China’s new rules

  The value and purpose of trademark registration not only to confer the trademark owner a monopoly over the trademark, but also to ensure that, when used in commerce, it can be associated with specific goods or services by consumers. Through commercial use, the trademark fulfills its essential purposes, namely distinguishing sources, assuring quality, and advertising, among other things. While an application for registration transforms an unregistered mark into private property owned by a specific entity, the value and purpose of the trademark system will be undermined and the opportunities for others to own the same mark will also be limited if the registrant merely squats on the mark without making genuine use of it. Cancellation is available in many jurisdictions that rectifies the non-use which is an irregular post-registration trademark event. In China, the practice of non-use cancellation has recently been altered.

  In China, if a registered trademark becomes the generic name of the approved goods it covers, or if it is not used for three consecutive years without justifiable reason, any organization or individual can apply to the Trademark Office for its cancellation.[1] A statement of non-use must be submitted in support of a cancellation request. The Trademark Office shall notify the trademark holder of the request and shall require the trademark holder to present evidence of use or justifiable reasons for non-use within two months of notification.[2]

  It is worth noting that the threshold for initiating cancellation proceedings was not high in the past, which spurred an increase in the number of cancellation challenges and a piling up of cases at the Trademark Office. Many of them were filed recklessly and lacked sufficient reasonable supporting evidence; in some instances, a one-page snapshot of a webpage showing the absence of the disputed trademark would be acceptable. Around the beginning of this year, a change was introduced in an effort to reverse the current situation. According to reports in the IP community, the Trademark Office issued notices to the requesting parties, requiring them to add more solid, substantial, and multiple evidence before a case was able to be docketed, such as snapshots of five consecutive pages of search results from at least three major search engines, e-commerce platforms or social media. In several cases, the Trademark Office went as far as to demand an affidavit of good faith.

  On May 26, the Trademark Office of the CNIPA amended and officially published the new guidelines for cancellation actions based on the non-use of trademarks for three consecutive years. Preliminary evidence of non-use¬¬¬—in the form of online search results and market research reports, for example—is now an explicitly required document.[3] It may include, but is not limited to, information regarding the trademark holder’s business scope, operational and legal status, and market presence, among other things. This kind of due diligence work—comprising online searches, market surveys and in-person visits—can be carried out using various sources including industrial platforms, the trademark holder’s official website, WeChat official pages, e-commerce platforms, and physical manufacturing sites.[4] Failure to produce and provide such evidence will result in a rejection of the request.

  In order to challenge a cancellation action and maintain the trademark registration, the owner of the trademark must demonstrate its use in commerce to identify the source of the goods, including the applying of the trademark to goods, packaging or containers, as well as to commercial transaction documents. Additionally, use of the mark in connection with the advertising of goods and services, exhibitions, trade fairs and other business activities relating to the promotion of goods or services may also be deemed acceptable evidence of use.

  Taiwan’s rules

  In comparison, Taiwan likewise permits non-use cancellation but operates under a system that emphasizes substantive review over rigid formalities. A registered trademark may be cancelled if it has not been used for three consecutive years without justifiable reason, has become generic, causes likelihood of confusion due to arbitrary alteration, or is likely to mislead the public as to the nature, quality, or place of origin of the goods or services in the course of actual use.[5]

  There are no restrictions on who can file a non-use cancellation request, and the trademark owner is not considered a necessary party at the time of filing. Requesting parties must, however, present specific and credible factual evidence to support an allegation of non-use.[6] Mere speculation or allegations alone are not sufficient. Preliminary evidence of non-use is admissible only if it is sufficient to convince the examiners. According to Taiwan’s Examination Guidelines, acceptable preliminary evidence includes documentation of visits to the trademark owner’s business premises, records of industry inquiries, and indications of long-term non-use such as dissolution or cancellation of the owner’s business registration, typically supported by official government records.

  Once preliminary findings raise doubt as to whether the mark has been used, the TIPO will notify the trademark owner to respond.[7] At this stage, under the negative fact theory, the burden shifts to the owner to demonstrate actual use or to provide a legitimate reason for non-use in order to maintain the registration of the disputed trademark.[8]

  Under Taiwan’s trademark system, maintaining a valid registration requires more than just token use. According to Article 5 of the Trademark Act, trademark use must occur “in the course of trade” and be identifiable as a source indicator by relevant consumers. Such use includes affixing the mark to goods or packaging, displaying or selling the goods, using the mark in services, or applying it to advertisements and commercial documents, including those in digital environments. In order to qualify as genuine, the use must serve a marketing purpose and must clearly differentiate the owner’s products in the marketplace.

  To demonstrate such use, the trademark owner must submit materials that reflect typical commercial activity and conform to ordinary business practices.[9] According to the Notice on the Use of Registered Trademarks released by the TIPO, acceptable forms of evidence include products, photos, packaging, containers, signage orders, advertising materials, shipping documents, export declarations or contracts showing the registered mark. Other relevant materials include business operation records or photos of service premises, especially if accompanied by proof of income such as receipts or invoices.[10] Importantly, such evidence must clearly identify the trademark, the specific goods used, the time and date of use, and the user’s identity, or otherwise enable these elements to be corroborated by cross-referencing documentation.[11] Simulated or last-minute use—specifically within the three-month period prior to the filing of the cancellation—in an attempt to circumvent cancellation is not accepted as valid.

  In conclusion, both China and Taiwan maintain non-use cancellation mechanisms that shift the burden of proof to the trademark holder once an action is lawfully instituted. In response to rising misuse, China has tightened its evidentiary thresholds at the first stage, requiring multi-source documentation and declarations of good faith before a case is even accepted for examination. In contrast, Taiwan does not impose such strict procedures on the requesting party, but still requires a preliminary presentation of sufficiently detailed and reasonable factual grounds to enable the TIPO to challenge the mark’s continued use.

  Overall, both systems pursue the same goals, namely preventing trademark hoarding and safeguarding trademark distinctiveness. In practice, however, Taiwan’s framework places greater emphasis on substantive fact-finding and flexible assessment, avoiding procedural exclusions based on rigid formalities. The table below provides a comparative summary of key aspects of trademark non-use cancellation in China and Taiwan.

Table 1: Three-year Non-Use Cancellation between China and Taiwan in Comparison

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