CHANG TSI
Insights
In practice, a common scenario arises when a registered trademark is judicially frozen by a court due to the rights holder's involvement in litigation or debt disputes. The rights holder may develop a false sense of security, reasoning: since the trademark is frozen, it is understandable that the mark cannot be used, and thus no one can cancel the trademark on the ground of three years of non-use.
On the other side, the cancellation applicant often has concerns as well: the target trademark is shown to be under judicial freeze — will a non-use cancellation application be rejected on procedural grounds? Even if accepted, will the registrant successfully defend on the ground that the trademark was frozen and objectively could not be used?
To address these two questions, we reviewed the official responses published by the China National Intellectual Property Administration (CNIPA) and analyzed multiple trademark cancellation review decisions. The conclusion can be stated upfront: a judicial freeze neither prevents a non-use cancellation application from being accepted, nor constitutes a legitimate reason for non-use.
Article 49, Paragraph 2 of the Trademark Law provides that where a registered trademark has not been used for three consecutive years without a legitimate reason, any entity or individual may apply to the Trademark Office for cancellation of that registered trademark.
What constitutes a "legitimate reason"? Article 67 of the Regulations for the Implementation of the Trademark Law sets out an explicit list:
(i) Force majeure; (ii) Government policy restrictions; (iii) Bankruptcy liquidation; (iv) Other legitimate circumstances not attributable to the trademark registrant.
It should be noted that judicial freezing is not included among the first three enumerated categories. Whether it falls under the fourth catch-all provision depends on whether the non-use is not attributable to the registrant, and whether the freezing measure objectively prevented use of the trademark — the very issue that has been consistently rejected in review practice.
In response to the question of whether a trademark freeze affects a non-use cancellation application, CNIPA has issued a public reply through its official online consultation portal: a non-use cancellation application filed against a frozen trademark will be accepted by the Trademark Office.
In other words, a frozen status does not constitute a procedural bar to accepting a cancellation application. It should be noted, however, that this response addresses only the procedural acceptance issue. The CNIPA did not directly answer whether a freeze may constitute a legitimate reason for non-use — that substantive question remains subject to case-by-case review. The authors conducted a case law search and identified the following reference cases:
(I) Cancellation Review of the "Taobao/TAOBAO" Trademark (Reg. No. 4883677)
In the review proceedings, the respondent argued that the trademark had been frozen and that there was a legitimate reason for non-use. CNIPA held: the freezing of a trademark is merely a property preservation measure imposed on the trademark — it does not restrict or prohibit the registrant from normally using the trademark on the approved goods. The claim of legitimate reason was therefore dismissed.
This decision captures the core reasoning: a freeze restricts the trademark owner's right of disposition (no assignment, cancellation, or recordal of licence, etc.), but not the right of use. During the freeze period, the registrant is entirely free to continue affixing the mark, advertising, and selling goods under it. 'Unable to dispose' and 'unable to use' are two entirely different things.
(II) Cancellation Review of the "Kao/花王" Trademark (Reg. No. 3775038)
The applicant in this case had acquired the trademark through a judicial auction before the designated review period, and argued that the trademark had previously been under judicial freeze, constituting a legitimate reason for non-use. After citing all four categories under Article 67 of the Implementing Regulations, CNIPA held: the fact that the trademark was judicially frozen and subsequently acquired through judicial auction does not constitute a legitimate reason for non-use.
The applicant also raised the COVID-19 pandemic as a force majeure defence, which was equally rejected — on the ground that the pandemic did not bring all commercial activity nationwide to a complete halt, and that the pandemic period did not cover the entire designated review period. This illustrates that even a statutorily enumerated ground such as force majeure requires a genuine, substantial causal connection covering the full designated period. The evidentiary bar is high; a freeze, which does not even qualify as an enumerated ground, faces an even steeper challenge.
(III) Cancellation Review of the "三七 SANQI & Device" Trademark (Reg. No. 18451556)
The applicant argued that the trademark had been frozen by the Guangzhou Huadu District People's Court and had objectively been unable to be used normally for nearly three years, constituting a legitimate reason. CNIPA's response was clear and concise: this argument does not fall within the circumstances contemplated by Article 67 of the Implementing Regulations; the claim of legitimate reason is not established.
(IV) Counter-Example: Cancellation Review of the "YOUNG MAN" Trademark (Reg. No. 3748603) — Succeeded on Bankruptcy Liquidation, Not on Freezing
This is a rare case in which the legitimate reason defense succeeded — but the true basis for success must be carefully understood.
