On June 26, 2026, China's National People's Congress passed the newly revised Trademark Law of the People's Republic of China (the "2026 Revision"). The new law, which contains 87 articles across nine chapters, will take effect on January 1, 2027. This revision introduces comprehensive improvements to the protection of exclusive trademark rights, with more detailed and precise rules on both the standards for determining infringement and the mechanisms for handling infringing conduct. This article provides an overview of these rules as set out in the new law.
I. Standards for Determining Trademark Infringement
Article 72 of the 2026 Revision (corresponding to Article 57 of the current law) lists the specific acts that constitute infringement of the exclusive right to use a registered trademark. The wording remains largely unchanged from the current law, with only minor textual adjustments. In terms of substantive standards, the new law retains "likely to cause confuse" as the core judgement for infringement, but introduces significant changes in three areas: the definition of "trademark use," the scope of fair use, and the rules for determining infringement in the online environment.
1. Definition of "Trademark Use" (Article 2)
For trademark infringement to occur, the use of a mark must serve to identify the source of goods or services. The new law adds Article 2(2), which formally defines the concept of "trademark use" as a statutory matter. In response to the prevalence of online infringement on e‑commerce platforms and social media, the new law also adds Article 2(3), which explicitly provides that use of a mark through the internet or other information networks constitutes "trademark use" under the law. This change gives rights holders a clear and direct legal basis for establishing trademark use in the online environment and significantly reduces the burden of gathering evidence in such cases.
2. Fair use (Article 73)
The new law expands the current scope of fair use through Article 73. Where a party uses an identical or similar mark in good faith and to a reasonable extent solely for the purpose of describing or indicating the characteristics of its goods or services, and where such use is unavoidable and amounts to non‑trademark use, such as descriptive fair use or nominative fair use, it shall be deemed fair use and shall not constitute infringement.
2.1 Descriptive Fair Use
Descriptive fair use refers to where a party uses words or graphics contained in other party's registered trademark not to indicate the source of their goods or services, but merely to objectively describe the characteristics of those goods or services themselves. Article 73(1) expands on Article 59 of the current law by adding that where a registered mark directly indicates the kind, nature, value, or geographical origin of the goods, the owner of the registered mark may not prohibit others from using the mark in a descriptive manner.
2.2 Functional Fair Use of Three‑Dimensional Marks, Color Combinations, Sounds, and Motion Marks
Under the current law, where a three‑dimensional mark consists of a shape that is functional or naturally dictated by the nature of the goods (such as shapes necessary to achieve a technical result or that give substantial value to the goods), the mark owner cannot monopolize use of that shape.
The new law extends this rule to the newly added categories of registrable marks, i.e., color combinations, sounds, and motion marks. Where such marks contain functional elements dictated by the nature of the goods, necessary to achieve a technical result, or giving substantial value, the owner likewise cannot prohibit others from making good‑faith use of those elements.
2.3 Nominative Fair Use
The new law adds Article 73(3), which provides for nominative fair use. For example, where a party uses a mark solely to indicate the intended use, target users, application scenarios, or to indicate the genuine source of the goods, and such use does not cause confusion, such use shall be deemed fair use and the registered trademark owner shall have no right to prohibit such use. For instance, when selling baby bottle accessories, a seller may state "compatible with XXX brand bottles" on the product page, provided that the seller's own mark is clearly displayed and the third‑party mark is not used prominently. This constitutes fair indicative use. However, if the use causes confusion, it falls outside the scope of this exception.
2.4 Prior Use Defense
Strictly speaking, Article 73(4) (corresponding to Article 59(3) of the current law, which remains unchanged) is a "defense" rather than a form of fair use. However, within the broader framework of fair use, it protects the legitimate rights of good‑faith prior users. Where another party had already used an identical or similar mark on the same or similar goods prior to the registration date, and that mark had acquired a certain influence, the registered mark owner may not prohibit that party from continuing to use the mark within the original scope of use, but may require the addition of distinguishable sign.
In judicial practice, courts typically consider the following factors when assessing whether use qualifies as "fair":
(1) Good faith: The use must be for the objective purpose of describing the characteristics, intended use, or source of the goods, rather than to free‑ride on the goodwill of another's mark.
(2) The use must be necessary and reasonable, i.e., the use shall be confined to what is necessary for "explanation or description" purposes, and shall not involve enlarging, bolding, or placing the third-party mark in a prominent position; and
(3) There must be no likelihood of confusion: the user must clearly display their own brand or business name so that ordinary consumers can easily distinguish the source of the goods and will not be confused.
Accordingly, businesses that need to refer to another's mark to describe compatibility or interoperability with their own products should ensure that their own mark remains the most prominent feature on the product or listing, and should use the third‑party mark only as descriptive text in ordinary font, with qualifiers such as "compatible with" or "for use with," to minimize the risk of infringement.
