Businesses should review trade marks before new Chinese regime comes into effect

As a result, international brand owners should review their Chinese trade mark portfolios, defensive filing practices and evidence of use ahead of the implementation of the changes. 

The reforms, aimed at improving brand protection, discouraging bad-faith filings and adapting trade mark rules to the digital economy, will take effect on 1 January 2027. The significance of the reforms goes beyond the traditional problem of third parties registering well-known overseas brands in China. Businesses with extensive Chinese trade mark portfolios will need to consider whether their own filing strategies can be justified by genuine commercial needs. 

For established brand owners, the reforms bring both stronger enforcement tools and greater scrutiny of their own filing practices. While they provide legitimate brand owners with stronger grounds for challenging trade mark squatters and repeat bad-faith filers, they are also likely to increase scrutiny of excessively broad, repetitive or unused defensive portfolios. 

Bad faith provisions broadened

Article 19 of the revised law introduces a broader bad-faith ground which can apply at the examination, opposition and invalidation stages of the registration process. A new provision targets applications where there is no intention to use the trade mark and the application clearly exceeds the applicant's normal business needs. Both elements form part of the test. 

The supporting draft examination guidelines indicate that the assessment may take account of factors including the applicant's industry, business scope and qualifications, its filing volume and the classes covered, its actual use of marks, its response to examination questions and the filing activities of related parties. 

Potential warning signs include very large filing programmes that bear little relationship to the applicant's commercial activities, repeated filings, applications covering unrelated areas of business, and filing activity that appears disproportionate to the applicant's scale or capacity.

This does not mean businesses must restrict their Chinese portfolios exclusively to marks and goods already in use. The new framework expressly accommodates defensive filings around registrations for a core business that is in use, as well as moderate filings for anticipated future business. The key question will increasingly be whether there is a credible commercial rationale for the scope of protection sought. 

For multinational businesses with established brands and broad commercial activities, a relatively wide portfolio may therefore remain entirely appropriate. By contrast, a smaller business accumulating large numbers of registrations across unrelated goods or services, without corresponding commercial activities or plans, is likely to face more difficult questions. 

Brand owners gain new tools

The reforms also strengthen the position of international brand owners. 

The expanded provisions should provide additional routes for challenging parties engaged in systematic trade mark squatting. The draft guidelines identify conduct including copying reputed or distinctive marks belonging to multiple businesses; repeatedly targeting the same third party; and mass filing of other parties' trade names, e-commerce names, domain names, product names or packaging. 

Filings by conspiring or related parties can also be taken into account, making it more difficult for a bad-faith filer simply to spread applications between connected entities. A later transfer of a mark will not cure conduct that was objectionable when the application was filed. 

This should be particularly helpful where the difficulty has historically been demonstrating the overall pattern of behaviour behind apparently separate applications. 

Defensive portfolios under scrutiny 

The practical challenge for legitimate businesses is that some filing practices historically adopted to protect brands in China could now attract greater scrutiny. 

International brand owners have often obtained defensive registrations extending beyond their immediate commercial activities. Under the revised regime, the distinction between proportionate brand protection and excessive filing will become increasingly significant. 

The answer is not necessarily to abandon defensive filing. Instead, businesses should be more selective about what they file and retain and should be able to demonstrate the commercial rationale behind important defensive registrations. The draft guidelines specifically contemplate defensive filings connected with core businesses in use and moderate filing for expected future activities. 

Businesses should therefore consider reviewing existing Chinese trade mark portfolios to identify rights supporting current business, filings intended to protect realistic areas of expansion, strategically important defensive protection, and registrations which may no longer have a sufficient commercial justification. For important defensive positions, maintaining a record explaining the business rationale for the protection may become increasingly valuable. 

Evidence of use takes on greater importance

A related theme running through the reforms is the growing importance of evidence. 

The revised regime expressly recognises trade mark use through the internet and other information networks. In practice, online activity capable of reaching Chinese consumers can therefore form part of the evidence supporting genuine use. An English-language website, for example, may potentially be relevant where Chinese consumers actually purchase the goods and the owner can establish a connected evidential chain through records such as sales, delivery and payment documentation. 

At the same time, the revised regime gives China’s National Intellectual Property Administration (CNIPA) power to initiate cancellation of marks that have not been used for three consecutive years without justification, rather than necessarily waiting for a third party to bring a non-use action. 

That makes evidence preservation more important. Brand owners should not wait until a registration is challenged to reconstruct historic use. Maintaining organised records of Chinese sales, online use and associated commercial documentation should become part of routine portfolio management. 

Integrity of the filing process 

Article 19 also addresses registrations obtained through deceptive or other improper means. The draft guidelines identify conduct such as concealing or fabricating facts or submitting forged application or supporting documents to the CNIPA. 

The significance for legitimate brand owners is that the integrity of the filing chain matters. Documents, signatures, corporate information and supporting evidence submitted in connection with Chinese applications should be genuine and accurate. Improper documentation submitted by an agent can potentially jeopardise the resulting registration. 

Shorter opposition periods 

The bad-faith reforms sit alongside procedural changes that will require quicker decision-making by brand owners. 

In particular, the opposition period is being reduced from three months to two months. This increases the importance of effective watching arrangements and rapid internal processes for assessing potentially conflicting applications and obtaining instructions. 

The revised framework will also formalise suspension procedures, including circumstances where determination of a trade mark matter depends on a related administrative or court proceeding. 

What should brand owners do now? 

For businesses with significant Chinese portfolios, the reforms provide a good opportunity to review both existing rights and future filing strategy. 

In particular, brand owners should consider: 

• reviewing existing Chinese portfolios, distinguishing between core rights, genuine future-use filings, defensive protection and registrations that no longer serve a clear commercial purpose; 
• maintaining contemporaneous records for important defensive filings showing why broader protection is commercially necessary, particularly where protection extends materially beyond the company's present business activities; 
• preserving evidence of use systematically, including sales, invoices, delivery documentation and relevant online activity directed at or reaching Chinese customers; 
• aligning new applications with commercial strategy while retaining appropriate defensive protection around genuine core businesses and realistic areas of expansion; 
• reviewing repetitive filing practices rather than automatically re-filing unused registrations simply to preserve rights; 
• checking the integrity of filing documentation and agent submissions, particularly where supporting corporate or use documentation is required; and 
• ensuring watching and reporting procedures reflect the shorter opposition timetable so that potentially problematic applications can be assessed promptly. 

The key message is not that defensive trade mark filing in China is coming to an end. Rather, the reforms increasingly favour justifiable protection over filing for filing's sake. 

For international businesses, that presents both an opportunity and a risk. A stronger bad-faith regime should make it easier to challenge those seeking to exploit established brands. At the same time, businesses will need to manage their Chinese trade mark portfolios more actively, ensuring that the scope of protection they obtain and retain can be justified by current commercial activities, genuine expansion plans or legitimate brand-protection objectives.