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[Supervised by a patent attorney] Will unused trademarks be cancelled? Basics and defenses of non-use cancellation trial

Picture of 弁理士 杉浦健文

``Trademarks you've gone to great lengths to acquire are canceled because you're not using them.'' Did you know that such a thing can actually happen? Japan's trademark law has a system for cancelling registered trademarks that have not been used continuously for three years or more. That is Non-use cancellation trial (Trademark Law Article 50).

This system is an important risk that trademark owners should understand from a "defense" perspective. If your company's registered trademark is canceled due to non-use, the foundation of your brand could be fundamentally shaken. The brand value that has been built up over many years can be destroyed by a single appeal.

On the other hand, it is also very effective as an "offensive" weapon. If a trademark owned by another company is an impediment to your company's business development, and the trademark is not being used, you can request a cancellation trial for non-use and have the rights extinguished. This can be a breakthrough in cases where prior trademarks are a bottleneck in launching a new brand or entering the market.

This article provides a comprehensive explanation of useful knowledge in practice, from an overview of the non-use revocation trial system to defensive measures, offensive strategies, and daily intellectual property management points. Don't you feel secure just by having a trademark? Please take this opportunity to review your company's trademark management system.

1. What is a non-use revocation judgment? - Overall picture of the system

Overview of the system based on Article 50 of the Trademark Act

Non-use cancellation trial is a trial system stipulated in Article 50 of the Trademark Law, and it is a system that allows you to request the cancellation of registration of a registered trademark that has not been used continuously in Japan for three years or more. Once a trademark is registered, it does not mean that it is secure forever; ``use'' is a prerequisite for maintaining rights.

System overview of non-use revocation trial (Trademark Law Article 50)

  • Base law: Trademark Law Article 50 (Trial for cancellation of trademark registration due to non-use)
  • Purpose: To cancel the registration of unused trademarks and ensure the sound operation of the trademark system
  • Period of non-use: Must not have been continuously used in Japan for 3 years prior to registration of appeal
  • Target: All or part of the goods and services designated by the registered trademark
  • Trial body: Japan Patent Office (Trial Board)
  • Burden of proof: The demandee (trademark owner) bears the burden of proving the fact of use
  • Effect: Once the revocation decision becomes final, the trademark rights for the designated goods and services will be extinguished

Behind this system is the basic concept of the trademark system. A trademark is something that only demonstrates its origin display and quality assurance functions when it is actually used in business. If an unused trademark continues to remain registered, it will unduly restrict opportunities for other businesses to use the trademark and inhibit healthy competition. For this reason, a system of non-use cancellation trials has been established based on the idea that there is no need to maintain rights for trademarks that are not used.

Why are unused trademarks canceled?

Trademark rights have unique characteristics compared to other intellectual property rights. While patent rights and design rights expire after a certain period of time, trademark rights can last semi-permanently if renewed and registered. However, this assumes that you are using it.

If a trademark is left unused, the following problems will occur:

  • Trademark depletion problem: If unused trademarks are "seized" as registered from a limited number of combinations of character strings and logos, new entrants will be unable to obtain good trademarks
  • Risk of unfair enforcement of rights: There is a possibility of sending warning letters to other companies or demanding license fees based on trademark rights even though the trademark is not actually used
  • Decreased trust in the trademark system: As the number of "paper trademarks" that are not actually used increases, the credibility of the trademark system itself is undermined

Non-use revocation trials are positioned as apublic interest system to prevent these harmful effects and ensure that the trademark system functions in line with its original purpose.

Anyone can make a claim - principle that any person can make a claim

One of the major features of non-use revocation trials is that any person can make a claim. Article 50, Paragraph 1 of the Trademark Act clearly states "any person", and anyone can request a trial for cancellation of non-use, regardless of whether or not they have a conflict of interest. This is in contrast to invalidation trials under the Patent Act (Article 123, Paragraph 2 of the Patent Act), in which only interested parties are eligible to claim.

Anyone can request it - no conflict of interest is required

A non-use revocation trial can be filed by any person, regardless of interest. This is based on the system's purpose that eliminating trademark non-use is in the public interest. Therefore, claims can be made not only by competing companies, but also by those who are starting a new business, consumer organizations, and even individuals. In practice, there are many cases where, when a prior trademark that poses an obstacle is found during a pre-application clearance search, a cancellation trial is requested on the grounds of non-use of the trademark.

