The non-use cancellationisone ofthemostimportantrulesinthetrademarklaws in theworldwide. The purpose of theruleis topromptthe use ofthe registeredtrademarks andtoavoidtheidleoftrademarkregistrations, especially in thejurisdictionswhere first–to-filesystemisadopted. In a non-use cancellation action,thetrademarkregistration should be cancelled or not, is subject to the fact that whetherthemark is used or not.Theoretically, this fact could be proved either by the Applicant of the non-use cancellation that no use has been made by the registeredownerin a prescribed period of time, or bytheregistered owner that the mark has been used duringthesaid time.Who should beartheburden of proof in thetrademarkcancellationactions?This varies indifferentjurisdictions.In this essay, we will discuss the practice in the Greater China, namely,mainlandChina, Hong Kong, Macau and Taiwan.
Before the discussion of localpracticein eachjurisdiction, let us talk about the duality nature of burden of proof on either theApplicantof non-use cancellation or the registered owner first.From the registered owner’sperspective, they are the rightful owner of thetrademarkand this should not beinterfered by any one, especially intheconditionwherethemark has been used by the registered owner, ortheregistered owner has reasonable ground for non-use.Meanwhile, the cancellation of a registered mark is beneficial for the Applicant of non-use cancellation action, but againsttheregisteredowner.Thereforeitis more reasonable or justice that the burden of proof should beborneby theApplicantof non-use cancellation, other than the registered owner.Whereas, from another perspective, the non-use of a mark is a negative fact and it is difficult to prove a negative fact in the most circumstances.In this sense, it is moreefficientto prove the positive fact which is use ofthemark than a negative fact which is non-use ofthemark.Therefore, it is the registered owner who should to prove the use of the mark. Efficiency or justice, which one is moreimportant?When conflict rises, it is subject to eachjurisdiction’s choice.
In mainland China, the burden of proof is located to the trademark owner1.If the registered owner fails toprovetheuse of the mark2, his mark will be cancelled.Although in practice, the Applicant ofthenon-use cancellation needs to file a preliminary evidence to show thatthemark has not been used within three year beforethenon-use cancellation date, the evidence could be a simple online search without athoroughinvestigation.Obviously, this rule is made in consideration ofsocial efficiency.It is widely awarethatChinahas a vastterritory.Itisnot possibletoundertake an investigation inevery villageor country from each city orprovince, sothatthe proof of non-use is not possible or at least economic.In case an investigation by questionnaires is an option, how many samples will berequiredto prove non-use of atrademarkinthewhole country?Since the non-use evidence could not been provided by the Applicant of non-use cancellation, the burden of proof should go totheregistered owner.Unluckily, there is no money reward fortheregistered owner if his trademark registration is maintained byproducing the evidenceof use.Toconclude, it isefficiencythat is more important than fairness inmainlandChina, so thattheregistered owner bear the burden of proof inthenon-use cancellation action.
Whatis the practice Hong Kong? Thepractice in Hong Kong is quite different from that in Mainland China. According to Article 79(1)of the Hong Kong TrademarksOrdinance, "•••the register shall be prima facie evidence of anything required or authorized by this Ordinance or the rules to be registered.", and Article 80 "In any proceedings relating to a registered trade mark, including proceedings for rectification of the register, the registration of a person as owner of a trade mark shall be prima facie evidence of the validity of the original registration and of any subsequent assignment or other transmission of it.”Accordingly, the registered owner is the legal right holder of the trademarkand if the “prima facie evidence” needs to be overturned, theApplicantof non-usecancellationmust prove to the contrary. This is also regulated by theHong Kong Trademark Rules 36 (2), namely,“The application shall be accompanied by a statement of the grounds on which the application is made and evidence in support of the application.”Incasethe Applicantdoses not submit preliminary evidencewhen filing the non-use cancellation, suchcancellationwill not be accepted.
However, itdoes not meanthat the Applicant bears alltheburden of proofof non-use.When the initial burden of proof is met bytheApplicant, the burden of proof will swift to the registered owner.According toHong Kong’s Trademarks Ordinance Article 82 (1)“If, in any civil proceedings under this Ordinance in which the owner of a registered trade mark is a party, a question arises as to the use to which the trade mark has been put, the burden of proving that use shall lie with the owner.”To sum up,theburden of proof is shared by the Applicant and the registered owner.The Applicant should prove that there ishigh possibilitythatthetargetedtrademark has not been used in the prescribed period of time.Ifsuchrequirementis not met, thecancellationwill not be accepted.If such requirement is met, the registered owner should provethathistrademarkhas been used.If no evidence of use is filed ortheevidence as filed is not sufficient, thetrademarkregistrationwill be cancelled.Please refer to thefollowingnon-use cancellation case in Hong Kong.
Tsinghua Unigroup, acompanyincorporatedin mainland China,filed a non-use cancellation actionagainst theHong KongtrademarkNo. 303760164for"UNIC"onDecember 18, 2019.The non-useevidence filed by Tsinghua Unigroupincludes 1) the search records of the Hong Kong Yellow Pages and the Hong Kong Trade Development Council, showing thatno information isavailablefor theregistered owner, 2) searching record of the database ofHong Kong Companies Registry, showingtheChinese nameofthe registered owner.And search record of the Hong Kong Trade Development Council, showing that noinformationis available for the revealedChinesename of theregistered owners; 3) a report of an on-site visit to the registeredaddressof theowner, showing that noactivitiesis undertaken in the registered address by thetrademarkowner.
After receiving the cancellationaction, the Hong Kong Intellectual Property Department acceptedit in formalityand notified the registered owner to defend the cancellation. The registered ownerdid not defendthecancellationactionwithin therequireddeadline. After all deadline passed, the Hong KongIP Departmentexamined the grounds ofcancellationand the evidence as produced.
