Trademark Squatting in China: Opposition, Invalidation and Non-Use Cancellation

Many foreign brand owners discover that their mark has already been filed in China by someone else: a distributor, a former manufacturer or a professional squatter. China is a first-to-file country, so this is common, but it is not the end of the matter. The PRC Trademark Law gives several routes to take a squatted mark back, and the right one depends on how far the squatter's application has gone and what evidence you hold. This guide explains the options.

Step one: find out where the squatted mark stands

• Still under examination: there is little to do except prepare evidence and watch for publication.
• Preliminarily approved and published: an opposition can be filed within 3 months of the publication date. This is the cheapest and most direct stage.
• Already registered: you can request invalidation, or file a non-use cancellation once the mark has gone unused for three consecutive years.

Opposition: the first choice during the publication period

Under Article 33, an opposition based on an earlier mark, agent squatting or prior rights can be filed by the prior right holder or an interested party within 3 months of preliminary publication. Anyone can oppose on absolute grounds, including a bad-faith application not intended for use (Article 4). If the opposition succeeds, the squatted mark is not registered. Missing the window means waiting for registration and then using the slower, costlier invalidation route, so check the publication date as soon as you learn of the filing.

Invalidation: two time limits

• No time limit: registrations obtained by fraud or other improper means, and bad-faith applications not intended for use, can be challenged by anyone at any time (Article 44).
• Within 5 years of registration: claims based on prior rights, on pre-emptive registration of a mark already in use with a certain influence (Article 32) or on squatting by an agent or representative (Article 15) must be brought by the prior right holder or an interested party within 5 years of registration (Article 45). The owner of a well-known mark is not bound by the 5-year limit against bad-faith registrations.

Distributors and manufacturers who file your mark

Article 15 targets exactly the situation foreign brands meet most often: an agent, representative, distributor or other business partner who registers the principal's mark without authorisation. Distribution agreements, purchase orders, correspondence and samples that show the partner knew your mark through the business relationship are the core evidence. The risk is not only in the domestic market: a squatter who records the mark with Chinese customs can try to stop your own goods, made in China for export, from leaving the country.

Non-use cancellation

A registration that has not been used for three consecutive years without a justifiable reason can be cancelled on anyone's request (Article 49). Professional squatters rarely use the marks they hoard, and in a non-use action the registrant must prove use, so this is often the simplest route once the three years have passed.

Can you keep using your mark meanwhile?

Article 59(3) allows a prior user whose mark was in use, with a certain influence, before the squatter filed, to continue using it within the original scope; the registrant may ask for an additional distinguishing mark. This is a defence, not a right to expand, and it does not stop the squatter from licensing others. The lasting fix is to win the mark back or secure your own registration.

Buying the mark back

Negotiation can be faster than proceedings when the price is reasonable. Two points matter: identical and similar marks held by the squatter must be assigned together or the assignment will be refused, and the assignment only takes effect once CNIPA approves and publishes it, so tie payment to approval.

Prevention

1. File in China before entering the market, exhibiting at trade fairs or signing with distributors or manufacturers.
2. Register a Chinese-character version of the brand at the same time.
3. State in distribution and manufacturing contracts that the partner may not file your marks.
4. Set up a watch after filing and oppose conflicting applications within the 3-month window.

On choosing and registering a Chinese brand name, see Choosing a Chinese Brand Name; on searching before you file, see Before You File in China.

J&C Intellectual Property Agency (JCIPO), founded in 2008, is a CNIPA-recorded trademark agency and a member of the China Trademark Association. We handle oppositions, invalidations, non-use cancellations and assignments for foreign brand owners, see our trademark services. Patent filings are handled through an affiliated patent agency.