This ``any person can claim'' feature means that there is always a risk for trademark owners. If your company's registered trademark has not been used for three years or more, you could be in a situation where anyone could file a request for a non-use cancellation trial at any time. Conversely, it also has the advantage of being relatively easy to take action to cancel another company's trademarks that are hindering business development.

2. Three requirements for cancellation

In order for cancellation to be granted in a non-use cancellation trial, the following three requirements must all be met. Conversely, if the trademark owner can overturn any of the above, it may be possible to avoid cancellation.

Requirement 1: Non-use for 3 years or more before registration of appeal

The most basic requirement is that the registered trademark in question has not been used in Japan for 3 years prior to the registration of the appeal. What is important here is that the starting point for the ``3 years'' is not the ``date of request for appeal,'' but the ``date of registration of the request for appeal.'' There is a slight time lag before a request for appeal is registered with the Japan Patent Office, but in practice it is generally a few weeks from the filing date.

The meaning of "use" is also strictly defined by law. The act of use must fall under Article 2, Paragraph 3 of the Trademark Act, and specifically includes the following acts.

  • The act of attaching a trademark to a product or its packaging
  • Acts of transferring, delivering, and exporting trademarked products
  • Acts of using trademarks when providing services
  • The act of attaching a trademark to advertisements, price lists, and transaction documents related to goods or services and distributing them
  • The act of displaying a trademark through the Internet

Merely knowing or remembering a trademark is not considered use. Specific usage behavior in actual business activities is required.

Requirement 2: Usage status for each designated product/designated service

A non-use cancellation trial can be requested for each designated product or designated service. For example, if a certain trademark is registered with Class 25 "Clothing" and Class 35 "Providing benefits to customers in the course of retail business", there may be a situation where the trademark is used for "Clothing" but not for "Retail".

In this case, the claimant can request a cancellation trial targeting only the unused "retail" portion. Conversely, trademark owners can maintain rights only for the goods and services they use. In this way, non-use cancellation judgments are not "all-or-nothing," but are flexibly determined on the basis of designated goods and services.

However, what you should be careful about is the interpretation of the scope of the goods and services used. For example, if the specified product "confectionery" is used only for "chocolate," there may be a dispute as to whether the use is permitted for the entire "confectionery" or only for "chocolate." In trial practice, if the specific product being used falls within the scope of designated products, there is a tendency for use of the designated product to be approved.

Requirement 3: There is no valid reason for non-use

Even if you have not used the service for more than three years, you can avoid cancellation if there is a "justifiable reason". However, the cases in which this "just cause" is accepted are extremely limited.

The hurdle for "just cause" is extremely high

Only reasons that cannot be attributed to the trademark right holder are accepted as "justifiable reasons", such as natural disasters, legal regulations (e.g. pending approval of the Pharmaceutical Affairs Law), wars or civil disturbances. Economic and managerial reasons such as simple business slump, temporary suspension of sales due to management decisions, problems with successors, and difficulty in procuring raw materials are not recognized as legitimate reasons. Also, subjective intentions such as ``planning to use it in the future'' or ``preserving the brand'' are not valid reasons.

The table below summarizes the three requirements and their specific details.

Requirements Content Point
Not used for more than 3 years The registered trademark has not been used for designated goods or services in Japan for three years before the registration of the appeal. Use is limited to acts defined in Article 2, Paragraph 3 of the Trademark Act. If it is used for even one day within three years, it does not meet the requirements
Determination of designated goods/services Cancellation will be determined for each designated product/service. If only some products/services are used, only the unused parts will be canceled Even if you register with a wide range of specifications, you can only protect your rights within the scope of the goods and services actually used.
No Justification There is no justifiable reason for non-use that cannot be attributed to the trademark owner Permitted only in extremely limited cases such as natural disasters and legal regulations. Business reasons or "future use plans" are not allowed

3. Defense measures - How to respond if a request for appeal is filed

How should a trademark right owner respond when a request for a non-use revocation trial is filed? Here, we will explain practical defense measures in detail.

The burden of proof is on the trademark owner

The biggest feature of non-use cancellation trials is that the burden of proof is on the demandee (trademark right holder). In normal litigation, the principle is that the party claiming the trademark proves it, but in a non-use cancellation trial, the claimant only has to claim that the trademark is not being used, and the trademark right holder must prove with evidence that the trademark is being used.

