China’s regulatory landscape for intellectual property is shifting beneath the feet of foreign enterprises. The Standing Committee of the National People's Congress has approved amendments to the Trademark Law, setting a January 1, 2027 enforcement date. For European small and medium-sized enterprises (SMEs) relying on the Chinese market, this represents a fundamental recalibration of risk and strategy rather than a mere bureaucratic update.
With only months remaining before these changes take effect, EU businesses must scrutinize their trademark portfolios with renewed urgency. The new law targets three critical areas: the deterrence of bad-faith registration, the enforcement of genuine commercial intent, and the acceleration of legal timelines. Ignoring these shifts invites significant financial and operational exposure.
Cracking Down on Bad Faith
Historically, the most pervasive threat to EU SMEs entering China has been "trademark squatting." This practice involves local actors registering foreign brands ahead of their official market entry, intending to extract lucrative settlements or block competition entirely. While previous amendments in 2019 banned such practices in principle, enforcement was often reactive and insufficient.
The 2026 Amendments introduce a proactive deterrent: direct financial penalties for bad-faith registrants. The China National Intellectual Property Administration (CNIPA) now possesses the authority to impose fines of up to CNY 100,000 (approximately €13,000) on those found to have registered marks with malicious intent. While this does not eliminate the risk of how brand dilution erodes value entirely, it raises the cost of doing business for opportunistic registrants.
EU SMEs must not mistake this legislative shield for a green light to delay registration. Timely filing remains the most effective defense. The existence of penalties for squatters does not absolve legitimate businesses of their responsibility to secure rights promptly. Strategic planning must prioritize early filing to preempt any potential conflicts before they arise.
The Era of Intent and Use
Perhaps the most significant operational change is the law’s emphasis on the "intention of use." The traditional strategy of defensive filing - registering trademarks across broad categories without immediate plans to sell products in those sectors - is becoming untenable.
Under the new framework, applicants must demonstrate a genuine business plan or evidence of actual use at the time of registration. If the CNIPA determines that the selected goods or services are irrelevant to the applicant's core business, it may refuse the application outright. This move targets speculative hoarding and forces businesses to align their IP strategy with their actual commercial roadmap.
For creative industries, there is a silver lining: motion marks can now be registered. EU companies designing dynamic branding elements should ensure these assets are captured under the new classification, as this expands the scope of protectable intellectual property.
Proving use has also been streamlined for digital-first brands. The amended law explicitly recognizes trademark use via the internet, including social media platforms, e-commerce sites, and corporate webpages. For EU SMEs operating digitally in China, these digital footprints now serve as valid evidence of intent during registration and as proof of use in enforcement proceedings.
Stricter Oversight and Shorter Timelines
The regulatory environment is becoming more litigious and faster-moving. The term for filing an opposition against a trademark application has been shortened from three months to two. This compressed timeline demands immediate action. EU businesses must have local legal counsel on standby to monitor newly published trademarks and respond within this narrower window to protect their rights.
Conversely, the burden of proof shifts heavily onto the registrant. The CNIPA can now initiate non-use cancellation proceedings itself, rather than relying solely on third-party complaints. If a registered mark is not used for an extended period, it faces revocation regardless of whether a competitor challenges it. Regular documentation of use is no longer optional, it is a maintenance requirement.
Deceptive trademarks face heightened scrutiny as well. Marks that mislead consumers regarding quality, materials, or origin will be refused registration. If already registered, they may be revoked if the deception persists. Furthermore, penalties for deceptive use can reach five times the illegal turnover. Since competitors are now empowered to report such violations, EU companies must rigorously audit their marketing materials and labeling to ensure accuracy and compliance.
The Well-Known Myth and Agency Regulation
A notable expansion in protection applies to well-known trademarks, granting cross-class protection to unregistered marks that achieve this status. However, for the vast majority of EU SMEs, achieving "well-known" status is an arduous, legally complex hurdle that few successfully clear. Relying on this exception is a dangerous strategy. The prudent path remains proactive, comprehensive registration across all relevant classes.
Finally, the law tightens regulation of trademark agencies and law firms. By prohibiting fraudulent solicitation and imposing heavier fines for improper conduct, the amendments aim to restore trust in the professional ecosystem. EU businesses should ensure their local representatives adhere to these heightened standards, as improper agency conduct can jeopardize an application.
Strategic Adjustments Required
The 2026 Amendments reflect a mature, disciplined approach to trademark administration in China. The era of lax enforcement and speculative filing is over. EU SMEs must respond with precision:
- Audit Current Portfolios: Identify gaps in coverage for goods and services aligned with future business plans.
- Prepare Evidence of Intent: Compile business plans and digital use evidence to support pending or new applications.
- Accelerate Legal Teams: Establish rapid-response protocols for oppositions, given the shortened two-month deadline.
- Verify Agency Compliance: Ensure local IP partners are adhering to the stricter ethical and procedural guidelines of the amended law.
Failure to adapt will result in increased vulnerability to squatting, rejection of applications, and loss of valuable assets. The new law rewards clarity, intent, and speed. European businesses that align their strategies accordingly will find a more predictable, albeit stricter, environment for growth in China.