In practice, to overcome a cited trademark that has been registered for more than three years, trademark applicants usually consider filing a cancellation application against the cited trademark on the grounds of non-use for three consecutive years. In cases where the evidence of use of the cited trademark is insufficient, in order to maintain the registration status of the trademark, the trademark registrant may proactively contact the cancellation applicant and attempt to negotiate a settlement to resolve the dispute. If an agreement is reached, the usual solution is for both parties to enter into a settlement agreement, with the registrant of the cited trademark issuing a letter of coexistence consent to help overcome the registration obstacle of the applicant's trademark, and the cancellation applicant withdrawing the cancellation application to terminate the cancellation procedure to help maintain the registration of the cited trademark.
The risk with the above settlement solution is that, on the one hand, the letter of coexistence consent may not be accepted by the trademark examination agency, and the conflict between the applied-for trademark and the cited trademark may still exist. The applied-for trademark will not be approved for registration just because the registrant of the cited trademark has issued a letter of consent. On the other hand, the withdrawal application must be submitted before the Trademark Office makes a decision on cancellation. If the Trademark Office has already made a decision on cancellation before the withdrawal application is submitted, the purpose of terminating the review of the cancellation case through the withdrawal application cannot be achieved, and the cited trademark may still be revoked due to non-use for three consecutive years.
In this case, in order to maintain the registration of the cited trademark, the case will have to enter the cancellation review procedure. In the cancellation review procedure, the risk of the above settlement solution mainly lies in the fact that the help provided by the settlement agreement to maintain the registration of the cited trademark has been greatly weakened or even disregarded. Regarding how to determine the role of recognition and settlement agreements in trademark cancellation review cases, the trademark examination agency mainly holds the following views:
1. 1. Maintaining the registration of the reviewed trademark only based on the settlement agreement without considering evidence of use
| Date of Issue | Title of the Office Document | Content of the Decision |
| November 13, 2020 | Decision of Review on Cancellation against No. 4775293 "alpina and Design” | Our commission believes that the settlement agreement signed by the applicant and the respondent represents the true intention of the parties and does not harm the rights and interests of others. Our commission recognizes the settlement agreement of the parties, agrees that the respondent withdraws its trademark cancellation application, and maintains the registration of the reviewed trademark. |
2. Evidence of use can prove the effective use or intention to use the reviewed trademark, and maintaining the registration of the reviewed trademark considering the settlement agreement
| Date of Issue | Title of the Office Document | Content of the Decision |
| December 31, 2019 | Decision of Review on Cancellation against No. 7174891 "M mcollection.com and Design” | The evidence submitted by the applicant, such as online media reports, promotional materials, and official website pages, can prove that the reviewed trademark was actually used during the designated period. Moreover, the applicant and the respondent have signed a settlement agreement, and the respondent's withdrawal application represents their true intention. Therefore, considering the overall situation of this case, the registration of the reviewed trademark for the reviewed services shall be maintained. |
| October 30, 2020 | Decision of Review on Cancellation against No. 4853870 "jamba juice and Design” | Our office believes that the evidence submitted by the applicant showing the use of the reviewed trademark during the designated period can prove their intention to use the reviewed trademark. Especially considering that the respondent and the applicant have reached a settlement agreement on the reviewed trademark dispute in this case, the registration of the reviewed trademark shall be maintained. |
| January 25, 2021 | Decision of Review on Cancellation against International Registration No. 639073 "DANONE” | In this case, based on Evidence 5 and the relevant evidence submitted by the applicant regarding the use of the reviewed trademark, and considering that there is no substantive dispute between the parties involved in this case, the registration of the reviewed trademark shall be maintained. |
3. The evidence of use cannot prove that the reviewed trademark has been effectively used in its designated goods/services, the settlement agreement shall not be considered, and the registration of the reviewed trademark shall be revoked in the cancellation review
According to investigation, from 2018 until the end of 2022, cancellation review decisions of this type have been in the majority. These review decisions clearly state that if the evidence of use cannot prove that the reviewed trademark has been used in its designated goods/services, the settlement agreement signed by both parties cannot serve as a sufficient basis for maintaining the registration of the reviewed trademark. (The respondent's non-objection to the evidence of use cannot be the sole basis for maintaining the registration of the reviewed trademark.) The decision on whether the reviewed trademark should be revoked due to non-use for three consecutive years does not depend on the content of the settlement agreement, because d there is no correlation between the settlement agreement and the use of the reviewed trademark. In the end, the registration of the reviewed trademark shall be revoked in the cancellation review. Some of the typical cancellation review decisions are:
| Date of Issue | Title of the Office Document | Content of the Decision |
| April 13, 2018 | Decision of Review on Cancellation against No. 4559090 "Tong’an and Design” | The evidence in this case cannot prove that the reviewed trademark has been used in its designated services. The applicant's argument regarding the signed "settlement agreement" with the respondent cannot serve as a sufficient basis for maintaining the registration of the reviewed trademark. Our commission does not support the review grounds provided by the applicant. |
| April 11, 2019 | Decision of Review on Cancellation against No. 7455891 "TOUCHMIX” | Based solely on the evidence presented in this case, the reviewed trademark's public and effective commercial use in the designated goods during the specified period cannot be proven. Therefore, the registration of the reviewed trademark shall be revoked. In addition, the applicant claims that they have reached a settlement agreement with the respondent regarding the withdrawal of their cancellation application to the Trademark Office. However, whether the reviewed trademark should be revoked due to non-use for three consecutive years does not depend on the content of the settlement agreement, and should still be judged based on comprehensive consideration of the evidence presented in this case. |
| November 23, 2020 | Decision of Review on Cancellation against No. 9560764 "RIFT” | The request for withdrawal of the application by the respondent should be made in the cancellation stage, not the review stage. According to Article 56 of the Implementation Regulations of the Trademark Law, the cancellation review should focus on the decision made in the cancellation stage, and the facts, reasons, and requests provided by the applicant, that is, whether the evidence provided by the applicant can prove that the respondent did use the reviewed trademark in its designated goods/services during the specified period. The respondent's non-objection to the evidence of use cannot be the sole basis for maintaining the registration of the reviewed trademark. |
| August 12, 2022 | Decision of Review on Cancellation against No. 10160089 “Wengyao” | Evidence 5, including the complaint, civil summons, settlement agreement, closing text message, and transfer records, has no correlation with the use of the reviewed trademark. All the evidence submitted by the applicant in this case is still insufficient to fully prove that the reviewed trademark was publicly, legally, truthfully, and effectively used in the designated goods such as Shochu during the specified period. Therefore, the registration of the reviewed trademark shall be revoked. |
| November 15, 2022 | Decision of Review on Cancellation against No. 21790820 "TOWERRECORDS” | According to Article 56 of the Implementation Regulations of the Trademark Law, the cancellation review should focus on the decision made in the cancellation stage, and the facts, reasons, and requests provided by the applicant, that is, whether the evidence provided by the applicant can prove that they used the reviewed trademark in its designated services during the specified period. Therefore, even if the parties involved in this case have reached a settlement agreement, it cannot serve as a sufficient basis for maintaining the registration of the reviewed trademark. |
4. Without considering evidence of use, it is clear that the reviewed trademark has not been used for three consecutive years without justified reasons, and should be invalidated; the request to maintain the registration of the reviewed trademark based on the settlement agreement between the parties lacks legal basis and is not supported, and the registration of the reviewed trademark shall be revoked
| Date of Issue | Title of the Office Document | Content of the Decision |
| May 31, 2019 | Decision of Review on Cancellation against No. 6542780 device mark | According to Article 49 of the Trademark Law, if a reviewed trademark is unused for three consecutive years without justified reasons, it should be revoked. The applicant's request to maintain the registration of the reviewed trademark based on the settlement agreement between the parties lacks legal basis and is not supported by our office. |
| April 26, 2020 | Decision of Review on Cancellation against No. 12807875 "SENSICARE” | According to Article 49 of the Trademark Law, if a reviewed trademark is unused for three consecutive years without justified reasons, it should be revoked. The applicant's request to maintain the registration of the reviewed trademark based on the settlement agreement between the parties lacks legal basis and is not supported by our office. |
| December 03, 2020 | Decision of Review on Cancellation against No. 1022324 "DANONE” | According to Article 49 of the Trademark Law, if a reviewed trademark is unused for three consecutive years without justified reasons, it should be revoked. The applicant's request to maintain the registration of the reviewed trademark based on the settlement agreement between the parties lacks legal basis and is not supported by our office. |
5. Analyzing and explaining that the settlement agreement is not the focus of trademark cancellation review cases from the original intention of the three-year continuous non-use cancellation system, and the focus of examination in such cases remains whether the evidence presented in the case can prove the actual use of the reviewed trademark.