This shift in the burden of proof is based on the idea that the person who knows best about the usage of a trademark is the trademark owner himself/herself. However, even if it is actually used, there is a risk that it will be canceled if appropriate evidence is not prepared, so it is extremely important to preserve evidence on a daily basis.

It is absolutely no good to leave it unattended - it will be automatically canceled if you do not answer

When a non-use revocation trial is requested, if the trademark right owner does not submit a written answer, the trial judge accepts the claimant's argument as is, and a revocation decision is made. There is no such thing as "if you ignore it, it will disappear naturally". When you receive a notice of appeal (copy) from the Japan Patent Office, be sure to respond within the deadline. The deadline for filing a written response is 40 daysfrom the date of service of the copy (specified period, which may be extended). If you miss this deadline, you may lose the opportunity to respond and the cancellation may become final.

Valid and invalid evidence

In order to prove use in a non-use cancellation trial, you need evidence that clearly shows who used the trademark, when it was used, what trademark it was used for, and what goods and services it was used for. Depending on the type of evidence, the probative power at trial varies greatly.

Things that are likely to be accepted as valid evidence

  • Product photos/catalogs: Photos of products and packages with trademarks (date and time of photography can be identified)
  • Transaction documents: Documents with trademarks and date confirmation, such as delivery notes, invoices, purchase orders, receipts, etc.
  • Advertisement materials: Newspaper advertisements, magazine advertisements, flyers, DMs (those whose publication date and publication date can be specified)
  • Website screenshot: Page where the product/service using the trademark is posted (URL and date recorded)
  • Exhibition record: booth photos, exhibitor list, handouts, etc.
  • Sales performance data: sales data, inventory management records, shipping documents, etc.
  • Contracts: License agreements, agency agreements, OEM agreements, etc. (use under license is also valid)
  • Store photos: Store signboards, in-store displays, menus, etc. (dates can be identified)

On the other hand, the following types of evidence may have weak probative power on their own or may be considered invalid:

  • Internal documents only: Proposals and minutes for internal use have weak proof because they do not involve transactions with third parties
  • Dated evidence: Evidence that cannot specify when it was used cannot prove use within the three-year requirement period
  • Only oaths/statements prepared by the company: Self-reports without objective support have limited proving power
  • Trademark in a different manner: If it is used in a manner significantly different from the registered trademark, it is not recognized as "use of the registered trademark"
  • Use different from designated goods/services: Evidence that the designated product is registered as “clothing” but is used as “bag” is invalid

Last-minute use is not allowed

You may think, ``I should just rush to start using it after a request for revocation trial is filed,'' but this is not the case. Article 50, Paragraph 3 of the Trademark Law stipulates that use made after knowing that an appeal will be filed (so-called "last-minute use") will not be accepted as evidence of use.

Last-minute use is clearly prohibited by law

Article 50, Paragraph 3 of the Trademark Law stipulates that use of a trademark after knowing that a request for appeal will be filed will not be accepted as evidence of use "if the requester proves that the use occurred after knowing that a request for appeal will be filed." In practice, if you suddenly start using the drug immediately before or after filing a request for appeal, there is a very high risk that it will be recognized as ``last-minute use'' due to the unnatural timing. Even if you suddenly start using a trademark that has not been used for three years several months before filing an appeal, it will be invalidated if the use occurs at an unnatural time. Continuous use on a regular basis is the best defense.

4. Preventing the risk of non-use with daily intellectual property management

The best way to prepare for a non-use revocation trial is to have a regular intellectual property management system in place. "Attack is the best defense", but "management is the best defense". Here, we will introduce three specific management points.

Use of the same trademark based on social convention

Management point 1: Understand the scope of "same as socially accepted"

In a non-use cancellation trial, it is not necessary that the trademark be used in exactly the same manner as the registered trademark. Use is permitted as long as it is considered to be the same in terms of social convention. Specifically, the following cases apply:

  • Use in katakana when the registered trademark is in hiragana (e.g. "Sakura" → "Sakura")
  • Used in English when the registered trademark is in katakana (e.g. "EVORIX" → "EVORIX")
  • Using a different typeface (Gothic → Mincho, etc.)
  • Slight differences in appearance (such as subtle differences in color)

However, care must be taken as there are cases where trademark identity may no longer be recognized, such as when the graphical elements of the logo are significantly changed, or when characters are added or deleted. Regularly check whether the aspect of the trademark used in actual business is within the scope of "same socially accepted" as a registered trademark.

