Pursuant to the decision of the 68th Chairpersons’ Meeting of the 14th Standing Committee of the National People’s Congress (“NPC”), the 23rd Session of the 14th NPC Standing Committee is convening in Beijing from 23 to 26 June 2026, during which it will continue its deliberation on the revised draft of the Trademark Law. In December 2025, the 19th Session of the Standing Committee conducted its initial deliberation on the revised draft (“First Reading Draft”). On 22 June 2026, the Legislative Affairs Commission of the NPC Standing Committee held a press conference at which its spokesperson introduced the latest amendments to the revised draft scheduled for deliberation at the current session (“Second Reading Draft”). MMLC Note: Subsequent to publication of this article, it was announced that the amendments have passed and will become law from 1 July 2027.
Core Transformation: Strengthening the Regulation of Registration and Use, Combating Malicious Hoarding
The essence of the Second Reading Draft lies in tightening controls at both the application and use stages, transforming trademarks from “static assets” into “dynamic obligations.”
First, at the application stage, the draft explicitly provides for the refusal of registrations filed without intent to use. The Second Reading Draft stipulates that trademark applications “not intended for use and clearly exceeding the needs of normal production and business operations” shall not be registered, and the applicant may face a warning and a fine of up to RMB 100,000 (approximately USD 14,736.70). This provision curbs malicious hoarding at its source, fundamentally challenging the traditional strategy of “defensive registration + three years of non-use,” and requiring enterprises to reassess the “reasonableness” boundary of their trademark portfolios.
Second, at the use stage, actual use is directly linked to the right to damages. The Second Reading Draft not only retains the provision that a trademark “not put into use for three consecutive years without justifiable reasons shall be liable for cancellation”, but also introduces a highly impactful evidentiary mechanism: in trademark infringement damages actions, where the alleged infringer raises the defense that the right holder has “not used the registered trademark”, the court may require the right holder to provide evidence of actual use within the three years preceding the filing of the action. This provision directly ties “use” to the “right to recover damages”. This groundbreaking provision, which did not appear in the First Reading Draft, represents one of the most critical breakthroughs of the Second Reading Draft.
Third, use in the internet environment is brought within the statutory scope of adjustment. The Second Reading Draft expressly provides that “the use of a trademark includes use carried out through information networks such as the internet”. This provision brings trademark use on online platforms, social media, livestream e-commerce, cross-border e-commerce, and even virtual spaces such as the metaverse within the statutory scope of recognition. For enterprises in the digital economy and those going global, evidence of use in the online environment will be incorporated into the “actual use” determination framework, directly affecting both the maintenance of trademarks and the exercise of rights to damages for infringement.
Regulating “Misleading Use” of Registered Trademarks: Severity of Penalties
In recent years, the regulatory focus of the Trademark Law has been on “malicious pre-emptive registration”. The Second Reading Draft now takes direct aim at conduct involving registered trademarks that are used in an improper manner. For conduct involving “use of a registered trademark in a manner that misleads the public,” the department responsible for trademark enforcement shall order rectification within a specified period; where the illegal business turnover is RMB 50,000 (approximately USD 7,368.35) or more, a fine of up to five times the illegal business turnover may be imposed; where there is no illegal business turnover or the turnover is less than RMB 50,000, a fine of up to RMB 250,000 (approximately USD 36,841.75) may be imposed; and if rectification is not made within the prescribed period, the trademark administration department of the State Council shall cancel the registered trademark. In addition, any entity or individual may file a complaint or report. This means that even with a lawfully registered trademark, if the holder deliberately uses it in a manner that causes the public to be misled as to the quality, place of origin, or other aspects of the goods, the holder will face substantial fines and even the “extreme penalty” of cancellation.
New Administrative Liability for Applicants’ “Good Faith Filing” and Strengthened Accountability of Public Officials
The Second Reading Draft provides that where a trademark applicant, knowing that the mark is deceptive and likely to mislead the public, nevertheless files an application for registration, thereby causing adverse effects, the applicant shall be subject to administrative penalties (a warning and a fine of up to RMB 100,000 (approximately USD 14,736.70)). This represents a significant shift: the cost of bad-faith filing is no longer limited to rejection of the application but may now directly result in financial penalties. At the same time, public officials who fail to exercise due diligence in examination, thereby causing adverse effects, shall be subject to disciplinary sanctions in accordance with the law, compelling greater prudence at the examination stage.
