Beginning in May 2026, we are launching this quarterly update to provide concise, practice-oriented insights into significant developments in China’s IP and AI regulatory landscape, together with practical considerations relevant to foreign companies and international counsel.
Executive Takeaways
- China continues strengthening scrutiny over trademark filings, misleading branding practices, and trademark enforcement.
- Businesses operating in AI, software, robotics, SaaS, and digital services sectors should reassess trademark coverage under the updated Nice Classification system.
- Chinese courts are placing increasing emphasis on reasonable confidentiality measures in trade secret disputes and evolving compliance obligations for AI service providers.
- AI-related businesses should pay closer attention to AI governance, operational safeguards, and internal compliance frameworks.
1. Draft Amendments to China’s Trademark Law Signal New Filing and Enforcement Trends
China’s latest draft amendment to the Trademark Law introduces several noteworthy developments that may materially affect brand protection strategies in China.
Key proposed changes include:
- Recognition of dynamic trademarks as registrable marks;
- Expanded cross-class protection for unregistered well-known trademarks;
- Administrative penalties for misleading use of registered trademarks.
These developments reflect China’s broader regulatory direction toward enhanced consumer protection and increased oversight of brand-related market conduct.
Practical Considerations for Brand Owners
Companies may wish to:
- Review whether animated logos, startup screens, motion graphics, or interactive UI elements could qualify for trademark protection;
- Begin systematically collecting evidence supporting brand recognition in China, including sales data, advertising materials, media coverage, and online engagement metrics;
- Review packaging and marketing materials to avoid presentations that could be interpreted as misleading consumers regarding product functions, certifications, or official affiliations.
For multinational businesses entering China, early evidence preservation may become increasingly important in future enforcement and well-known trademark recognition proceedings.
2. Absolute Grounds Examination Remains Strict in China
China continues to apply relatively strict standards regarding trademark applications involving absolute grounds for refusal under Article 10 of the Trademark Law.
Applications involving sensitive wording, misleading indications, inappropriate geographic references, or terms potentially affecting public interests remain exposed to elevated refusal risks.
Practical Considerations
Before filing in China, foreign applicants should consider:
- Conducting targeted review of potential absolute-ground risks;
- Reviewing recent refusal decisions involving similar wording or branding structures;
- Preparing alternative filing options for commercially important marks;
- Seeking local assessment where branding contains geographic, descriptive, or culturally sensitive elements.
In practice, marks that are registrable in the U.S. or Europe may still encounter difficulties in China under Article 10 standards.
3. Increased Regulatory Attention on Misleading Trademark Positioning
Chinese regulators have recently intensified enforcement against trademarks used in a misleading commercial manner, particularly where branding may cause consumers to misunderstand product functions, quality, origin, or government affiliations.
Serious cases could potentially result in administrative penalties or cancellation actions.
Practical Considerations
Foreign companies operating in China should carefully review whether local marketing practices:
- Present trademarks in a manner resembling technical or functional claims;
- Suggest official endorsement or certification without sufficient basis;
- Use wording or visual elements likely to create misleading commercial impressions.
From a compliance perspective, closer coordination between legal, marketing, and branding teams is becoming increasingly important.
4. Higher Evidentiary Expectations in Non-Use Cancellation Proceedings
Chinese trademark authorities continue raising expectations regarding the authenticity, relevance, and consistency of evidence submitted in non-use cancellation proceedings.
At the same time, examination comments have become more detailed and transparent.
Practical Considerations
Foreign trademark owners should consider maintaining more comprehensive China-use evidence files, including:
- Sales records;
- Product packaging;
- Advertising materials;
- E-commerce screenshots;
- Website records;
- Invoices and distribution documents.
For companies relying primarily on cross-border sales or indirect distribution models, evidence planning should begin well before disputes arise.
5. Revised Nice Classification May Create New Protection Gaps
The Nice Classification (13th Edition, 2026 Text) officially came into effect on January 1, 2026.
Several categories involving AI, robotics, SaaS, medical technologies, and digital services have been revised or expanded.
Practical Considerations
Foreign companies, particularly in AI, software, robotics, healthcare technology, and digital services sectors, may wish to reassess whether existing China trademark portfolios adequately cover evolving business activities.
AI-related services, robotics, smart hardware, and SaaS offerings may now fall within newly adjusted or more refined classifications.
Failure to update filing strategies under the revised classification system may create unexpected protection gaps, particularly for rapidly evolving technology businesses.
6. Trade Secret and Data Asset Protection Continue to Intensify
Trade secret and data-related disputes continue increasing in China, particularly in connection with AI training, employee mobility, platform operations, and data commercialization.
Chinese courts are paying closer attention to whether companies implemented “reasonable confidentiality measures” prior to alleged misappropriation.
Practical Considerations
Foreign companies operating in China should consider strengthening:
- Tiered access control systems;
- Internal permission management;
- Logging and audit mechanisms;
- Watermark and traceability measures;
- Employee onboarding and departure protocols.
In practice, insufficient internal confidentiality controls may significantly weaken enforcement prospects in China trade secret litigation.
7. Chinese Courts Continue Developing Liability Standards for AI Hallucination Cases
Chinese courts appear increasingly inclined to analyze AI hallucination disputes under negligence-based liability frameworks, rather than imposing strict liability on AI model providers.
Recent decisions suggest courts expect AI service providers to implement both meaningful user warnings and reasonable technical safeguards designed to reduce inaccurate or misleading outputs.
Practical Considerations
Companies deploying AI products or AI-enabled services in China should consider:
- Implementing clear disclosure mechanisms regarding AI limitations;
- Establishing AI-generated content labeling systems where appropriate;
- Developing internal AI governance and ethics review procedures;
- Monitoring evolving Chinese regulatory and judicial standards closely.
China’s developing judicial approach suggests that courts may focus heavily on whether service providers fulfilled reasonable compliance and risk-control obligations.
8. AI Agent Deployment Requires Stronger Operational Safeguards
AI agent technologies are being adopted rapidly across operational and commercial scenarios in China. At the same time, regulators and industry authorities have begun expressing increasing concern regarding operational security, data access, and automated high-risk actions.
Practical Considerations
Companies deploying AI agents or autonomous workflow systems in China may wish to consider:
- Implementing permission and operational limits for AI agents;
- Requiring dual-approval mechanisms for high-risk actions such as fund transfers, database deletion, or bulk exports;
- Maintaining operation logs and audit trails;
- Establishing abnormal activity monitoring and intervention mechanisms.
As AI agents become more integrated into enterprise operations, governance and operational control measures are likely to become increasingly important from both compliance and cybersecurity perspectives.
Conclusion
China’s trademark and AI regulatory landscape continues evolving rapidly, particularly in areas involving brand protection, AI governance, operational compliance, and technology-related enforcement risks.
For foreign companies and international counsel, China-related IP and AI strategies increasingly require not only formal registrations and filings, but also closer attention to practical enforcement trends, internal compliance measures, and evolving judicial expectations.
Companies operating in AI, software, digital services, consumer technology, and related sectors may benefit from reassessing trademark protection, AI governance frameworks, and operational risk-control mechanisms in light of these developments.
Foreign companies and international counsel should continue monitoring both legislative developments and evolving enforcement practices in China, particularly in rapidly developing sectors involving trademarks, AI technologies, and digital services.
