First-to-File vs First-to-Use: Why China Trademark Strategy Is Different

First-to-File vs First-to-Use: Why China Trademark Strategy Is Different

China operates a first-to-file trademark system — the party that files a trademark application first generally obtains the rights, regardless of who used the mark first. This is fundamentally different from first-to-use systems like the United States, where trademark rights arise from commercial use.

This distinction has enormous practical consequences for any business manufacturing in, selling to, or exporting through China.

Pro tip: Don't wait until you're ready to enter the Chinese market. Check your mark's availability now with a free trademark check.

First-to-File vs First-to-Use: The Core Difference

What This Means in Practice

In the United States, if you've been using "ACME" for widgets since 2015 and someone files a trademark application for "ACME" for widgets in 2026, you have priority based on your prior use.

In China, if you've been selling "ACME" widgets globally since 2015 but never filed in China, and someone files for "ACME" for widgets with CNIPA in 2026, they get the registration — and they can block *you* from using your own brand name in China.

The Trademark Squatting Problem

China's first-to-file system has created a massive trademark squatting industry. Squatters monitor foreign brands and file trademark applications in China before the brand owner does.

How Squatters Operate

1. Brand monitoring — squatters track foreign trademarks through USPTO, EUIPO, and other registries
2. Preemptive filing — they file applications with CNIPA for marks that aren't yet registered in China
3. Extortion/sale — they contact the brand owner and offer to sell or license the registration
4. Blocking enforcement — the squatter's registration can be used to:

- Block the legitimate owner from registering

- File customs complaints to seize the owner's goods

- Demand removal from e-commerce platforms

- Sue for trademark infringement

High-Profile Squatting Cases

Numerous well-known brands have been affected by Chinese trademark squatting:

• Foreign brands discovering their names already registered when entering China
• Companies unable to sell products under their own brand name on Chinese e-commerce platforms
• Manufacturers finding their marks registered by former Chinese suppliers or distributors

The Cost of Squatting

Compare this to the cost of proactive filing: approximately $500-1,500 per class.

Preemptive Filing Strategy

The best defense against squatting is a preemptive filing strategy — registering your marks in China before squatters can act.

When to File

File in China as soon as any of these conditions apply:

• You manufacture products in China (even for export only)
• You sell or plan to sell in the Chinese market
• You sell on e-commerce platforms accessible to Chinese consumers
• Your brand has any international visibility (website, social media, trade shows)
• You have Chinese suppliers, distributors, or partners who know your brand
• Your brand operates in an industry targeted by squatters (fashion, technology, food & beverage, cosmetics)

What to File

1. Your primary mark in English/Latin characters
2. Chinese character versions — this is critically important:

- Transliteration (音译) — phonetic Chinese equivalent

- Translation (意译) — meaning-based Chinese equivalent

- Hybrid — combining sound and meaning

1. Logo/device marks — if your branding includes a distinctive logo
2. Key sub-classes — cover your current and planned goods/services
3. Defensive sub-classes — consider adjacent sub-classes where squatters might file

Learn more about selecting Chinese character marks in our China trademark registration guide.

How Broadly to File

Consider this framework:

Bad Faith Provisions: The 2019 Amendment

The 2019 amendment to China's Trademark Law introduced significant anti-squatting provisions:

Article 4: Bad Faith Filing Without Intent to Use

*"Applications for trademark registration made in bad faith that are not intended for use shall be refused."*

This is the most significant anti-squatting tool introduced in recent years. It targets:

• Professional squatters who file hundreds of marks with no genuine business
• Speculative filers who register marks hoping to sell them later
• Defensive hoarding without any intent to use

How Article 4 Is Applied

Evidence of bad faith includes:

• Filing large numbers of applications across many classes without corresponding business activities
• Targeting well-known foreign brands not yet registered in China
• Pattern of trademark trading — history of registering and selling marks
• No genuine business corresponding to the registered goods/services

Article 15: Agent/Representative Bad Faith

Protects against trademark agents, distributors, or business partners who register your mark in their own name without authorization.

Article 32: Prior Use with Certain Influence

Provides limited protection for foreign marks that have been used and gained "certain influence" (一定影响) in China before the squatter filed. This requires evidence of:

• Use in China (not just abroad)
• Consumer recognition in China
• The squatter's knowledge of your mark

Strategic Recommendations

For Businesses Not Yet in China

1. File immediately — even basic coverage is better than none
2. Prioritize Chinese character marks — these are the highest squatting risk
3. Search the CNIPA database — check if squatters have already filed
4. Budget for multi-class filing — China's per-class costs are relatively low
5. Set up trademark monitoring — detect squatting attempts early

For Businesses Already Affected by Squatting

1. Assess the situation — is the squatted mark registered, pending, or published?
2. Oppose if in publication period — opposition is the most cost-effective remedy
3. File non-use cancellation — if the squatter's mark has been registered for 3+ years without use
4. Pursue invalidation — under Article 4, 15, or 32 for bad faith
5. Negotiate — sometimes purchasing the mark is the fastest (though most expensive) option
6. File your own applications — in classes/sub-classes not yet squatted

For Businesses Manufacturing in China

Even if you only manufacture in China for export:

• Register in manufacturing-relevant classes — protect against production interference
• Register in export-relevant classes — prevent customs issues
• Include supplier contracts with IP protection clauses
• Monitor for squatting by current or former manufacturing partners

The GTC Advantage for China Trademark Strategy

Global Trademark Company provides strategic China trademark services including:

• Pre-entry strategy — comprehensive filing plans before market entry
• Anti-squatting assessment — evaluating and addressing existing squatter registrations
• Chinese character mark development — expert transliteration and translation guidance
• Multi-class filing — strategic sub-class selection for maximum protection
• Trademark monitoring — ongoing surveillance for new squatting attempts
• Enforcement support — opposition, invalidation, and customs recordation

Next Steps

Don't become a squatting statistic. Start with a free trademark check to evaluate your mark's current status in China, then work with our team to develop a preemptive filing strategy through our China trademark services.

*This guide reflects China's Trademark Law as amended in 2019 and current CNIPA practices as of 2026. Trademark law and practice are subject to change; consult a qualified trademark professional for advice specific to your situation.*