Regular storage of evidence

Management point 2: Regularly collect and save usage evidence

The most important thing in preparing for a non-use revocation trial is to systematically collect and preserve evidence of trademark use on a daily basis. If you rush to gather evidence after receiving a request for trial, it may be too late. We recommend establishing the following routine.

  • Evidence preservation once a year: Check the usage status of each registered trademark at least once a year, collect and store evidence
  • Date Recording: Include date information on all evidence. Record the URL and date and time in website screenshots
  • Store both digitally and physically: Back up digital data and scan and save paper documents
  • Prioritize evidence involving third parties: Prioritize the collection of highly objective evidence such as transaction documents with business partners and articles published in external media
  • Make it a habit of taking photos and recording: Regularly take photos of scenes where the trademark is used, such as product packaging, store signs, exhibition booths, etc.

Trademark portfolio inventory

Management point 3: Regularly inventory your portfolio

The number of trademark rights owned by a company tends to increase as its business expands. However, not all trademarks are used in your current business. Review your trademark portfolio from the following perspectives through regular inventory.

  • Check usage status: Check whether each registered trademark is actually used in your current business
  • Identification of unused trademarks: Check for trademarks that have not been used for more than 3 years
  • Consideration of resumption of use: Consider whether there is a way to resume use of unused trademarks (e.g. use in new products, licensing, etc.)
  • Organizing rights: For trademarks that are not scheduled to be used in the future, consider postponing renewal or transferring them to another company
  • Optimization of designated goods and services: If there are designated goods and services that are not being used, be aware of the risk of cancellation and take defensive measures as necessary

It is efficient to take inventory of your trademark portfolio at the time of renewal. Once you have paid the renewal fee, make a decision by comparing the usage status of each trademark with your future business plan. Securing evidence of trademarks that should be maintained and organizing unnecessary trademarks will also lead to optimization of intellectual property costs.

5. Aggressive strategy - take advantage of cancellation of other companies' trademarks

So far, we have explained non-use revocation judgments from a defensive perspective, but now let's look at how to use them as an offensive strategy. Non-use cancellation judgments can be a powerful tool for promoting your company's brand strategy.

Using prior trademarks as a breakthrough

During a clearance search for a trademark application, it is not uncommon for a company to discover a commercial trademark that is identical or similar to the trademark it wishes to use. In this case, the following options are usually considered:

  • Change your company's trademark (review of brand strategy)
  • Negotiate with the right holder of the prior trademark (coexistence agreement, assignment, license)
  • Request for cancellation of prior trademark (use of non-use cancellation trial)

Of these, a non-use cancellation trial is the most effective in cases where the prior trademark is not actually used. Once the prior trademark is cancelled, the hurdle is removed and your company's trademark application has a better chance of being registered. This strategy can be used in a variety of situations, such as launching a new brand or securing domestic trademarks for overseas expansion.

Advance non-use research is the key to success

Before filing a request for cancellation for non-use, it is extremely important to thoroughly investigate whether the trademark in question is actually not being used. If the other party can provide evidence of use, the appeal will not only be dismissed and the trial costs will be wasted, but there is also the risk that the other party will learn of your company's intentions.

Make sure to conduct a preliminary investigation - "Departing without notice" is prohibited

Before filing a request for non-use cancellation trial, please thoroughly conduct the following investigation.

  • Web search: Perform an Internet search for the target trademark and check its usage in products and services
  • EC site research: Check if products with the target trademark are being sold on Amazon, Rakuten Market, Yahoo! Shopping, etc.
  • Corporate information research: Check the trademark owner's business content, performance, press releases, etc., and check whether there are any business activities related to the target trademark
  • Store/on-site survey: If possible, check usage conditions in physical stores
  • Patent Information Platform (J-PlatPat): Check trademark registration information, renewal status, and presence of related applications

If no trace of use is found as a result of the investigation, it can be determined that the possibility of success in a non-use revocation trial is high. However, evidence of use is often in the possession of the trademark owner, making it difficult to confirm in advance that the trademark has not been used completely. After understanding this point, consider the risk and return in a comprehensive manner before filing an appeal.

