Three Years Unused, Your China Trademark Wins Nothing

You can win a Chinese trademark case outright and collect nothing. Not a reduced award. Zero. Article 64 lets the defendant argue that you have not used the mark in China for three years, and if you cannot prove otherwise, liability for damages disappears while the finding of infringement stands.

The judgment reads well on the first page. The court confirms the registration is valid, confirms the defendant's mark is confusingly similar, confirms the goods are similar, and orders the defendant to stop.

Then the damages section says the claim is not supported, and the reason is not that the infringement was minor. It is that the plaintiff could not show the mark had been used.

This is the least intuitive outcome in Chinese trademark law, and it is the one that most often blindsides a foreign brand that registered defensively and then did nothing with the registration.

Quick answer: Article 64 provides that where the defendant raises non-use as a defence and the owner cannot prove actual use within the preceding three years, and cannot prove other loss caused by the infringement, the defendant bears no liability for damages. Statutory damages under Article 63 are capped at CNY 5 million, with punitive damages of one to five times the base for malicious infringement in serious circumstances. None of that applies if use cannot be proven. Article 49 separately allows any third party to cancel a registration unused for three consecutive years.

Why a trademark case is two cases

Chinese trademark litigation separates two questions that brand owners treat as one.

Question one: is there infringement? This is answered by comparing the marks, the goods, and the likelihood of confusion. A valid registration is usually sufficient to establish standing, and this stage is where most of the legal argument happens.

Question two: what is owed? This is answered by evidence of use and evidence of loss. It is a documentary exercise, and a registration certificate is not a document that helps with it.

A brand can win stage one comfortably and lose stage two completely, and the result is an injunction with no money attached. That outcome is not a partial victory. It is a loss with a favourable headline, because the cost of running the case has already been incurred and the deterrent value of an injunction against an unidentified defendant is close to zero.

What counts as actual use

The standard is not "the mark exists somewhere". It is use in the Chinese market, on the approved goods, in a way that can be tied to a date.

Two failure patterns dominate.

The invoice problem. Chinese VAT invoices frequently list a product description and a quantity, and nothing else. The mark is on the packaging but not on the invoice. Courts have repeatedly declined to treat such invoices as use of the mark, because the invoice does not connect the transaction to the registered sign.

The fix is procedural and boring: require that the mark appear on commercial documents, not just on the box. That instruction has to reach the Chinese distributor or the sales entity, and it has to be given before the documents are generated, not after a dispute starts.

The territorial problem. A US brand selling into the US market, manufactured in China, has manufacturing activity in China and commercial use in the US. Article 64 asks about use in China. Factory output for export is not, by itself, use of the mark in the Chinese market.

The 2019 amendment and subsequent practice added an important qualification for export-oriented OEM activity, but the qualification is narrow and fact-specific. It is not a general rule that export manufacturing equals use. The OEM analysis is covered in the OEM trademark prevention guide.

Symbolic use does not count either

There is a second filter after the territorial one, and it catches brands that try to fix the problem cheaply.

Courts distinguish genuine commercial use from token use. A single small transaction, arranged shortly before or during a dispute, with no continuity and no commercial rationale, is commonly treated as symbolic rather than real. It does not satisfy Article 64.

The indicators courts look at are unremarkable: volume relative to the business, continuity across the period, whether the goods were actually available to Chinese consumers, whether the transaction had any commercial purpose beyond creating evidence.

The practical consequence is that there is no cheap retroactive fix. Use has to be real, and it has to have happened before the dispute, because a dispute is exactly when a manufactured pattern becomes visible.

What the damages would have been

It is worth seeing what is forfeited, because the amount explains why defendants raise the defence so readily.

Article 63 sets the calculation order:

1. Actual loss suffered by the owner.
2. Profit gained by the infringer, where loss is hard to determine.
3. A reasonable multiple of a licensing fee, where profit is also hard to determine.
4. Statutory damages up to CNY 5 million where none of the above can be established.

On top of whichever figure applies, reasonable costs of stopping the infringement are recoverable, and for malicious infringement in serious circumstances the court may award one to five times the base amount as punitive damages.

CNY 5 million is about USD 745,000 at the October 2026 mid-rate. That is the ceiling on statutory damages, not a typical award, but it establishes the size of the stake. A defendant facing that range has every incentive to raise Article 64, and raising it costs nothing.

The second three-year rule, which is worse

Article 64 removes money. Article 49 removes the registration.

Any entity or individual may apply to cancel a registration that has not been used for three consecutive years. There is no standing requirement, the official fee is CNY 450, about USD 67, and the applicant does not need to be a competitor or to have any interest in the mark.

So an unused registration faces two independent risks: it cannot produce damages, and it can be deleted on request. The defensive filing that felt prudent in year one is, by year four, both unenforceable in damages and vulnerable to cancellation.

The mechanics of defending against that filing, including what evidence CNIPA accepts, are in the non-use cancellation guide.

How to make an unused registration usable

There are three honest options and one dishonest one.

Use it. The cleanest fix. Put the mark on goods sold into China, however modestly, and keep documents that connect the mark to the transaction. A small but genuine Chinese revenue line is worth more evidentially than a large export business.

License it, with recordal. A recorded licence to a Chinese entity creates documented use in China, provided the licensee actually trades. The licence must be recorded with CNIPA for the use to be clearly attributable, and the recordal process is covered in the licence recordal guide.

Accept the limitation. A defensive registration that blocks squatters is still worth having even if it can never produce damages. The value is preventive, not compensatory, and it should be budgeted as such rather than assumed to be an enforcement asset.

The dishonest option is manufacturing evidence after a dispute begins. It is visible, it is penalised, and it converts a damages problem into a credibility problem.

Questions that come up every time

Can I win a China trademark case and get no damages?

Yes. Under Article 64, if the defendant argues non-use and the owner cannot prove actual use within the preceding three years, the defendant bears no liability for damages even where infringement is established.

What counts as actual use?

Use in the Chinese market on the approved goods, evidenced by documents that tie the mark, the goods and a date together. Invoices, contracts, packaging, advertising and customs declarations all count, but only where the mark appears on them or is clearly linked.

Do foreign sales count?

No. Use must occur in China to support a Chinese registration. Sales into the US, Europe or elsewhere do not establish use in China.

Is one small sale enough?

Usually not. Courts look for genuine commercial use rather than token use, and a single nominal transaction is often treated as symbolic.

What is the damages cap?

Statutory damages are capped at CNY 5 million, about USD 745,000, where loss, profit and licensing fee cannot be determined. Punitive damages of one to five times the base are available for malicious infringement in serious circumstances.

Does non-use also get my trademark cancelled?

Yes, separately. Article 49 allows any entity or individual to cancel a registration unused for three consecutive years. Article 64 removes damages; Article 49 removes the registration.

Does this apply to defensive registrations?

Especially to defensive registrations, because they are the ones most likely to have no use behind them. A defensive filing is still worth having, but it should be valued as a block rather than as an enforcement asset.

Can I fix this after a dispute starts?

Not retroactively. Use that begins after the dispute is visible is assessed against a hostile standard, and a pattern of transactions created for the proceeding is treated as symbolic.