Three-year non-use cancellation of a trademark can be said to be the hardest hit area for evidence forgery. The reason is that Article 49 of the Trademark Law stipulates that: “Where a registered trademark has become the generic name of the designated goods or stays unused for three consecutive years, any unit or individual may apply to the Trademark Office for revoking the same”

    When a trademark registrant receives a "Notice of Providing Evidence of Use", he must quickly collect evidence of use that meets the statutory requirements and submit it to the Trademark Office within the prescribed time limit or risk having the registered trademark cancelled. Although there are remedial methods such as reexamination and litigation, even if the remedial procedure is initiated, the strict requirement of providing evidence of the use of the trademark cannot be escaped. Moreover, the review and litigation phases are often more stringent.

    At first glance, the provisions of Article 49 of the Trademark Law are a bit "inhuman". The registrant has clearly registered a trademark successfully. After three years, perhaps due to other people's decision to blow things out of proportion, a trademark registrant must provide evidence of use. This obligation cannot be treated negatively or ignored; otherwise the successfully registered trademark may be cancelled.

    However, the original intention of the legislation is not to make it difficult for trademark registrants. It is only because of the large number of applications for trademarks in China and the high idle rate among trademarks. A choice was made between public interests and personal interests, so Article 49 of the Trademark Law came into being.

    In this context, some trademark registrants neglect to use their registered trademark, or use it infrequently, or use it but do not effectively manage the evidence of use. At the same time, they do not want their registered trademark to be cancelled. Some registrants choose to take the risk and falsify their evidence of use.

    Since the registrant is not required to provide the original or notarized form of evidence in the administrative stage of the three-year non-use cancellation, and electronic transaction vouchers are often used in common transactions. SIPO also lacks corresponding administrative punishment measures, which created the problem of serious evidence forgery cases of three-year non-use.

    In mainland China, invoices for market transactions are common and are issued by the State Administration of Taxation. They have strong credibility, and the Trademark Office readily recognizes invoices as proof of use for three-year non-use cancellation cases in the administrative stage. However, officials do not necessarily require registrants to submit original invoices or notarized copies. Therefore, fraudulent invoices are the worst-hit areas in the use of evidence fraud.

    In a recent case of cancellation review decision issued by the State Intellectual Property Office, in which SIPO cancelled a registered trademark in accordance with the law.

    In this case, the trademark registrant took advantage of the fact that SIPO does not require the submission of original evidence and forged copies of invoices. The registrants tampered with goods/services mentioned in the invoice, changing them from actually traded goods in the real invoices to goods/services in the review, and changed the entities mentioned in the invoices. As a result, it formed a chain of false evidence with other self-made product images and contracts whose performance could not be verified, in an attempt to slip through and continue owning the trademark.

    In the trial of this case, an interesting episode also occurred – the trademark registrant contacted the applicant for the cancellation voluntarily, hoping to sell his trademark, offer a high transfer price. The applicant did not agree to the request of the registrant, and the above cancellation decision was made.

    It is worth mentioning that the Announcement No. 87 issued by the State Administration of Taxation in 2016 clearly stated that the national value-added tax invoice inspection platform is the official inspection platform for VAT invoices and other invoice information. Businesses and individuals can use this platform to verify authenticity ща special VAT invoices, general VAT invoices, unified motor vehicle sales invoices, and electronic general VAT invoices issued by the new system. Through it seems simple, checking and proving the authenticity of invoices has always been difficult, since there is no established linkage mechanism for invoice verification. Although search results of the national VAT invoice verification platform return "information inconsistency" or "no invoice found", it might not always mean the invoice is forged – it could be an entry error, or an incorrect taxpayer’s address information, an expired invoice, etc.

    This poses a problem for the counterparty. If the counterparty cannot provide strong counter-evidence, it will not be enough to determine that the invoice in question is false, and the counterparty will have to bear the unfavorable consequences.

    For registrants who have not used their trademarks and win the case with forged evidence it may mean good news, as in the future they will more actively forge invoices and other evidence. The costs are low and the inspection by authorities is difficult, so it is rarely undertaken. If false evidence is discovered, the punishment measures are very slight, so forging evidence is low-cost, high-reward.

    However, this obviously violates the principle of good faith and is not conducive to the sound development of China’s trademark registration and use system. It is far from enough to just passively check each case to prevent the use of false evidence in cases of three-year non-use cancellation.

    Although trademark administration and judicial organs should establish a linkage mechanism with tax authorities, and trademark administration and judicial organs should actively perform their functions to effectively ensure that forged invoice evidence can be discovered and eliminated immediately, but the foundation of evidence governance lies in trademarks. It is important to educate the registrants themselves, to improve respect of laws and regulations to eradicate the phenomenon of evidence falsification.