In 2020, the average number of monthly trademark applications in China reached 775,000. It is expected that the figure has exceeded 800,000 in 2021. With the increase in the number of trademark applications, non-use cancellation actions (NUCs) have also soared. A NUC is an administrative procedure that can be taken by any entity or individual when a registered trademark has not been put in use for three consecutive years without a justifiable reason. NUCs are generally adopted by applicants as a means to overcome the cited marks that block their own trademark applications.
After a NUC is filed, the China Trademark Office (CTMO) will notify the trademark registrant and require that evidence of use for the past three years be submitted within two months. Before 2022, the examination of the evidence of use was quite lax. For a trademark registered in several subclasses, the registrant only needs to submit evidence of use for one subclass or two to maintain the trademark registration in all the subclasses it covers. Under such circumstances, if the petitioner of the NUC wants to get the registration canceled in other subclasses, he will have to lodge an appeal before the Trademark Review and Adjudication Board (TRAB). The TRAB will carefully review the evidence of use and match it against all the subclasses, and cancel the trademark registration on those subclasses for which the registrant fails to provide evidence of use. This explains why 70–90% of trademark registrations are canceled in appeals before the TRAB. In fact, they should have been canceled by the CTMO if the CTMO reviews the evidence of use in a stricter manner.
Now, it seems that the CTMO has decided to refine their long-lasting practices in the review of evidence of use of NUCs. According to the recent notifications of submission of evidence of use from the CTMO, when the registrant only submits evidence of use for some of goods or services, the CTMO will not maintain the entire registration. Instead, the registration will only be maintained for corresponding subclasses for which the registrant has provided valid evidence of use, and the registration in the remaining subclasses will be canceled.
Such a change will benefit petitioners of NUCs in two aspects.
- Previously, given the burden of proof of registrants in NUCs is not demanding, the chance of success in cancelling a registration is low. In order to increase the prospects, registrants usually filed NUCs only against those goods or services in conflict with their own applications so that registrant have to specifically provide evidence of use for these items. Now, petitioner of NUCs no longer need to screen these conflicting items. They can safely proceed with NUCs for the entire registration.
- The change in the examination practice will significantly shorten the timeframe for NUCs. Generally speaking, it takes nine months for the CTMO to complete the examination. If any party lodges an appeal, it takes approx. twelve months for the TRAB to decide. The process is both time-consuming and expensive. The CTMO’s new practice will help petitioners save much time in NUCs so that they can have their own trademarks registered and put them in commercial use as soon as possible.
It is expected that the changes will slightly prolong the timeframe for a single NUC, but in the long term and in the big picture, all trademark applicants with bona fide intent to register and use their trademarks will benefit.