The "First-to-File" Trap: Why Your Brand Isn’t Yours in China (Yet)
In the global race for market share, China remains the ultimate prize. But for many Western brands, the dream of expansion quickly turns into a legal nightmare of "Trademark Squatting".
Unlike the Western "First-to-Use" principle, where rights are earned through business activity, China operates on a strict "First-to-File" system. This means the first person to register a mark owns it—regardless of whether they actually created the brand or intended to use it.
At Kung Fu Data, we see this dumb tax paid far too often. Here is the truth on the trademark battleground, told through the landmark cases of those who learned the hard way.
1. The Michael Jordan (Qiaodan) Saga: The Danger of Transliteration
For over a decade, Michael Jordan was embroiled in a legal war with Qiaodan Sports, a Chinese company that registered "Qiaodan" - the Mandarin transliteration of "Jordan".
The Conflict: By the time Jordan sued, Qiaodan Sports had built a $500 million empire with 5,700 stores using his name, jersey number "23," and his sons' names.
The Ruling: It took nine years for the Supreme People's Court to finally rule that Jordan had "prior name rights" over the Chinese characters. However, he lost the rights to the Pinyin (phonetic) version "QIAODAN," as the court found no unique "stable relationship" there.
The Lesson: Registering your English name is only half the battle. If you don't register your Chinese character name and its Pinyin equivalent, a squatter will do it for you.
2. New Balance vs. New Barlun: The "N" Logo War
New Balance has fought dozens of copycats, but its battle against New Barlun is a landmark for damages.
The Conflict: New Barlun registered a slanting "N" logo that was almost indistinguishable from New Balance’s iconic branding.
The Ruling: In 2022, the Shanghai Intellectual Property Court awarded New Balance CNY 25 million (~$3.7 million) in damages. The court found that New Barlun acted in "bad faith," using its registration as armor to cause deliberate market confusion.
The Lesson: Even if a squatter successfully registers your mark, you can fight back under Unfair Competition laws if you can prove your brand had "certain influence" in China before they filed.
3. The Burt’s Bees Case: The Distributor Betrayal
The Burt's Bees case highlights the extreme danger of neglecting your Chinese-language intellectual property.
The Conflict: Burt's Bees had secured the trademark for their English name in China. However, they failed to register the Chinese version, 美国小蜜蜂 (American Little Honey Bee). Their local distributor recognized the gap and registered the Chinese name themselves.
The Impact: Data later revealed that 美国小蜜蜂 was the primary term pulling the majority of organic traffic to the stores. Because the distributor owned the name, they effectively owned the brand's digital front door and most of its customer demand.
The Lesson: Never assume an English trademark is enough. At Kung Fu Data, we insist that all IP - English and Chinese - is secured in the brand's name before a single unit of inventory moves, ensuring you, not a third party, own the traffic you generate.
Action Items: The 2026 Trademark Checklist
As we head into 2026, China is shortening opposition periods to just two months, meaning you have less time than ever to spot and stop squatters.
File Before You Fly: Register your marks in China at least 12-18 months before you intend to launch.
Register the Trio: You must own (1) the English name, (2) the Chinese Character name, and (3) the Pinyin version.
Audit Your Sub-Classes: China uses a unique "Sub-class" system. Owning a trademark for "Shoes" does not automatically protect you for "Shoe Polish" or "Sports Bags".
Monitor Constantly: Set up an automated monitoring system to catch bad-faith filings during the new, shorter 2-month window.
Document Everything: Maintain rigorous "evidence of use" in China (invoices, ads, shipping records) to defend against "Non-Use Cancellation" actions if your brand remains inactive for 3 years.