On June 26, 2026, China promulgated a comprehensive revision of the Trademark Law which is scheduled to take effect on January 1, 2027 (“New Law”). The revisions enhance the existing legal landscape with beneficial updates to brand owners, particularly with respect to well-known trademark protection and counteracting bad-faith conduct across the trademark lifecycle. This alert outlines the key changes and their practical implications for brand owners.
1. Well-Known Trademark Protection: An augmented approach to support local and overseas needs
Article 21 – Cross-Class Protection is No Longer Conditional upon Local Registration.
Under the New Law, well-known trademarks will be afforded cross-class protection even if brand owners do not have a trademark registration in China. This enables international brands to seek protection even if they only have registered trademarks overseas or where their trademark applications in China are pending. However, brand owners will still be required to prove the well-known status of their trademarks when making a well-known trademark claim in China. The burden of proof remains high. Evidence that shows substantial, locally-grounded reputation and consumer awareness will be essential.
Articles 63 & 69 – Recognition of Well-Known Trademark Status in Anti-Unfair Competition and Overseas Proceedings.
The New Law codifies an existing practice that well-known trademark status may be recognised in anti-unfair competition proceedings, and further introduces a new mechanism for brand owners to seek well-known trademark recognition in China when they are involved in overseas trademark proceedings or disputes.
The well-known trademark status recognition mechanism appears to favour domestic Chinese business in supporting their global expansion and addressing challenges such as Luckin Coffee’s trademark dispute against a copycat in Thailand. As the New Law does not impose any condition on the nationality or legal status of a trademark owner who seeks such recognition, in theory, overseas brand owners may also benefit. It remains to be seen how the mechanism will be implemented in practice.
It is also uncertain how overseas trademark authorities and courts would respond to such recognition. Brand owners with global trademark needs are recommended to review local trademark practices and strategically position themselves via trademark registration and collating territory-specific evidence to support their claims in the relevant markets as appropriate.
2. Stronger measures against bad-faith conduct across the trademark lifecycle
A. Trademark Application – Article 19 (Bad-Faith Applications): The current Trademark Law prohibits bad faith applications of trademarks lacking “intent to use”. The China National Intellectual Property Administration (“CNIPA”) has previously invoked this to challenge trademark applications that cover a large number of classes, doubting the applicant’s genuine intention.
The New Law has refined the relevant provision. Under Article 19, applications of trademarks not intended for use and “clearly exceed normal business needs” shall be rejected. Some observers welcome such refinement as it may leave room for businesses to maintain defensive registrations around core brands. Yet, blanket defensive filings across all classes or other hoarding behaviour such as filing a large number of applications without genuine intent to use would still likely face rejection. If defensive filing is needed to protect their trademarks, brand owners should focus on related goods/services and avoid the unrelated classes.
Trademark applicants who violate Article 19 may be fined up to RMB 100,000 if the violation causes adverse effect (Article 54). This penalty also extends to other types of bad faith filings:
(1) knowingly filing marks that are prohibited from use and registration under new Article 15 (e.g. emblems, officials signs, deceptive or misleading signs etc.) and under new Article 16 (certain domestic geographical names and commonly known foreign geographical names);
(2) intentionally filing marks that imitate well-known marks (Article 21);
(3) an agent or a party with prior dealings intentionally filing a brand owner’s mark without authorization (Article 22); or
(4) intentionally filing marks that prejudice a third party’s prior legitimate rights (Article 24).
B. Use – Article 56 (Penalties for Misleading Use): The New Law introduces a new provision penalizing misleading trademark use. Violating entities may be fined up to 5 times their illegal turnover, or up to RMB 250,000 if the illegal turnover is under RMB 50,000 or undetermined.
This provision was introduced to curb deceptive trademarks. Since 2025, the CNIPA has commenced ex officio invalidations against over 3,300 trademarks aiming to clamp down on “scheming” trademarks (“心机商标”), a colloquial term for a phenomenon where businesses register descriptive or suggestive terms as marks and use them with typographic tricks that exploit public perception and mislead consumers as to product quality or characteristics. The CNIPA has recently offered a reporting avenue on its website to welcome any complaints against misleading trademark use. The number of marks being invalidated is expected to rise.
