China: Non-Use of Registered Trade Mark May Result in Inability to Enforce Against Others

Does a registered trade mark undergoing a continuous three-year non-use cancellation procedure ("non-use cancellation") but not yet finally cancelled still enjoy exclusive rights? Can the registrant use it to enforce against others for infringement and seek relief? 

Article 55 of China’s Trade Mark Law states that exclusive trade mark rights terminate upon the publication date of cancellation announcement, implying pre-publication validity. Article 57 defines trade mark infringement as unauthorised use of an identical mark on identical goods, or a similar mark on identical/similar goods likely causing confusion. Under Article 64, if an alleged infringer raises a defence of "non-use of the registered trade mark", the court shall require the registrant to provide evidence of actual use within the three years preceding the lawsuit. Failure to prove use and other losses (e.g., goodwill harm, reasonable enforcement costs) exempts the alleged infringer from liability for damages.

Collectively, these provisions conclude that a registered trade mark remains protected after a non-use cancellation application is filed by others until the final cancellation decision takes effect. The registrant can use this as the basis to demand cessation of infringement, although whether compensation can be obtained depends on actual status of use.

The recently published second-instance judgment of the Zhejiang Higher People's Court in the "Little Devil" case [(2024) Zhe Min Zhong No. 758]^*1 challenges this perception.

“Little Devil” Case Summary

An individual registered trade mark No. 9257917 "小惡魔" (Traditional Chinese, "Little Devil") for clothing and other goods. In June 2022, a Hangzhou company filed a non-use cancellation application against it, alleging no actual use of the mark from 9 June 2019 to 8 June 2022 (the "Cancellation Period"). In January 2023, the mark was licensed to a Chengdu company and subsequently assigned to that company. The China National Intellectual Property Administration (CNIPA) initially decided to maintain the mark’s registration for clothing. However, through litigation, the Beijing Higher People’s Court ruled that the mark had not been used in actual and effective use during the Cancellation Period [(2024) Jing Xing Zhong No. 11149]. On 30 April 2025, the CNIPA re-issued a decision, confirming the facts established in that ruling. However, as of this writing, no cancellation announcement has been published to formally confirm that the mark has expired.

The Hangzhou company used the mark "BEASTER & Device" on clothing and used "小恶魔" (Simplified Chinese, "Little Devil") as a title and search keyword for promotional content on online platforms and social media. During the pendency of the non-use cancellation proceeding, the licensee of the above trade mark, a Sichuan Company (an affiliate of the Chengdu company), sued the Hangzhou company in August 2023 for trade mark infringement and unfair competition. The first-instance court found the infringement established. However, in May 2025, the Zhejiang Higher People’s Court overturned the original judgment and rejected all appeals by the Sichuan Company.

The Second-Instance Court's View

The court held that the validity of a trade mark ultimately cancelled for non-use can be divided into three stages:

• Stage 1 (before the filing of a non-use cancellation application): The mark is fully valid and protected.
• Stage 2 (from the time the non-use cancellation application is accepted to the date of the cancellation announcement): The mark is formally valid but has substantially lost its protective value due to the initiation of the non-use cancellation procedure. During this period, regardless of use, this protective value cannot be restored.
• Stage 3 (after the date of the cancellation announcement): Trade mark right ceases.

Regarding Stage 2, the court explained that the fundamental reason for the protection of trade marks lies in their function of identifying the source of goods and carrying goodwill; if a mark is ultimately cancelled due to non-use, it means that it has lost this function and its protection value when the non-use cancellation proceeding is initiated; the subsequent use by others of the identical or similar marks does not actually infringe the lawful rights and interests of the trade mark owner; although the administrative and litigation procedures are time-consuming and cause delays in the cancellation announcement, this does not change the fact that the actual protection value of the mark has been lost on the date when the non-use cancellation application is accepted, and no retrospective judicial protection should be granted during this period.

The alleged infringing acts in this case mainly occurred during Stage 1 and Stage 2. The court held:

1. During Stage 1: The Hangzhou company’s acts constituted trade mark infringement and unfair competition. However, since the registered trade mark was not actually used during this period, no actual loss was caused, and therefore the claim for damages was not established.
2. During Stage 2: The mark had substantially lost its protective value due to the non-use cancellation proceeding. The Sichuan Company no longer had any basis to demand cessation of infringement or compensation, and thus its claims should be dismissed.

