China's SPC Signals Stronger Judicial Action Against Systematic Bad Faith Trademark Filings

For international brand owners operating in or considering entry into the Chinese market, bad‑faith trademark filings have long been one of the most persistent and frustrating risks.

Historically, the primary tools available were administrative procedures: oppositions, invalidations, and non‑use cancellations. While indispensable, these mechanisms are often slow, resource‑intensive, and reactive, allowing serial filers to reappear across multiple classes and marks, turning brand enforcement into a never‑ending game of ''whack‑a‑mole''.

Beyond whack‑a‑mole: China’s new approach to trademark squatting

As highlighted in our 2023 article “China: Combating Bad‑Faith Trademark Registrations Through Civil Litigation”, Chinese courts had already begun pioneering a more direct and potent weapon: civil litigation based on the Anti-Unfair Competition Law (AUCL). Landmark cases like the 2021 Xiamen Intermediate Court's "InSinkErator" ruling demonstrated that courts could order bad-faith applicants (and even their trademark agents) to cease filings and pay substantial damages. This approach was praised for its time and cost efficiency, its deterrent effect in stopping repeat filings at the source, and its ability to grant monetary compensation — a remedy unavailable in administrative proceedings. 

Within this developing judicial framework, the Supreme People’s Court’s 2025 "Repeated Bad Faith Trademark Registration as Unfair Competition" case — published as Case No. 10 in the SPC’s 2025 Annual Intellectual Property Exemplary Cases (released in April 2026) — further clarifies the application of the AUCL to trademark squatting behaviour. In this case, the SPC confirmed that repeated, coordinated bad faith trademark registrations may constitute acts of unfair competition, giving rise to civil liability not only for registrants themselves, but also for affiliated entities and, where appropriate, trademark agents involved in the conduct.

Notably, the decision reflects a continued judicial focus on addressing trademark squatting as a form of market order disruption rather than as isolated registration disputes. By situating repeated bad faith filings within the unfair competition framework, the SPC reinforces an enforcement pathway that enables courts to intervene more effectively against organized and commercialised squatting practices, while aligning trademark protection with broader principles of fair competition.

How were trademark registrations used against the claimant?

The case involved a legitimately operating company in the beer and related products sector whose brand had achieved “a certain degree of influence” through long‑term, continuous use. Rather than facing a single speculative registrant, the plaintiff confronted a coordinated scheme involving:

1. A primary bad‑faith registrant with no genuine business activity;
2. Affiliated entities filing in concert across multiple classes; and
3. A trademark agency repeatedly handling targeted applications

The defendants did not stop at registration. They used their marks strategically by filing oppositions and invalidations, issuing warning letters, and invoking trademark rights to obstruct the plaintiff’s market expansion. The SPC characterised this conduct as using trademark registration as a tool, with market obstruction as the objective.

Key judicial takeaways

The SPC’s decision confirms three important developments in China’s trademark enforcement landscape:

• From individual filings to systemic conduct: Courts will assess whether a pattern of behaviour amounts to an unfair competitive strategy, rather than focusing narrowly on isolated trademark applications. In doing so, Courts examine such patterns, including:
  • High‑volume, cross‑class filings with no genuine intent to use;
  • Coordination between registrants, affiliated entities, and trademark agents; and
  • Use of registered marks to obstruct competitors (oppositions, invalidations, warning letters).
• Expanded liability beyond registrants: Trademark agencies and affiliated entities may be held liable where they knowingly facilitate or participate in bad‑faith filing schemes.
• Holistic evidence review: Courts will examine filing volume, timing, scope, relationships between parties, and post‑registration enforcement conduct to determine intent and competitive impact.

Why this matters to the international brand owners

For international brand owners operating in China, the implications are tangible and encouraging:

• Administrative remedies are no longer the only line of defence.
• Civil litigation can be proactive, targeting repeat filers and coordinated actors.
• Deterrence increases: Exposure now extends beyond individual squatters to professional intermediaries.
• Judicial climate is more protective of genuine market players, including foreign brands, not merely formal registration positions.

From defensive survival to strategic enforcement

The significance of this case lies not in damages alone, but in its reframing of the judicial narrative. Chinese courts are increasingly clear that trademarks are not instruments for commercial ambush. Where registration is divorced from use and weaponised against legitimate competitors, it can, and will be, addressed as a competition issue.

For international brands that genuinely invest in China, this marks a shift from defensive survival to credible, strategic enforcement. In practical terms, it means the question is no longer whether enforcement is possible in China but how proactively it should be pursued.

Read the original article on GowlingWLG.com

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