China's New Trademark Law Takes Effect January 1, 2027: What Foreign Brand Owners Must Do Now

China runs the largest trademark system in the world, and for foreign brands it has long been the place where a missing registration could cost you your own name. On June 26, 2026, China’s legislature adopted the most comprehensive revision of its Trademark Law in decades. The China trademark law 2027 reforms take effect on January 1, 2027 — less than three months from now.

Several changes help foreign brand owners, particularly on bad-faith squatting. Others quietly raise the bar, especially on deadlines and proof of use. If you sell into China, source from China, or sell on marketplaces where Chinese sellers compete with you, here is what changes and what to do before New Year’s Day.

The big picture: from filing volume to genuine use

The revised law grows from 73 articles to 87, adds a new chapter on registration conditions, and substantially expands the rules on trademark administration. The policy direction is consistent throughout: China is moving away from a system that rewarded whoever filed first and most, toward one that places more weight on genuine use, legitimate business need, and good faith.

Eight changes that matter to foreign brand owners

1. Bad-faith filers can now be fined directly

Under the old law, penalties for bad-faith filing were aimed mainly at the trademark agencies that took the instructions. The revised law adds administrative penalties against the applicants themselves: a warning and a fine of up to RMB 100,000 (roughly US$14,700) for bad-faith filings that cause adverse effects. The targeted conduct includes filing without a genuine intent to use and in volumes clearly beyond normal business needs, and filing to deliberately exploit well-known marks, prior rights, or the marks of a principal by its own agent or distributor. The test for hoarding now looks at objective factors — whether filing volume matches business reality — rather than an abstract inquiry into intent.

One proposal did not survive. Earlier drafts would have allowed rightful owners to force a compulsory transfer of a squatted registration. The final law dropped it, so you still need invalidation proceedings to clear a squatted mark. Prevention — filing first — remains far cheaper than cure, a lesson we walked through in our earlier China trademark squatting case study.

2. The opposition window shrinks from three months to two

This is the most consequential procedural change for foreign owners. Once a conflicting mark is preliminarily approved and published, you will have two months, not three, to oppose it. For a company that relies on a watch service feeding reports through regional counsel before anyone in headquarters makes a decision, that lost month can be the whole margin.

3. Online use now counts as trademark use

The law now expressly provides that use through the internet and other information networks is trademark use. Sales on e-commerce platforms, social media activity, live-streaming, and website use can support a defence against non-use cancellation — and online infringement falls squarely within administrative enforcement. For direct-to-consumer and marketplace brands, that is good news, provided you keep the evidence.

4. CNIPA can cancel unused marks on its own initiative

The familiar three-year non-use cancellation remains, but China’s trademark office (CNIPA) can now also cancel registrations that have gone unused for three consecutive years, or that have become generic, on its own initiative. The detailed procedure will come in implementing regulations. Defensive registrations you never got around to using are now more exposed.

5. Unregistered well-known marks gain cross-class protection

Previously, only well-known marks already registered in China could block use on dissimilar goods. The revised law removes that limitation. This helps famous foreign brands that have not filed in every class — though proving well-known status in China remains an evidence-heavy exercise and is no substitute for registering.

6. Motion marks are registrable — and functionality applies to all non-traditional marks

Animated logos and other motion marks can now be registered alongside sound, colour, and 3D marks. At the same time, the functionality exclusion that once applied only to 3D shapes now extends to all non-traditional marks, so colour, sound, and motion registrations can be challenged as functional.

7. Damages rules tighten against eve-of-litigation use

The statutory damages cap stays at RMB 5 million, with punitive damages up to five times for wilful, serious infringement. Two refinements matter: actual losses and the infringer’s profits are now co-equal measures, and a registrant facing a non-use defence must show use in the three years before the infringement — not before the lawsuit — which closes the door on use manufactured just before filing suit. A new provision also sanctions collusive or fabricated trademark litigation.

8. Misleading use of registered marks is now policed

Authorities can order rectification and impose substantial fines where a registered mark is used in a way that misleads consumers about the nature, quality, or origin of goods, with revocation possible for non-compliance and a public reporting channel. Review your China-facing branding for claims that could be read as misleading.

Who should care most

• E-commerce brands selling into China or on global marketplaces with heavy Chinese seller participation — the shorter opposition window and online-use rules hit you most directly.
• Companies manufacturing in China, where factory-level squatting of client marks is a recurring risk; the agent-and-distributor provisions and new penalties strengthen your hand if you are registered.
• Startups and growth-stage companies that have deferred China filings — the first-to-file system has not changed, and the new penalties deter squatters without returning marks they already hold.
• PE and strategic acquirers — China trademark position, including evidence of use, belongs on your diligence list, as we discuss in IP Due Diligence in M&A.

Your pre-January 1 checklist

• ☐  Audit your China portfolio against the products, sub-brands, and Chinese-character marks you actually use or plan to use in the next three years.
• ☐  File now for any gaps, including Chinese transliterations and translations of your brand — first-to-file still governs.
• ☐  Tighten your watch service so conflicting publications reach a decision-maker within days, not weeks, to fit the two-month opposition window.
• ☐  Build a living evidence-of-use archive covering e-commerce listings, social media, live-streams, and sales records, dated and attributable to each registered mark.
• ☐  Review unused defensive registrations for exposure to ex officio non-use cancellation, and decide which to support with use and which to let go.
• ☐  Check distributor and manufacturing agreements for clauses that prohibit filing your marks and require assignment of any marks filed in breach.
• ☐  Review non-traditional marks (colour, sound, shape, motion) for functionality vulnerability.
• ☐  Coordinate China filings with customs and marketplace enforcement, including recordation where available.

How this fits your wider cross-border strategy

China’s reform is part of a wider tightening of brand enforcement across the supply chain. Tariff pressure and the end of de minimis treatment in the US are already shifting where goods are made and how they move, as we covered in De Minimis Is Gone. A brand that registers in China, records with customs at its key ports of entry, and monitors marketplaces in a coordinated way gets far more from each of those tools than one treating them separately.

The bottom line

China’s new Trademark Law is a real step forward for legitimate brand owners: squatters face fines, online use counts, and famous marks get broader reach. But it also rewards owners who are organised and penalises those who are not, through shorter deadlines and a stronger focus on proving use. With January 1, 2027 approaching, now is the time to close filing gaps, sharpen your watch programme, and build the evidence file. If you want a China trademark readiness review, that is one of the cross-border engagements we handle most often.

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Disclaimer: This article provides general information about IP strategy and should not be relied upon as legal advice. IP laws vary significantly by jurisdiction and every business situation is unique. Consult qualified counsel about your specific circumstances.