Comments

The current Trade Mark Law stipulates that the rights to unused registered trade marks terminate upon the cancellation announcement, with no future validity. However, the second-instance court in this case held that once a trade mark is cancelled for non-use, its legal effect should be traced back to the date the non-use cancellation application was accepted. This appears to indicate the court’s view that, from this date until the cancellation announcement date (a period often spanning years in reality, nearly three years in this case), any infringement lawsuit filed by a registrant against another person using the mark constitutes improper use of the right and should not be upheld. This perspective clearly defies the current legal framework.

Previously, some courts have also ruled that a registered trade mark had lost its substantial protective value due to lack of actual use before final cancellation, such as the Jiangsu Higher People's Court's second-instance judgment in the "Mingjue" automobile trade mark infringement case [(2012) Su Zhi Min Zhong No. 0183]^*2. However, in that case, the registrant had not used the mark in any form, merely holding a registration. Some argued that the registrant's lawsuit itself constituted an abuse of rights. Therefore, the court's view in that case that a trade mark should not be protected because it had not demonstrated commercial value during its validity period was not challenged.

Regardless, the Zhejiang Higher People’s Court’s differentiated determination on the status of trade mark rights after non-use cancellation in the “Little Devil” case is instructive. The judicial perspective reflected in the case—that the exclusive right to use a trade mark ultimately cancelled for non-use terminates from the date the non-use cancellation case is accepted—if adopted, will more effectively curb trade mark hoarding and encourage genuine trade mark use. Specifically, if a registrant hoards trade marks and arbitrarily files infringement lawsuits, the defendant may file a non-use cancellation to suspend the infringement proceedings. Once the trade mark is ultimately cancelled, the alleged acts no longer constitutes infringement, and no compensation is required. 

Whether this view will be widely adopted by other courts remains to be seen.  China is not a case law country. Other courts are not obligated to follow precedent, and judgments on similar issues may differ.  Whether this view will be incorporated into the ongoing revisions of the Trade Mark Law also deserves further attention.

It is also worth discussing that when the registrant is not a pure hoarder and may have made certain use of the mark, is it completely appropriate to infer that the mark has lost its protection value and exclusive rights after the non-use cancellation procedure was initiated simply because the mark was eventually cancelled? In this case, Sichuan company's evidence of use during the Cancellation Period was twice recognised by the CNIPA, although subsequently rejected by the court.  Moreover, Sichuan company appears to have continued the use on a significant scale^*3 as of this writing. In addition, the cancellation announcement of the mark has not yet been published, and theoretically, the trade mark right has not been ultimately lost. Some believe that the court's second-instance judgment on the infringement case appears premature. Others believe that strictly adhering to current law and determining that the alleged conduct was not infringing after the final cancellation announcement would be more consistent with a naive view of fairness.

While the second-instance judgment in this infringement case is effective immediately upon its issuance, the parties involved can still apply for a retrial with the Supreme People's Court before the end of the year. We will monitor subsequent developments.

Implications for Enterprises

In China, although obtaining a trade mark registration does not require prior proof of use, actual use must be made within three years of registration, otherwise there is a risk of cancellation. 

Current trade mark and judicial practice continue to strengthen the legal status of trade mark use. A registered trade mark owner who has not actually used the mark will find it difficult to effectively accuse others of infringement. The defendant may raise a defence that the owner did not use the mark. If confirmed by the court, liability for damages may at least be exempted. According to the above case, it may even directly negate the establishment of infringement.

If the trade mark owner has not sufficiently used the mark previously but resumes use after encountering a non-use cancellation, can the registration be maintained? Chinese trade mark practice once allowed such registrations to survive, treating others’ non-use cancellations as a warning to the trade mark owners to commence use, but current room for this is minimal.

Therefore, brand owners must ensure timely and genuine use of their trade marks after obtaining a registration, and maintain a complete chain of evidence of promotion and actual sales (such as product packaging, advertising, promotional materials, sales records, receipts, invoices, etc.) to mitigate potential cancellation challenges.

Only by genuinely investing in brand creation and use can a solid and inalienable legal and market foundation be established.

References

*1 https://mp.weixin.qq.com/s/0cpRoP3JC1kjICP3Bh_h3g 

*2 https://mp.weixin.qq.com/s/MYo_4_86ZZALF-Wij2MG9Q

*3 https://mbdnz.world.tmall.com/; https://shop145768265.taobao.com/; https://shop358201330.taobao.com/