The Squatting Problem

Trademark squatting — where someone registers a foreign brand's trademark in China before the genuine owner does — has plagued international businesses for decades. Squatters typically demand large payments to 'return' the mark, or they use the registration to block the genuine brand from entering China.

But the landscape is changing. CNIPA's aggressive implementation of the 2019 Trademark Law amendments has made squatting riskier and less profitable. In 2025, CNIPA rejected over 40,000 bad faith applications and penalized dozens of trademark agencies.

How to Identify a Bad Faith Filing

• The applicant files an unusually large number of trademarks (hundreds or thousands)
• The marks closely mirror well-known foreign brands
• The applicant has no genuine business corresponding to the goods/services
• The applicant or their agent has a history of squatting or litigation
• The applicant contacts you demanding payment after filing

Legal Remedies: A Multi-Pronged Approach

1. Opposition (During Publication)

If you catch the squatter's application during the 3-month publication period, file an opposition asserting your prior rights and the applicant's bad faith. This is the fastest and cheapest remedy.

2. Invalidation (After Registration)

If the mark has already registered, file an invalidation action with TRAB. You must show that your mark was already well-known in China before the squatter's filing date. In 2026, well-known mark status is easier to prove for foreign brands with significant Chinese media presence.

3. Non-Use Cancellation

If the squatter registered the mark 3+ years ago but hasn't used it, file a non-use cancellation. This is often the most effective remedy since squatters rarely have genuine use.

4. Criminal Complaint

Under China's revised laws, large-scale trademark squatting for extortion may constitute criminal fraud. Several squatters were prosecuted in 2024-2025.

Prevention: Your Best Defense

• File early: The first-to-file system rewards early birds. Register your mark in China before publicly announcing your brand.
• Cover key classes: At minimum, file in your core classes plus Class 35 (retail/advertising).
• Monitor regularly: Set up alerts for similar marks in the Trademark Gazette.
• Build your brand presence: Active use, advertising, and media coverage in China strengthens your rights against squatters.