| Date of Issue | Title of the Office Document | Content of the Decision |
| March 27, 2020 | Decision of Review on Cancellation against No. 8571383 "PF” | Although the applicant and the respondent, as stakeholders of the reviewed trademark, have reached a settlement agreement, the primary consideration should be whether the registrant has actually used the reviewed trademark in order to promote effective utilization of trademarks, maintain the registration and use needs of other parties who have normal use demand, and make reasonable use of limited trademark resources. |
| July 15, 2020 | Decision of Review on Cancellation against No. 15618412 "Magic Leap” | The intention of establishing the three-year non-use cancellation provision in China's Trademark Law is to remove "dead" trademarks from the trademark register, so as to play the rightful role of identifying the origin of goods or services and clearing up unused "dead trademarks", prevent waste of trademark resources, and maintain fair competition. If, during the cancellation review stage of trademark rights, the trademark review authority decides to maintain the registration of a disputed trademark solely because the parties involved have reached a settlement agreement or a trademark transfer agreement, and the applicant withdraws their cancellation application, without considering whether the disputed trademark has been actually used for commercial purposes, it would violate the original intention of the three-year non-use cancellation system in the Trademark Law and may become a bargaining chip for exchanging interests between the parties. Therefore, the focus of this case is whether the original applicant has actually used the reviewed trademark during the specified period. |
| June 18, 2021 | Decision of Review on Cancellation against International Registration No. 1271979 "IPSIDE” | When examining non-use cancellation and cancellation review cases where a trademark has not been used for three consecutive years, the focus is mainly on whether the reviewed trademark has been actually used during the three years prior to the filing date of the cancellation application, and a settlement agreement reached between parties does not generate reasonable grounds for non-use. Therefore, in this case, although the applicant and the respondent have reached a settlement agreement regarding the reviewed trademark, the primary consideration should be whether the registrant has actually used the reviewed trademark in order to promote effective utilization of trademarks, maintain the registration and use needs of other parties who have normal use demand, and make reasonable use of limited trademark resources. |
| November 16, 2022 | Decision of Review on Cancellation against No. 22113851 "DEVILSBACKBONEDB and Design” | When examining non-use cancellation and cancellation review cases where a trademark has not been used for three consecutive years, the focus is mainly on whether the reviewed trademark has actually been used during the three years prior to the filing date of the cancellation application, and a settlement agreement reached between parties does not constitute a justified reason for non-use of the reviewed trademark. Therefore, in this case, although the applicant and the respondent, as stakeholders of the reviewed trademark, have reached a settlement agreement, the primary consideration should be whether the registrant has actually used the reviewed trademark in order to promote effective utilization of trademarks, maintain the registration and use needs of other parties who have normal use demand, and make reasonable use of limited trademark resources. |
By reviewing the decisions made in recent years regarding cancellation review cases, it can be seen that the views of the trademark review authority on how to determine the effect of a settlement agreement on maintaining the registration of a trademark are not completely consistent. However, in terms of proportion, there are very few cases where the request to maintain the registration of the reviewed trademark based solely on a settlement agreement is supported. Even if a settlement agreement is considered, the premise for maintaining registration is that evidence can prove the actual use or intention to use the reviewed trademark. In cases where there is insufficient evidence to prove actual use, even if a settlement agreement is signed, the registration of the disputed trademark will still be revoked. Furthermore, maintaining the registration of an unused trademark through a settlement agreement may harm public interests, occupy limited trademark resources, violate the original intention of the non-use cancellation system, and fail to make reasonable use of limited trademark resources. Therefore, settlement agreements may not be given full consideration.
