An analysis by PONS IP’s Trademark Department identifies the key implications of the reform for companies’ portfolios, protection strategies and business operations in China
China is preparing a significant overhaul of its trademark system. The new Trademark Law, which will enter into force on 1 January 2027, strengthens measures against bad-faith applications, introduces new categories of registrable signs and places greater emphasis on genuine trademark use. An analysis by PONS IP’s Trademark Department highlights the areas that businesses should review now to anticipate the impact of the new framework on their operations and trademark strategies in China.
The reform affects one of the world’s largest trademark ecosystems. By the end of 2025, mainland China had more than 49.8 million valid registered trademarks, while the revised legislation expands the Law from 73 to 87 articles. Its main objectives include regulating access to registration, tackling bad-faith filings and strengthening trademark protection and responsible use.
Greater scrutiny of bad-faith and opportunistic filings
One of the most significant developments for businesses is the tougher approach to applications filed without a genuine intention to use the trademark. Applications that clearly exceed normal business needs may be refused, while certain bad-faith conduct causing harm may lead to fines of up to RMB 100,000, approximately €13,335 based on the ECB reference exchange rate for 15 October 2026.
This has a direct strategic implication for companies managing large international portfolios. Businesses will need to pay closer attention to the commercial rationale behind their filings, particularly where applications are defensive or designed to anticipate future expansion. The analysis therefore points towards a closer alignment between trademark portfolio strategy and actual or planned business activity.
The reform also strengthens the mechanisms available to tackle misappropriation. Protection for well-known trademarks is extended and, in certain circumstances, will no longer depend on prior registration in China. The reference to prior “legitimate rights and interests” also broadens the potential basis for protection to include assets such as trade names, titles, characters and recognised packaging.
For international businesses, this makes the ability to identify and preserve evidence of reputation, prior rights and legitimate interests particularly significant when preparing to respond to potentially opportunistic filings.
New opportunities for non-traditional trademarks
The reform is also significant for businesses whose brand identity extends beyond conventional names and static logos.
Dynamic trademarks, including animated logos and certain visual start-up or loading sequences, will become registrable. At the same time, the functionality exclusion is extended to three-dimensional, colour, sound and motion marks.
This opens a new area for companies to assess whether distinctive visual, digital or sensory elements used in their business could form part of their wider trademark protection strategy. It also means that functionality will need to be considered when assessing both new applications and the strength of certain existing registrations.
For companies developing digital products, interfaces or other brand experiences incorporating movement, sound, colour or three-dimensional elements, non-traditional trademarks therefore become an increasingly relevant area of portfolio review.
Genuine use becomes a business issue, not just a legal one
The new Law also gives greater weight to genuine trademark use and expressly recognises use through the internet and other networks. Sales through platforms, corporate websites and certain digital activities may therefore become relevant evidence of use.
At the same time, the China National Intellectual Property Administration (CNIPA) will be able to cancel trademarks ex officio where they have remained unused without justification for three consecutive years, or where they have become the generic name of a product.
For companies, this increases the importance of examining whether their Chinese trademark portfolio still corresponds to their current commercial footprint, products and planned development, while identifying registrations for which appropriate evidence of use should be preserved. The PONS IP analysis specifically identifies invoices, contracts, catalogues, campaigns, dated screenshots and e-commerce evidence among the materials businesses should organise. [
This point is particularly relevant to businesses selling through distributors, e-commerce platforms or other digital channels, as well as companies manufacturing in China without necessarily selling directly in the Chinese market.
Licensing, OEM manufacturing and distribution also need attention
The implications extend beyond trademark registration itself. Under the revised framework, a licensor will be able to terminate a licence if the licensee fails to guarantee product quality. Misleading use of a registered trademark in relation to ingredients, origin, quality or other characteristics may also result in corrective orders, significant fines and potentially cancellation if the conduct is not remedied.
PONS IP’s Trademark Department therefore identifies licensing, OEM manufacturing and distribution agreements as another area that businesses should review before 2027, particularly in relation to quality obligations, auditing, control over trademark use and termination provisions.
The reform is consequently relevant not only to businesses selling directly in China, but also to companies that manufacture in the country, operate through distributors, license their trademarks, work under OEM arrangements or are preparing to enter or expand in the Chinese market.
Less time to react to competing applications
Finally, the reform introduces an important procedural change: the opposition period for a published trademark application will be shortened from three months to two. The shorter timeframe reduces the period available to detect a potential conflict, assess the associated risk and coordinate instructions internally. For businesses with international portfolios, this places greater importance on early trademark monitoring and faster internal decision-making procedures.
Seven business priorities ahead of 2027
From a business perspective, PONS IP’s Trademark Department identifies seven priority areas that companies with interests in China should consider before 1 January 2027:
- Strengthen trademark monitoring, adapting alerts and internal processes to the new two-month opposition period.
- Audit existing portfolios to identify priority trademarks, unused registrations, duplications and protection that no longer reflects business needs.
- Consolidate evidence of use, including invoices, agreements, catalogues, campaigns, dated screenshots and e-commerce records.
- Document the commercial rationale behind new filings, particularly defensive applications or those anticipating future expansion.
- Review licensing, OEM manufacturing and distribution agreements, including provisions covering quality, auditing, control of use and termination.
- Assess non-traditional trademarks, including three-dimensional, colour, sound and motion signs, and consider potential functionality issues.
- Prepare for potential misappropriation by identifying and preserving evidence of reputation, prior rights and legitimate interests. [
From reaction to anticipation
Taken together, the changes make the period before 1 January 2027 an opportunity for companies to reassess how their trademark protection in China relates to their broader commercial strategy. The central business issue is not simply whether existing registrations comply with the new framework. Companies should also consider whether their portfolios reflect where they sell, manufacture, license, distribute and plan to expand, whether sufficient evidence exists to support key registrations, and whether emerging forms of brand identity should receive additional protection.
PONS IP’s Trademark Department supports companies in defining and implementing their protection strategies in China, including portfolio audits, trademark monitoring, evidence-of-use management, contractual reviews, oppositions and action against bad-faith registrations