II. Multi‑Layered Enforcement Mechanisms and Legal Liabilities for Infringement
With respect to trademark infringement, the 2026 Revision retains the existing enforcement mechanisms combining negotiation, administrative action, and civil damages, while making several improvements. In the administrative enforcement context, it expands the powers of law enforcement authorities, clarifies the timing for rights holders to prove actual use of their marks, and strengthens the rules on malicious litigation. These changes aim to protect exclusive trademark rights while also preventing abuse of those rights.
1. Negotiated Settlement
The parties may resolve the dispute through negotiation.
2. Administrative Enforcement
With respect to administrative liability, where an infringement is established, the trademark enforcement authorities may take the following measures:
2.1 General Penalties: Cessation, Seizure, and Fines
(1) Order the immediate cessation of the infringing act;
(2) Seize the infringing goods;
(3) Seize tools primarily used for manufacturing infringing goods or for forging registered trademark labels;
(4) Impose fines (Article 74 of the 2026 Revision sets out detailed fine scales):
Where the illegal turnover is CNY 50,000 or more, a fine of up to five times the illegal turnover may be imposed;
Where there is no illegal turnover, or the turnover is less than CNY 50,000, a fine of up to CNY 250,000 may be imposed;
Where the infringer has committed two or more trademark infringements within five years, or where other serious circumstances exist, a heavier penalty shall be imposed.
2.2 Measures against Good‑Faith Sellers: Order to Cease Sales
Under Article 74 of the 2026 Revision, where a seller did not know that the goods infringed a registered mark, and can prove that the goods were lawfully obtained and identify the supplier, the trademark law enforcement authority shall order the seller to cease sales of the goods.
2.3 Criminal Cases: Referral to Public Security
Article 75 of the 2026 Revision provides that where a trademark infringement is suspected of constituting a crime, the enforcement authority shall refer the case to the public security authorities (i.e., the police) for handling in accordance with the law.
3. Civil Damages
The new law sets out the following rules for calculating damages for trademark infringement, as well as special rules on malicious litigation and the exemption from liability for damages:
(1) Damages are calculated based on the actual loss suffered by the rights holder or the profits gained by the infringer from the infringement;
(2) Where both are difficult to determine, damages may be calculated by reference to a reasonable multiple of the trademark licensing fee;
(3) Where the infringement is intentional and serious, punitive damages of between one and five times the amount determined under the above methods may be awarded;
(4) Where the books and records relevant to the infringement are primarily in the hands of the infringer, and the infringer fails to provide them or provide false records, the court may determine damages based on the rights holder's claim and evidence;
(5) Where none of the above methods are feasible, the court may award damages of up to CNY 5 million based on the circumstances of the infringement (this rule is unchanged from the current law);
(6) Damages also include reasonable expenses incurred by the rights holder in stopping the infringement (e.g., attorneys' fees, investigation costs, and evidence gathering expenses);
(7) Malicious Litigation
The new law strengthens the rules on malicious litigation. Article 81 of the 2026 Revision provides that where a party brings a trademark lawsuit through malicious collusion or unilateral fabrication of underlying facts, the court shall impose penalties in accordance with the law; and where such conduct causes damages to the opposing party, the party shall bear civil liability.
(8) Exemption from Liability for Damages Based on the Trademark Owner’s Non‑use of the Mark
Where the alleged infringer argues that the rights holder has not used the registered mark, Article 78 of the 2026 Revision provides that the court may require the rights holder to provide evidence of actual use of the mark during the three‑year period prior to the infringement. The current provision under Article 64 uses the wording "within the previous three years", which lacks a clear starting point for calculation. In practice, this has given rise to uncertainty, the revised provision addresses this ambiguity by providing a clear calculation basis.
For rights holders, the adjustment in the new law means the evidentiary period is now more certain, but they must maintain a well‑organized archive of trademark use evidence in their day‑to‑day operations to ensure they can provide evidence covering the required period when an infringement occurs. For alleged infringers, the defense strategy is now clearer: they can precisely request that the rights holder produce use evidence for a specific period, which can serve as an effective tool against abusive litigation. For the courts, this change promotes uniformity in adjudication and reduces procedural disputes over the timing of the evidentiary period.
Closing Remarks
The 2026 Revision establishes a more modern framework for handling trademark infringement, raising the bar for rights holders' enforcement strategies and for businesses' compliance practices.
For rights holders: upon discovering potential infringement, evidence (especially electronic evidence) should be secured immediately through notarization, timestamps, or blockchain forensics, to avoid the risk of losing evidence if the infringer removes the listing or the platform takes it down. As a procedural strategy, rights holders may combine administrative and civil remedies. For example, by first filing a complaint with the market regulator to obtain investigatory powers and gather sales data, and then using the resulting administrative decision as strong evidence in subsequent civil litigation to claim damages or punitive damages.
For alleged infringers: they should actively invoke the statutory defenses available, including non‑use by the rights holder, fair use, or prior use, to counter abusive or malicious litigation.
The new law not only addresses the emerging challenges of trademark protection in the digital era, but also significantly raises the cost of non‑compliance through a range of tools, including the crackdown on bad‑faith filings and the regulation of malicious litigation. The new law provides both judicial and administrative authorities with clearer and more precise standards for adjudication and enforcement.
