New Standards for Non-Use Trade mark Cancellations in China

Higher Standards for Proving Trade mark Use (for Owners)

Alongside the stricter rules for applicants, China has also raised the bar for trade mark owners to prove “use” if their registration is challenged. In a non-use cancellation defense, it is no longer enough to show token use or minimal activity with the mark. The evidence provided by the trade mark owner must demonstrate real, continuous, and public commercial use of the trade mark in Mainland China.

Key points about the new use standard:

•       Genuine commercial use: The use must be part of actual trade in the relevant goods or services, not just internal or ornamental use. For example, simply printing the trade mark on a brochure or a prototype product once every few years, solely to keep the registration alive, would likely not qualify. There should be business transactions or sales to customers in China under that trade mark - this is a major issue for Australian businesses that only manufacture in China for supply to markets outside China, especially as China is unique in having Customs monitoring of branded products leaving the country.

•       No “symbolic” use: Practices that were sometimes used in the past – like one-off shipments, small online listings, or other sham efforts just to create a record – will be viewed skeptically. Chinese courts and the CNIPA have made it clear that nominal use or use for the sake of maintaining the registration is not sufficient.

• Use must match the registration: The trade mark should be used in the form it is registered and on the goods/services it is registered for. If you registered a logo or a specific English name, for instance, using a significantly altered logo or a translated name might not count as use of the registered mark. Likewise, if your trade mark is registered for clothing but you only used it on accessories, that may not defend against a cancellation for non-use of the clothing category.

•       Time and location: The use must have occurred in the relevant three-year period in Mainland China. Using the mark in other countries or in Hong Kong/Taiwan is irrelevant for the Chinese registration. All evidence should be dated and ideally spread over the period to show continuous use.

Examples of acceptable evidence of use that a trade mark owner should keep include:

•       Product packaging, labels, or tags showing the trade mark, along with dates and details of sales in China.
•       Sales invoices, contracts, or shipping documents indicating products with the trade mark were sold to Chinese customers or distributed in China.
•       Marketing and advertising materials (brochures, online ads, social media posts, trade show materials) targeting the China market, with dates.
•       Screenshots of the trade mark being used on Chinese e-commerce sites or other online platforms, or media articles showing the brand in use.

For small businesses that own a trade mark registration in China, these stricter standards mean you must actively use your trade mark in China’s market and document that use. If you registered your brand in China but have not started doing business there, you could be at risk. After three years, another party could challenge your registration for non-use, and you would need strong proof of genuine use to defend it. Notably, if you are an Australian company that only manufactures in China for export and does not actually sell in China, you should be aware that using your trade mark only on exported goods may not count as “use” in China for these purposes. In such cases, your Chinese trade mark could be vulnerable to cancellation. To secure your rights, consider at least some token domestic sales or marketing in China (if feasible), or be prepared to explain and evidence why there was no use (e.g. delays due to regulatory approvals), though the success of excuses can be uncertain.

Why These Changes Matter for Australian SMEs

These new standards in China’s trade mark system have significant practical implications for foreign small and medium enterprises (SMEs). Australian businesses exporting to China or manufacturing there should take note of the following impacts:

•       Harder to clear out squatters or conflicting marks: If an Australian exporter finds that a Chinese entity has already registered their brand in China (a common scenario in a first-to-file system like China), removing that blockage via a non-use cancellation will now be more challenging. It will require more time, evidence and possibly higher costs to succeed. This can delay market entry or the resolution of trade mark disputes.
•       Importance of early registration: Because cancellation of someone else’s unused mark is no longer quick or guaranteed, it’s more critical than ever to register your trade marks in China as early as possible. Ideally, this means before you start exporting, marketing, or even negotiating with partners in China. Early registration can prevent bad-faith actors from grabbing your brand first. The stakes for securing your mark early have risen dramatically – failing to do so could result in expensive legal battles or even being forced to rebrand for the Chinese market.
•       Increased burden on resources: Larger companies might afford extensive investigations and legal processes in China, but SMEs often have limited budgets. The new requirements (such as hiring investigators to gather non-use evidence or compiling extensive documentation of use) can be costly and logistically difficult for a small business. IP Solved can assist Australian SMEs to engage local Chinese law firms or service providers to meet these requirements, but these extra requirements add to the expense of protecting your brand.
•       Need for ongoing compliance: Owning a trade mark in China is not a “set and forget” asset. Under the tightened rules, Australian companies must ensure they use their registered trade marks in China in a real way and keep proof. If your product launch in China is delayed or plans change, you risk losing the trade mark to a cancellation. This means trade mark strategy should be aligned with business strategy – for instance, if you register a mark but won’t use it soon, be aware someone could challenge it after three years.  It may be necessary to contemplate re-filing for your mark.
•       Risks for contract manufacturers: Many Australian businesses have products made in China for export back home or elsewhere. If a Chinese factory or another local party registers your brand in China (either to extort you or to block exports), these new rules might make it harder for you to fight that quickly. Additionally, if you hold the registration but only use the brand on goods that are exported out of China, you might not satisfy the “use” requirement. In the worst case, a third party could get your Chinese trade mark cancelled and then potentially use it against you (for example, by impeding your shipments through Chinese customs). Protecting your trade mark in China is therefore vital even if you don’t plan to sell there.