Penetrating Regulation of Trademark Agencies: Deep Integration of Agency Liability and Bad-Faith Filings
The Second Reading Draft requires trademark agencies to undergo information filing and expressly provides that where an agency knows or ought to know that its client falls within the scope of bad-faith filings such as “not intended for use and clearly exceeding the needs of normal production and business operations” and nevertheless accepts the engagement, it shall bear legal liability. This provision transforms the general prohibition against malicious agency practice into a strict joint liability regime triggered by “knows or ought to know”, and adds a filing obligation, creating a powerful deterrent against agencies that assist, abet, or condone trademark hoarding for profit, thereby severing the “professional services” chain that facilitates bad-faith registration.
Protection of Special Marks: Cross-Legal Coordination and Forbidden Political Elements
With respect to the protection of special marks, the Second Reading Draft adds a coordinating provision: the registration and use of marks such as national park marks, Olympic symbols, and special marks as trademarks shall be carried out in accordance with this Law and relevant laws and administrative regulations. This means that the protection of these special marks will no longer be governed in isolation by separate regulations but will form a robust coordinated protection regime with the Trademark Law. In addition, the Second Reading Draft expressly provides that marks that are identical or similar to “iconic elements relating to the important theoretical achievements and historical events of the Communist Party of China” shall not be registered or used as trademarks.
Improving Rules for Handling Overseas Trademark Infringement Cases to Support Chinese Enterprises Going Global
The Second Reading Draft further improves the rules for handling overseas trademark infringement cases, with the aim of strengthening the protection of Chinese enterprises’ legitimate trademark rights and interests abroad. The Second Reading Draft expressly provides that where, in the course of overseas trademark registration examination or the handling of trademark cases, it is necessary to prove that a trademark is well known to the relevant public in China, upon the request of the party concerned, the trademark administration department of the State Council may make a determination as to the well-known status of the trademark. In addition, where a party obtains overseas trademark registrations or handles other trademark matters for a client within China through fraudulent or other improper means, thereby harming the client’s interests or the national interest, public interest, or the lawful rights and interests of others, the matter shall be handled and penalized in accordance with the relevant provisions of the Trademark Law. This provision provides a domestic legal basis for Chinese enterprises to defend their rights overseas and has significant practical value.
Conclusion
The Second Reading Draft further elevates the legal status of actual use requirements by strengthening the cancellation‑for‑non‑use system and the allocation of the burden of proof in infringement damages actions. For rights holders, three practical changes warrant particular attention: the shortened opposition period, the narrowing room for adjusting defensive registration strategies, and the inclusion of internet‑based use evidence in the determination of actual use.
Core Transformation: Strengthening the Regulation of Registration and Use, Combating Malicious Hoarding
The essence of the Second Reading Draft lies in tightening controls at both the application and use stages, transforming trademarks from “static assets” into “dynamic obligations.”
First, at the application stage, the draft explicitly provides for the refusal of registrations filed without intent to use. The Second Reading Draft stipulates that trademark applications “not intended for use and clearly exceeding the needs of normal production and business operations” shall not be registered, and the applicant may face a warning and a fine of up to RMB 100,000 (approximately USD 14,736.70). This provision curbs malicious hoarding at its source, fundamentally challenging the traditional strategy of “defensive registration + three years of non-use,” and requiring enterprises to reassess the “reasonableness” boundary of their trademark portfolios.
Second, at the use stage, actual use is directly linked to the right to damages. The Second Reading Draft not only retains the provision that a trademark “not put into use for three consecutive years without justifiable reasons shall be liable for cancellation”, but also introduces a highly impactful evidentiary mechanism: in trademark infringement damages actions, where the alleged infringer raises the defense that the right holder has “not used the registered trademark”, the court may require the right holder to provide evidence of actual use within the three years preceding the filing of the action. This provision directly ties “use” to the “right to recover damages”. This groundbreaking provision, which did not appear in the First Reading Draft, represents one of the most critical breakthroughs of the Second Reading Draft.
Third, use in the internet environment is brought within the statutory scope of adjustment. The Second Reading Draft expressly provides that “the use of a trademark includes use carried out through information networks such as the internet”. This provision brings trademark use on online platforms, social media, livestream e-commerce, cross-border e-commerce, and even virtual spaces such as the metaverse within the statutory scope of recognition. For enterprises in the digital economy and those going global, evidence of use in the online environment will be incorporated into the “actual use” determination framework, directly affecting both the maintenance of trademarks and the exercise of rights to damages for infringement.
