China Trademark Squatting and Bad-Faith Filings: A Guide for Foreign Brands

Why squatting works in a first-to-file system

China protects the trademark you register, not the one you already use. Under the first-to-file principle of Article 31 of the Trademark Law, an application for the same or a similar mark on the same or similar goods is preliminarily approved and published for the one filed first. A squatter exploits that rule: they watch a foreign brand succeed, file the mark in China before the owner does, and then demand a buy-out price for what should be the owner's own name. The 2019 revision of the Trademark Law — the fourth amendment, effective 1 November 2019 — was designed in part to blunt exactly this practice, and it matters that foreign brands know the tools it added.

The bad-faith provisions to build your case on

• Article 4 — no filing without intent to use. A trademark application filed in bad faith and not for the purpose of use shall be rejected. This is the 2019 amendment's flagship weapon against bulk-filing squatters who register hundreds of marks with no business behind them.
• Article 32 — prior rights and preemptive registration. An application may not harm another's existing prior rights, and may not, by improper means, preemptively register a mark that another has already used and that has acquired a certain influence.
• Article 15 — the agent and relationship rule. An agent or representative who, without authorization, files the principal's mark in its own name is caught by paragraph 1; paragraph 2 extends the rule to anyone who, through a contract, business relationship or other connection, clearly knew of the other party's prior use.
• Article 44(1) — invalidation for improper means. A registration obtained by deception or other improper means, or in violation of Article 4, may be declared invalid on application by any unit or individual.
• Article 13 — well-known marks. Well-known marks enjoy broader protection, including against cross-class registration where the public would be misled. Article 14 makes recognition case-by-case and on-demand.

The three procedural routes, and when each fits

• Opposition. Under Article 33, anyone may file an opposition within three months of publication of a preliminary approval. This is the fastest lever and works best when you catch the squatter's application early.
• Invalidation. Under Article 45, a request for invalidation based on relative grounds (including Articles 15 and 32) must be filed within five years of registration — but a well-known mark owner attacking a malicious registration is not bound by the five-year limit. Where the ground is an absolute one such as Article 4 or 44(1), any unit or individual may apply.
• Non-use cancellation. Under Article 49(2), if a registered mark has not been put to genuine use for three consecutive years without justification, any person may apply to cancel it. Many squatters register and never use, so this is a powerful clean-up tool once the five-year invalidation window has closed.

These are distinct procedures with different standing rules and time limits — a point foreign owners often blur. An opposition is filed before registration; invalidation and cancellation attack a mark already registered. Choosing the wrong one can cost you the window.

Working with the Madrid system

China is a member of both the Madrid Agreement (joined 1989) and the Madrid Protocol (joined 1995), so a foreign brand can designate China in an international registration. The CNIPA examines the designation and issues a provisional refusal or protection decision under the Protocol's time limits. Madrid gives you a single filing, but the underlying fight — opposition, invalidation, cancellation — is still fought in China, under Chinese law, against the same squatters.

A practical response playbook

• File early. In a first-to-file system the cheapest defense is to file in China before your first shipment, launch or trade show.
• Watch and oppose fast. Monitor CNIPA publications for your marks and file opposition within the three-month window — delay converts a cheap opposition into an expensive invalidation.
• Keep evidence of use and influence. Sales figures, invoices, marketing and media coverage in China are what Article 32 and the well-known-mark rules run on.
• Negotiate from strength. A squatter asking to "sell back" your mark is often a sign they know their filing is vulnerable to Article 4 or 49(2) — a buy-out may be cheaper than litigation, but only negotiate with the full picture in hand.

The provisions summarized here are current as of the date of writing; the Trademark Law and the CNIPA's examination guidelines are amended periodically, so confirm the operative text before relying on any single article. Our intellectual property team handles opposition, invalidation and cancellation proceedings for foreign brands, and works with our IP litigation practice when a dispute reaches the courts.