Protecting Your Trademark in China: First to File, and the Squatter Problem

China awards a trademark to whoever files first, not to whoever used the brand first. A company that has sold under a name in Europe for thirty years has, in China, no registration and — in most cases — no priority. That single rule explains almost every China trademark problem foreign companies run into: the distributor who registered your name, the factory that owns your logo, the customs seizure of your own goods. It is also why the fix is cheap if you do it early and expensive if you do not.

1. First to file, and what it really means

China's system is a registration system. Between two applicants for the same mark on the same goods, the earlier filing wins; use in another country is largely irrelevant to who gets the registration. The practical consequence is uncomfortable: your own brand, registered by someone else in China, can be used to stop you manufacturing there, to stop your goods leaving the port, and to demand a price for a name you built.

There are exceptions, and they are narrow. A mark already used in China with a certain influence can be blocked from pre-emptive registration by improper means (Article 32 of the current law). Registration by your own agent, representative or a party who knew of the mark through a business relationship is separately prohibited (Article 15). Applications filed without any intent to use can be refused or invalidated (Article 4). Each of these is a route back — but each requires evidence, time and a fight that filing first would have avoided.

Note also what a squatter's registration does not do to you if you were already using the mark in China: where you used a mark with certain influence before the registrant filed, you may continue using it within the original scope (Article 59(3)). That is a shield against an infringement claim, not a right to expand — and not a substitute for owning the mark.

2. How a foreign company files

A foreign applicant with no domicile or establishment in China must appoint a trademark agency recorded with CNIPA; you cannot file directly from abroad. Two routes are available:

• A national application through that agency. You choose the class and the subclasses, which is the point — see below.
• A Madrid designation of China through WIPO, off an existing home registration. Cheaper across many countries, but the specification is examined and mapped to Chinese subclasses by the examiner rather than chosen by you, which frequently leaves gaps.

For a company whose China exposure is real — manufacturing, distribution, e-commerce — the national route usually buys more protection per renminbi. Registration lasts ten years from approval and is renewable for ten-year terms; renewal is filed in the twelve months before expiry, with a six-month grace period on payment of a surcharge. Diarise it: a lapsed mark in China is a mark that becomes available to someone else.

One structural question to settle before filing: who owns the mark — the parent, or the China entity you are about to set up? Both are workable, and the answer interacts with your entity choice and your exit options. If you are still deciding the vehicle, see WFOE, JV or representative office and how to set up a WFOE; trademark filing belongs in that same early workstream, not after the licence is issued.

3. The subclass system — why “we registered in class 25” is not an answer

China follows the Nice Classification of 45 classes, but subdivides each class into subclasses (similar groups). Goods in the same subclass are in principle treated as similar; goods in different subclasses of the same class often are not. Footwear and clothing sit in different subclasses of class 25; a registration covering one may not stop a confusingly similar mark in the other.

This is the single most common gap in a foreign portfolio in China. A mark registered on the strength of a home-country specification is mapped into whichever subclasses that wording happens to touch — and the neighbouring subclasses, where a copyist will file, stay open. Filing strategy in China is therefore a subclass exercise: cover the goods you sell, the goods you plausibly will sell, and the adjacent subclasses that a bad-faith applicant would target.

4. Register the Chinese name — before the market names you

Chinese consumers, distributors and platforms will refer to your brand in Chinese whether or not you have chosen the characters. A Latin-script registration does not cover a Chinese-character equivalent. There are three ways to build one — literal translation of the meaning, phonetic transliteration, or a coined name that suggests both sound and a favourable meaning — and all three should be checked for prior filings, dialect pronunciation and unintended connotations before use. If a nickname has already taken hold in the market, treat that as a filing priority: it is the version a squatter will register.

5. If someone got there first

Four routes, and usually a combination:

1. Opposition. Once an application passes examination it is published, and third parties may oppose. The window is three months under the current law and drops to two months from 1 January 2027 — which is precisely why watch services earn their fee.
2. Invalidation. After registration, invalidation may be sought within five years on relative grounds; the five-year limit does not apply where a well-known mark was copied in bad faith. Bad-faith filings without intent to use, and squatting by agents or business contacts, are grounds here as well as in opposition.
3. Non-use cancellation. A registration unused for three consecutive years without proper reason can be cancelled on application — often the fastest lever against a hoarder who registered dozens of marks and used none.
4. Negotiation. Unglamorous, and frequently the commercially rational answer where the squatter's registration is genuinely vulnerable but the timeline is not survivable. Its price is set by how strong your cancellation case is, so build that first.

Once you do own the registration, record it with China Customs. Recordal requires a CNIPA registration (a foreign registration, including through Madrid, is not enough on its own), lasts up to ten years, and lets customs detain suspect shipments — including exports, which is where counterfeits of a foreign brand usually surface.

6. What changes on 1 January 2027

China adopted a revised Trademark Law on 26 June 2026 — 87 articles across nine chapters, in force 1 January 2027. It is an evolution of the same first-to-file system, tilted further towards actual use:

• Hoarding is refused on an objective test. The new Article 19 refuses applications filed without intent to use that clearly exceed normal production and business needs — a volume-against-business test rather than an inquiry into subjective bad faith.
• The opposition window halves to two months (Article 36). Brand-monitoring cadence and internal approval speed have to change with it.
• Online use counts as use (Article 2), so e-commerce and social-media activity can support a defence against non-use cancellation.
• Penalties rise. Bad-faith registrants face warnings and fines of up to RMB 100,000 (Article 54); trademark agencies that facilitate them face up to RMB 200,000 and suspension.
• Dynamic marks become registrable (Article 14), with functionality exclusions extended to sound and colour combinations.
• CNIPA can confirm well-known status for use in overseas proceedings (Article 69), and courts can sanction malicious or fabricated trademark litigation (Article 81).
• What was dropped matters too: the draft ideas of compulsory transfer of a squatted mark to its rightful owner, and periodic post-registration use statements, were not adopted. Recovering a squatted mark still means cancelling or invalidating it, then filing.

Article numbers change with the new law; the strategy does not. File early, file wide enough across subclasses, own your Chinese name, watch the register, and use the mark provably — including online.

Frequently asked questions

Sources

• CNIPA — revised Trademark Law adopted, effective 1 January 2027 (87 articles, nine chapters; bad-faith fines; three-year non-use revocation).
• CNIPA — how foreign applicants apply for trademark registration (agency requirement; national and Madrid routes).
• Mayer Brown — New Trademark Law in China takes effect on 1 January 2027 — Article 19, the two-month opposition period, penalties, and the draft proposals that were dropped.
• China Briefing — China's trademark regime and brand protection — first-to-file, the subclass system and Chinese-character marks.
• Internal: How to set up a WFOE in China; WFOE, JV or representative office; Five checks before committing capital.

This article is general information for foreign companies, not legal advice on any specific matter. Rules and practice change; please take advice on your facts.

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