“Your application has been rejected. A local entity already owns your brand name.”
You have just been hit by a “Trademark Squatter.” In many Western jurisdictions (Common Law), you could simply prove you used the mark first. But China operates on a strict “First-to-File” system. Generally speaking, whoever runs to the Trademark Office (CNIPA) first owns the rights, regardless of who invented the brand.
Is your China strategy dead? Not necessarily. While the “First-to-File” rule is rigid, recent legal amendments have armed foreign brand owners with powerful new weapons. Here is your battle plan for reclaiming your IP.
1. Diagnosis: Who is the Enemy?
Before you spend a dollar on legal fees, you must identify who squatters are. The strategy depends entirely on their profile.
- The Professional Squatter: This entity owns hundreds of trademarks (e.g., “Nike,” “Apple,” “YourBrand”). They have no intent to use them; they hold them for ransom.
- Good News: CNIPA hates these people. Success rates against them are high.
- The Opportunist: A random individual who saw your brand on Instagram and registered it, hoping for a lottery payout. They own only one or two marks.
- Bad News: Harder to prove “Bad Faith” because they look like a legitimate business starter.
- The Insider (The “Traitor”): Your former manufacturer, distributor, or business partner registered the mark behind your back.
- Best News:Article 15 of the PRC Trademark Law explicitly forbids agents/representatives from registering their principal’s marks without authorization. You will almost certainly win.
2. The Legal Counter-Attack: Proving “Bad Faith”
If you decide to fight, your primary weapon is “Bad Faith” (恶意).
In 2019, China amended its Trademark Law (specifically Article 4) to state: “Bad faith trademark applications that are not intended for use shall be rejected.”
To win a Trademark Opposition (if the mark is pending) or an Invalidation (if it’s already registered), you must build a narrative that the squatter acted in bad faith.
Evidence that wins cases:
- Mass Hoarding: Show that the squatter has registered dozens of other famous foreign brands.
- Copycat Designs: Did they also copy your logo, website design, or packaging? This proves they knew exactly who you were.
- The “Ransom” Note: Did they email you offering to sell the mark for an exorbitant price? Save this email. It is the “smoking gun” evidence of bad faith.
3. The Commercial Solution: The “Anonymous” Buyout
Sometimes, litigation takes too long (12–18 months). If you need to launch next month, buying the mark (Assignment) might be the pragmatic choice.
The “Double-Blind” Strategy:
Never approach a squatter as “Global Brand Inc.” If they know you are a multinational corporation, the price will jump from $5,000 to $500,000.
- Step 1: Hire a specialized local investigation firm or IP lawyer.
- Step 2: They approach the squatter posing as a small local business (e.g., a clothing retailer from a different province) interested in the name.
- Step 3: Negotiate a “fair market price” (often between USD 2,000 – USD 10,000) for a quick transfer.
- Step 4: Transfer the mark to the agent, who then transfers it to you.
4. Cost vs. Success Rate Analysis
Is it worth the fight? Here is a realistic breakdown based on current market data.
| Strategy | Est. Timeline | Est. Cost (Legal Fees) | Success Rate | Best For… |
| Opposition (Blocking a pending mark) | 10 – 15 Months | Low ($1k – $3k) | High (60-80%) | Fighting professional hoarders or agents. |
| Invalidation (Killing a registered mark) | 12 – 18 Months | Medium ($3k – $6k) | Medium (40-60%) | Marks registered <5 years ago; “Bad Faith” is clear. |
| Non-Use Cancellation | 6 – 9 Months | Low ($1k – $2k) | Very High | Squatters who registered >3 years ago but never sold products. |
| Anonymous Purchase | 1 – 3 Months | Variable (Price of mark) | 100% (Guaranteed) | Urgent product launches; Stubborn squatters. |
Conclusion: Don’t Panic, But Act Fast
The “First-to-File” system punishes hesitation, but it no longer protects thieves. With the CNIPA’s aggressive stance against hoarding and the “Bad Faith” provisions, foreign brands have reclaimed thousands of stolen trademarks in recent years.
Your Next Move:
Check the status of the squatter’s mark immediately.
- Is it < 3 months since publication? File an Opposition.
- Is it > 3 years old? File a Non-Use Cancellation.
- Is it a professional hoarder? Collect evidence and sue.
Need a preliminary assessment?
Send us the squatter’s registration number. We can conduct a free “Bad Faith Scan” to determine if they are a known offender and estimate your chances of success.
FAQ: Fighting Trademark Squatters in China
Q: Can I use my US/EU trademark in China while the dispute is ongoing?
A: Legally, no. If the squatter holds the registration, they technically have the right to sue you for infringement, even if it’s your brand. You risk having your goods seized by Customs or your Tmall store taken down. You must clear the path first.
Q: What is the “Non-Use Cancellation” (Three-Year Rule)?
A: This is the most cost-effective weapon. If a registered trademark has not been used in commerce in China for three consecutive years, anyone can file to cancel it. Since squatters rarely sell actual products, this is often the easiest way to kill their rights without a complex legal battle.
Q: How much does a squatter usually ask for?
A: Professional squatters often start asking for RMB 100,000 to 500,000 ($14k – $70k). However, with skilled negotiation (especially anonymous negotiation), many settle for RMB 20,000 – 50,000 ($3k – $7k), as they know the mark could be cancelled for non-use eventually anyway.