In summary, the changes aim to curb abuses of the system, but they also mean foreign businesses must be more proactive and diligent in managing trade marks in China. For Australian SMEs, a market like China – which is a major trading partner – presents huge opportunities, but also challenges like these new trade mark rules that must be navigated carefully.

What Should Small Businesses Do Now?

Given the above changes, here are some recommended actions for Australian companies and other foreign SMEs dealing with China:

•       Register your trade marks in China early: Do not wait until you enter the Chinese market or start exporting. File trademark applications in China as soon as you have a brand name or logo that you use on products made in or for China. Early registration can preempt trade mark squatters. Remember that China’s system generally awards the first filer, not necessarily the first user.
•       Conduct trade mark clearance searches: Before entering China, have IP Solved check if anyone has already registered your key brands in the relevant classes. If you discover a conflict (someone else’s registration), you can strategise early – possibly negotiate, or plan for a non-use cancellation when the time comes. Just be aware that if you must pursue cancellation, you will need solid evidence and patience under the new rules.
•       Document your trade mark use in China: Keep a well-organised record of any use of your trade marks in China. For example, save copies of dated sales receipts, invoices, and shipping records for goods sold under the mark in China. Keep marketing materials and screenshots of any online use (with timestamps). This archive will be invaluable if you need to defend your trade mark against a non-use claim. It’s wise to update this at least yearly with new evidence of use and we recommend that you share this with your contact at IP Solved so we can keep the evidence handy to save time and money.
•       Use your trade mark meaningfully: Plan to actually use your registered trade mark in China’s commerce. If you’ve registered a mark but haven’t started sales, consider small-scale product launches or partnerships that put the product on the Chinese market, even in a limited way, within the first three years. Alternatively, if you know you will have a gap in use (for instance, a project is on hold), consult with your IP Solved advisor about how to handle potential non-use challenges – there are limited acceptable excuses (such as force majeure events), but they are hard to rely on.
•       Monitor and enforce your rights: Keep an eye out for any suspicious trade mark filings or uses that conflict with your own. IP Solved can maintain a watch on filings for you. If you suspect a trade mark squatter has your brand, you might need to oppose their application (if it’s still pending) or prepare for a non-use cancellation if their registration becomes mature (i.e. over three years old with no use). Given the new hurdles, you might also explore other legal avenues like negotiation or mediation with the other party.
•       Seek professional advice: At IP Solved our trade mark attorneys are familiar with Chinese law and this is more important than ever. They can guide evidence gathering and ensure filings meet the new standards. For Australian businesses, the cost of prevention (registering and strategising early) will almost always be lower than the cost of fighting a legal battle after the fact.

Conclusion

China’s new standards for non-use trade mark cancellations represent a shift towards stricter enforcement and higher expectations on all parties. For businesses, especially SMEs from countries like Australia that engage with China, this means trade mark strategy must be approached with greater care and urgency. You can no longer assume that an unused trademark squatting on your brand will be easy to knock out. Likewise, if you secure a trade mark in China, you must actively use it in commerce or risk losing it.

In practical terms, the message is clear: protect your brand in China early, use it diligently, and keep proof of that use. The cost of inaction or delay has gone up. A lost trade mark in China can translate to a missed market opportunity or costly rebranding. By understanding these new rules and adapting accordingly, Australian small businesses can better safeguard their intellectual property and seize opportunities in the Chinese market without unnecessary legal hurdles.  If you have any questions then contact us at IP Solved.