Beijing Higher People's Court considers evidence of use in non-use cancellation actions

China

The Beijing Higher People's Court has reaffirmed its position that evidence of use filed when defending a non-use cancellation action in respect of a registered mark should demonstrate that the goods bearing the trademark concerned have been circulated substantially in the Chinese market. Merely having a licence agreement in place or submitting an advertisement depicting the subject mark for the recruitment of a general agent in China (and not promoting the goods in question) is not relevant.

In 2009 Italian company Tecnica SPA filed a non-use cancellation action with the China Trademark Office (CTMO) against a Chinese registration for a device mark in Class 25 (Registration No 3038850), which was registered by a Chinese company named Shenzhen City Meite Trading Company Limited (深圳市美特贸易有限公司), on the basis that the said device had not been put into actual use in China by the registrant for the past three consecutive years.

The CTMO held that the subject mark should be cancelled, as Meite had failed to submit evidence of use on or before the prescribed deadline. Meite disagreed with the cancellation decision and filed for a review with the Trademark Review and Adjudication Board (TRAB), and submitted the following evidence:

  • promotional materials (advertisements) and invoices;
  • a licence agreement and the corresponding licence fee payment receipts; and
  • printouts of its website between February 10 2006 and February 9 2009.

Meite also provided reasons why it had not been able to submit such evidence on time to the CTMO.

After examination, the TRAB accepted Meite's reasons for the late filing of the evidence and decided that Meite had provided a complete chain of evidence of actual use of the subject mark. The TRAB found that the evidence filed was valid and showed effective commerce use. Therefore, it maintained the subject registration based on the submissions and evidence filed by Meite.

However, Tecnica disagreed with the decision and filed an appeal with the Beijing First Intermediate Court to revoke the TRAB's decision. The Beijing First Intermediate Court examined the evidence of use filed by Meite and agreed that the items of evidence were correlated and supported each other. The court further held that the mark had been put into actual use, so the registration was maintained.

Tecnica filed a further appeal to the Beijing Higher People’s Court, which overturned the lower court's decision. Accordingly, the mark was cancelled by the Higher Court. The case analysis and reasoning are as follows.

Meite had filed and submitted:

  • a copy of an advertisement bearing the subject trademark for the recruitment of a general agent in China and the invoice for placing such an advertisement;
  • a licence agreement with a Chinese company, together with licence fees payment records and receipts; and
  • undated photos of goods bearing the subject trademark and printouts of Meite's website (www.lafuma.cc) showing the subject mark.

The Higher Court held that the mark should be cancelled on the grounds that the evidence could not support or demonstrate that the subject mark had been put into actual use by Meite or any authorised party or parties during the prescribed period. It took the view that, although the said advertisement did show the trademark, such advertisement could not demonstrate that the mark had been put into use on the items covered by the registration. Apart from undated photos of the registered goods, Meite and/or its trademark licensee could not adduce further evidence to show the actual use of the subject mark as required, even though a licence agreement was filed. The court noted that the goods bearing the mark had not been circulated substantially in the local market.

In the final analysis, it is clear that actual and genuine use of the mark for the registered specification of goods or services is crucial in cancellation actions; brand owners should take note that such evidence of use should be carefully maintained and docketed to show that the goods are being circulated substantially in the market.

Ai-Leen Lim and Lawrence Yeung, AWA IP (Beijing) Co Ltd, Beijing

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