The various acts to combat “scheming” trademarks appear helpful to fortify consumer safeguards. Brand owners shall revisit their trademark application and use strategies to avoid violations of Articles 19 and 56, though the extent of this impact remains to be seen.
C. Cancellation – Article 57 (Ex Officio Cancellation Authority): The New Law empowers the CNIPA to ex officio cancel registered trademarks that become generic or have not been used for three consecutive years, enabling the proactive pruning of “dormant marks”.
The New Law is silent on the circumstances and procedures that trigger the implementation of this new provision but it is expected that affected trademark owners will be offered an opportunity to present their views in defending the registered trademarks. Brand owners are recommended to review their trademark use status in China and keep good record of such use.
D. Enforcement – Article 81 (Malicious Litigation): This provision, codifying existing judicial practice, aims to address abusive trademark infringement proceedings lodged in bad faith. Malicious litigation has been broadly defined to capture collusion in bad faith, fabrication of facts, or similar improper conduct.
Parties initiating malicious litigation may face judicial penalties and civil liability, including damages payable to the wrongfully sued. This provision specifically targets bad-faith registrants leveraging litigation to extract unfair settlements.
3. Other notable changes under the New Law:
- Movement marks are now eligible for registration (Article 14)
- The opposition period has been shortened from 3 months to 2 months (Article 36)
- The scope of “prior rights” is refined to “prior legitimate interests”, which has codified existing protectable subjects while broadening the scope to potentially cover new forms of intellectual assets, such as online identities (e.g., social media accounts), and names and images of virtual characters. The addition of the qualifier “legitimate” safeguards against the misuse of this expanded scope of rights, precluding potential claims based on prior rights obtained in bad faith or unlawful means (e.g. through unlawful assignment or transfer) (Article 24)
- Codifying the practice of suspension in opposition, refusal review, opposition review and invalidation proceedings where the issue of prior legitimate interests has been raised and is contingent upon another proceeding (Article 41)
- In trademark infringement cases, damages can be assessed based on the infringer’s profits or the rights holder’s actual loss. The infringer’s profit is no longer a secondary option (Article 77)
4. Recommended Actions for Brand Owners
While implementing rules are pending, we advise brand owners to take the following steps proactively:
- Portfolio review: Identify movement marks for filing in China, review existing trademark portfolios to look for gaps in protection, including identifying potential movement marks that may now be filed in China, and evaluate existing defensive registration strategy in light of the New Law.
- Use & market perception evaluation: Conduct a targeted review of current trademark use and market perception, focusing on potential misleading use on core product packaging and key advertising channels, and determine whether existing filing strategies or usage practices require adjustment to align with the New Law.
- New marks filing strategy: It is getting more difficult to secure trademark registration in China under the CNIPA’s current policy to aggressively tackle deceptive or misleading content. Article 10 of the current Trademark Law (usually known as the “absolute grounds of objection”) has been more frequently invoked as the basis of rejection and the chance of overcoming such rejection is usually low. As discussed above, the New Law has reclassified the absolute grounds as Articles 15 and 16 and introduced new penalties for violation. Given this background and China’s determination to eliminate deceptive and misleading trademarks, brand owners should avoid adopting or devising trademarks containing words or elements likely to mislead the public as to the quality, craftsmanship, materials, place of origin or other characteristics of the goods and services.
- Document business justifications: Maintain good internal records documenting any legitimate business needs and justification, such as expansion plans, licensing strategies, known infringement risks etc. if defensive or broad filing projects need to be deployed.
- Enhance monitoring services: Revamp your monitoring strategy and internal procedures to cater for monthly reviews as it will be necessary to act with greater urgency in light of the compressed two-month opposition period.
For further information, please contact:
Catherine Zheng, Partner, Deacons
catherine.zheng@deacons.com
