False Alarm or Mere Preparation? An In-Depth Analysis of the 2025 Proposed Changes to China’s Trademark Law and Practical Effects

In the ever-changing landscape of Chinese Intellectual Property law, the only constant is change. Among the numerous updates, the recent amendment to the Trademark Law has sparked significant debate, expectation, and ultimately, reassurance. For international businesses and foreign legal firms keeping a close eye on China, understanding these changes is more than just a matter of compliance—it is a crucial strategic imperative.

Introduction: From Major Impact to Subtle Effects

Reflecting on 2023, the China National Intellectual Property Administration (CNIPA) released a Draft for Comments suggesting amendments to the Trademark Law, which had a significant impact. The draft proposed major changes, including banning repetitive trademark applications, enforcing strict proof-of-use requirements for trademark owners to keep their registrations, and introducing various other important reforms aimed at cleaning up a registry plagued by bad faith filings. The industry initially welcomed these efforts enthusiastically. However, this enthusiasm was short-lived. The 2023 draft was so strict that it triggered widespread controversy. Many stakeholders believed some measures were too harsh, potentially penalizing legitimate business activities along with fraudulent ones. This backlash had a strong influence.

Fast forward to December 27, 2025, when the Standing Committee of the National People’s Congress published the much-anticipated Draft Revision of the Trademark Law. Unlike the bold 2023 draft, this new version is more balanced and cautious. The most extreme provisions from 2023 have been completely removed, resulting in a draft with fewer major surprises. Because of this moderation, experts widely expect this version to be enacted. Does this mean a return to the previous state of affairs? Not at all. While the most severe proposals were eliminated, the 2025 draft introduces several important changes and clarifications that will significantly impact how trademark prosecution and litigation are handled in China. Below, we provide a detailed overview of these key updates and discuss their implications for foreign companies operating in the Chinese market.

I. Strengthening the Principle of Good Faith: Article 9

New Provision:

• Applications for trademark registration and use must adhere to the principle of good faith and must not misuse rights to damage national interests, public welfare, or the legitimate rights and interests of others. [New Addition]

Analysis:

• Although the concept of good faith has long guided intellectual property practices in China, its clear inclusion in the law now provides a stronger tool against bad-faith actors. This is especially important for international brands.
• Imagine a common problem: a third party—often a trademark squatter—registers your brand name in China before you do. Armed with that registration, they may sue you for trademark infringement, file complaints against you, or report your products on e-commerce platforms, effectively holding your legitimate business hostage.
• Previously, combating this was complicated and reactive. With this amendment, brand owners have a clear legal foundation to challenge such behavior. If you are targeted by malicious registration and harassment, you can directly invoke Article 9. It offers a legal argument that the squatter is abusing their rights and that their registration should not be upheld, effectively disarming their weaponized trademark. This changes the focus from why didn’t you register first? to this registration constitutes an abuse of the legal system.

II. Broadening the Scope of Registrable Trademarks: Article 14

New Provision:

• Any sign capable of distinguishing the goods of a natural person, legal entity, or other organization from those of others—including words, images, letters, numbers, three-dimensional shapes, color combinations, sounds, motion marks, and combinations of these elements—may be registered as a trademark. [Expansion]

Analysis:

• In today digital era, dominated by screens and animations, the concept of a trademark needs to adapt. This amendment officially includes motion marks (animated logos) among the types of trademarks that can be registered.
• This change is particularly beneficial for international technology firms, gaming companies, and luxury fashion brands. Although the CNIPA had previously accepted motion marks on a trial basis, formally recognizing them removes uncertainty. It demonstrates that China is fully embracing international norms concerning non-traditional trademarks. If your brand identity depends on a specific animation—such as an app opening sequence or a dynamic logo on a website—the legal protections for that distinctive element in China are now clearly established. This development expands the scope of protection within your intellectual property portfolio.

