My Take on the Chinese Culture on Counterfeiting

Let us have a frank word about China. You spend months, maybe years, perfecting your product. Sales are strong. You are getting noticed. Then suddenly, you see it pop up online again, except this time it is cheaper, slightly off, and definitely not yours. This is the world of Chinese trademark warfare and it is as miserable as it sounds.
Your best-seller catches on, and before you can say “intellectual property,” there’s a bloke in Shenzhen mass-producing knock-offs at half the cost. You are now in the awkward position of competing against your own creation, and you’re losing. Slowly. Expensively.
Now, here’s the kicker. China does have a decent trademark system. The problem is not China, it is how most foreign businesses blunder into it thinking Western rules apply.

First Come, First Screwed
China uses a first-to-file trademark system. That means whoever registers the name first wins. No backstory required. No need to prove they created the brand. So if you are waiting to “test the market” or “see how it goes,” odds are someone else is already registering your name, logo, and whatever else you forgot to protect. Then they sit on it, wait for your success to roll in, and offer to sell it back to you, for a laughable price. This delightful scheme is known as trademark squatting, and it is practically a cottage industry. Just ask New Balance. They ended up in legal battles with “New Barlun” and “New Balanced.” Adidas? Faced down “Abidas,” “Abidos,” and several cheeky Chinese translations. It is bad-faith registration with a side of gall.
The Chinese authorities are trying to crack down on it. In 2024, they proposed reforms targeting malicious filings. Still, you would be foolish to wait around for legislation to save your brand.

Your NDA Means Nothing Here
Now, another nasty surprise. That NDA you made your manufacturer sign? The one you found on Google? Worthless in China. Western-style NDAs don’t hold up. What you need is a properly drafted Chinese-language NNN agreement, that is non-disclosure, non-use, non-circumvention. Without it, your manufacturer can, and probably will, make a fortune selling your product out the back door. And you will be left footing the bill and wondering where it all went wrong.

“But I Registered Internationally!” Good for You. Still Not Enough.
You might think registering under the Madrid System protects you. Not quite. WIPO will issue a certificate, but China does not. And until you have a Chinese-issued certificate in hand, you cannot bring an enforcement case. You can request one, but it will take a few months, during which time your infringer is merrily building their sales pipeline.
Also, if someone snags your mark first, you’ve got three months to file an opposition once the mark is published. After that, your chance is gone, and your legal costs are about to go up.

What You Should Actually Do
Right, how do you avoid all this? Register your trademark early. In English and in Chinese. File it directly with the China National Intellectual Property Administration (CNIPA). Do not rely on the international route alone. Do this before your product goes viral, not after. And if you manufacture in China, do not even think about it until you have got a local contract and a signed NNN agreement. Preferably drafted by someone who has done this before.

It’s Not All Doom.
Some brands have fought back and won. New Balance eventually received a record damages award. Christian Louboutin held the line on his red soles. Even Adidas managed to boot out the worst of the knock-offs. Do this before your product goes viral, not after. And if you manufacture in China, do not even think about it until you have got a local contract and a signed NNN agreement. Preferably drafted by someone who has done this before.

It’s Not All Doom. Some brands have fought back and won. New Balance eventually received a record damages award. Christian Louboutin held the line on his red soles. Even Adidas managed to boot out the worst of the knock-offs.

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