China Trademarks: Use It or Lose It

A trademark registrant in China is not required to use the trademark, but that could soon change. If a draft revision of China’s Trademark Law is adopted, registrants may be required to certify their use of their trademark every five years after registration. We have covered other aspects of the proposed law in Draft Revision to China’s Trademark Law and Bad Faith TM Applicants, Bad News.

According to Article 61 of the draft revision,

The trademark registrant shall, within twelve months after every five years from the date of approval of the registration of the trademark, explain to the administrative department of intellectual property under the State Council the use of the trademark on the approved goods or justifiable reasons for non-use.

Under the current iteration of China’s Trademark Law, a registrant need not proactively demonstrate use of the trademark at any time (though it may need to do so if the registration is challenged on the basis of non-use by another party). If ultimately approved, however, the draft revision will change this state of affairs, requiring trademark holders to certify their trademark use every five years. This represents a significant move by China toward linking trademark rights to the use of the trademark in question—and not just to the registration of the trademark with the China National Intellectual Property Administration (CNIPA).

The framework in the draft revision bears some resemblance to the post-registration trademark maintenance requirements in the United States. Trademark registrants in America must file a declaration of use (also known as a Section 8 declaration) between the fifth and sixth anniversaries of their trademark registration, and then again each time the trademark is renewed every ten years. China’s proposed requirements are more demanding than those in the United States, at least in terms of frequency. Though in the United States the requirement to file a Section 8 declaration tapers off to once every ten years following the first renewal, in China the five-year intervals will continue indefinitely, at least under the current draft revision.

Applicants will still have the possibility of registering trademarks in China even if there is no use of the trademark in China. This is in marked contrast to the United States, where the trademark must already be in use in commerce for the United States Patent and Trademark Office (USPTO) to register it. However, under the China Trademark Law draft revision, it will no longer be possible to indefinitely hold a trademark registration without there ever being use of your trademark. The new Article 61 would, as a practical matter, require use of the trademark commence no later than six years after registration.

If the draft revision becomes law, failure to certify use of the trademark will result in abandonment of the registration. This means China trademark registrants will now have to guard against a pitfall already faced by registrants in the United States and other countries, such as the Philippines. Holders of existing China trademark registrations should be on the lookout for future guidance from CNIPA.

Article 61 also directs CNIPA to “conduct random inspections of the authenticity of the statements, and if necessary, may require the trademark registrant to add relevant evidence.” If you have already registered a trademark in China, you should ensure that you properly document use of the trademark and are able to readily provide the relevant documentation to CNIPA in case of an inspection. Needless to say, falsely claiming use of the trademark in case of an inspection will not be a good idea.

The changes in Article 61 could be positive or negative for international businesses, depending on their situation. On the one hand, it will no longer be possible for a brand to keep trademark registrations alive just in case they decide to use the trademark. Such flexibility is particularly helpful to brands that are in the process of establishing a China presence or which have not yet rolled out the full range of their products to the Chinese market. The draft revision’s new requirements on trademark use will also make it harder to use defensive registrations, designed to keep others from registering and using the trademark in question.

At the same time, the draft revision’s provisions would help CNIPA clear some of its trademark deadwood, which often prevents a brand from registering a trademark due to conflicts with trademarks that are not being used, and in some cases registered to businesses that are no longer going concerns. Article 61’s new requirements also will complicate matters for bad faith actors, such as trademark squatters, as there will be a time limit to how long they can hold a trademark registration for nefarious purposes.

The bottom line for existing or prospective China trademark holders is this: Use the trademark or lose it.