All change in China - brand owners should prepare for new trade mark law

New trade mark laws will come into effect in China from 1 January 2027, with some important changes for brand owners to factor into their strategy and enforcement. 

As many brand owners have trade marks registered in China, given its global significance as a manufacturing hub and commercial market, businesses will need to consider how the new laws may impact their rights. Here we outline some of the key changes under the new laws.

Enhanced Powers of the China National IP Administration (CNIPA) to challenge registrations for non-use

From 2027, CNIPA can proactively instigate non-use proceedings if it suspects there has been no commercial use of a trade mark in China for three consecutive years. At present, non-use actions are commenced by a third-party or the other side in a dispute, for example. The fact that the CNIPA can now challenge the use of a Chinese registration means that brand owners should audit their portfolios to see where any vulnerabilities lie. 

Furthermore, businesses would be well advised to now establish a repository of dated evidence of use for any core brands that are registered in China. This could be reviewed and updated periodically and should include dated details of sales, invoices, export shipments, marketing materials used in China and online uses in Chinese-approved websites (this would exclude any sites that are not accessible in China, including many of the usual popular social media sites, regularly used by UK companies and those outside of China).

Reducing the period to oppose a third-party trade mark from three to two months

Although this will speed up the examination process and improve efficiencies, it also means brand owners will need to act more quickly to oppose concerning third-party applications and ensure global watching services are in place for core brands. 

Expanding the definition of trade mark ‘use’

If filing evidence of use in China to defend a non-use revocation action or to demonstrate that a trade mark has become distinctive through use in China, under the new law, the CNIPA will accept use evidence from internet environments, including on e-commerce and social media platforms.

Updated grounds of objection as to a trade mark being: (a) ‘deceptive’/ ‘misleading’ as to, e.g., ‘quality or other characteristics’ of the goods/ services; and (b) ‘contrary to public order and good morals’

The CNIPA will make this ‘deceptiveness’ assessment of a trade mark based on the public’s everyday experience. Such objections would apply even if just one component of a trade mark may lead to deception (e.g. including a place name in a trade mark, if the goods are not from that place, where LONDON is in a mark for goods made in China).

With the public order/ morality objection, even if a mark can have multiple meanings, the objection will arise if one of those meanings is offensive. If these objections arise and are not overcome, the brand owner should also take care not to use the relevant trade mark in commerce in China, to avoid the risk of facing significant fines. 

Brand owners should seek advice as to whether any new marks may fall foul of these provisions before they are used or filed in China.

Updated laws to address malicious ‘bad faith’ filings

The new law introduces a specific objection for malicious registrations. This is in respect of marks that are “not intended for use” and which are “obviously exceeding the normal needs of production and business operations”. Both of these elements would need to be shown. For example, this could include filings across multiple classes where the commercial interests of the applicant do not map onto all classes as filed. This provision seeks to deter trade mark squatters on the Chinese register and defensive filings for all classes that clutter up the register, with no apparent intent to use the trade mark.

Brand owners should undertake a proactive review of their portfolios and assess whether any additional classes need to be filed in China before the new law comes in. If any new classes are filed once the new law is in place, it may be prudent to prepare a ‘business rationale’ report, to demonstrate the planned and expected expansion into these new goods/ services and why they are commercially justified.