting trademark examiners, senior legal experts, and industry scholars to share insights on trademark laws, examination standards, industry trends, and case experiences. In-depth analyses of cases related to the three-year non-use cancellation system should be performed to extract lessons and reinforce understanding of trademark management policies and evidence requirements. Encouraging staff participation in industry seminars and academic exchanges will broaden their perspectives and deepen their expertise. Through continuous training and case study, agencies can cultivate a skilled, service-oriented, and resilient team capable of delivering high-quality, efficient trademark services to enterprises.
V. Conclusion
The dual regulatory frameworks of trademark hoarding under Article 4 and the three-year non-use cancellation system under Article 49 of the Trademark Law play a vital role in standardizing trademark administration and promoting the healthy development of the trademark sector. These policy updates, however, bring both challenges and opportunities for enterprises and trademark agencies alike. Enterprises are encouraged to enhance their trademark application strategies, maintain robust evidence of use, and refine their management processes to safeguard their legitimate trademark rights effectively.
Looking forward, it is essential for both enterprises and trademark agencies to embrace professionalism, innovation, and collaboration to navigate evolving market dynamics and regulatory demands. This approach will foster the growth of the trademark field and contribute positively to economic and social advancement. Recent case analyses underscore the critical importance of compliance with policies and regulations, as well as strategic trademark planning, for both enterprises and agencies. Success in today’s complex and ever-changing trademark landscape depends on continuous learning, innovation, and adaptability.