For most businesses, proving that a trademark is in use is rarely a difficult task.

Advertising campaigns, product sales, media coverage, corporate websites, brochures, trade exhibitions, and other commercial activities continuously generate evidence of trademark use. Whether in trademark prosecution proceedings or in non-use cancellation actions, companies can usually provide ample documentation demonstrating the actual use of their trademarks.

The situation, however, is quite different for private fund managers.

Under China's regulatory framework, private fund managers are prohibited from publicly soliciting investors or conducting public marketing activities directed at unspecified persons. Their business operations are therefore subject to inherent restrictions. Once an industry is legally prohibited from engaging in public promotion, a seemingly simple question arises:

If a trademark becomes subject to a non-use cancellation action, how can a private fund manager prove that the trademark has in fact been continuously used?

Although this appears to be a trademark law issue, it is in reality a question that sits at the intersection of financial regulation and intellectual property law.

The Opinions on Strengthening Regulation and Risk Prevention for the High-Quality Development of Private Investment Funds (Guo Ban Han [2026] No. 54) (the “Opinions”), recently issued by the General Office of the State Council, provide an important perspective through which this question can be examined.

The Distinctive Nature of the Private Fund Industry Is First and Foremost a Regulatory Issue

The Opinions constitute one of the most significant regulatory documents issued for China's private fund industry in recent years.

From registration and filing requirements to risk monitoring and industry exit mechanisms, the Opinions further strengthen the regulatory framework governing private funds and once again confirm the industry's distinctive characteristics when compared with ordinary commercial sectors.

In practice, private fund managers have long operated within a highly regulated environment. Unlike consumer brands, they cannot advertise publicly. Unlike internet businesses, they cannot freely conduct public marketing campaigns. Investor eligibility, fundraising methods, and disclosure obligations are all subject to stringent regulatory controls.

These restrictions are intended to protect investors and prevent financial risks. At the same time, however, they inevitably shape the manner in which private fund managers establish market presence and brand recognition.

For ordinary businesses, brand value is often built through public marketing and commercial promotion. For fund managers, by contrast, reputation is more commonly established through long-term investment performance, professional credibility, and word-of-mouth recognition among investors.

As a result, the commercial activities of private fund managers differ substantially from those of traditional businesses. In recent years, these differences have increasingly begun to influence the application of intellectual property law.

Does “Trademark Use” Necessarily Require Public Promotion?

Traditionally, trademark use is often associated with advertising and commercial promotion.

Businesses advertise products or services, consumers identify their source through trademarks, and the trademark system functions accordingly. Consequently, in non-use cancellation proceedings, trademark owners typically rely on advertising contracts, promotional materials, sales records, invoices, and transaction documents to establish continuous use.

For private fund managers, however, this conventional evidentiary path is inherently limited.

Fund managers cannot engage in large-scale public marketing activities, nor do they typically generate traditional sales evidence. Many materials capable of demonstrating trademark use exist instead in fund filing documents, fund agreements, investment management records, investor communications, and internal operational materials.

This raises a critical question:

Do such materials constitute “trademark use” within the meaning of trademark law?

From a legal perspective, the essence of trademark protection lies not in advertising itself, but in a trademark's ability to identify the source of goods or services.

If a trademark has been continuously used in connection with fund management services and enables relevant investors to identify the source of those services, the absence of public promotion should not necessarily be determinative in assessing whether genuine trademark use has occurred.

Indeed, this issue has become increasingly prominent in trademark disputes involving private fund managers.

From Regulatory Characteristics to Judicial Standards

In recent years, the Beijing Intellectual Property Court and the Beijing High People's Court have gradually begun to recognize the impact of industry-specific regulatory requirements on trademark use.

In a number of cases involving private fund managers, courts have paid increasing attention to evidence such as fund filing materials, fund agreements, investment management records, and investor communications.

The fundamental issue in these cases is not whether sufficient evidence exists, but rather how commercial use should be understood within a specially regulated industry.

For ordinary businesses, trademark use is typically reflected through public, broad, and continuous market exposure.

For private fund managers, however, genuine commercial activities frequently occur within relatively closed investment management environments.

If courts were to ignore these industry-specific realities and apply evidentiary standards developed primarily for consumer-facing industries, even fully compliant fund managers might encounter significant difficulties in proving trademark use.

Viewed from this perspective, the significance of the Opinions extends beyond regulatory reform.

More importantly, the Opinions once again confirm the unique regulatory characteristics of the private fund industry. These characteristics provide a clearer institutional context for understanding how commercial activities are conducted within the sector and how trademark use should be evaluated in future intellectual property disputes.

In this sense, although the Opinions are fundamentally a financial regulatory document, their influence has already begun to extend into the field of intellectual property law.

When Public Promotion Is Restricted, Brand Value Becomes Even More Important

Paradoxically, the inability to engage in public promotion may have contributed to an underestimation of brand value within the private fund industry.

Historically, some fund managers have devoted relatively limited attention to trademark strategy and brand protection. For many institutions, a fund name has been viewed primarily as a regulatory registration tool rather than a strategic asset requiring long-term investment and protection.

This perception may now be changing.

The Opinions expressly prohibit the use of terms such as “Private Fund” and “Venture Capital Fund” in business names or business scopes without regulatory approval and require the rectification of entities that fail to comply with these requirements.

As a result, the number of entities legally entitled to use such industry-specific designations is likely to decrease.

As regulatory entry barriers continue to rise, the market recognition value associated with fund names, trade names, and brand identifiers is likely to increase correspondingly.

From an intellectual property perspective, fund brands are gradually evolving from simple market identifiers into assets carrying both commercial value and regulatory significance.

Future disputes concerning fund names, abbreviated brand references, trade names, and market confusion may increasingly be resolved through trademark law and unfair competition law.

From Trademark Protection to Trade Secret Protection

The Opinions also propose the establishment of a whistleblower system for private funds, a development that deserves attention from intellectual property practitioners.

Private fund managers possess substantial amounts of commercially valuable information, including investment project materials, valuation methodologies, due diligence reports, investment committee documents, transaction structures, and investor information.

Such information often constitutes the core competitive asset of a fund manager.

As internal reporting mechanisms become more sophisticated, the industry's challenge will no longer be limited to preventing information leakage. Rather, fund managers will increasingly need to strike a balance between effective internal oversight and the protection of trade secrets.

Trade secret protection will therefore evolve from a purely dispute-driven issue into a broader governance issue.

Information classification systems, access controls, confidentiality mechanisms, and employee departure management may all become increasingly important components of compliance governance within the private fund industry.

Conclusion

Historically, the private fund industry has faced one central limitation: it could not engage in public promotion.

Going forward, fund managers may face a different and more practical challenge:

How can they demonstrate trademark use, preserve brand value, and protect core information assets when public promotion itself is restricted by law?

In this regard, the significance of the Opinions lies not only in strengthening industry regulation, but also in fostering a deeper integration between intellectual property law and the unique regulatory environment governing private funds.

That integration may ultimately prove to be one of the most significant developments in the future evolution of intellectual property governance within the private fund industry.

Author: Xu Lekai and Team

About the Author

Xu Lekai and Team regularly advise on intellectual property protection, brand enforcement, trademark prosecution and contentious matters, as well as cross-border intellectual property disputes. The team closely follows developments at the intersection of financial regulation and intellectual property law.