Must a Chinese Trademark Be Cancelled After Three Years of Non-Use?

1. The three-year non-use rule

Under Article 49 of China’s Trademark Law, any entity or individual may apply to the Trademark Office to cancel a registered trademark that has not been used for three consecutive years without a justified reason.

2. Circumstances in which a mark may remain registered

A mark is not necessarily cancelled merely because it has been unused for three years. There are two principal exceptions.

First, the relevant period is the three years immediately preceding the filing of the cancellation request. If the alleged period of non-use falls outside that prescribed period, cancellation on that basis will not follow.

Second, a registrant may intend to use the mark but be prevented from doing so for justified reasons accepted by the Trademark Office.

Justified reasons include the following:

(1) Force majeure: unforeseeable, unavoidable and insurmountable circumstances, including natural disasters such as earthquakes, typhoons and floods, or human and social events such as war.

(2) Government policy restrictions: new laws, policies or administrative measures that prevent the registrant from using the mark.

(3) Bankruptcy liquidation: inability to use the mark because the registrant is undergoing bankruptcy liquidation as a result of serious losses or insolvency.

(4) Other justified reasons that are not attributable to the registrant.

The first three categories are relatively clear. The fourth requires particular care where a trademark has been assigned: the assignment procedure itself does not constitute use, and assignment is not, in itself, a justified reason for non-use. Before accepting an assignment, an assignee should investigate the mark’s use during the preceding three years to reduce the risk of cancellation after the transfer.

3. Responding to a non-use cancellation request

Within two months after receiving the Trademark Office’s notice, the registrant must submit evidence of use during the three years preceding the cancellation request, or explain and substantiate a justified reason for non-use.

If no evidence is submitted, or the evidence is invalid, and there is no justified reason for non-use, the Trademark Office will cancel the registration. A registrant that genuinely intends to use a mark but has temporarily been unable to do so should therefore explain the justified reason and provide supporting evidence within the prescribed period.