Option of transfer negotiation

Although a non-use cancellation trial is a powerful tool, filing a trial is not necessarily the only solution. In some cases, it may be effective to first trynegotiating transferwith the trademark owner.

Case where transfer negotiations should be considered

  • If there are time constraints: A non-use revocation trial usually takes about 6 months to 1 year from request to trial. If the brand launch schedule is fast approaching, a transfer negotiation may be a quicker solution
  • If there is a possibility that the other party is using it: If the possibility of use cannot be completely ruled out as a result of the investigation, it is wise to begin negotiations first to avoid the risk of losing the case at trial
  • If you want to maintain a friendly relationship: If the other party is a business partner or partner company, an amicable resolution through negotiation may be preferable to the confrontational method of arbitration
  • Using non-use cancellation judgment as a negotiation card: By showing the attitude that ``if you are not using the property, I will request a cancellation judgment,'' you may be able to advance the transfer negotiation advantageously. For the other party, if the trademark is not in use, it would be a more reasonable option to obtain compensation through transfer

Regardless of which strategy you choose, thorough research and expert advice is essential. By formulating a strategy that combines non-use cancellation judgments and transfer negotiations, it is possible to realize brand strategies in the most efficient manner.

6. Benefits and summary of consulting a patent attorney

Non-use cancellation trials are an area of trademark law that requires particularly specialized knowledge and practical experience. Regardless of whether you are on the defensive or attacking side, by consulting and requesting a patent attorney, you will be able to respond more reliably and efficiently.

Advantage 1: Evaluation of used evidence and strategic evidence composition

Patent attorneys can accurately determine what kind of evidence is valid and what kind of evidence is insufficient based on past trial decisions and precedents. If you are on the defense side, you will select the most effective evidence from the evidence you have and write a written defense that logically proves the fact of use. If you are on the attacking side, evaluate the possibility of the other party's use in advance and determine the probability of success in filing an appeal. The knowledge of experts is also essential in determining whether the manner of use of a trademark falls under the category of "same according to socially accepted standards."

Advantage 2: Avoiding procedural risks

Non-use revocation trials have strict procedural requirements and deadlines. If you miss the deadline for filing your answer by even one day, you may lose your rights, no matter how legitimate the reason may be. By hiring a patent attorney, you can avoid these procedural mistakes and take the necessary actions at the appropriate time. Additionally, based on our experience, we are able to accurately make decisions regarding additional claims and supplementary evidence as the trial progresses.

Advantage 3: Planning a comprehensive brand strategy

Non-use revocation trials cannot be completed as a standalone procedure, but should be positioned within a company's overall brand strategy. Patent attorneys are familiar with all aspects of trademark practice, including trademark application, registration, management, and dispute handling, and can propose comprehensive brand strategies, including non-use cancellation trials. For example, we can support you from multiple perspectives, such as adjusting the timing of filing a new trademark application in parallel with the cancellation of an earlier trademark, auditing the usage status of the entire portfolio, and reviewing license agreements.

Although the non-use cancellation trial is a system that deals with the basic requirement of "use" of a trademark right, its practice is very deep and there are many aspects that are difficult to judge. Understanding both "defense" and "offense" and practicing both daily intellectual property management and strategic utilization are the keys to protecting and increasing a company's brand value.

Is there a risk that your company's trademark will be canceled due to non-use, or are other companies' unused trademarks becoming an obstacle to business development? If you have any concerns, please consult an expert patent attorney.

Please contact EVORIX for consultation regarding non-use revocation judgment

Our experienced patent attorneys provide one-stop support for everything from trademark defense measures to offensive strategies.
Please feel free to contact us using the free consultation form.

Non-use revocation judgment Article 50 of the Trademark Law Trademark management Trademark rights Brand strategy Intellectual property Patent attorney EVORIX
Takefumi SUGIURA, Patent Attorney

AUTHOR

Takefumi SUGIURA （杉浦 健文）

EVORIX Intellectual Property Law Firm　Managing Patent Attorney

Supports clients across IT, manufacturing, startups, fashion, and medical industries, covering patent, trademark, design, and copyright filings through trials and infringement litigation. Specialized in IP strategy for AI, IoT, Web3, and FinTech. Member of the Japan Patent Attorneys Association (JPAA), Asian Patent Attorneys Association (APAA), and Japan Trademark Association (JTA).