Trademark Protection in China: First-to-File, Squatting, and What to Do Before You Launch

The rule that surprises everyone: first to file wins

Trademark rights in China are not earned by use or fame — they are granted to whoever files first. 国家知识产权局 (CNIPA) examines applications formally and on absolute grounds (distinctiveness, prohibited signs), but a prior user’s rights generally do not block a first filer’s registration. The consequence is an industry of trademark squatters: professional filers who watch foreign brands — through export fairs, app stores, cross-border e-commerce listings, and even crowdfunding pages — and file the marks before the brand owner does.

The result, seen repeatedly in practice: a company sells into China through a distributor for two years, decides to open its own entity, files for its trademark — and discovers a Shenzhen trading company registered it in 14 classes three months after the first container shipped. The brand owner’s own name is now an obstacle it must buy back or fight.

Filing strategy: what to do before launch

The core discipline is simple — file before you are visible:

1. File before market entry, ideally before naming announcements, export shipments, or Chinese e-commerce listings. Squatters monitor all of these.
2. File the name in every script it will appear in: Latin characters, the official Chinese name, plausible transliterations, and the logo.
3. File in the right classes under the Nice system (45 classes), plus buffer: the classes you operate in now, the adjacent ones you will enter (a beverage brand should hold Class 32 drinks but also Class 35 retail and Class 43 restaurant services), and — since 2023 — the retail services class (Class 35) that CNIPA now accepts properly.
4. Consider defensive filings in classes where association damage would hurt, if budget allows.
5. Use the Madrid Protocol deliberately: an international registration designating China is valid and cheaper for portfolio management, but a direct national filing is often faster to prosecute and gives more flexibility in response to office actions. For a first China filing, direct national filing is the usual recommendation.

Fees are modest: an official fee around RMB 270 per class for up to 10 items (plus agent fees if used). The economics of early filing versus later litigation are not close — early filing is orders of magnitude cheaper.

If you have been squatted: the toolkit

Being first-to-file does not make squatter marks untouchable. The tools, roughly in escalation order:

Bad-faith evidence wins these cases: squatters typically hold portfolios of dozens or hundreds of marks copied from foreign brands. Since 2019, Article 4 has allowed refusal of bad-faith applications made without intent to use, and CNIPA’s bad-faith examination guidelines have made such portfolios much easier to dismantle; the 2026 revision goes further — from 2027, applications with no intent to use that obviously exceed normal business needs are refused outright, and bad-faith filing itself becomes an administratively fineable offence (up to RMB 100,000). But the realistic timeline for a contested fight is 1–3 years. Plan brand launches on the assumption the filing is clean.

Enforcement: three doors

Once registered, protection is enforced through three channels:

• Administrative action (市场监管/知识产权局): complain to local AMR/IP office; they can raid premises, seize goods, and fine infringers. Fast (weeks), cheap, effective against physical counterfeits — but no damages for you, only fines to the state.
• Civil litigation: statutory damages up to RMB 5 million, punitive damages up to 5× for bad-faith infringement, and courts now accept evidence through notarised purchases, blockchain timestamping, and time-and-place evidence. Specialised IP courts in Beijing, Shanghai, Guangzhou and IP tribunals in 20+ intermediate courts handle these.
• Criminal referral: counterfeiting above thresholds (goods value ~RMB 50,000 for sales of counterfeit registered marks) is a crime; transferring evidence to police (公安) is the strongest deterrent against organised counterfeiting.

Customs recordal deserves its own mention: record your trademark with General Administration of Customs (总署备案) — a RMB 800 fee valid 10 years per mark — and customs will detain suspect imports/exports ex officio or on your application. For brands whose counterfeits move through export logistics (Shenzhen, Yiwu, Guangzhou), this is the single highest-leverage enforcement registration in China.

The 60-second China trademark checklist

1. Before any China-facing announcement: search CNIPA’s database (and check if squatted)
2. File: all names/scripts/logos, current + adjacent classes, direct national filing
3. Calendar: renewal (every 10 years), use-evidence collection (continuous), opposition watch (3-month windows today; 2-month windows from 2027)
4. Register with customs if goods move through Chinese ports
5. If squatted: evidence first, then opposition/invalidation — do not tip off the squatter by contacting them before securing evidence

The theme of this article is the same as everywhere in Chinese IP law: the system rewards the prepared. Registration is cheap, fast, and predictable; remediation is none of those things.

If your supplier is the risk: pair the registration with an NNN agreement

Trademark registration protects you against the world — including the factory. But a registration does nothing to stop your supplier from using your designs, making look-alikes, or selling directly to your customers, and in a China manufacturing relationship those are the more common harms. That is what an NNN agreement (non-disclosure, non-use, non-circumvention) is for: a contract drafted for PRC law, signed by the exact manufacturing entity, with liquidated damages a Chinese court will enforce. The two layers work together — the registration binds third parties, the NNN binds the counterparty.

For the full framework, see China NNN Agreements: The Complete Guide for Foreign Buyers — enforceability, chop and entity verification, liquidated damages, tooling, subcontractors, and a six-part FAQ series.