On June 26, 2026, China’s National People’s Congress passed a sweeping amendment to the Trademark Law — the most significant IP enforcement reform in a decade. Taking effect January 1, 2027, the changes double maximum damages, crack down on trademark squatters, and give foreign brands new tools to protect their marks in China. Here is what changed and how to prepare.
Why It Matters
Trademark infringement and bad-faith registration have been persistent pain points for foreign businesses operating in China. A 2025 European Chamber survey found that 38% of member companies reported trademark infringement incidents, up from 31% in 2023. On June 26, 2026, the Standing Committee of the National People’s Congress passed a significant amendment to China’s Trademark Law, set to take effect on January 1, 2027. The amendment targets three chronic problems: malicious registration, agency misconduct, and deceptive trademark use. For foreign brands, it introduces both stronger enforcement tools and new compliance requirements.
The amendment’s most practical change: it creates a public right to report trademark violations, giving third parties — including competitors and industry associations — a formal channel to trigger investigations into trademark misuse. For foreign companies without dedicated in-house China IP teams, this means external partners can help police your brand.
The Details
The amendment introduces several key changes. First, “motion signs” are now registrable as trademarks (Article 14), opening up new options for brand protection strategies centered on dynamic branding elements. Second, the amendment establishes new prohibitions on marks related to the state’s political and historical events (Article 15.1) — foreign companies need political and cultural sensitivity checks before filing.
Third, and most significantly, the amendment cracks down on malicious trademark registration with increased penalties (Articles 19, 54). Bad-faith registrants face higher fines, and the legal grounds for opposing or invalidating such registrations have been strengthened. This directly addresses the “trademark squatting” problem that has cost foreign companies millions in litigation and rebranding costs.
Fourth, trademark agencies face higher penalties for misconduct (Articles 67, 68), giving rights holders stronger legal standing when pursuing infringement claims involving agencies that facilitated bad-faith registrations. Finally, the amendment introduces penalties for malicious trademark lawsuits — a response to the growing phenomenon of trademark trolls who register brands and then sue legitimate users.
Penalties have increased substantially across the board. The maximum statutory damages for trademark infringement have been raised from 5 million RMB to 10 million RMB (approximately $685,000 to $1.37 million). Punitive damages — at up to five times the calculated loss — are now available for repeat infringers and intentional violations.
The amendment takes effect January 1, 2027, giving foreign businesses six months to prepare. The European Chamber has welcomed the changes but noted that enforcement at the local level remains the critical variable — China’s trademark enforcement has historically been stronger in first-tier cities (Beijing, Shanghai, Guangzhou) than in smaller jurisdictions.
Case in point: The US-China Security and Trade Review Commission documented that foreign companies spent an estimated $200 million annually between 2020 and 2025 on litigation to reclaim trademark rights from squatters. High-profile cases include NBA star LeBron James’ “King James” mark, which was squatted on 16 separate classes before the 2022 victory; New Balance’s seven-year legal battle against “New Boom” (finally won in 2022); and the Italian luxury brand Bottega Veneta’s 2023 victory against a Shenzhen-based knockoff chain with 18 retail locations. The 2026 amendment addresses exactly this pattern: Article 19 now explicitly lists bad-faith registration as grounds for invalidation, and the higher penalties shift the cost-benefit calculation away from squatters. A key deadline to watch: the CNIPA (China National Intellectual Property Administration) is expected to release implementing regulations by September 2026, which will clarify procedural details for leveraging the new provisions.
Regional enforcement comparison: The effectiveness of the new provisions will depend heavily on where you encounter infringement. Courts in Beijing and Shanghai handled 65% of all trademark infringement cases in 2025, with median damages awards of 480,000 RMB ($66,000) versus 180,000 RMB ($25,000) in provincial courts. The amendment’s expanded statutory damages (up to 10 million RMB) are most likely to be applied in these first-tier jurisdictions. For companies operating primarily in second- or third-tier cities, the practical enforcement gap remains — you may need to seek jurisdiction in Shanghai or Beijing courts to realize the amendment’s full benefits.
What You Should Do
- Audit your China trademark portfolio. Identify any marks currently registered by third parties that should belong to your company. The strengthened provisions for opposing bad-faith registrations apply from January 1, 2027 — prepare your challenges now.
- Register motion-based branding. If your brand uses animated logos, transition effects, or motion-based identifiers, these are now explicitly registrable. File applications early to establish priority.
- Review your agency agreements. Ensure your China trademark agent is reputable and compliant. The higher penalties for agency misconduct mean your agent’s compliance posture directly affects your risk exposure.
- Build a case for punitive damages. Document all known infringement incidents with dates, screenshots, and evidence of willful conduct. The new punitive damages framework requires proof of intentional violation — the better your documentation, the stronger your position.
One Data Point
The number to remember: 38% — the share of European Chamber member companies in China that reported trademark infringement in 2025. With maximum statutory damages doubling from 5 million RMB to 10 million RMB and punitive damages now available at up to five times the calculated loss, the potential recovery for a successful infringement case has gone from approximately $685,000 to as much as $6.85 million. The economics of enforcement have shifted — it now pays to pursue infringement claims that previously weren’t worth the legal cost.
— China Gateway 360 —
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