III. The Use Requirement: Article 18

New Provision:

• Applications for trademark registration that are clearly not intended for actual use but exceed the needs of normal production and business operations shall not be registered. No registration shall be obtained through deception or other illegal methods. [Revised]

Analysis:

• This rule is aimed at hoarders — those who register large numbers of trademarks without any real intention to use them, often just to sell them later or prevent competitors from using them. The wording here is particularly notable because it is somewhat vague.
• The phrase clearly beyond the needs of normal production and business operations is subjective, giving the Trademark Office broad discretion. In practice, this creates uncertainty. On one side, examiners can strictly enforce this rule to immediately reject suspicious mass filings. On the other, they might choose not to apply it strictly in certain industries, making the rule less effective. For foreign applicants, the takeaway is clear: make sure your applications appear commercially motivated. Maintaining a reasonable number of trademarks is safe, but submitting many variations of the same mark just to block others could trigger this provision and result in refusals due to a perceived lack of genuine intent to use.

IV. Understanding the Details of Famous Marks: Article 20

New Provision:

• If a trademark application is a reproduction, imitation, or translation of another person unregistered well-known trademark and is likely to cause confusion, it shall not be registered…[Amended]

Analysis:

• This change adjusts the level of protection granted to unregistered well-known trademarks—a group that often includes luxury brands entering the Chinese market for the first time or influencers.
• The key distinction here is important. The draft indicates that the protection for an unregistered famous mark will vary depending on the type of infringement:
  • Confusion: If it can be shown that the infringing use causes consumer confusion, protection is limited to goods that are similar or identical.
  • Dilution: If it can be demonstrated that the use results in dilution (reducing the distinctiveness of the famous mark), protection may extend to dissimilar goods.

• This represents a nuanced legal adjustment. It prevents unregistered marks from having excessively broad exclusive rights unless they meet the high standard of fame necessary for a dilution claim. For foreign brands, this highlights the need for strong evidence. To obtain protection across different product categories for an unregistered mark, it is necessary to prove not only confusion but also that the mark has a level of recognition that can be diluted.

V. The Race Against Time: Article 35

New Provision:

• …any prior rights holder or interested party may… submit an opposition to the trademark administrative department of the State Council within two months from the date of publication. [Change]

Analysis:

• The opposition period has been reduced from three months to two.
• Although two months may still seem ample compared to countries like South Korea, which allows only 30 days, this serves as a warning for international stakeholders to remain alert. In a global setting, two months can pass very quickly. Coordinating with headquarters, collecting evidence of use, and preparing opposition documents all require prompt action as soon as a watch notice is received. This amendment effectively speeds up the entire trademark prosecution process.

VI. The Procedural Earthquake: Article 40

New Provision:

• Part 1: During the examination of trademark oppositions, reviews of rejection, reviews of non-registration, and invalidation trials… if determining prior rights depends on the outcome of another case currently being handled by a Court or an administrative agency, the examination or trial shall generally be suspended… [Revised]
• Part 2: When a Court reviews a decision on rejection, non-registration, or invalidation made by the trademark administrative department… the court shall base its judgment on the facts as they existed at the time the original decision or ruling was made. [New addition]

Analysis:

• This change is arguably the most technically significant and impactful in the entire draft, fundamentally altering the procedural approach to trademark litigation.
• Part 1: Mandatory Suspension
  • Currently, in practice, if a trademark rejection is appealed due to a conflicting cited mark that is simultaneously being challenged for non-use (a cancellation action), the China National Intellectual Property Administration (CNIPA) often waits before proceeding. This amendment makes suspension mandatory in such cases. It codifies a common-sense principle: why decide whether your mark is blocked if the blocking mark might soon be invalidated? This saves resources and avoids unnecessary work.
• Part 2: Ending the Change of Circumstances Principle (A Game Changer)
  • The second part is a major shift. It effectively eliminates the use of the Change of Circumstances principle in trademark administrative litigation.
• To illustrate: You apply for a trademark, but it is rejected because of a prior cited mark (Mark X). You appeal to the CNIPA, which upholds the rejection. You then sue the CNIPA in court.
  • Under the old system: If during the lawsuit you successfully cancel Mark X due to non-use, the court would consider this new fact (a change of circumstances), overturn the CNIPA rejection, and order your mark to be registered.
  • Under the new draft: The court will only consider the facts as they were when the CNIPA made its decision. If Mark X was valid at that time, the rejection remains. The court generally will not take into account that Mark X was later invalidated during the lawsuit.
• This represents a major change. It means the administrative stage at the CNIPA is now effectively the final opportunity to resolve blocking issues with new evidence. You cannot rely on courts to update the facts later. For foreign applicants, this means you must be much more proactive during opposition and review stages. You cannot simply appeal and wait; you must actively clear obstacles (such as canceling cited marks) before or during CNIPA review, or face a much tougher challenge in court.

