Famous in New York, Unprotected in China: A Supreme People's Court Ruling on Trademark Squatting

The evidence file told a good story. A designer's brand had grown out of the New York street scene around the turn of the millennium. One of its sneaker releases had drawn a crowd big enough to bring out the police and make the New York papers. The brand had been filed as a trademark in the United States in 1993, long before anyone in China applied for the same word.

None of that was enough. In late 2023, China's Supreme People's Court refused to reopen the case, and the Chinese registration of "STAPLE" for clothing and footwear stayed on the register.

What happened

A Chinese applicant filed for "STAPLE" in the clothing class in February 2006. The US company that later acquired the American rights asked China's trademark office to declare the Chinese registration invalid. Its main argument was that the Chinese applicant had used unfair means to pre-empt a mark that was already in use and had some reputation, which Chinese law prohibits.

The trademark office and the courts below rejected the request. The US company applied to the Supreme People's Court for a retrial.

What the Supreme People's Court decided

The reputation has to exist in mainland China. The rule against pre-emptive registration protects marks that have been used in China and are known to a section of the relevant public in China. Trademark rights are territorial, and the use that counts is commercial use that happens inside mainland China.

Foreign fame, however real, is outside the test. The court accepted the evidence showed an earlier US filing and a high reputation in the United States for clothing and footwear. All of it concerned use and registration outside China, so it could not show the mark had a reputation in China before February 2006.

Arguments not raised in time are lost. The US company had also argued that the Chinese applicant copied other brands and had no intention of using the mark. Because it had not relied on the "other unfair means" ground at first instance, and because intent to use belongs to a cancellation case, the court would not consider those points.

Why this matters for a brand that sells to or through China

Chinese trademark law registers the first applicant. The main exception, for a mark "already used and with some reputation", looks only at what happened in China. A brand known worldwide can still be squatted in China if it had no Chinese sales, advertising or distribution before the squatter's filing date.

Other routes exist and they are narrower. A well-known mark can be protected even without registration, but "well-known" is a high bar decided case by case. A mark filed by a former agent or distributor can be opposed on that relationship. Bulk filers can be attacked for unfair means. Each route needs evidence and time. A Chinese filing made before anyone else's needs neither.

The revised Trademark Law, in force from 1 January 2027, keeps this rule and tightens its wording. An applicant must not "knowingly pre-empt" a mark that someone else is already using and that has some reputation (art. 24 of the revised law). The territorial point in this ruling is unchanged.

What to do

1. File in China before you sell there, before you manufacture there and before you exhibit there. A Chinese factory, a trade-fair visitor or a would-be distributor may see the brand first.
2. File the Chinese-language version too. Chinese buyers will give your brand a Chinese name whether you choose one or not. Register the one you want before someone else registers theirs.
3. Keep China-specific evidence. If you are already selling in China without a registration, keep dated invoices, customs records, Chinese-language advertising and distributor agreements. Foreign press will not carry the argument.
4. Raise every ground at the start. If you do challenge a squatter, plead every basis you have, including bulk filing and bad faith, in the first round. This case shows arguments can be lost by being left out.

Part of my guide to trademark protection in China.

If your brand has turned up in China under someone else's name, send me what you have found and I will tell you which route fits. Discuss trademark protection in China →