Trademark Squatting: Prevention and Remedies in Japan and China

Trademark squatting (冒認出願, also called pre-emptive filing) means filing someone else’s brand as a trademark without their consent. Japan and China both follow a first-to-file principle, under which the first applicant obtains the registration, so filing early yourself is the best preventive measure. If a squatter files first, the remedies in Japan are information offers, oppositions, invalidation trials and cancellation trials; in China, they are oppositions, invalidation declarations and non-use cancellation, among others.

What is trademark squatting? Common patterns

Trademark rights arise country by country. Even a brand used for many years in one country may be impossible to register in another if someone else files there first.

• Distributors and business partners: a distributor in negotiations or under contract files the mark in its own name
• Brokers: file a brand before it enters the market and then offer to sell it back
• Former employees and joint venture partners: file the brand after the relationship ends
• Filings targeting other versions of the mark: file whichever of the kanji, katakana, Latin-alphabet or Chinese versions has not yet been filed

Squatting can not only prevent you from using your own brand, but also lead to infringement claims against you or to your listings being removed from online marketplaces. For the basics of Japan’s trademark system, see How to register a trademark in Japan.

Preventing squatting before it happens

1. File before entering the market: file before making the brand public through distributor negotiations, trade fairs or online announcements.
2. Cover every version you will use: in Japan, consider kanji, katakana, Latin-alphabet versions and logos; in China, also consider simplified characters and the Chinese name.
3. File separately in Hong Kong: registration in mainland China does not protect the mark in Hong Kong. Hong Kong has its own trademark system, and applications are filed with the Intellectual Property Department of the Government of the Hong Kong Special Administrative Region.
4. Address it in contracts: include in distribution and non-disclosure agreements a prohibition on unauthorized filings and an obligation to transfer any mark that is filed.
5. Monitor: regularly check Japan’s Published Trademark Gazette and China’s trademark announcements.
6. Keep evidence of use: records of sales, advertising, media coverage and transactions later serve as evidence of the mark’s fame and prior use.

Registering a company name does not create trademark rights. For the relationship between trade names and trademarks, see Rules for company names (trade names), and for contractual safeguards, see Key points for contracts under Japanese law.

Clauses to include in distribution agreements

• Rights in the trademarks and brand belong to the head office
• The distributor must not file or register the trademarks without the head office’s consent
• Any mark filed or registered in breach must be transferred to the head office
• The distributor must stop using the trademarks after the agreement ends
• Ownership of domain names and social media accounts

Remedies in Japan

Main grounds for refusing registration

• Unfair-purpose filings of marks well known abroad: marks identical or similar to a mark widely known in Japan or abroad and filed for an unfair purpose (Article 4(1)(xix) of the Trademark Act). Typical examples are filings intended to force a buy-back at a high price or to block entry into Japan.
• Others’ marks well known in Japan: marks identical or similar to another party’s mark widely known in Japan (Article 4(1)(x)).
• Unauthorized registration by an agent or representative: registrations made by an agent or representative of a foreign rights holder without consent and without a legitimate reason (cancellation trial under Article 53-2 of the Trademark Act).

What matters in proving your case

Whichever remedy you pursue, evidence decides the outcome. Show the mark’s fame through sales records, advertising, media coverage and registration status abroad, and show the unfair purpose through the history of dealings with the other party and any buy-back demands. If the squatter is not using the mark, a non-use cancellation trial is also an effective option. In this trial, it is the rights holder who must prove that the mark was used in Japan within the three years before the request was registered.

Separately from whether a trademark is registered, it may also be possible to seek an injunction under the Unfair Competition Prevention Act against conduct that causes confusion with a widely known indication.

Even if you are offered the mark for sale, avoid accepting straight away. Decide only after comparing the prospects and costs of a challenge.

Remedies in China

In mainland China, trademarks are examined and registered by the China National Intellectual Property Administration (CNIPA). Brands of Hong Kong companies and of Japanese companies entering mainland China are sometimes squatted. Foreign brands in China often use a Chinese name, and there are cases where only the Chinese version is squatted. Under the current Trademark Law (as amended in 2019), the main remedies are as follows.

Comparing the systems in Japan and China

The amended Trademark Law taking effect on January 1, 2027

On June 26, 2026, the Standing Committee of the National People’s Congress passed a comprehensive revision of the Trademark Law, which takes effect on January 1, 2027. It is the first comprehensive revision since the law took effect in 1983, and the law grows from 8 chapters and 73 articles to 9 chapters and 87 articles.

According to announcements by the CNIPA and others, the main pillars of the revision are stronger measures against bad-faith pre-emptive filings (抢注), regulation of marks that mislead the public, more detailed supervisory rules and tougher penalties.

• Stronger measures against bad-faith filings not intended for use and against pre-emptive filing of others’ brands
• Tighter regulation and supervision of marks that mislead the public
• Tougher penalties for violations

The specific penalties and procedural details will need to be confirmed in the amended text and in practice going forward. Article numbers and procedural requirements may change once the law takes effect. When taking action in China, confirm the amended text and current practice with a Chinese trademark agency.

For Japanese SMEs, JETRO runs a program that subsidizes part of the cost of oppositions, invalidation actions and similar proceedings against trademarks squatted overseas. Eligibility, requirements and whether applications are being accepted need to be checked each fiscal year.

First steps when you discover squatting

1. Save the gazette and application information and your communications with the other party
2. Confirm the opposition deadline (two months in Japan, three months in China) and draw up a schedule
3. File applications yourself for the versions of the mark you will use
4. Designate a single point of contact for negotiations with the other party and avoid careless statements
5. Discuss which remedies to pursue with a patent attorney (弁理士) in Japan and a local trademark agency in China

A squatter may send a warning letter alleging trademark infringement or file a complaint with an e-commerce platform to have your listings removed. To prepare for the impact on your business, organize evidence of your prior use and your options for a challenge early. In Japan, you may be able to continue using the mark under a right of prior use, for example where you were using it before the other party’s application and it was already widely known among consumers in Japan at that time.

How TIMOA can help

The most effective defense against trademark squatting is filing before market entry and addressing the risk in contracts with distributors and other partners. If squatting does occur, Japan and China each offer remedies with deadlines, so it is important to detect it early and act quickly.

Working with partner patent attorneys, TIMOA supports prior trademark searches and filings in Japan, as well as information offers, oppositions and trials against squatted marks, in Chinese and Japanese. Procedures in China are handled in cooperation with local professionals. For details, see our IP, Risk & Compliance page.