VII. Financial Penalties for Malicious Trademark Applications: Article 53

New Provision:

• If a trademark applicant engages in any of the following malicious acts that cause negative consequences, the trademark enforcement authority will issue a warning and may impose a fine of up to 100,000 RMB.” [New Addition]
• The malicious acts specified include knowingly applying for prohibited marks, filing applications without the intention to use them (hoarding), or deliberately infringing on existing rights such as famous trademarks or personal names.

Analysis:

• This provision introduces a direct monetary penalty for bad faith trademark filings. Although a fine of 100,000 RMB (around $14,000 USD) may not be financially devastating for large corporate squatters, the combination of a formal warning and a public record of the penalty acts as a deterrent.
• However, there is a subtlety to consider. This draft strengthens the enforcement of Article 15 (prohibited marks) and Article 18 (hoarding). The industry has long criticized the aggressive use of prohibited provisions (Article 10) by examiners to reject trademarks. Now, with fines linked to malicious applications, there is a risk of overly harsh enforcement. This creates a Damocles sword effect for applicants: if an examiner labels an application as malicious, it no longer results in just a rejection but could lead to legal penalties. This raises the stakes for every trademark filing.

VIII. Addressing Misleading Use: Article 56

New Provisions:

• Part 1: If a trademark owner uses their registered trademark in a way that deceives the public, they will be required to correct this within a set timeframe; failure to comply may result in a fine of up to 50,000 RMB.
• Part 2: If a registered trademark is found to be used misleadingly as described above, the Trademark Office may cancel the registration, including cases of non-use initiated by the office itself.

Analysis:

• This article has two main effects. First, it targets deceptive uses of trademarks, such as falsely claiming “0 Additives” on products that do contain additives, aiming to prevent misleading marketing that exploits trademark status to confuse consumers. For international companies, this means ensuring that trademark use in China is truthful and not misleading, or else they risk fines and cancellation.
• Second, it reinstates the authority of the Trademark Office to proactively cancel trademarks that are not in use, similar to the 2001 Trademark Law. Previously, cancellations for non-use were mostly triggered by third-party requests. This change indicates the government’s readiness to actively remove unused trademarks without waiting for competitors to act, though how aggressively this will be enforced remains to be seen.

IX. Protecting Fair Use: Article 70

New Provision:

• Using a registered trademark solely to indicate the use, intended user, application scenario, or genuine source of goods is allowed and cannot be prohibited by the trademark owner, provided it does not easily cause confusion.

Analysis:

• This clause formally incorporates the Fair Use or Descriptive Fair Use defense into the Trademark Law. While this defense has existed in court practice and under the Anti-Unfair Competition Law, its inclusion here provides clearer legal certainty. It confirms that using a trademark to describe a product function (e.g., stating a part is compatible with iPhone) or the origin of raw materials is permitted, as long as it does not mislead consumers about the product source. This offers protection for distributors and resellers of international brands, allowing truthful descriptions without immediate risk of trademark infringement claims, so long as the use remains descriptive and non-confusing.

Conclusion: Balancing Stability and Strategy

The 2025 Draft Revision of the Trademark Law may not be as drastic as the 2023 version, but it marks steady progress. The elimination of the most extreme usage requirements indicates a preference for stability over sudden changes. Nonetheless, changes like restricting Change of Circumstances in litigation and enforcing stricter penalties for bad faith conduct demonstrate a more refined tightening of regulations.

For foreign companies and international IP firms, the message is clear: although trademark squatting in China remains an issue, enforcement is becoming more effective. Dependence on courts to rectify administrative errors is decreasing (see Article 40). Success in China’s IP landscape will increasingly rely on strong prosecution strategies at the Trademark Office level rather than expecting judicial remedies later. This draft favors those who are well-prepared, honest, and proactive. For international observers, it signals that while major disruptions have lessened, the environment continues to evolve—and the best strategy is to remain flexible and engaged.