Trademark squatting in China: why first-to-file catches out foreign brands

First-to-file, and what it really means

Most common-law countries give some weight to use. Trade under a name long enough and you accumulate rights you can assert against a later registrant. China does not work that way. Priority runs from the filing date, and the register is the primary evidence of ownership.

There are narrow escape hatches — a mark that is genuinely well known in China before the filing, or a prior right the squatter clearly knew about, such as a supplier registering the brand of a customer it works for. They are real, and they occasionally work. They are also slow, evidence-hungry and expensive, and they are the reason a ¥270 filing fee is one of the cheapest protective decisions available to any brand entering China.

China has been tightening the screws on abusive filings. Article 4 of the Trademark Law already allows refusal of bad-faith applications filed with no intention to use, and the 2026 revisions consolidate the scattered anti-squatting rules into statutory provisions, extend the prohibitions across the whole application process and raise administrative fines on offending agencies to as much as ¥200,000. Enforcement against professional hoarders is genuinely improving. None of it changes the underlying rule: timing still wins.

How brands actually lose their name

• The manufacturer registers it. The most common story. You send drawings and a logo to a factory for samples; the factory — or an employee of it — registers the mark. It is now lawfully theirs, and your leverage in the next price negotiation has evaporated.
• The distributor registers it. Often framed as helpful: “we will handle the China registration for you.” Registered in their name, it becomes a hostage in every renewal discussion.
• A professional squatter finds you. Hoarders monitor Kickstarter, trade fairs, Amazon bestseller lists and foreign registers, and file speculatively on anything with momentum. The business model is resale, to you.
• You announced before you filed. A press release, a trade-show booth or a viral product post is a filing signal to anyone watching.

The subclass trap

China uses the international Nice Classification of 45 classes, then layers its own subclass system inside each one. In practice, protection is assessed subclass by subclass: goods in different subclasses of the same class are frequently treated as not similar, so a registration in Class 25 covering clothing may leave footwear or headwear in the same class unprotected and free for someone else to take.

This is where copy-paste specifications from a home-country registration fail. A specification drafted for the USPTO or EUIPO, filed unchanged in China, routinely leaves gaps precisely where a squatter will aim. Getting the subclass coverage right is the single most valuable thing a competent Chinese agent does for you, and it is why a Madrid Protocol designation of China — convenient and cheap as it is — often yields narrower protection than a national filing tailored to the subclasses.

Do not overlook Class 35 either. It covers retail, wholesale and e-commerce services, and if you sell online in China without it you can find someone else operating a store under your name entirely lawfully.

Your Chinese name is a separate mark — and you may not have chosen it

Registering your Latin-character mark protects the Latin-character mark. It does not protect the Chinese characters your customers actually use. Chinese consumers, media and marketplaces will produce a Chinese name for your brand whether or not you supply one, by transliteration, translation or nickname — and that organic name is registrable by anyone.

So file at least three marks: the Latin-character mark, the Chinese-character mark, and the logo if it carries independent recognition. Pick the Chinese name deliberately with someone who can hear how it sounds across Mandarin and Cantonese and what the characters connote — then register it before you use it publicly.

What filing costs, and what losing costs

Registration lasts ten years and is renewable. Against that, the asymmetry is stark: three classes of protection cost less than a single hour of the litigation you would need to undo a squat.

If someone already has your mark

• Oppose, if the mark is still inside the three-month window after preliminary publication. The cheapest point to intervene.
• Invalidate, on bad faith, prior rights, or a relationship — the supplier or distributor cases are the strongest, because the squatter’s knowledge of your brand is documented in your own emails.
• Cancel for non-use, once the mark has sat unused for three consecutive years. Squatters hoard rather than trade, so this works more often than people expect.
• Negotiate, usually through an intermediary and without revealing how badly you need it.
• Rebrand for China. Unglamorous, instant, and sometimes the commercially correct answer.

Quick FAQ

When should I file, if I am only sourcing from China and selling elsewhere?

Before you send your logo to a single factory. Sourcing exposes your brand to exactly the people most likely to register it, and a customs recordal against your own exports is a worse problem than losing the Chinese market you were not selling to anyway.

Is Madrid or a direct CNIPA filing better?

Madrid is cheaper and simpler across many countries at once. A direct national filing lets you tailor subclasses, respond faster to office actions and generally ends up with broader real-world protection in China. For China specifically, most practitioners recommend filing directly — or filing via Madrid and topping up nationally where the subclass gaps are.

Can I check whether my mark is taken before I spend anything?

Yes. CNIPA runs a public trademark search, and a preliminary check is quick. Read the results with care, though — similarity in China is assessed against the subclass structure, so a clean-looking search is not the same as a clear path to registration.