Thoughts on the Defensive Trademarks and Non-use Cancellation System

Author: Judy (Wenjuan) Liu

Defensive trademark registration protection in related classes for important core trademarks has become a common strategy adopted by trademark right holders. Despite the increasing efforts to combat trademark squatting in bad faith, defensive trademark registration is still undoubtedly the most economical and effective way.


However, 'defensive trademark' is not a 'special statutory right of' trademark under the Trademark Law of Republic of China (hereunder refers to PRC Trademark Law). Its registration protection is still subject to the PRC Trademark Law and other relevant laws and regulations. The most prominent thing is that defensive trademarks must also meet the requirements of the Trademark Law for the use of registered trademarks. Article 48 of the PRC Trademark Law stipulates that if a registered trademark is not used for three consecutive years without justifiable reasons, any unit or individual may apply to the Trademark Office of China National Intellectual Property Administration for cancellation of the registered trademark. If a trademark is not put into actual use after registration, it will be susceptible for  cancellation application on the grounds of three-year non-use (hereinafter referred to as 'non-use cancellation'), and thus it may be cancelled.


Defense trademarks are registered by right holders to protect their core trademarks in different classes, aiming to expand the protection scope and avoiding the bad-faith filings of trademark squatters. They do not appear to be aimed to 'use” and seem difficult to co-existence with the above-mentioned  non-use cancellation system.


The necessity of Defensive trademark registration protection


It is said that ‘what is rational is actual; and what is actual is rational. Though, the registration of a defensive trademark is not for the purpose of actual use, it can effectively prevent others from preemptively registering trademarks with high reputation on related goods/services in bad faith. Moreover, it prevents consumers from being confused and misidentified due to the above-mentioned bad-faith trademark preemptive registrations. Therefore, practitioners generally agree that defensive trademarks are different from bad faith trademark squatting and should be protected to a certain extent.


According to Article 13 of the Trademark Law, a registered well-known mark may prohibit others from registering, copying, imitating, or translating the identical or similar trademark of the registered trademark on different goods. This provision not only extends the protection scope of the right of well-known trademarks, but also indicates the need to protect trademarks with high reputation in their unused, unregistered and different classes. In practice, there are also a large number of cases in which prior trademarks with high reputation have been protected in different classes.


The balance between defensive trademarks and non-use cancellation system


The primary role of the defensive trademark is reflected in its negative aspect, which is to prevent others from preemptively registering trademarks in bad faith, rather than taking into actual use. In current practice of non-use cancellation, when a defensive trademark encounters an application for non-use cancellation, the right holder is helpless against the defensive trademark that has not been put into use. Therefore, many right holders have to re-register the defensive marks to maintain the registration of defensive trademark, which in turn unjustifiably inflates the number of trademark applications and wastes administrative examination resources.


The author believes that the reason for the above-mentioned dilemma of defensive trademarks is that the examination standards of the non-use cancellation are too strict in China. Although Article 48 of the PRC Trademark Law stipulates that the trademark owner may provide a valid reason for not using the trademark to maintain the exclusive right to use the registered trademark right. In practice, the 'justification for non-use of trademarks' is very strict, and “defending” is not currently an acceptable justification.


Since there is a need for protection of a defensive trademark that is not intended for use, could it be viewed as a valid reason for the non-use of a registered trademark, while at the same time preventing its abuse as an umbrella for becoming a 'zombie trademark'? The author believes that taking account into the recognition function of registered trademarks, it could be balanced by strictly applying the conditions for defensive trademarks. That is, the higher the popularity and stronger the recognition function of the core trademark, the more its defensive trademark should be protected. 'Defensive trademark' could be considered as a reasonable justification for not using a registered trademark, but it needs to meet the standard that the right holder's core trademark has reached a high degree of popularity or is even well-known. Of course, in practice, more exploration is needed to balance the defense trademark and the non-use cancellation system.


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