China Revises Trademark Law to Curb ‘Bad Faith’ Marks

China has completed its first comprehensive revision of the Trademark Law in more than four decades, introducing strict new regulations targeting “bad faith” trademarks designed to mislead consumers. The revised law, passed by the 23rd Session of the 14th National People’s Congress (NPC) Standing Committee on June 26 and signed by President Xi Jinping via Presidential Order No. 77, will take effect on January 1, 2027.

The new law, comprising 9 chapters and 87 articles, represents the first full-scale overhaul of the Trademark Law since it was enacted in 1983. According to CCTV News, the revision targets long-standing issues in trademark registration, use, and enforcement that have plagued China’s intellectual property landscape.

The ‘Bad Faith’ Trademark Problem

So-called “bad faith trademarks” (心机商标/xinji shangbiao) are legally defined as deceptive trademark signs that exploit legal loopholes by registering misleading terms as trademarks rather than using them as product descriptions. Common examples include “白象多半袋” (“White Elephant Half More Bag” — implying extra product), “0糖”/“0脂”/“0卡” (misleading health claims), and “手打” (handmade claims).

NPC Legislative Affairs Commission Spokesperson Huang Haihua explained the severity of the issue, stating that “some enterprises put great effort into trademark registration and use, turning trademarks into ‘toolkits’ for misleading consumers.” He added that the term “bad faith trademarks” fully reflects consumers’ negative evaluation of this practice, which “severely disrupts trademark management order and harms consumers’ legitimate rights and interests.”

The scale of the problem is substantial. Between 2023 and April 2026, the China National Intellectual Property Administration (CNIPA) rejected 1.273 million “bad faith” trademark applications, and as of May 2026, it had declared 3,351 deceptive trademarks invalid ex officio, as reported by China Youth Daily.

Stricter Penalties and Enforcement

The revised law introduces a tiered penalty structure for misleading use of registered trademarks. For cases where illegal turnover reaches 50,000 RMB or more, fines can reach up to five times the illegal turnover. For cases below that threshold or with no turnover, fines of up to 250,000 RMB apply. Businesses found in violation will be ordered to correct within a specified period, and failure to do so results in trademark revocation by the State Council Trademark Office.

CNIPA Deputy Director Rui Wenbiao emphasized the principle behind the reform, noting that “trademarks are used to identify the source of goods and services, and cannot be used as advertisements for false propaganda to mislead consumers,” as reported by Beijing Daily.

Curbing Trademark Hoarding

A significant component of the revision targets trademark hoarding — the practice of registering large numbers of trademarks without intent to use them. Applications that are “not for use and clearly exceed normal production or operation needs” will now be rejected outright. Registered trademarks that remain unused for three consecutive years without just cause can be revoked. In infringement lawsuits, trademark owners must provide evidence of actual use within the three years prior to the alleged infringement.

Fu Jicun, Director of the Intellectual Property Law Institute at China University of Political Science and Law, told China News Service that the new law strengthens enforcement from three key aspects: “First, it focuses on source governance, imposing administrative liability on those who intentionally apply to register deceptive signs. Second, it fills the institutional gap in penalties for misleading use. Third, it improves the public oversight mechanism.”

Enhanced Oversight and International Protection

The revision also strengthens oversight of trademark agencies, requiring them to register personnel information with the State Council and holding them liable if they knowingly accept applications for hoarding purposes. A new public oversight mechanism allows any entity or individual to report or file complaints about misleading trademark use.

For Chinese companies expanding overseas, the revised law introduces provisions allowing CNIPA to confirm well-known trademark status for use in foreign trademark disputes — a measure designed to combat overseas trademark squatting that has long hindered Chinese brands’ international expansion.

Broader Implications

The revision signals China’s commitment to strengthening intellectual property protection and addressing long-standing criticism of inadequate enforcement against bad-faith trademark practices. China’s trademark system has grown to become the world’s largest, with 83.523 million cumulative applications and 49.777 million valid registered trademarks by the end of 2024 — both ranking first globally.

As the law takes effect on January 1, 2027, businesses using deceptive or misleading trademarks face significantly higher financial penalties, while consumers gain enhanced protection and new mechanisms to report deceptive practices. The reform aligns with broader trends in China’s legal system toward stricter market regulation and consumer protection.

Research compiled from CCTV News, China Youth Daily, People’s Daily, China News Service, and Beijing Daily.