The evidence submitted by the respondent (an entity affiliated with Jinhua Youth Bus) showed that the Jinhua Intermediate People's Court had successively issued rulings accepting bankruptcy liquidation proceedings against Youth Bus and more than twenty affiliated companies in a substantive consolidation, and had appointed administrators. CNIPA held that bankruptcy liquidation is an expressly enumerated legitimate reason under Article 67 of the Implementing Regulations, and that — given the inherent delays in bankruptcy proceedings in practice — the registrant objectively lacked the conditions to use the trademark within a reasonable time period. The trademark was accordingly maintained.
In short, the decisive factor in this case was bankruptcy liquidation as a statutory enumerated ground — not the fact that the trademark was subject to any judicial control. This case should not be misread as establishing that judicial control over a trademark automatically exempts it from non-use cancellation.
Drawing on the above cases, the review authority's position can be summarized in three points:
First, freezing and use are not in conflict. The legal effect of a court freeze on a trademark is to prohibit disposition — assignment, cancellation, and the like — in order to secure future enforcement. Actual use of the trademark on approved goods is not restricted by the freeze. Since the registrant is objectively able to use the trademark, a failure to do so reflects the registrant's own choice or neglect, and cannot be characterized as 'not attributable' to the registrant.
Second, the review of legitimate reasons is substantive, not formal. Even where a statutory enumerated ground is invoked — such as force majeure — there must be a genuine, sufficient causal connection between that ground and the non-use, covering the full designated period. The failure of the COVID-19 defense in the Kao case is a prime illustration.
Third, bankruptcy liquidation is an independent and sustainable ground, but its conditions lie in the bankruptcy proceedings themselves. The support received in the YOUNG MAN case was based on the bankruptcy liquidation itself and the inherent delays in the process — not on the freezing of the trademark. Where a registrant happens to be in bankruptcy proceedings, the evidence should focus on the court's ruling accepting the bankruptcy case and the appointment of the administrator, rather than on the trademark's frozen status.
(I) For Trademark Rights Holders (Respondents in Non-Use Cancellation Actions)
1. Do not cease use of the trademark merely because it is frozen. Use during the freeze period is legally valid and constitutes the core evidence against a cancellation action. Evidence of use — contracts, invoices, product samples, promotional materials, and e-commerce sales records — should be preserved as a matter of course.
2. Do not make the freeze the primary basis of a cancellation defense. Based on existing case law, a legitimate reason defense premised solely on freezing has virtually no prospect of success. The defense should focus on genuine use evidence. Where statutory grounds such as bankruptcy liquidation or government policy restrictions genuinely apply, they should be separately and thoroughly substantiated.
3. Purchasers who acquire trademarks through judicial auction should exercise particular caution. The Kao case shows that the argument that ‘the previous owner did not use the trademark because it was frozen’ is not accepted. After acquiring the trademark, the new owner should promptly commence genuine use, or assess whether the trademark already carries a non-use cancellation risk and factor that risk into the bidding price.
(II) For Non-Use Cancellation Applicants
1. A frozen status of the target trademark does not prevent filing a non-use cancellation action. CNIPA has confirmed that such applications will be accepted in the normal course; the application may proceed without concern.
2. The registrant’s ‘freeze defense’ can be expected to fail. Where the registrant’s response relies solely on the frozen status as the legitimate reason for non-use and lacks actual use evidence, the probability of a successful cancellation is high.
3. Check whether the registrant is in bankruptcy proceedings. This is the only defense route that has succeeded in reported cases to date. Before filing a non-use cancellation application, verify the registrant’s bankruptcy status through the National Enterprise Bankruptcy Restructuring Case Information Network or similar channels, and assess the likely outcome accordingly.
A judicial freeze freezes the trademark's 'disposition' — it does not freeze the trademark's 'use', nor does it freeze a third party's right to file a non-use cancellation action. For rights holders, a frozen trademark is not an asset safely locked away — it remains an asset still counting down the non-use cancellation clock. The only reliable protection has always been genuine, public, and lawful commercial use.
Review Decision ShangPingZi [2026] No. 0000101071 — Cancellation Review of Trademark No. 4883677 "Taobao/TAOBAO"
Review Decision ShangPingZi [2026] No. 0000035258号 — Cancellation Review of Trademark No. 3775038 "Kao/花王"
Review Decision ShangPingZi [2024] No. 0000217715号 — Cancellation Review of Trademark No. 3748603 "YOUNG MAN"
Review Decision ShangPingZi [2024] No. 0000211551号 — Cancellation Review of Trademark No. 18451556 "三七 SANQI & Device"
This article is based on publicly available cases and is intended for reference only. It does not constitute formal legal advice.
