MyLink Law Office

According to the Trademark Law, where a registered trademark stays unused for three consecutive years without a reasonable reason, any company or individual can file application to cancel the trademark.

The reasons for not using a registered trademark vary. It could be because the owner of the trademark has abandoned the trademark in its business. However, if the intention of registering a trademark by a trademark squatter is to sell the trademark finally and is not for purpose of use, the registered trademark can also be not really used by the squatter.

Under such circumstances, the procedure of cancellation of a registered trademark with three years non-use may give remedy to a third party who has a stake in the trademark. In particular, if the trademark is squatted and not used for a long time, a third party who has a stake in the trademark (“the Applicant”) may have the opportunity to cancel the trademark and obtain it by re-registration.

In this article, we will discuss how a squatted trademark can be cancelled through three years non-use procedure and how the trademark can be re-registered after it is cancelled.

I. How to calculate the three consecutive years

The three consecutive years shall be three years back from the date of application for cancellation. For example, if the date of application for cancellation is January 10, 2015, then the three years shall be from January 10, 2012 to January 9, 2015.

The trademark squatter is liable to provide evidence of using the trademark during this period.

However, if it is less than three years from the date the registered trademark is approved and announced, then the cancellation cannot be filed.

II. What is non-use?

To understand the non-use, it shall be defined that what form of use is accepted as the use of trademark.

The use of trademark shall meet the requirement of public, real and legitimate commercial use.

The commercial use of a registered trademark includes the use of trademark on commodities, on the package or container for the commodities, as well as on the transaction documents in relation to the commodities, or use the trademark for advertising, exhibition or other commercial activities.

In terms of public, real and legitimate commercial use of trademark, the following requirements shall be met:

1)The use of a registered trademark in public commercial field. The public use means the use is not an internal one. The criteria for public use shall be that whether the relevant public is aware of the existence and use of the trademark in the market. In addition, through the use of trademark, the public is able to identify the source of commodities/service.

2)The use of trademark shall be real and in good faith. It shall not be symbolic use for purpose of avoiding being cancelled.

3)The trademark shall be used on designated commodities/service as indicated on the trademark certificate.

In accordance with the Trademark Law, if the non-use of trademark is with reasonable reasons, the trademark shall not be cancelled. The reasonable reasons include Force Majeure, bankruptcy/liquidation, limit by the government policy etc.

III. After the cancellation is filed, what are the burden of proof by the squatter and the possible defense by the Applicant?

Generally speaking, the cancellation of a registered trademark can be easily brought up without any liability of proof by the Applicant.

In the trademark cancellation procedure, the trademark squatter is liable to submit the evidence of use of trademark. However, if the trademark is not really used, for purpose of avoiding being cancelled, the trademark squatter may try to provide false evidences. According to the procedure, the Trademark Office will examine the evidences provided by the squatter and make decision over the application for cancellation. In the event the trademark is maintained by the Trademark Office, the Applicant filing the cancellation is allowed to file appeal to the TRAB (Trademark Review and Adjudication Board) and respond to the evidences provided by the squatter.

In our experience, in case of appeal by the Applicant, the Applicant may make defense to the evidences in relation to the use of trademark submitted by the squatter as below:

1.To examine whether the user of the trademark is the squatter. Besides the use of trademark by the squatter, the use of trademark by a licensee is also acceptable. However, in the event the evidences are related to the use of the trademark by a licensee, the squatter is liable to prove the licensor and licensee relationship between the squatter and the user of the trademark. Otherwise, the use of trademark by a third party cannot be automatically deemed as evidence in relation to the use of the registered trademark;

2.To examine whether the use of trademark is a public, real and legitimate use;

3.To examine whether the trademark is used on designated commodities/services. In the event the trademark is used on commodities/services which are not in the scope of designed ones as indicated on the trademark certificate, such use of trademark does not constitute the one acceptable to maintain the registered trademark;

4.If the application for cancellation includes the cancellation of specific designated commodities/services, the Applicant shall particularly examine whether the evidences provided by the squatter includes the one indicating the use of trademark on these specific commodities/services.

5.To examine whether the logo of the trademark in use provided by the squatter is same as the registered one.

IV. Suggestions for re-registration of trademark after cancellation

In the event the Applicant for cancellation is the one whose trademark is squatted, once the application of cancellation is supported, the Applicant shall consider how to re-register the trademark successfully and avoid the trademark being squatted by others again.

Under current rules, within one year upon the cancellation of a registered trademark, the Trademark Office will not grant any application for same or similar trademark registration. Therefore, in consideration of the principle of earlier application, earlier being granted, the Applicant shall file the application for trademark registration on the first day following the one year period expires.

However, in theory, there is possibility that two or more applicants file the same trademark for registration on the first day following the one year period expires. Under current rules, in case of applications on the same date, the Trademark Office will approve and announce the one with prior use and reject the remaining applications.

Therefore, if two or more applicants file for same trademarks on same or similar commodities/services, the Trademark Office will request the applicants to provide the evidence of prior use, and determine the priority in relation to the applications accordingly.

To ensure successful registration, we suggest after the trademark is cancelled, the Applicant shall create evidences in relation to the use of trademark. To make sure the use of trademark is a public and real one, we suggest the Applicant can use the trademark by making advertisement on a third party media, such as on newspapers, magazines or internet. The effect of such evidences will be much stronger than the ones of internal use.

This article is published solely for the interest of friends and clients and should not be relied upon as the legal advice of any kind from us. Should you have any questions about this article, please contact the partner of Mylink Law Office.

Contact Person：

Erex Chen, Managing Partner

Tel：+86-21-68556500

Email：erexchen@mylinklaw.com