TheHong KongIP Department refused to cancel thetrademarkregistration, because theexaminer opinesthat the evidenceas provided by theApplicant is insufficient to show the highpossibilityof non-use ofthemark in Hong Kong.According to the official decision, although it is disclosedthattheregistered owner is inactive in Hong Kong, itdoesnot necessarily prove thatthemark has not been used in Hong Kong.Since the highpossibilityof non-use is not proved in this case, the non-use cancellation is refused.
Hong Kongchosesthejustice over theefficiencyand meanwhile shows a good example to balance justice andefficiency.Is it same in Macau, another Chinese special administrative region?Let us read the legislation first.Accordingly toparagraph 5 of Article 232 of the "Industrial PropertyActs" of Macao ,"The registered right holder or, if any, the person licensed by it, shall be responsible for certifying the use of the trademark, otherwise it is presumed that the trademark has not been used."It can be concluded that theburden of proof for the useof markis borne by the registered owner, which is quitethe same as thatin the mainlandChina.
An example will make everythingclearly3.The HongKongLand Limited Companyis a company headquartered in Hong Kongand has registered thetrademark“LANDMARK"for the services in class 42 in Macau in 2008.However, it is trying toregisteredtheChineseversion for“LANDMARK"but was notsuccessful. In2012, a non-use cancellation has been filedagainstthe HongKongLand’s Macautrademarkregistration No. N/12115 for“LANDMARK"in class 42. Hong Kong Land produced the evidence of use, together with the non-use reasons in response to the non-use cancellation.The evidences were advertisements made in the Hong KongLandmark Oriental Mandarin Hotellocated in No. 1 Plaza in Macau.The non-useexcusewasthattheEnglishand Chinese version was planned to be used together, since themost consumers in Macau speak Chinese as their mother tongue.However, as theChinesetrademark was not registeredsuccessfully,theEnglishmark has not been usedon a largerscale.Boththeevidence of use and the excuse of non-use were not accepted by Macau IP Office.The IP Office ruledthatthe evidence shows the use of the mark for hotelservicein class 43, instead class 42.With regard to the reason for not usingthe markon a large scale isalso refusedbecausethereason for not use is a subjective reason, instead of an objective reason.This decision wasmaintainedin theintermediate court of Macao.
Unlike mainland China and Macau, Taiwan adoptssimilarpractice as that in Hong Kong.According toArticle 63(2)of the "Trademark Law"in Taiwan,"IP Office in Taiwan is entitled tocancelthe mark ex officio or upon application of a third party, in the condition thattheregistered mark has not been used for three consecutive years afterregistration.”Regarding the burden of proof for non-use cancellation,it is stipulated inarticle654ofTaiwan "Trademark Law".Inpractice, the Applicantofnon-use cancellation needs to provide evidence to prove that the trademark has not been used for commercial purposes. If the evidence is insufficient, the cancellation application will be rejected. If the evidence of non-use could prove that the mark isprobablynot used or theexaminercould suspectthatthe mark has not been used, the examiner will sendthenon-use cancellation to the registered owner and ask them to fileevidenceof use.If the registered owner fails to submit evidence of use within the time limit, the trademark will be cancelled.
Let’s take a case for example.In 2021, a non-use cancellation was filed byGuangdongTalentScience and Technology Co., Ltd.against the Taiwan trademark registrationNo. 01558769for"little genius(in Chinese)Okidscan"in class 41 owned by Lipin International Co., Ltd. The Applicant of non-use submitted a group of non-use evidence, including 1)Visitingreport to the address of the registered owner, showing that theregistered owner was not found to be operating in that place, andthe saidplace has become the address of other business entities; 2) search record fromTaiwan’s industrial and commercial registration data, showing that the registered owner wasdissolvedin 2014; 3) search records for theGooglesearchengine, revealing two websites which usedthetrademark.Thelastupdates of these websites weremade intheyear 2012 and 2013 respectively.Although these two website are still available, no interaction was made. 4)Searchrecords from the popular online shops,likebid.yahoo.com,ruten.com.twandshopee.tw, no resultis revealed duringthesearch.
After examining the above evidences, the examiner accepted the non-use cancellation application,so he notified the registered ownerto submit the evidence of use. Theregisteredowner did not submit the evidence of use within the time limit, so the trademark wascancelled.We can concludethatefficiency andjusticeare balanced in the non-use cancellation action in Taiwan.
To conclude, mainland China and Taiwan adopts similarpractice, where the registered owner bears the burden of proof in a non-usecancellation. Whereas Hong KongandTaiwan adoptsdifferentpractice, in which the Applicant of non-use cancellation and the registered owner share the burden of proof ina non-usecancellationaction.These are subject todifferencechoices in eachjurisdiction, balancing justice andefficiency.However, is there any better choice?
1Articles 66 of Regulation for Implementation of Trademark Law of China: if, at the expiry of the time limit, no evidence of use is provided or the evidence provided is invalid and there are no proper reasons for non-use, the Trademark Office shall cancel the registered trademark.
2In this article, the reason for non-use is not included in the discussion.
3Refer to the collegiate panel decision of the Intermediate Court No. 39/2014.
4The Trademark Office shall notify the trademark owner of the non-use cancellation and provide a time limit to submit the evidence of use. When the trademark owner submits a statement of defense, the Trademark Office shall serve the statement of defense to the Applicant of non-use cancellation. However, if there is no specific evidence of non-use or the ground of non-use is clearly unreasonable, the non-use cancellation should be rejected initially. Under the circumstances specified in Article 63 (2), where the notice of non-use cancellation is served, the trademark owner shall prove the use of trademark. Those who fail to respond within the prescribed period of time, the trademark will be cancelled.”