Written By: Zhou Xiaoli, Zhou Xinyi, King & Wood Mallesons’ Intellectual Property group

Applicant for cancellation: Heyi (Hong Kong) Asset Management Co., Ltd.

Trademark registrant: Dai Nengzhong

Key words: Trademark use, Non-use cancellation, Franchising,  Commercial administration of the licensing of the goods and services of others.

Case brief

The Registrant’s trademark No.13274116 “和易购” (“the subject mark”) was registered on January 28, 2015 designating on services of “advertising; business management assistance; commercial administration of the licensing of the goods and services of others; sales promotion for others; personnel management consultancy; relocation of businesses; photocopying services; accounting; sponsorship search; retail or wholesale services for medicines” in class 35. On May 16, 2019, the Applicant filed a non-use cancellation petition against the subject mark on the services of “advertising; business management assistance; commercial administration of the licensing of the goods and services of others; sales promotion for others; personnel management consultancy; photocopying services; accounting; sponsorship search” with the Trademark Office for the reason that the subject mark has not been used on aforesaid services in the last three years. The Trademark Office made a decision on April 30, 2020 to maintain the registration and then the Applicant filed a request for cancellation review with the CNIPA on May 15, 2020.

Decision

After examination, the CNIPA holds that although the Registrant submitted 1) introduction about the creativity of the subject mark; 2) trademark license agreements and  the licensees’ Business Certificate; 3) the files of the subject mark; 4) store photos; 5) sales orders and delivery lists; 6) the franchising agreements; and 7) account sales and other evidence to prove the use of the subject trademark, these evidence can only prove that the Registrant has effectively used the subject mark on “sales promotion for others” and the similar services in the last three years, while are not able to prove the subject mark has been used on “advertising; business management assistance; commercial administration of the licensing of the goods and services of others; personnel management consultancy; photocopying services; accounting; sponsorship search”. Therefore, the CNIPA decides to cancel the registration of the subject mark on the services of “advertising; business management assistance; commercial administration of the licensing of the goods and services of others; personnel management consultancy; photocopying services; accounting; sponsorship search”.

Typical significance

Whether a trademark is subject to non-use cancellation for three consecutive years should be determined on whether the evidence could prove the trademark has been openly, actually and legitimately used on the approved goods during the period specified. The own use by trademark owner, the use by licensee and other use that is not against the will of the trademark owner all could be considered as actual use. Use of a trademark refers to the commercial use of a trademark. It includes putting the trademark into use on goods, on packaging or container and transaction documents for the goods, or using the trademark in advertising and promotion, in exhibition and other commercial activity, where it is being used to distinguish the origin of the goods or services. According to Article 56 of the Trademark Law, where a trademark registrant has used a registered trademark on the designated goods approved for use, the registration of that trademark can be maintained for goods that are similar to the designated goods. The use of a registered trademark on similar goods other than the designated goods approved for use shall not be considered as trademark use. The purpose of the above mentioned regulations is to urge trademark owner to use its registered trademark actually, legitimately, normatively, openly and effectively on the approved goods or services, so as to put trademark into effect and enable the relevant public to distinguish the origin of the goods and services providing by different market entities, and to prevent the waste of trademark resources and improperly use up public resources.

In this case, the evidence provided by the Registrant could prove he licensed the subject mark to different market entities for use on convenience store, which could be deemed as “franchising” in common sense. However, such kind of use, as being the registrant’s franchising business,  shall not be considered use on “commercial administration of the licensing of the goods and services of others”.

In the case of licensing a trademark as a franchising resource, the classification of services for use of trademark should be determined based on the services actually provided by the licensee. Unless the trademark owner provides business administrative services to licensees during the franchising, it is not appropriate to determine that the use of the licensed trademark by licensees constitutes trademark use on “commercial administration of the licensing of the goods and services of others”. “Commercial administration of the licensing of the goods and services of others” is a service classified in Class 35, subclass 3502, which essentially is a business management assistance service for others. The evidence provided by the Registrant in this case is unable to prove that the Registrant had provided guidance or assistance to the licensees during the franchising, so the subject mark had not distinguished the origin of “commercial administration of the licensing of the goods and services of others”, thus the registration for that service should not be maintained.

King & Wood Mallesons represented the Applicant in the whole process of this cancellation case, and argued about the use evidence in terms of franchising could not sufficiently maintain the registration of commercial administration of the licensing of the goods and services of others due to the material differences herein.