Regulating “Misleading Use” of Registered Trademarks: Severity of Penalties
In recent years, the regulatory focus of the Trademark Law has been on “malicious pre-emptive registration”. The Second Reading Draft now takes direct aim at conduct involving registered trademarks that are used in an improper manner. For conduct involving “use of a registered trademark in a manner that misleads the public,” the department responsible for trademark enforcement shall order rectification within a specified period; where the illegal business turnover is RMB 50,000 (approximately USD 7,368.35) or more, a fine of up to five times the illegal business turnover may be imposed; where there is no illegal business turnover or the turnover is less than RMB 50,000, a fine of up to RMB 250,000 (approximately USD 36,841.75) may be imposed; and if rectification is not made within the prescribed period, the trademark administration department of the State Council shall cancel the registered trademark. In addition, any entity or individual may file a complaint or report. This means that even with a lawfully registered trademark, if the holder deliberately uses it in a manner that causes the public to be misled as to the quality, place of origin, or other aspects of the goods, the holder will face substantial fines and even the “extreme penalty” of cancellation.
New Administrative Liability for Applicants’ “Good Faith Filing” and Strengthened Accountability of Public Officials
The Second Reading Draft provides that where a trademark applicant, knowing that the mark is deceptive and likely to mislead the public, nevertheless files an application for registration, thereby causing adverse effects, the applicant shall be subject to administrative penalties (a warning and a fine of up to RMB 100,000 (approximately USD 14,736.70)). This represents a significant shift: the cost of bad-faith filing is no longer limited to rejection of the application but may now directly result in financial penalties. At the same time, public officials who fail to exercise due diligence in examination, thereby causing adverse effects, shall be subject to disciplinary sanctions in accordance with the law, compelling greater prudence at the examination stage.
Penetrating Regulation of Trademark Agencies: Deep Integration of Agency Liability and Bad-Faith Filings
The Second Reading Draft requires trademark agencies to undergo information filing and expressly provides that where an agency knows or ought to know that its client falls within the scope of bad-faith filings such as “not intended for use and clearly exceeding the needs of normal production and business operations” and nevertheless accepts the engagement, it shall bear legal liability. This provision transforms the general prohibition against malicious agency practice into a strict joint liability regime triggered by “knows or ought to know”, and adds a filing obligation, creating a powerful deterrent against agencies that assist, abet, or condone trademark hoarding for profit, thereby severing the “professional services” chain that facilitates bad-faith registration.
Protection of Special Marks: Cross-Legal Coordination and Forbidden Political Elements
With respect to the protection of special marks, the Second Reading Draft adds a coordinating provision: the registration and use of marks such as national park marks, Olympic symbols, and special marks as trademarks shall be carried out in accordance with this Law and relevant laws and administrative regulations. This means that the protection of these special marks will no longer be governed in isolation by separate regulations but will form a robust coordinated protection regime with the Trademark Law. In addition, the Second Reading Draft expressly provides that marks that are identical or similar to “iconic elements relating to the important theoretical achievements and historical events of the Communist Party of China” shall not be registered or used as trademarks.
Improving Rules for Handling Overseas Trademark Infringement Cases to Support Chinese Enterprises Going Global
The Second Reading Draft further improves the rules for handling overseas trademark infringement cases, with the aim of strengthening the protection of Chinese enterprises’ legitimate trademark rights and interests abroad. The Second Reading Draft expressly provides that where, in the course of overseas trademark registration examination or the handling of trademark cases, it is necessary to prove that a trademark is well known to the relevant public in China, upon the request of the party concerned, the trademark administration department of the State Council may make a determination as to the well-known status of the trademark. In addition, where a party obtains overseas trademark registrations or handles other trademark matters for a client within China through fraudulent or other improper means, thereby harming the client’s interests or the national interest, public interest, or the lawful rights and interests of others, the matter shall be handled and penalized in accordance with the relevant provisions of the Trademark Law. This provision provides a domestic legal basis for Chinese enterprises to defend their rights overseas and has significant practical value.
Conclusion
The Second Reading Draft further elevates the legal status of actual use requirements by strengthening the cancellation‑for‑non‑use system and the allocation of the burden of proof in infringement damages actions. For rights holders, three practical changes warrant particular attention: the shortened opposition period, the narrowing room for adjusting defensive registration strategies, and the inclusion of internet‑based use evidence in the determination of actual use.